Regime . Is everybody going to float . What a difference this summer makes. Tom it is august. We are going to give you what we can today. Right now, we need wisdom on the top headlines. Here is vonnie quinn. Border,along the korean the most Serious Exchange of artillery fire in five years. North korea fired a rocket at a south korean border position and that prompted south korea to unleash an artillery barrage. Earlier this month, two south korean soldiers were wounded by a landmine in the demilitarized zone. Policy makers are getting closer to raising Interest Rates for the first time in nine years. Participant said conditions were approaching the point where the economy could sustain a rate hike. Moved to prop up the yuan. The Chinese Central Bank has injected the most money. The yuan fell 3 in three days last week. Kazakhstan is the latest emerging market to give up control of the exchange rate. Tenge reached a 23 drop. Hillary clinton might not have used the private server for emails while she was secretary of state if she had to do it all again. She did have her own email account. Others had done it before. It was more convenient. That is the thing. She did not really think it through. Had had she, she says she would have done it differently. The question is whether classified material was mishandled. Notaids have said she did read classified emails offer private server. Ordered tom brady and nfl commissioner Roger Goodell to appear in court on august 30. The judge sounded skeptical of the nfls position yesterday. The saga continues. Tom it was something yesterday. I read the judges comments and he really went after the nfl. Brendan this is the spokesperson for Hillary Clinton. It is absolutely not more convenient, what she did. I can understand using your Gmail Account would be more convenient and tempting. But it was deeply inconvenient. She put a server in her house and maintained it separately. That a chunk of hardware you stick in your home, attached to the internet, manage with software. It is completely inconvenient to do it. It was a conscious decision, not just a thing she actually did accidentally did. Tom Michael Mckee and richard claritin are coming. To 13. Ow back crude begins to test 39. On to the second screen. 15. 25. , west texas is on that 39 in the watch. brent is what the world is watching. Through 65, 66, 67. In march, we got 270 ruble per dollar to 70 ruble per dollar. Of course, the glencore news, as well. As corporations are challenged. I want to get through this in to seconds. Two seconds. This is the real economy affect when we talk about mumbojumbo on the data screen. 15 inflation in russia. Brendan one of the most surprising things is the relative independence of the central bank of russia. Stick or as a hockey right angle. We do that for mr. Putin because he likes ice hockey. That is a submarine. Because he likes submarines. Tom you are all wound up this morning. You wait your wheaties this morning. Brendan sorry. Modest confusion ensued yesterday. Dovish was the word i saw most often. That is a tinge of further new mediocre. Rublenge, the peso, the the 30 leaves for janet yellen. Michael mckee provides minute by minute wisdom. We are honored to bring in richard from pimco. On of the nations experts the linkage of central banks. Mike, what was the several and few yesterday . Are putting markets something that happened three weeks ago in the context of what has happened since. The things they were worried about, the dollar, china, oil prices of all gotten worse over that time period. Then you get this dovish interpretation. You have to go back and look at what they also said. Close to getting ready to raise rates. It is all about growth. Myers, he is not a subtle, quiet guy. Larry is all fired up. Lets get going. The kazakhstan tenge, will it tell larry to be quiet . Michael i dont think the tenge is going to do it. There were two things people are tired of. One is deflategate. Brendan amen. Raise rates already. Michael youve talked about it already. We will get past the volatility. Tom richard, what an interesting soup this august. Help us from the chair that janet yellen sits in. The choice that she has. The toolbox she has available. What is it . She has several tools in the toolbox. She emphasizes, dont Pay Attention to the first. Look at the past for liftoff, which she says will be very gradual. In terms of what is in her inbox or on her bloomberg screen, she is probably thinking, the world is a messy place. Every day, you wake up and see something in china or the middle east or kazakhstan and janet yellen, more so than any that i have studied, is willing to acknowledge that Global Development are a. Are a big input. Wirp. An i look at it 10 times a day. Thatan market economists bloomberg surveys have a median call at moving. What is the difference between the way the market looks at a fed call and a market economist looks at a fed call . Richard because the federal funds rate is no longer going to be precisely nailed by the fed, in order to ensure the probability, you have to take a stand on where the funds rate is going to be. Different assumptions about where the funds rate gives you different probabilities. Vonnie michael, you talked about the conditions that were around when the fed was meeting last. Those conditions have only worsened in some ways. He dollar, oil we got inflation data that was really tame yesterday. Michael the fed will not have time to assess the way things change between now and then. We dont know how far the chinese yuan is going to move. If it did have a significant effect, how is it going to affect growth . Is it better that we see prices low so more people have money to his end so people have more money to spend or will it hamper job cutbacks . Tom it is john hicks august. We all know that. Real economy effects of the soup we are talking about . What is it mean for europe gdp, china gdp . Does it dampen u. S. Gdp . Richard u. S. Exports have been very weak. Typically, we have u. S. Export growth in the single triple digits. It is