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tv   Whatd You Miss  Bloomberg  December 15, 2016 3:30pm-5:01pm EST

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national security council. she had been floated as a possible white house secretary. earlier in her career, she worked for richard nixon. keith kellogg has been named as chief of staff and executive secretary of the -- senators, claire mccaskill and lindsey graham says russia needs to pay a high price for its election meddling. mccaskill says she supports tougher sessions against moscow. lindsey graham told cnn his goal is to put "crippling sanctions against russia on the desk of incoming commander-in-chief donald trump." senator bernie sanders has undergone an outpatient procedure for skin cancer. the procedure was completed today, and sanders returned to work afterwards. french lawmakers have voted overwhelmingly to extend the national state of emergency for another six months, until july 15. it is the fifth extension since the attacks in paris that left
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130 people dead in november, 2015. islamic state cleansers possibility for that violence. emergency in power security forces to apply the highest level of protection in the run-up to spring's presidential and general elections. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. i am emma chandra. this is bloomberg. live from bloomberg's world" is in new york, i am scarlet fu. joe: i am joe weisenthal. we are 30 minutes away from the close of trading. scarlet: u.s. stocks making a comeback. the day after the fed meeting and the fed said they were raising interest rates.
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joe: the question is --"what'd you miss?" scarlet: plus, is cash still ken -- harvard economist rogoff wrote a book about the sinister side of cash, and we might be seeing those effects in countries like india and venezuela. he will join us in the next hour. and 20 states to mylan and other generic drug makers of conspiring to raise drug prices. we will speak with the connecticut attorney general later this hour. let's get started with a check and where major indexes stand as we head toward the close. abigail doolittle is standing by. abigail: we have stocks trading higher into the close. the dow, s&p 500, and mastec are all higher, but it is worth noting the three averages, and various times early today had peaked with record closes. the nasdaq had been within less
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than two points of an all-time intraday record high. the strength for stocks -- it seems investors are digesting a little bit of excited trade here -- indecisive as well, uncommitted after the fed. speaking of the fed, of course, we are looking at rate hikes -- the first in a year about probably one of the most telegraphed rate hikes and certainly quite some time. and it shows. when we look at a three-month chart -- roughly a three-month chart of the 10-year yield -- this is actually a quarterly chart -- we see yields have spiked higher by an astounding amount, 1%. for the biggest quarterly move ever. really pretty amazing. it's suggests -- it suggest investors were pricing this in well ahead of the news. some say this reflects trump growth, but it could be the idea that some investors. trump would be ok for the -- thought trump would be ok for the fed to go ahead.
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when we go into the bloomberg, we have a great chart -- one of my favorite charts -- g #btv 2256. on top, we have the blue 10 year yield. in white, the five year inflation swap. a future look at inflation. this comes from vincent cigna rela, a bloomberg strategist, and he says historically swaps have led. he has a great point. when we look at the orange circles, we see the 10-year yield has a tendency to rise through the swap, and when they lower, the 10-year yield follows. this could suggest we see a pullback in rates. it is worth noting on the bottom, that if the correlation. the markets are highly correlated, making the case stronger for the idea we could see yields drop following swaps down. if we take a look at yet another chart, this is of a bond index -- the bloomberg barclays and get index. there are treasuries in there, investment grade bonds -- also said different bonds.
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we see a massive uptrend out of 2000 and we chose the starting point because it was the beginning of qe and the extraordinary rate policy that help the market to some degree, but in the orange boxes we see what are called death crosses, when the 50-day moving average moves below the 200-day moving average. it signals volatility for the market. not asf bearishness, and there are shows be for other markets. some ared suggest what saying is the end of the bull market in bonds, but the last three have signals volatility before the market has moved up. it is interesting to take this into account, and of course, we will be following this into the future, scarlet and joe. scarlet: thank you so much, abigail. withlet's dig deeper ashish shah, head of fixed income. thank you for joining us. moment.y, a huge
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i think that is fair to it.gorize something i was thinking about over the last day -- last year, when the fed telegraph they were going to hike four times, this year it only hiked once, next year it sees three hikes. it seems that the market believes that more. do you think it is more credible this time around? ashish: i think the backdrop is far better. unemployment is a lot lower. inflation is starting to pick up. they have done their job. they have eased into this. the u.s. economy is robust. the thing that concern them and really derailed them last year will -- was what was going on in the rest of the world. scarlet: so, are we seeing the end of the three-decade-long bull market in bonds? ashish: i don't think so. when you think about demographics, when you think about the amount of debt the rest of the world has, i think there is still going to be a place for bonds out there. into do think we are late
