Transcripts For BLOOMBERG Bloomberg Surveillance 20140930 :

One of note today, walgreens we will give it up too. Items of note, the indian Prime Minister meets secretary kerry in washington, hes really doing a fullcourt press. From Madison Square garden to central park to dinner last night with the president. Where he drank only lem none water. A hearing in washington on those White House Security breaches and finally just want to point out microsoft is introducing windows 9 in india. Weve got him here in the u. S. And microsoft c. E. O. In india opening up a new data center. The white house breach is something. How did they depth that far in . The damage of it, like everybody else ive opinion in the green room whos done a tour of the white house and its spiritual, its part of america that this guy got into. Have you been in the lincoln bedroom . No, i did not sleep in the lincoln bedroom. Clearly you didnt give enough money to the clinton administration. 47. Hillary said to me something, tom, youll love it. Let me do a data check right now and were going to Double Barrel the terminal with the euro and the move, futures up 7. A higher yield, that euro we add 125 plunging euro. Onto our next green quickly, 39. 4, some stability, Rocky Mountain and gold again threatens 1200. Im going to do two monitors today. This is for you scarlet. This is the comparison of hong kongs g. D. P. With china. Heres the insent of hong kong, heres chinese independence in 1997. Then here is that improvement in mainland china. And theres the steady decline. The dissatisfaction rising. This is the tension here. But this is still five times the per capita g. D. P. In hong kong versus the mainland. Hong kong is very wealthy and not equivilent to china. On a per capita basis, but the wealth gap in hong kong is pretty extreme as well. Markets on the move, i can do this, adam, you can type it in. Heres the euro coming down bam and thats it, Economic Data that you talked about. Mario draghi i guess is happy. How can you be happy over Economic Data thats lousy. In heory, you asen experter europe in theory. There it is. Lets go to front page. We go 12 time zone hours away. To hong kong, a warning from leaders, they say the demonstration will escalate if demands are not met. Another night of protest, but peaceful. Police did keep their distance. Tomorrow is national day, october 1, the 65th anniversary of the founding of peoples republic of china. Theres a lot of anticipation of what could happen tonight into tomorrow. Demonstrators are still blocking road in some parts of town. Sfrans, next to the Central Business district. The index down once again, the biggest decline since february. Well, theres so much unrest, so many questions, its hard to put capital to work in china right now. The chief executive, protesters want him to resign. He has actually just spoken out insisting that protesters go home immediately. Within your perspective, what is the power of the students right now . Its not clear because theyre younger, university and high school students. Theres that contingent versus democracy veterans. Well be speaking with the founding chairman later on. You know whats amazing to me. You pointed this out yesterday, scarlet. The residents of hong kong have never been able to elect their own people. For 156 years, it was appointed by the queen or king, and now more recently under chinese rule, its a central committee. A lot of grievances according to the people of hong kong. The u. S. Is said to become the worlds leading producer of liquid patroleum. This is on the cover of the f. T. In june and again in august, the u. S. Is in a virtual dead heat with the saudis. Isnt that incredible. We produce more oil than saada arabia and close behind is russia. Were not there yet and saudis point out they can boost production. In theory they could boost it up to 15 million a day, which we cannot do. Weve seen oil prices have stayed stable even with all the crisis. Third front page story, company news story, George Clooney is not company news story, hes all encompassing. Shares of ford falling 8 . It will miss its 2014 profit forecast. Weakening sales in russia. Deflation in south america, 900 million loss larger than forecast. And recall expenses in north america reducing income by more than a billion dollars. Yeah, its a soberering reality check from the new c. E. O. 7 down yesterday afternoon. You wonder how many other multinationals will be coming up with ideals like this. Currently in europe well be looking for those. Absolutely. Those are front pabling stories. There it is, september 30, Third Quarter ends with a new global distraction, student leaders draw a line across a cause way in hong kong. The u. S. Is the locomotive. Us l strategies, he joins in this hour, i guess as we look at hong kong. How disruptive can this be to some form of asian economic growth, thats been obviously evident . I think hong kong, if that was a window to which china looks at the rest of the world, tom. From the rest of the world, china is actually a magnifying glass. Hong kong is what youre looking through when you look at china. So the things that magnify and even though as adam said before, china and hong kong have been together and in the last 150 years, hong kong has not had free press. Keep in mind, those that are protesting, many of them were not born in 1997, so theyve seen a fairly smooth Movement Towards democracy and theres dissatisfaction because the chief executives who have been nominated by china since 1997 have not been much to the liking of the public. Does hong kong and the others change the strategy, rob . Well, i think from our protective what were looking in hong kong is to see what the reaction is by the Chinese Government in the developments in hong kong. Very important to us that hong kong remain a vibrant Financial Center and a gate way to china. We think thats a key part to the current financial set up. To the extent we saw that come into question through actions by the government, that i think would be a major event that would impact our view on china overall. Within your deployed assets, how do you respond to the idea that hong kong could be shang high. Is that feasible . Clearly the it is to get shanghai more like hong kong. We dont think youre at the point where you can really repress hong kong from a Financial Center perspective. We believe hong kong still has a vital role. We should mention that these are live shots of the the admiral t. District. 6 00 on a tuesday night. Its not dark yet and the buildup continues as we head into national day for china. Into their midnight is the beginning and a National Holiday in hong kong. Now in its second week of protest. Certainly after a violent weekend. Rob, heres the one thing. We look at these pictures live from hong kong, we talk about whats happening there. Theres isis, et cetera, but we bring it back to the u. S. Where g. D. P. Just credited 4. 