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tv   Trending Business  Bloomberg  May 19, 2015 10:00pm-11:01pm EDT

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he says greece could leave the eurozone. do let us know what you think about the top stories. follow was on twitter -- bus on twitter -- us on twitter. we head over to jakarta later this hour. let's look at the markets. clearly the best performance so far in asia -- similar gains of what we saw yesterday, but still in the morning session. 30 minutes before. a lot of this is down. we will talk about this later on. it is very impressive growth figures. you have the quarter to quarter figure beating expectations. 2.4%. dollar yen pushing to 1.21 we are at 1.20.
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these are more of the weakness compared to yesterday. it was at about 7 p.m. yesterday. we had very good housing data out of the u.s. it is pushing to 1.21 for dollar to yen. we want to focus on australia. down a quarter of 1%. it is a deep selloff we saw in the mining shares. a lot of pressure in commodity selling. oil was swelling. we saw 45. goldman is saying that. oil prices fell for a six-day. it is the pressing the value of commodity prices from this time yesterday. we are trading at fairly low levels. as promised, a quick look at the opening numbers. indonesia -- up half of 1%. perhaps in reaction to some
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banking decisions yesterday. they had rates on hold as expected but they loosened when it came to first-time homebuyers. is through the value of the property. it is up half of 1%. at this point, they are staying put with the court forecast -- current forecast. 5.4%. i think we are pushing towards 13,200. more or less, very near the 16 year low against the u.s. dollar. let us leave it there for now. back to you. has greetedarta double the number of recalls. it is recalling 34 million vehicles. it is the largest recall in car history. we have been tracking this story since the get-go. craig, this is a huge number. craig: it is massive.
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34 million in the u.s. alone. as you know, we have learned in the last week or so that in japan and other parts of the world, there have been millions more added to these recalls that forceeally been around in just the last couple of years. this is a slow-motion car wreck that has ballooned into what is not only the biggest recall in the auto industry, but perhaps the biggest recall of any consumer product. you look back in history to high profile recalls like tylenol in the early 1980's. this will surpass that. there are a number of questions still to be resolved. what the actual tab will be to clean up this mess. you have takata just telling analysts just last week that they have asked the carmakers
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about paying in installments to cover the cost of these recalls. these costs will stretch beyond that. there will be penalties from the u.s. government as noted today. those will be small compared to the likely costs of legal settlements both with customers and perhaps you may have some problems with the department of justice. you have senators in the u.s. calling for the department of justice to go after takata to do a criminal investigation. that has been, in the past, a substantial amount of costs have come from. do you think about toyota and the unintended acceleration recalls. they took years before the department of justice finished its investigation and that was a substantial fine. more than $1 billion. it is a substantial amount of cost that is still ahead for to akata. rishaad: craig in tokyo for us.
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we will be looking at this story through the show. we want your opinion. tweet us your thoughts and include that hashtag. let's stay with corporate japan because it is being applauded for helping fuel the country's revival. the economy is rebounding for the second straight quarter as businesses have raised spending on inventory. the latest gdp numbers came out earlier. we have some optimism for a change. >> definitely. quite a surprise this morning. japan has been struggling after falling in recession last year. we are seeing strong growth in the past two quarters. this time around, japan's economy raised 2.4% from the previous quarter. that is beating analyst estimates. it is also more than double the pace of growth we have seen in the previous quarter and we only
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saw an annualized growth of 1.1%. of course, the weeak yen helping japan's economy, helping corporate profits. businesses are not showing signs they are raising wages. they are also spending more and picking up inventory. but, that is also a point we need to be a bit cautious about because we are seeing expansion driven by a pickup inventories which could suggest that consumption is still falling behind production. still, we have the bank of japan policy meeting tomorrow and we are expecting policymakers to keep policy unchanged this time around. of course, this positive data out of japan is expected to offer support for policymakers that the japanese economy is currently on a recovery track. rishaad: thank you. let's have a look at other stories making headlines. let's get around up.