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an economic cycle, and you are starting to see growth. i'm that is the weird part having trouble getting my head around -- people are talking about fiscal stimulus, inflation, getting exciting, but how many years has his recovery been going on? , like, seven years? how much longer can they go? i know this expansion's do not die of old age, but it is not like we have not been growing. ashish: we have been hearing stories of deregulation and loosening up the economy. that will free up resources for further growth, but you have to worry if they push on the accelerator too hard late into a cycle that does not have a fantastic history. scarlet: how much inflation are people pricing in? we talked generally about how inflation will climb and we see parts of it coming up in inflation expectations, but nobody knows how much further past the 2% target we will get. ashish: they are pricing 2%, and for all this talk of inflation, inflation hasn't really very
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that tremendously over the last 10, 15 years there are a lot of good reasons for that. what you want to think about is we have a lot of unknowns. when you have unknowns, you want to reduce risk. how do you do that best in bonds -- you go global, you hedge the dollars out. hedgeke sure you stay in global. it has much better upside versus capture.-- downside if you are an italian investor, having a global diversified bond fund made a lot of sense. the same logic applies to u.s. investors. joe: explained that further --if you are a u.s. investor, what are the specific opportunities abroad? ashish: you can look at economies like australia, where there has been weak growth. you can look at places like the u.k., where there has been weak growth. actually, what is interesting, when you had to those bonds back into u.s. dollars, you pick up a lot of basis points of yields. that is easy money to be gotten. it is what you get when you hedge a global bond portfolio
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back into u.s. dollars. you want to hedge because the dollar has been rising. a 5% increase since the election. joe: right, because if you were to go raw, long the aussie-10 year -- ashish: in a day. you want to hedge back to dollars. at the end of the day, if it is heating up over here, if we have a more active central bank -- there are a lot of central banks that want to continue to ease, that are looking to be accommodated for bonds. why not go invest their? scarlet: you are talking about u.s. investors looking abroad to buy bonds. investors investors or european investors coming to the u.s. to capture some yield through treasuries? ashish: this deepening of the curve has attracted foreign investors, but it is very expensive for foreigners to come into the u.s., and hedge those dollars back to yen. that is an opportunity if you are a u.s. investor or you can pick up 100 basis points versus
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short-term u.s. cash. that is free money to japan is not going to default in the next three months. why not go out and get that? you can only capture that if you are in a hedged global bond front -- fund. hearing about the divergence reminds me of a cyclist in the tour de france trying to do a breakaway, and the crowd catches up with them. can the u.s. really breakaway if everywhere else in the world is in easy mode, not inclined to hike, or does that snuff out the recovery because the dollar gets too strong? ashish: i do think you have to watch the dollar. watch risk assets and you have seen a big rally in the s&p without a lot of substance. that poses a risk to the global risk market, and that is one of the reasons why, friendly, u.s. duration is starting to look attractive again. scarlet: are we going to talk about the new normal being dead completely? ashish: i think it is way early to do that.
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i think a lot of things are going on. we continue to talk about weakness coming out of china, you know, versus this newfound hope in the u.s. for change. i think you have to be balanced, and make sure you are hedging your bets. bonds are there to be the anchor in your portfolio, and i do not think there is any reason near term to go away from that. joe: do you think people, when they are looking at this new incoming administration, have been overoptimistic about what it can deliver, and reality will set in -- they cannot change things that much? ashish: i know when it comes to politicians, you want to be skeptical on what actually is going to happen as opposed to what they promised. sweeps, and to past say a lot gets promise. some stuff gets delivered. i think some stuff with the delivered, and there will be opportunity. you want to own duration to make sure you balance out the risks in the portfolio. joe: chief investment officer of global credit and fixed income,
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thank you very much, ashish shah. scarlet: jurors in south carolina have returned a guilty -- guilty verdict in the case of dylan ralph. we have -- dylan roof. we have more chills when did he come available. amongoming up, mylan, others, are being sold by 20 states saying senior executives engaged in a scheme to fix prices for an antibiotic and oral diabetes medications. we will talk to the attorney general of connecticut next. this is bloomberg. ♪
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teva and aren being sued by teva 20 states.