virtually flat right now. As you both pointed out, although we write down fears thats a lower energy prices. Hould be an issue those all three are playing into the outlook. Tom kazakhstan enjoys four standard deviation moves today. Are we going to see a tantrum in the United States . Richard i dont think so. I think kazakhstan is basically a rounding error. Sorry. Brendan almost everything they export his energy. Tom there goes that speech he was going to give. [laughter] they dont trade much in the United States, as well. Tom we will be good but, as well. Twitter question. Lets get through this quickly. Which country has the most to lose from chinas gdp slowdown . Stay with us with markets on the move. It is bloomberg surveillance. Tom good morning, everyone. Many markets are on the move. We will keep you abreast. Our top headlines. Vonnie in washington state, three firefighters battling a wildfire were killed after their vehicle crashed. Flames probably overtook the vehicle, authorities say. Weather channel may put itself up for sale. The channels owners of high honored have hired bankers. Option, selling just the digital business, which has a higher value than the cable channel. You still have a chance to bid on the fabulous sun valley estate owned by the last ceo of lehman brothers. The auction has been delayed to let more bidders take part. You have to make a 500,000 deposit 500,000 deposit to make a bid. If there is a video tour of the house, you cant afford it. [laughter] hewlettpackard is releasing earnings. We will also hear from , chasing 10m billion in revenue and maybe a buyer. Cory johnson is here. Lets start with hp. Big changes are coming. What will analysts look for. It is a disaster. It has seen quarter after quarter of declining sales. They are now just going to break the company in two and try to press the reset button. Last quarter we saw a 7 sales decline. Even as they go into this, things are getting worse for hewlettpackard. The restructuring is the most important thing to listen to. There have been hints that the neverending restructuring of this company, the onetime charges associated that have gone on for more than a decade onetime charges for more than a decade is going to go even longer and the layoffs are going to continue and they are going to continue after they split the companies apart. If you equate that it is just a bad time to be in hardware sales, how badly is hewlettpackard doing . Is it just the structural change or are they messing it up . Cory hewlettpackard is doing the worst among the big hardware slingers. I sound like i am in a bad mood this morning. Lets call it negative growth. [laughter] cory you have negative growth that ibm, you have negative growth in the hardware business that oracle. But the most negative of the negative growths is that hewlettpackard. Tom help me with that. Cory cisco is doing well and should be commended. Tom i want to switch topics. Fiorina do poorly at hewlettpackard . My perception is that she did. Clarify this. Cory this is ground that i have trod quite a bit eerie at quite a bit. Tom that is why i am asking. Cory the judgment is that the results were poor and they squandered very necessary corporate resources. Tom did she green light that merger . Cory oh my god, she pushed it through with tremendous force. Vonnie a quick word on salesforce. Com. It is growing like wildfire. Cory it is growing like an expiring wildfire. [laughter] hewlettpackard sorry, salesforce the growth story looks fantastic. To low 20slen off this year. Is growth in billings growing more slowly than revenue. When a growth story starts growing at a much slower pace, it is the time that investors tend to worry. It is a profitfree company. Sells. Buys, 5 somebody loves this puppy. Cory they love it until they dont. Tom are you one east coast or west coast . Cory mountain time. Tom in our next hour, we will talk particularly about china with Stephen Roach. I will talk to him about labor arbitrage. Mexico. An incredibly ugly 20 hours for the mexican peso. It is bloomberg surveillance. Good morning. Tom good morning, everyone. Bloomberg surveillance. New york city gazes out and gazes south to the financial district, where they are measuring the carnage. Lets get to a morning mustread with Brendan Greeley. China wants great power, not great responsibility. Superhero quotes are always welcome on surveillance. Beijing Still Believes it can by the trust and soft power it craves. As long as analysts dont feel the Chinese Governments pronouncements are genuinely reliable, skepticism about the yuan will grow. Quotes the nixon era treasury chief. It is our currency, but it is your problem. Is that what china is saying to the world . Richard i think it is a little bit more of a subtle dynamic. China is a major factor in the global economy. In 10 years, they will be a major factor for good. Right now, they are going through the awkward transition now from a controlled, rapidly growing economy to a much more open and much more slowly growing economy. They are really grappling with that challenge and that transition. Brendan it is my experience with children that all years contain an awkward transition. [laughter] youdan we have talked with about whether our Federal Reserve should be paying attention to developments in other countries. Is that conversation happening at all in beijing . Richard i believe it is. You have several Power Centers in beijing. You have the state council and the central bank. By all accounts, the central bank is less independent than is the fed. We need to understand the dynamic within their system is different. A right of passage for the mass crew on International Math crew on international economics. His china unraveling . Is this system around china unraveling . Richard i think they both probably say that there is a risk of unraveling. Theconventional wisdom and imf is usually good at the conventional wisdom is that they have the will and the wallet to deal with the challenge. They have the will to address the problems. What is part of the conversation execute the game plan . Is there a game plan or just a big wallet with a scattershot approach . Tom Stephen Roach later. Coming up, we have a very special guest for you off the desk at jpmorgan. John morgan will join us. John normand will join us next. Tom heres what you need to know now. Futures that 13. All sorts of emergingmarket currencies weeaken. Right now, our top headlines. Vonnie the fed is closing in on its first Interest Rate hike in nine years. Minutes were released yesterday. They showed the fed is still concerned that inflation is below the 2 target. Greece is getting the first chunk of its 97 billion bailout. Most of it is already spent. The government is getting 14. 