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havex chinese citizens been indicted by the u.s. for stealing mobile phone technology and allegedly sharing it with the chinese government. in a 32 count indictment, the group which includes a defector from china, is charged of conspiring to give trade secrets. the alleged misconduct stretches back to 2006 when three of the defendants were students at the university of southern california. according to the complaint, a 36-year-old soul technology that filters radio signals and that technology came from two california-based companies. both of which happen to be apple suppliers. in 2006, he began work and allegedly took the technology to china where he participated in setting up a fabrication facility that allegedly supplied
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chinese commercial and military entities. he was arrested on saturday on his arrival from china at lax airport. the 32 count indictment was unsealed later. we are seeing a sharp last-minute plunge for yahoo!. that was the story at the end of the trading day. this on a report of potential changes on the irs regulations that govern spinoffs. that proposed irs will change would complicate yahoo!'s efforts to have a stake in alibaba group. they tried to conduct a tax-free spinoff in its shares. if the irs changes, investors will be on the losing end because many shareholders bought gayahoo! betting they would have a tax-free payout. marissa mayer is under increasing pressure to return cash to shareholders. investors want to see faster changes at the company. monetizing the asian assets seem critical to all of this. japan, one ofhoo!
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the top priorities of the moment. this is the stock price continuing to see considerable volatility. chinese mobile messaging service surging by the most in record a new york after reporting rockets -- profits. to company expect revenue jump by nearly 270% in the second quarter. momo generates revenue from online gaming services and subscriptions. the company's history dates back to 2011 and it is seen as critical to alibaba because they don't have their own social media service. the partnership is critical for momo because it earns revenue from those subscription fees, mobile games which is all tied to the strength of alibaba. rishaad: thank you. following bloomberg business, all about greece. the latest on greece and its
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efforts to stay afloat. check it out on still ahead, a warning of the central bank. we head over to mumbai. euro exit would be really serious for europe. we hear more from him when we return. ♪
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greece has been given until the end of the month to strike a deal with its creditors. germany and france want more urgency on the talks that has now been a four month standoff. they will push the greek prime minister at the eu summit but agree it is in everybody's interest for greece to stay in the euro. for more on the future for the country and the european union, ranciney own frontwhee
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spoke to josep joseph stiglitz. immensely was revised in 2011. it was a disaster. as an economist, i said this was not going to work. what is remarkable is the ecb still comes out with forecasts. their models are really bad. i tease my students -- i say if you ever came out with that -- francine: you get a zero. why are they so bad and how did they fix it? joseph: when you have austerity, they don't have the understanding for economics. combined with the weakening of the financial sector, this is a fundamental, structural problem with the eu. may have this in the market and
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money will be a problem. the austerity combined with the contraction of public lending and it is a toxic combination. they did not have that built into the models. the same problem they had in failing to forecast the 2008 prices. francine: should greece leave the eurozone? it makes sense. take the payment but they are in charge of the debt. joseph: give germany and the rest of europe refuses to change the program, i think there is no alternative. the first test would be for europe to realize that austerity is a mistake. lawse are fundamental fa in the structure of the eurozone. francine: they need money in the next couple of weeks. i understand what you are saying but we don't have the time for that. if you were greece, would you be ok under these conditions?
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joseph: under the conditions that the eurozone refuses to change a policy that has proven wrong, let the country down. 25% decline in gdp. this is depression-like. more than 50% unemployment. this is destroying the country, the future. i think i would have to lean and say yeah, you bargain in good faith. not everything, -- everything, but you get an awful lot. they have to face up to the reality. francine: what happens if greece leaves or default? joseph: it is really serious for europe. greece is small, but what it is saying is this contract, this union is a temporary union. the next time spain has a problem and they have a different government, people will say well, the european leaders do not bargain in good
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faith. they don't face reality that their policies are not working. they are pushing. that means interest rates will soar. you really are bringing more instability into europe. a real risk that the whole european -- not the eu, but the euro project which was flawed from the start, could be repaired is going down the tubes. >> stories making headlines around the world -- china has offered a lifeline to brazil. official announced $7 billion for the struggling and ordered 22 jets. saidrazilian president china could invest up to $23 billion in mining infrastructure and manufactureing deals.