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this comes a day after the department of justice charged two former executives of heritage pharmaceuticals with conspiring to fix prices. we are joined by george jepsen, connecticut attorney general, one of the state involved in the lawsuit. mr. attorney general, we need to get a sense of the scale -- how widespread is the price fixing scheme? we believe it is massive, quite widespread. it is the first legal action being taken. we expect more. joe: when you say massive and widespread, how exactly -- what with the mechanics of the scheme you are alleging -- how was it coordinated? a. g. jepsen: when we are finding, and the evidence will show, is explicit price fixing to this is not circumstantial evidence when the evidence comes out and some of it has been redacted in what we filed today because of sensitivity to justices and our own ongoing investigation. explicit price
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fixing where in text messages, you knows, conversations, we have cooperating witnesses could the case is very strong. generic drugs are in every household in america. it is a 75 billion dollar a year industry. if you can jack up the prices by 5%, 10%, you're talking millions of dollars in added cost to consumers. states through medicaid -- federal government through medicare -- this is a big deal. scarlet: and we are talking here about two drugs. can you quantify how big the violation is in dollar terms? a. g. jepsen: we do not have that number because the investigation is ongoing. i can tell you that the investigations that are ongoing go well beyond the six companies that are listed in our legal action, and the number of drugs being investigated goes well beyond
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these two. joe: what is the origin of this investigation? what initially tipped you off to look into this? a. g. jepsen: good question. i just want to point out -- i am proud to say that state attorneys general work together on a bipartisan basis on tackling these national issues. this one had its origin backing july of 2014 when one of the assistant attorney general in my office read an article in "the new york times" about generic drug prices moving up, not down, the way they should. he, interjection with his department chair, initiated guess yet conjunction with his department chair, initiated -- in conjunction with his department chair, initiated. you have had two parallel investigations going on. connecticut, alone, until three months ago, in september, when investigation,r and now we have 19 others who
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have signed on to our legal action today. we expect more to follow. justice, of course, unveiled criminal action against two heritage executives yesterday. scarlet: right, and we brought that up as we introduced you. in the past, sharp price increases of generic drugs tended to be blamed on shortages. do you think there was, basically, fake shortages being talked about here -- that was a cover for price-fixing? i cannot say why the industry offered the excuses they offered. in this instance, the antibiotic acne drug -- they conspired by dividing up market share. basically, different buyers were allocated to one of the three different companies. the type 2 diabetes generic -- across-the-board
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increase in price by the four conspirators. joe: you mentioned that you think the investigation is ongoing, that you expect to bring further action against more companies, more drugs. can you provide more details on the scope of that, potentially? a. g. jepsen: i wish i could, but it changes as we pick up rocks. this has been changing for the last two and a half years. as we pick up rocks, we are finding new things. we do not know how big it is going to be, but it is going to be quite big. scarlet: you say to a net half years -- is that how long investigation has been going on, or how far that this action has been going on? i wonder if there is any link to the fort, the changes in health care regulation in this country. a. g. jepsen: i am not aware of any evidence that would suggest that. connecticut's investigation was initiated in july or august of
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2014, and the justice department initiated their investigation two months later. anecdotally, a lot of people noticed that generic drug prices, really in 2013, 2014, 2015, were going up, and going up in ways that seemed inexplicable. so, it is really examining those situations as the focus of our investigation. and as we mentioned earlier, and you did as well, the doj charged two former executives of heritage pharmaceuticals with conspiracy to fix prices. were they the ringleader of this conspiracy, and if so, how do they go about gathering and consolidating the other drugmakers to follow their lead? a. g. jepsen: they -- with respect to the acne antibiotic, there was one generic in the field already, and they they made their presence known that they were going to enter the field in a
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significant way, and eventually reached an understanding that divided up different portions of the market. a third company entered as well on that basis. drug,espect to the second it was a similar situation. you had existing generics and new entrants into the field, and it seemed that all four parties found it better to work together and raise prices across the board than to compete against one another. scarlet: ok. and you mentioned there are 19 other states in addition to connecticut suing these companies, and more states could potentially join in as well. what are they waiting for? will be the catalyst for them to join in on this action? cases,epsen: in most states have their own internal processes for deciding whether to join a particular legal case. so, we're confident that in the next few months -- not the next few months, the next few days
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and weeks we will have additional entrants into the case. scarlet: all right, connecticut attorney general george jepsen, thank you for joining us and clarify the situation for us. bloomberg did reach out to the companies involved in the lawsuit. mylan said it participates in price-fixing. meanwhile, teva pharmaceuticals says it is reviewing the complete. heritage pharmaceuticals say you are cooperating with the doj. the others involved in not respond to requests seeking comment by bloomberg. next, another hacking scandal for yahoo! is threatening its deal with verizon. what does it mean for the company's stock? this is bloomberg. ♪
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scarlet: i have scarlet fu --"what'd you miss??" with the massive hack at yahoo!, we want to look at the stock and perspective of the stock on wall street. this is the white line -- yahoo! news share price, recovering
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from $26 in february, to as much as $45 in september, now trading at $38. the purple bar is the percentage recommendations among analysts that we track. it has been steadily falling in february, when the stock was at its low, to about 40% now. there is a divergence with analyst recommendations, and the yellow line, which is the price target. it has climbed to $47. it seems strange, right -- contradictory? one reason is there are no self-ratings on yahoo!. analysts, of course, are the choice we optimistic. they do not have a sell rating on yahoo!. also, the stock has been converging with a price target. this was in august and september. perhaps what happened was analysts continue to move up their price targets because they had already met their price target for a long time. they did not see any reason to get into this stock, given all the discussions. joe: also, you have to figure if the deal is to happen now, there would be a big pop in the
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stocks, but you are taking a big risk, because this is the second big hack, and we have reported verizon is looking into this. here is what is doing better -- the global stock market. this is a chart of the msci world index. you can see it has really taken off. this is, sort of, all of the stocks in the world. the chart below is the relative strengths indicator, and anything above that red line is considered to be in over-bought territory. we have been looking at a lot of charts since the election that have moved to extreme valuations one way or another because the moves have been so relentless. the stock moves have been steadily going up -- new highs every day. yields on bond steadily going higher. so, we have a situation where we have extreme momentum indicators, but still in the reversal. scarlet: it is insisting that it was in over-sold condition around the election. the timing worked out. joe: in terms of an extreme snapback. scarlet: the technicals were
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lining up. the market closes next. thus check the major indexes. the dow coming off highs, but still closing high -- up 63 points. were ready to close 63 points. ♪
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>> we're moments away from the closing bell. stocks bouncing back after the reserve rattle earlier. u.s. dollar surging to its highest no 14 years after the that it will raise interest rates quicker than anticipated. to our viewers who tuning in live on twitter. you can watch our closing bell twitter every weekday. >> we begin with our market minutes. it was up day in stocks, making come back here from yesterday's decline. to dow creeping up closer 20,000. dataere's a lot of solid really good manufacturing report. good home builder sentiment report. >> consumer prices.