5 billion, arriving just in time to pay 3. 5 billion to the European Central bank. They finance official says greece will spend it. The rest of the cash is also spoken for by suppliers who have not been paid. Former president jimmy carter holds a press conference to talk about his Cancer Treatment this morning. Last week, he said liver surgery revealed that cancer has spread to other parts of his body. He is 90 years old. You can watch the press Conference Live on bloomberg tv. Valiant pharmaceuticals is close to a deal to buy the maker of the female sex drive pill that just won approval. The female libido drug will begin sale in october. July was a bad month for the bad timehonored swiss watch industry. It had the biggest decline in nearly six years. The swiss say the chinese customers are still buying the luxurious watches, but they are traveling to europe to do it. They are traveling to europe. That is interesting. Tom like they come to new york. Vonnie the euro has depreciated so much. Brendan people in border towns in switzerland traveling across the border in germany to buy things cheaper. Always done that, but traffic has gone through the roof in the last year. Here is how much things have changed this summer. In late june, we had they had of the central bank of kazakhstan on our air. We asked him about the value of his currency. Will reachthe tenge equilibrium and we are in good position visavis dollar. It is fine. It is very likely he meant what he said at the time, but two months have passed. This morning kazakhstan floated the tenge and watched the value dropped 27 . That is the kind of summer it has been. Now fromand joins us london. John, are we moving toward a currency regime in which everything has to load question has to float . John i think you were going through a series of regime changes as Commodity Prices fall and things are laid bare by fed rate rises. I think anyone who is highly exposed to Commodity Prices and does not have large foreignexchange reserves will see their foreignexchange adjust. Brendan you put a finer point on that in your note which includes a star wars reference. You said neither commodities nor Commodity Currencies have escaped the tractor beam of chinas industrial cycle. Which is more important . The possibility of a fed move was a reality of the china move that already happened . John they are both important, but to different degrees for different countries. Turkey is a commodity exporter and you think the china slowdown would be a positive for that economy, but because the fed is still going to hike at some point, that is a negative for the lira. It is hard to identify and emergingmarket currency that is not vulnerable. Tom you are commanding the most important desk in the world for jpmorgan, arguably. What is the sweat factor this morning . Not 1998,know it is but what is the level of exposure this morning as we see things unravel . John i think it is pretty low. What has happened this morning in kazakhstan is another domino in the chain. Last not going to be the one. The fact that the currencies have been falling since the taper tantrum, as we prepare for rate normalization, even though there is a degree of stress in the marketplace, these events are somewhat familiar to people. Vonnie if we do see oil recovered to 50 per barrel, does it follow that these currencies appreciate again . John no way. Not more than 3 or 4 . If the oil price rebounds, that will put a base under inflation in important places like the u. S. That will give the fed confidence to move forward on rate normalization. These countries will just swap problems. I would not be buying Commodity Currencies if the oil price were to stabilize. You just a short because the fed story is going to take over. Brendan honest asia homero set amarosa said shea is less concerned about the foreign currency reserves these countries have. Rand has a lowa level of currency reserves. Which currency bothers you the most . John i worry about them for different reasons. About the foreign reserve base being critical in your determination. This is more of a situation where a greater share of debt is issued and local currency is owned by Foreign Investors and it is about stressing the balance of payments per week. You can still get the currencies falling a lot. It may not be in the high ty fashion that it was in the late 1990s. Tom when you link your work with your economic team, what is the call on the dollar . John we are going to get to those levels and we are at those levels on some measure. It is not a rubin dollar. That was backed by high Interest Rates in the states and by a equity markets. Now you have a dollar supported by the weakness of nonus economies. That should make you question how much further this can go. As soon as the u. S. Economy weakens in response to a stronger dollar, you would see the move reverse. I still have that is a risk scenario for next year, but that is not the central case. I think we will still make new highs on this. Tom thank you so much. Normand from london. Oil decidedly continues its decline off the inventory news yesterday. How low can it go . It is the subject of our single best chart. We will do that next. Good morning. Tom good morning, everyone. Bloomberg surveillance. A most interesting morning. Time for our single best chart. It has got to be oil. It is west texas intermedia