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backed has alitary referendum on the newly drafted constitution, but has indicated there could be new elections on hold. the prime minister says it will take at least three months to organize a referendum. that will affect the political roadmap laid out since the army seized power a year ago. the government says elections could take place next year. the first asian nation to offer shelter to muslim refugees for leading -- fleeing bangladesh. philippines made the announcement that they were planning to put the vessels out to sea. indonesia, thailand and malaysia have turned refugees away and thousands have been stranded. a conference on the growing crisis is to be held in bangkok next week. rishaad: we are heading into a lift-- kfc tries to
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flagging sales. we will see how social media has responded to the resurrection. that is right after this short break. ♪
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rishaad: jpmorgan may change after receiving only lukewarm backings from shareholders. only to the words -- two thirds
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have approved the recent round of conversations. >> how much should top executives be paid? it is a question over at j.p. morgan chase where the board is considering changes to its compensation policies after a record low percentage of shareholders. 61% approved the latest round of executive pay and that is the lowest since the so-called save for pay proposals were started at the new york-based bank in 2009. it is also down from 79% approval last year and 94% in. 2013 ceo wasple, jpmorgan's owed $20 million which include $7.4 million in cash in terms of compensation. but shareholders and proxy advisors objected and among the objections -- the debate did not get up a good reason for giving his his first cast bonus in
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years. there was problem with the trade and big losses in the prior year's. s. votes were mandated by the dodd-frank act in the u.s. and required to hold these nonbinding surveys every three years. they can yea or nay on the proposals. the lead director of the bank's committee says shareholders want to see incentive pay linked to performance and they want to see that increase over time. observers point out the 61% approval over at j.p. morgan is very close to 50% and big banks do not want to get a failed vote. morgan stanley approved its ceo pay with about 89% voting in favor which is down from last year's 92%. meanwhile, shareholders rejected the makers executive pay plan in
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there tuesday annual meeting. according to a proxy filing, execs were to get about $25 billion in fiscal 2014. that was rejected last year. voted inareholders favor of the compensation packages. one possible difference between last year and this year, shares in the company have fallen about 16%. su keenan, bloomberg news. rishaad: here's a question for you -- what do kfc and a contest have in common? revenue. >> we will try to make a connection. lets kickoff with the euro. >> this is the semi final. greecestant from submitted a song that was appropriate to the current situation in the debt crisis right now. the title was called one last breath. some people saying come back and save me, what happened was not
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fair. all i have is one left breath. some people are saying the timing seems kind of right a couple of days beforehand. some people say greece has found cash. what is the title of the song? "i will survive." every vote for greece tonight will contribute to one euro to paying off their national debt. good news is she made it to the finals. collects at the end of this week -- >> at the end of this weekend? >> yes. they had different names. >> we are saving ourselves. you remember this colonel? >> of course. the spokesman. >> kfc is what we are talking about. kentucky fried chicken. they are bringing the colonel
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back. a revamped for the stores. new buckets, new designs. brands doing what a lot of the fast food brands are doing -- a big refresh and looking back in the past. they are definitely going old school. check this out. there is colonel sanders. i love the name. name. is a very american this is someone you may recognize from saturday night live. here'll haven't -- darrel hammond. he does a good impression. some people are saying he sounds like george w. bush. here is what is going around on twitter. et colonel sanders to repel from a chopper into my chimney?" here is what other people are saying on twitter. just funny comments. mcdonald's brings back the
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hamburglar and kfc brings back the colonel. it is time for taco bell to bring back the chihuahua. now withtting hungry us talking about fast food. rishaad: coming up, first shanghai and now shenzhen. kong and whoong better to discuss that thean the chief executive of hong kong exchanges. charles lee is coming up next. trending business returns right after this. ♪
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♪ takata shares are dropping after doubling the number of recalls in the u.s. -- 34 million cars in the largest recall in history. regulators say it might take years for all these vehicles to be made safe. 11 different automakers and a shortage of replacement parts as well. japan's economy leading analyst estimates by 2.4% on an annualized basis. corporate japan spending, the weekend helping to boost export
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and increased spending there. -- the reserve bank global trend toward easing having a substantial risk to sustainable growth. both industrialized and emerging assets are being pushed into competition. demand,ld with weak nations might get engaged on a risky contest. japan just finished out the morning session. that is see what is going on. david: we are watching shares in hong kong and shanghai. 8/10 of 1% coming after goldman sachs removed the stock from its conviction. stock but180 on the this is one of the stocks that has been caught up substantially. something like that.