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>> consumer prices were solid. initial claims were solid. >> your favorite metric. we've got nine out of the 11 500r industry groups in s&p rising led by financials once again. sector is up almost 20% since election day. the dow, it's been the gorman andr, j.p. goldman sachs and american there. leading >> let's take a look at bonds. actionreally where the -- let's look at bonds. we see long term rates continuing to rise up.'03 on the hitting 2.6r, today. first time it hit that level in long time. germany was up. massiveo point out that u.s.etween brewing between
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ten year yields and german yields. big explainer. versus .37. fed decision yesterday really for asiansion government bonds. chinese ten year yield, tipping worst moves ever. for really ugly day southeast asian long term government bonds. thailand singapore, and indonesia. all getting hammered. that fede effects of decision felt overseas. >> absolutely. speaking of the fed decision, powerllar continuing to higher. getting some fresh momentum. dxy since 2002. it surpassed previous peaks that saw in early 2015 and early 2016. today's batch of economic data supporting the fed's forecast hikesfaster pace of rate
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in 2017. of the major pairs here, yen approaching 120 per dollar. below 104.lling for the pound, you can see down than 1%. sterling might be undervalued. seen its >> finally, on commodity, look nearly 7%.down getting destroyed. gold also getting hit really hard. nearly 3%. those precious metals taking to that fedshed after decision. oil basically unchanged. >> those are today's market minute. we have breaking news. oracle reporting results 2nd quarter chrysted earnings topping consumer estimate by a penny. on the revenue line, oracle missing the consensus estimate here.
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$9.07 million. headlines for those who want to know about oracle's cloud business. revenue $1.05 billion. company sees booking over cloudlion for recurring business. oracle theirs off by half bump 1% -- 1%. fogle will take over the top job at the start of the new year. in after -- we'll bring you more developments. >> joining us now for a macro is michael shaoul. you said the fed continues to be curve.the
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they see three hikes. do you think they'll deliver on that? knows. as far as the first question, if look where the fed is today, almost identical for what the fed expected to do in 2016 back year.ember of last an economy which is in much better shape but domestically within the u.s. i think the fed is behind the curve. fair, it's a deliberate .trategy janet yellen talked about orun the economy in attempt to get levels.petition back to the question, whether you can do that and keep inflation contained at a level that is acceptable to the bull market.
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>> what she and probably want the next 12 months is to do what they think they need to do. still believe this is a fed toir that wishes explicitly see u.s. wages accelerate >> does she achieve maximum signaling three rate increases in 2017? >> that was unintended consequence. but things getting better. would have been somewhat
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strange. we've seen loot of good economic data. we seen credit market based repair all the damage all the year. of last that result is the fed is willing to imagine doing as much in 2017 doing in 2016 and a year ago. talk course, we got to about not just the fed but central banks. the bank of england meeting today. look at what's going on overseas, what we found no one asked janet yellen about international development. as if it doesn't exist. fromt seems to have faded the headlines. we haven't seen the negative impact on the u.s. economy. inside the bloomberg, the data this week on u.k. unemployment was disappointing.
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the decline is small. this could be the reflection point. shows how economic data has been surprising to the downside. allen ofree with scotia bank. >> economic data bounces around. i did no believe the u.s. asnomy will decelerate outcome of the brexit vote. you still have very generous conditions. that might come at some point in time. may put some decisions on hold. i don't believe there's been any u.k. economy.e >> one foreign economy that times this year sort of shake the global china.nce was it seem to be slowly reentering the picture. stocks,d week with bonds. go inside the bloomberg i have a showing total social
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finance. basically credit has been exploding. you have this situation where credit has been surging. the financial markets are is china going to once again, last december or january, going to be something market?kes world >> underlying economy looks okay. the banks themselves are holding cash. have had dislocation in the domestic credit market. the bigthink was one of things in china. chance of a market event. you had sort of small version of the summer of 2015, underlying okay.y looks i think would understand that. >> thisreml of liquidity.
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fears. about real estate >> the story of china has been too much money in the country. problems to doic anything that there's too much money. keeps into seeping into asset market. months it was at equity market. this time around, it's the real estate market. i think they like to have a real is improving which ly.est that's very difficult to have. you have thi messy process of willing it keep quiddity at a high level. tothe same time, trying control where that liquidity goes. that's difficult. these episodes. we're in the middle one now. back some of it.
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messy markets get >> china are really at the mercy of the u.s. dollar. to bring the conversation back around to the fed again. in your note, how a chart here. we've got it on the bloomberg. that questions whether it's proactive. the top penalty, citigroup, u.s. economic surprise index, which has correlation with the dollar. was created as a measure to tell which direction the dollar was going. we look at those two measures as a guide to what was a measure tf fed sat down. the we started really using this. theeconomic conditions when fed themselves talking about economic conditions, financial conditions both in the u.s. and elsewhere. what you see is the both financial conditions and economic conditions much better
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now than they were a year ago. it's a reminder for all of the markets reaction to what the fed yesterday and did yesterday, actually went back to a year ago with a much better underlying backdrop. is not hawkish. >> michael shaoul asset management. thank you very much. >> coming up, a deeper look at india.h clamp down in ken rogoff joins us next. this is bloomberg.
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>> "what'd you miss?," india decision to scrap 80% of currency. radical reform that may prompt a
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trend. howard university professor ken book. latest ken joins us now in studio. the india story has been going a while. there's been lots unintended consequences. india with shift more towards a cashless society? what their plan was. by the way, my book, i say if developing an economy, don't try this at home. i don't want to go cashless. want to get rid of big bills. cash. they hadn't printed new money to replace the old money. they say turn in your bills. have new bills to replace them. >> it's half baked. ready. western .his was 85% of their currency $100 bill.'t >> what about the argument -- we
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big picture.t specifically on this question of not having printed the bills first. it possible were they to have done that word would have gotten benefitedould have certain connected people. if the idea to jolt people with shock. >> his big idea, he wants to get the corrupt officials, criminals. he's right they're holding most of the cash. lot of collateral damage. you have to weigh this. the idea of doing a sudden jolt this actually came up in the mid mid-1970's. let's get the criminals and do something fast. the an interesting idea but issue of collateral damage, even in the united states, i think would be big. in india, it's 90% cash economy. of u.s. less than 10% transactions are in cash. of lessons should they be applying for from india
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experiment? >> i don't think if i want to model.ezuela as a role their big bill was two cents. inflation.mpant i don't know what they're thinking. by the way, one thing india could have done is stamp the old bills. the greeks thought about that one. goinghey thought about off euro. turn them in they got a stamp. the idea is there you still flush out the money but at cash toople have the conduct transactions while the replacement is happening. seem >> by the way, the new note don't fit in the atm machine. >> ultimately though, what are you going looking for? with your book regardless whether they've done. it's live realtime experiment. >> they give some of the reasons why he's doing it. we go back and economist like yourself look at this period, what are going to be the
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data points that you're going to want see whether this work well or didn't work? think there are two aspects. there are going to be thousand papers on this what was the shock. theever been done to take currency out the system. there's an interesting question over the longer term. implementation and corruption. it cou have long term beneficial effect. >> what do expect to happen jaryd wards. -- afterwards. do you expect people to be less a lot of cash?p shows arnment willingness to do this? the primenot mistaken minster said this is once in a lifetime thing. >> it's nonbinding. >> it's not binding. nervous.people
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there are a lot of ideas to try to restrict the use of cash to calculate -- calibrate it. radical.robably too was there a terrorist incident or something. we really don't know. >> one thing that this did do sectore india's banking a little bit stronger. they got a huge amount of deposits. had the liquidities which makes for cheaper rates to banks gain more power that relies less on cash? >> not necessarily. it depends on what the government offers as a substitute. lot of the ideas are for the government to provide additional curb -- currency. you have to have a physical currency around for privacy and robust. india, they had this
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huge storm all the powers out. the atm machines -- it is one of at reasons you need cash around. >> one of the things we're buying physical goods so they can spend their a rolexiano stores and watch. would you anticipate people hold their wealth try to in some physical good so not all of their wealth is able to be tracked in the banking system? >> that's sort of all ready true the legaltent in economy and in the illegal economy. some that happened to extent. gold coins, for example not cash. as liquid rolex watches can be counterfeit. is to make it harder.
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they had crime before they had currency.ny kind of >> howard university professor is staying with us. we'll tell you why cash is still world. this this is bloomberg.