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it is such a short amount of time. it has to do with all this money coming in to hong kong. it is not available in shanghai, but that is where does most of its business. approaching this no w. 45.27 for the shanghai composite. take a look at what it was compared to the shanghai composite. shares are seeing some pressure right now which is why you see this premium. it is down a quarter of 1%. that is basically tracking the premium of eight shares. did measures the price premium. we have been trading above 100 which means they are trading across the border for several months. it is holding to this massive rally we have seen from the shanghai composite. 40% year to date. there is a lot of money coming
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here as well. eight shares are sold 25% higher from year to level of mid-march. you look at the daily quota of the money that has come its way into hong kong. average --. 9.5 billion on. a fair amount of money that has been reallocated into the city. the question is -- are they fully allocated as far as their eight shares is concerned? i will leave it there for now. rishaad: one company benefiting from the china stock is the operator of the hong kong exchange. joining us now is the chief executive charles lee. he is at the seminar taking place in the city. thank you for coming on to the program. lets start off with the hong kong exchange. we have seen the share price up
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by about 50%. of course, after that, surging since the start of april. what do you think of valuations? are you looking forward to more turnover in the future? i actually don't really focus very much on my own stocks. that is the consequences of what happens in the market. we sometimes look at it as a proxy of how the market ac ts because we have a huge correlation with profit. in terms of the market, i think it will be up and down. we are reaching a new norm. time, wever a longer are only seeing the beginning of the process of liberalization on the funds coming out of the mainland. we will see a lot more interaction of very
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significantly different liquidity pools on both sides of the market. there is intersection in hong kong which will have a lot of sparks and chemicals and the market will become very different going forward. rishaad: charles, what you have been asked about already and a lot has been the shenzhen linked with hong kong. you have already said it will be in the second half of the year. when will testing begin? do you actually have a narrower timeframe of when the actual thing gets going? charles: we need to get the exchange system ready and we will be ready by july, the end of july. if this is announced, whenever it is announced, we will begin to inform the market and work with the market and test together with the market. the longer time we have between where we hand out finishing at the end of july or the
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announcement, we will be using that overlap time to work with the industry to get them ready. if the announcement goes a bit later towards the point we need to get ready, we will begin to build the time after that. the general sense is we need to grab approximately three to four months after the actual announcement. rishaad: ok, well, what are the lessons you have learned from the shanghai connect that you can bring to bear on the shenzhen connect? charles: the shenzhen connect is a very simple replicate of shanghai connect. a lot of people think the shenzhen connect -- that is a misconception. ablehinese investors are to come through the shanghai connect. they have two buttons. they can push one or push the other.
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all the volume is coming from the shanghai so they are using to push that button. it is all electronic coming through the pipe. connect,aunch shenzhen there will not be a separate pipe because there is really no urgent need for it because investors anywhere would go through the shanghai link because it is all electronic. the northbound is separate. the shenzhen connect is really initially going to be for international investors to that isn a new market not in the shanghai connect. for the southbound, nobody is being held back. waiting for the southbound to happen because of a lack of a shenzhen bridge. when shenzhen is launched, it will be a separate southbound bridge. when that is built, i'm sure they will find all sorts of ways to make sure the traffic comes
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through the shenzhen link. from a hong kong perspective, it does not really matter. it is all going southbound. we don't really see the difference between either. rishaad: charles, very quickly, a lot of questions to ask you. the is what are you doing -- the next one is what are you doing to expand the link? what are you doing next? charles: we will have more stocks to be traded. eligible stocks. both sides will be enlarged hopefully to cover almost the entire market except some of the smaller players and also hopefully we will also be considered to be enlarged. i think the shenzhen connect will be important for some of those enhancements to take place. rishaad: ok, there was a lot of talk around the metal exchange taking place.