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>> "what'd you miss?," india may notesliminated 23 billion from circulation. cash is still in many other parts. of physicalue dollar doubled since 2005 to $1.48 trillion. at this.ok we breaks down cashes by shares countries. ismany and -- still with us kenneth rogoff howard university
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professor and author of "curse cash" which explains why some advanced economies are more cash inclined than others? german's stats are accurate. why is that? >> the difference between the value of transactions and the number of transactions. in the u.s., the number of transactions 32% cash. but the value is under 10%. not thaty, it's different. the main difference is in germany, they are much higher taxes. there's a lot of tax evasion. there's a lot of stores, retail that only businesses take cash. they're not reporting all receipts. do survey how much cash holding 50% more than americans. maybe another $100 in their car house. >> we had that chart here. you can see significantly higher in germany than austria.
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>> nothing compared to 3200 euro child.ry man, woman and they're not counting for it. >> i wonder, though, cash you ind there's use for cash every society partly as hedge against problems that might erupt. it also point won't go away in places like u.s. and europe. demand for cash. that curb city from -- currency from people outside of those countries. that will always be there. >> maybe 40% or 45% of u.s. held it's lower share for euro. of that is sort of dubious. drug lords,exican --ombiaian rebel, russian >> also legitimate businesses. >> yes, they are. fairly light touch to this and get rid of the big to calibrate it. there are other ideas in the
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europeans have put in limits on of cash transactions. some countries wire cash registers. black box youle can't tamper with that goes straight to the treasury. approaches. getting rid. big bills is light handed. other >> whenever your ideas come up, very strong gut reaction. people worry about privacy and the start saying that fascist want to take away their physical money. the biggest impediment the attitude towards being able anyone money without tracking if. the belief that is the form of planom to implementing a you proposed. >> if we believe that we don't a $500 bill and $10,000 bill. people are not
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wildly in hundreds. man,are 3400s for every woman and child in the u.s. except in tax evasion. that's the question. can still buy something for $100,000 in a briefcase easily enough. you trying to get it the wholesale crime. players.y big $100 bills. lot of kenneth rogoff howard university professor, thank you so much. thierry wizman the will join us. bloomberg.
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>> let's get to first news. jurors in south carolina have returned a guilty verdict in the trial of dylann roof. he's been convicted of fatally shooting nine church-goers in charleston, south carolina. same panel will consider whether roof should be sentenced to death or life. attorney. at his own secretary of state john kerry regime in syria is carrying out massacre. agoing theshort time attacks in aleppo are inexcusable. reiterated his concerns about syria to russia. a what we want in aleppo is
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precursor to any ability to move to other things. verifiable,d fair hostilitiesation of that include all attacks by the regimes and allies. all combatants in aleppo. military says more than 1000 people have been allowed to leave aleppo under a reached withal syrian rebels. travel toes will rebel controlled territory. in paris, a prosecutor has for the dismissal of chiefs against imf lagarde. she's been court over handling dispute during her time as france's finance minister. says itic prosecutor was prosecution's opinion before trial that lagarde shouldn't be found guilty. france, it's not entirely unusual for prosecutors to
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with an indictment imagineby investigative imagine craig sagger was payment. if basketball games. evealed in 2014 that he's been leukemia and in march disclosed his cancer was no longer in remission. sager was 65 years old. a day, pore24 hours -- powered by more than 26 journalist. this is bloomberg. >> thank you. we've got breaking news on gilead. the company was told to may merck 2par. -- $2.5 billion. to a federalding
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jury. are seeing 1% drop. 1.15%.k up the exact flip side on this verdict thisat's all $2.554 billion is worth. dow chemical coming to an end. will convert buffet's common stock.e to this is under terms of deal that to 2008. commonwill get shares of stock valued about $4.2 billion. dow will convert a $1 billion preferred stake that was held by the great investment authority. bad -- investments investmented by buffetf. cominge bank sees drama for the bond market. >> most important point today is
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that they arrived to the fixed income market. very low rate. are nowvestor investors realizing the fed might be hiking rates. see the ratelly hikes come. to discussh us now this moment is thierry wizman. strategist.est rate moment or is this just another cyclical upswing? >> it can be both. let's pick a big moment. yield 2.5%, still fairly low. both from historical perspective. also think that ten year yields attracts gdp, we'll see growth 4% next year. bit on the ten year is a lowe. it should be closer to three or er.h >> are bond selling off for the season?
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>> there's more inflation. holdhard to want to nominal asset who's coupon is not going to increase with inflation when inflation is raising. compensated for that. bond yields rise. are the things thinking about the economic outlook for next year. feels very open. it feels quite wide, we could have fiscal stimulus and bunch of infrastructure spending and tax cuts and that could make gdp rocket. we could have happen overseas and tensions with the new administration. have uncertainty. wideo you think about the range of outcomes when sort of figuring out your forecast? >> great question. with regard to overseas, the main risk that everyone is is europe.o look at the more so than china. too many people have been china collapsing has never happened. the going to fade into
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background. we'll get comfortable with it. europe i don't think anyone is comfortable with. we have about four protective elections. dutch election, french election. ecb said they're mindful of rates. by making sure they extend the ofprogram through the end 2017. which covers all of these major elections. about these risks, the central bank has our back. in the u.s., the central bank not have air back -- our back. rates.e raising fomc, arers of the applying approach to the u.s. spending may not go cut. may not get you have to find some probability for this happening. appropriate rate of interest as they look forward, it's higher than it was before.
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guess that trump administration will pass some thing. assign someight to probability to these things happening. of monetary an era divergent. lookedk of japan has into other method. the think we're still in era of monetary sector. that's the whole piece behind the strong dollar. we're also in a period a fiscal policy divergents. you say, the u.s. will spend tax less.otentially we may get more spending out of europe. u.s. the degree most emerging markets are entering a period of fiscal responsibility. >> let's talk about emerging markets and fiscal responsibility. brazil for one having recently proposed, they passed a law very trying to limit the debt and deficits in the country. latin americaee
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right now? what currency stand out to you? mention, brazil is not the only country in latin be undergoing a massive fiscal catastrophe. rating agencies are breathing down their neck. they have been somewhat loose spending programs. now they're all facing ratings downgrades. they're all forced to adjust on the fiscal side. what stands out are maybe those economies that maybe benefit a little bit from the increase in prices of oil that we've seen recently. we think it will continue to drift higher. like colombia. cost.rill oil at low >> thierry wizman global interest rat rates you're stickg with us. we'll get your thoughts on mexican peso. this is bloomberg.
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>> federal reserve not only central bank raising rates. mexico raying costs more than expected. still with us is thierry wizman. he's global interest rate at the mccory group. for 2017 youk focus on mexico. this rate increase is bigger than expected. job?it do its >> i don't think so. job,you mean by doing its is it going to control the level of the peso. it's hard to say that it will. mexico is facing a lot of
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problems in 2017. the big onously is the nafta.iation with that's going to play out locally. we also have that fiscal austerity will put a damper on the economy. well.s inflation as then this election that's coming up in 2018. potentially we can see radical candidate win that election. .mexico. rfect storm for >> excluding any changes in the u.s.-mexico relationship due to the change in the administration, it sounds like ready, the underlying conditions aren't very positive now. >> right. to get awe were positive resolution from mexico, the naftaway during negotiations things would improve. we will not know this for many months. the trump administration has 200 days plan for renegotiating nafta. had a story this
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week all ready companies putting investments plans in mexico on hold. they want to see how things out. while the 200 days happens while there's uncertainty, how much hit by theconomy get unknown? >> it's hard to say. the basis of the fiscal austerity, we can shave percent growth. maybe instead of 2 quarter percent, things are bad. can we get a recession, absolutely. be saying this before today. just seeing how aggressive the bank has been, that's hiking that turn an economy into a recession. >> what do you do? saying that the trump daysistration may take 200 200 and you need to or need to be -- mexico.mechanic
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how do you we position ourselves? want to defer my opinion on rate. we were surprised by the central bank of mexico. i will tell you that the that you see a orkes periodic spikes 21 21.5 in the dollar mexican taxpayer, it's out there. some time over the next 200 we'll see more spikes. especially given the haphazard nature of the news of this administration. >> else where a -- elsewhere you the colombia peso. >> no one future is looking bright. i will say that, they got this peace treaty colombia peso. >> no one future is with the re. better with feel oil prices going up. apart from that, it's not going be another good year for latin america.
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that could take the pressure off. all ready?priced in >> commodity prices rallied a lot. there forood use out commodities has been priced in all there for commodities has been priced in all ready. i don't think that commodities like copper will continue to rally. true that the trump administration will have a lot of infrastructure, projects done. remember china will be damping down on eits growth. >> i want to bring us back to mexico. my producer told me you had a great chart. which shows inflation expectations soaring. the print of cpi is the blue line. continues to skyrocket, we're not looking at the level as the move higher, whatudden move higher . kind of impact does that have on that election you were talking about? >> it's not good. -- prospect ofprohibi inflation is not good. you something else,
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concedes too much on the u.s., the nationalist in mexico will get the upper hand in the election. if they can see too little and the u.s. leaves nafta, you have another reason for recession in mexico. needleve to thread this carefully. >> this seem likes a theme we're seeing all over world where you have politicians roughly in line with the establishment and the left or right. theseforced to take unpopular measures that then their the end of with more radical alternative. seems like a global problem. agree. 2017important themes in betwe will be the continuation. there's a lot of disaffection around. it happenseeing in emerging market. take a note what's happening in
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korea. >> thierry wizman, global interest rate and currency strategist, thank you very much. >> coming up next, exclusive conversation with j.p. morgan and jamie diamond. from new york, this is bloomberg.