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what about this commodities connect here? there have been some movement, some of the top coming out of the meeting taking place in the convention saying you are saying less about the commodities the last year. is that on the back burner right now? charles: it is not. i think we are at the slightly early mid stage of where we were on the commodity connect side. we are very confident that ultimately, hopefully in the not-too-distant future, we will be able to announce a certain level of connectivity with the commodity side. we are trying to see whether we can connect the international product to a domestic liquidity and the domestic product to international liquidity. the second layer is connecting the liquidity's somehow. that will be a little more
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longer and complicated to work out. the last bit which will take even longer, and much more interesting and significant, is connect the domestic markets and infrastructure into the international futures market. because the market is where china imports almost everything. at the same time, need to find a better way to manage that in the international futures market. rishaad: i want to get back to shanghai and talk about this new market they are creating for u.s. and chinese companies. this is the plan for emerging industries. thet that seen by you as hong kong exchange as a bit of a slap in the face? charles: not at all. there is clearly, the hong kong exchange business has brought chinese companies here for ipo's and raising companies and we trade them. the first 10 years, we were the
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only game in town. the second 10 years, they have a great market as well so now a lot of people were able to go there. the valuation is quite high, but it is difficult to get listed there. some of them do come to hong kong. sure china's reform will make their market a lot easier to list which might bring that evaluation. over time, i think we will see the markets playing different roles. rishaad: i want -- the thing is alibaba lost out to the u.s. and alibaba could find its way to the shanghai market. will you look again to changing your listing rules? charles: we are looking at it. the fcc will be looking at it. it is a very complex issue. inciple, it is easy for
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people to agree that we need to do something competitive. we cannot change our standards. -- the comes to actual devil is in the details. it is becoming a lot harder. we are working on it but i am not predicting a particular outcome for that. rishaad: thank you so much for joining us. it was a pleasure to have you on trending business tonight. charles li, ceo of the hong kong exchange. checking on some of the other stories -- looking at the philippines. they are using facebook and twitter to crack down on insider trading. they are formerly monitoring the social media to eliminate ponzi schemes. they are pursuing cases and gathering evidence on violators. philippines is one of the world's biggest users of social media. they are trying to track down tax invaders. australians -- interest rate
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cuts in last week's federal budget aimed at families and businesses all helping to boost melbourne institute of consumer sentiment above 100. a boost in polling for the government. indonesia is holding at 7.5%. of lender rules will help the faulting economy. this will allow first-time homebuyers the right to borrow. it raised more than 5% but reversed following that announcement. let's get back to takata. tumbling the most in six months. they have doubled the number of cars linked to faulty airbags. it is 34 million vehicles and the largest vehicle recall in history. we have been tracking the story since the gekko. -- get-go. craig, this is resulting in a
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massive number. craig: absolutely. you look back. the first recall related to these airbags was way back in 2008. they really started in mass couple of years ago and sort of kept rearing its ugly head. at this point, it is finally a situation where takata is no longer dragging its feet. it is a company that all the while has resisted taking these airbags recalls nationwide. it said the problem was perhaps related to high humidity areas and certain parts of the country and certain parts of the world. it is now expanding recalls nationwide in the u.s. it is also admitting it is a defect with its airbags. it is something that it has a resisted. rishaad: ok, well, the thing is this will not come cheap. how much is it going to cost them and can they possibly survive this? the ntsae heard ht nt
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administrator talk about this. more than $1 million in penalties and civil penalties are something the company already faces. that is just a pittance compared to the amount of costs this will run takata both in running their plants to make these replacement inflator's, perhaps lost business and future contracts. you also have substantial, potential legal settlements ahead with customers and also perhaps even with the department of justice. you have seen connecticut senator blumenthal call for the doj to get involved. rishaad: thank you, craig, joining us from tokyo. theext, the nations of refugee crisis try to find a
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solution. we will tell you about it when we return in a couple of minutes. ♪