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>> let's turn to big interview
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with j.p. morgan chase chairman jamie dimon. megan murphy caught up with the he spokehief where about wall street and washington in the wake of the trump administration. dimon was potentially pick for treasury secretary. quite publics been about -- i don't think i'm suited to be secretary of terry. i love what i do. do something to else. else. >> that's the answer. when i look now as recently look back wheni you were talking about what you the next the next administration would be. you said you thought it would be
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very difficult for wall street confirmed and get in. now we look at the landscape we have, we have several wall street figures. some of you know very well, including gary cohen. rex tillerson from exxon-mobile. what do you think they're going to bring to the administration that's different? what's new that they're going to bring. >> i was dead wrong about -- you will not see a wall street person in washington. how a completely upheaval. the republicans are in charge. the republicans have not been the way you've the democrats largely be anti-business for years. i think if you are going to be the president, you should have thebest people around table. it's a mistake for the american public to be told if you work company, work for a makesthat automatically you bad. you want the best team. honestly, i think it's a good thing. lot of these people are very people.d these are people deep knowledge. hopefully will do a great job. >> do you think that now when you look at that sort of shift in terms of wall street that this is a bit of reset moment
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the industry more broadly in tn terms of what the american people are expecting? >> it's a reset moment for treated.s to be 145 million people work in america. 125 million work for private forrprise p20000000 work government. we hold them in high regard. have 125, you have 125, you 120.n't take the other example.s a perfect civic society not the profits here, government, business, working together to improve the lives of american citizens. i think the reset has a chance same thing. if you can duplicate, when you have a hugeyou'll renaissance. >> bloomberg consideration with conversation with dimon took
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place in detroit. focusing on jobs and rebuilding the communities. murphy asked dimon in techniques used in detroit can be replicated elsewhere. you travel around the world, and see all of these things, singapore does it. it's a country. malaysia, reform. partially chinese, -- a prime with the samen vision and strength to get it done. its gdp is now higher than gdp american.rage prime minster is pretty tough. streets werethe clean. they had lot of affordable housing. he made sure they you couldn't live it wasn't indian building or chinese building. streets wee clean. they deseg -- desegregated.
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ofell people, you put some friendsal democratic responsible singapore, there will be a back order. you can't force people to live live.they want to you can't punish people from the people have to think policy. what works and what doesn't work. thing with other countries. i mentioned germany vocational schools. germany is doing well in europe. you learn these things when you world.nd the books writtenn about it. venezuela, ecuador, argentina, cuba, north korea, what did they do? ones that worked. south korea, no natural resources. story.vable, no natural resources. singapore, no natural resources.
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unbelievable. i can go on and on what works and what doesn't. i worry about bad public policyt causing constant there. you keep on hearing productivity is low, stagnation, new normal. that's not true. we've had multiple wars. we're not educating our kids. had government shut downs spent money. failures in the health second's why we're going it's not the economic model. they looking for simple answers. aren't.s there all of these things are fixable. >> exclusive conversation there with j.p. morgan chase game jaime dimon. int interview will be aired full. >> coming up, what you need to know for the tomorrow's trading day. this is bloomberg.
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>> "what'd you miss?," u.s. stocks rising to a bit of a come back. following the fed decision. dow 20,000. towards
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>> we still have a ways to go. everything got pretty hammered yesterday. >> financial led the way per usual. post trumpto be the norm now. in terms of what's coming up tomorrow. u.s.tion in the the >> we still have a ways to euroa comings out for tomorrow. ofs is for the month november. u.s.ll be looking at housing stocks release tomorrow. home builder sentiment was good. and now is good as the sentiments says. >> more fed talk. don't miss this, jeffrey lacker will be speaking at the economic outlook conference. that does it for "what'd you miss?." thank you so much for watching.
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if you're watching "bloomberg technology." start with a check of your bloomberg "first word" news. a federal jury has convicted dylann roof of all three counts of a rationally motivated slaughter of nine black church
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members. the jury took less than two hours to reach the verdict. and roof again told the judge he wants to represent himself as prosecutors seek a death sentence. u.s. secretary of state john kerry says the fall of alpeppo would not enthe ongoing war in syria. kerry says he wants to see safe corridors for civilians and firefighters to leave the ravaged city but also calls for an immediate end to the hostilities. french lawmakers have voted overwhelmingly to extend the national state of emergency for another six months. it is the fifth extension since the paris attacks that left 130 dead in november, 2015. the move will allow security forces to apply the lie hiest level of protection in the run-up to the presidential and general leakses. japan is trying to resolve a territorial dispute with russia. the prime minister met today with president putin at a japanese resort. japan wants to return a four-islands russia invated at the end of the world war


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