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>> checking on stories making headlines across the world. north korea has canceled meeting. theas scheduled to tour complex on thursday but was told the trip is off. pyongyang failed to give a reason. it was a symbol of inter-korean reconciliation. about 120 southern companies employee about 54,000 north and workers. the u.s. government says there are no remaining impediments to normalizing relations with cuba now that havana is willing to give over its embassy business in washington. president obama and castro
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announced plans to normalize relations with the bank has been reluctant to open an account for cuba for fear of violating existing sanctions. an encounter in the south china sea before in american combat ship and a chinese military vessel. it happened earlier this month when the uss fort worth met the chinese ship. the u.s. says they communicated using recently agreed codes for unplanned encounters. rishaad: malaysia is in talks with china and indonesia today discussing the growing people crisis in southeast asia. thousands of refugees have settled in bangladesh with many feared to be stranded at sea. let's bring in our corresponded. nt. anything coming out of the stocks? >> it was the usual
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diplomatic attitude. they face emphasis on putting emphasis on the countries of origin and destination. the absent in the emergency meeting cast doubt on how realistic these goals can be achieved. malaysia, indonesia and thailand have placed response ability -- responsibility. as for the bangladeshi migrants, malaysia said it would waste no time in sending them back home. rishaad: this crisis is seen as a major test for these people. what does it mean for the region? stickingell, they are to this noninterference policy which has been around since the 1970's. analysts are not expecting the region to come down hard on myanmar. they have november elections coming up so this migrant crisis is not necessarily high on his priority list.
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thailand next week will be holding a conference on may 29 with the nations affected by this issue. myanmar has not indicated whether it will be sending a representative. scrutiny is certainly increasing on the region and malaysia in particular on how it will resolve this ongoing humanitarian crisis. back to you. rishaad: thanks for that. sophie joining us from kuala lumpur. up next, monetary policy. what he is concerned about, next. ♪
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rishaad: the start of the trading day in india. just over 60 minutes away. we also have the indian reserve bank governor talking and warning there is a global trend
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towards easing and sustainable growth. they are saying both industrializing mobile markets have been pushed and it is a competition on monetary policy. let's find out more. we have a look on what the governor said here. the governor is making a familiar argument for better coordination between monetary policy. it is the threat of deflation starting in central banks into dangerous struggle for stronger domestic growth. one that ignores the needs of developing nations. adding the central-bank developing economies should bear in mind the international responsibility. it is an international monetary policy which has substantial risk both sustainable growth adding it is not an industry country problem, not an emerging country problem, but a problem of collective action.
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the governor has one of the most vocal critics of monetary stimulus policy being deployed by developed economies. let's quickly listen to what he had to say. sustainable conventional policies may have effects on risk building and i think in the past, it talked about that elsewhere. i worry about sustaining quite policies. sunanda: he also spoke about repeat offending, the kind of volatility they are seeing. saying depreciation has been due to the dollar strength but it has been less volatile since the other major peers. back to you. rishaad: thank you. let's see what is trending today. >> the lunch hour is
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approaching. colonel sanders, we all love a little fried chicken and we will get some a little later today. kfc refreshing its brand. it is doing what mcdonald's, burger king and other fast nude chains are doing -- fast food chains are doing. kfc is very popular in china. yum! brands has a foothold in that market. they are facing increasing competition at home and that is why the bringing back colonel sanders. here's the reincarnated colonel sanders. you might recognize him as darrell hammond. he does a pretty good impression. some people are saying it sounds a little like george w. bush. kfc to eating that the colonel is back. they are celebrating the 75th anniversary of the original recipe. i think we should order some. don't you? rishaad: stay tuned to asia edge coming up next. we have the big stories of the
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day, including facebook as the new frontier as philippines steps up its fight against insider trading. we have the details. this is bloomberg. "asia edge" is next. ♪
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♪ mark: i'm mark halperin. john: and i'm john heilemann. and with all due respect hillary clinton, it's great to hear your voice. ♪ she speaks. after 40,150 minutes, hillary clinton looked at the press today in cedar falls, iowa. heard their questions, and then opened her mouth, and she gave answers. there's no time to spare. let's go to our big wall of hillary answers. number one, her state department e-mails. the state department proposed they would all come out at once in january. today, a federal judge said no, they have to come out on a rolling basis starting sooner than that. the questior


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