6 . How long can we have a situation where all this concern about whats happening around the world has pushed people to buy 10 years and yet weve got strong growth. When does that push yield back to both 3 . I think thats a great point. We think theres a couple of factors going on here. One is the Global Growth outlet keeping it slow. We also think the long term trend growth rate for the u. S. Is below where we are now, so closer to 2 . That long term trend rate is very important for long term rates which is certainly keeping rates down. We ne of our viewers today, see 4 luss g. D. P. Looks for 3. 3 g. D. P. For the quarter ending today, you dont agree. I think it is going to be elow 3 for the quarter today. One reason is what adam talked about before. Global growth is slowing everywhere. The United States is not an island. We cant continue to grow here. So what we saw with ford motor well see affect individual companies. Over to america and then again to be seen in future quarters. And what youre also saying then is 4. 6 g. D. P. From the Second Quarter was a one off. It was a one off and when you consider that the First Quarter drop was much more than has been anticipated, adam. The pull back was not as much expected. Ok. Well continue with our guest hosts for the hour. Coming up, pro democracy protesters continue to take a stand in hong kong. Well be speaking with the ounding chair of chinas democratic party. Well be right back. Good morning everyone, coming up, he did not get married in venice but weve got another great actor for you, kevin spacey, at 1 00 p. M. , on some of his interests and what they have to do with technology. And house of cards. He was not the actor alma married. No, hes not. I got that straight. Hong kongs chief executive has spoken making his first public remarks since the citys pro democracy protest turned violent. They gathered in the Central Hong Kong district today earlier today. Protests swelled overnight. They called for demonstrators to go home immediately on the eve of chinas national day. Where does that leave the moment. Joining us is the founding chairman of the citys drt democratic party. The shock of Hong Kong Police using force against demonstrators capturing the worlds attention. The fear is there will be a violent crack down similar so what we saw 25 years ago. What happens tomorrow . Will protesters go home as he has urged . No, unless they deliver something to hong kong people. Actually, what were asking for is already promised to us, we just delayed and delayed and delayed. So were asking for something which were entitled to. And its up to our chief executive to get it for us. But also denying it to us. Thats why the people are clamoring for him to step down. A very reasonable request. Theres no indication that he will step down so far. Is there any evidence that beijing directed the use of tear gas on the protesters or the chinese p. L. A. Are involved . I cannot believe that the decision was made by the senior officer in charge at the scene. No way. Such a decision could only come from beijing. Theres no doubt about at all. Nobody in hong kong dares to make that decision. That being the case, i want to put this into context because student led protest tend not to end well. How do you project this playing out in the next few days, beyond october 1 . Well, the world has seen how peaceful our demonstrators are. I mean, they raise their hands, and the policemen are fully armed. Many Police Vehicles were abandoned and surrounded by the protesters, anywhere in the world they would burn the Police Vehicles or turn them upside down. But these vehicles in hong kong were not even touched by the people. Theyre such a peaceful, loving crowd. They just want democracy and they have demonstrated with peace and love as they were taught to do. Certainly the decent thing for the chief executive to do is to sper swayed beijing to deliver democracy in hong kong as promised and hopefully one day china will take that route and the world will be a much better world is china is democratic. Mr. Lee forgive my ignorance speaking as an american and looking at these images of tear gas being shot at the public, you yourself, have been hit by tear gas. Why is it that chinese leadership is not willing to grant citizens effectively the right to elect the leader of what is effectively traditionally been a much more democratic type of society in hong kong . I think for two reasons. One is Hong Kong Government is not on our side and the International Community has not spoken up in our favor either. I think the international for us to speak up because both beijing and london appeal to International Support where the joint decoration was announced in 1984. International community did give them its support. It is up to britain, up to the rest of the world to speak for the hong kong people and they have seen how lovable these otesters are, young and keen and peaceful. Certainly the International Community should speak up. Mr. Lee, our guest host has a question for you. Mr. Lee, now youve had 15 years of this situation with three different chief executives. How happy have you been with the transition. Or do we have this long time coming. The question with the chinese main land often says, after all hong kong people have never had democracy more than 150 years, why should they be changing now . What would you answer to that . Simple, the British Government never promised us democracy. The Chinese Government did. It is their obligation to give it to hong kong instead of postponing it. Nd instead of moveing the Chinese Government made it its commitment to give hong kong democracy. Martin lee, thank you so much for joining us this morning, this evening your time. The founding chairman of the Hong Kong Democratic Party joining us live from the city. Coming up, actually i think it will be in the next hour, well be speaking with the congressman about his unique relationship with the indian Prime Minister. His by the way was the first again y. The first 30yearold elected to the house of representatives. Hes a kid and hes got a very unique relationship with the indian Prime Minister. We will discuss ahead of his time. Which you are watching on bloomberg television. Perhaps you are even streaming it on your phone or tablet. Well be right back. Good morning everyone, new york city, the fashion capitol of the world. Whos celebrating this morning as we look at a gorgeous end of september morning in new york city. That would be one oscar dela renta. She wore a dela renta dress. Oscar takes the trophy at top of the fashion industry this morning. Not wearing dela renta, scarlet few is. Were going to stay with hong kong democracy protesting because he says why shanghai wont replace hong kong anymore soon. China should be learning from the first world institution. It should emulate the rule of law and free willing media environment that under pin hong kongs success, not stamp them out. Thats a curious interpretation. Rob wilder, help us understand about a 30 year capital deployed overseas, chinas down periods. Opportunity or just too cloudy and need to stay away . We think there are quite a few opportunities in the Global Market and china is one of the drivers of those. If we think about rates and currency overall, clearly and i think we reference this earlier the u. S. Economy continues to have momentum. We see it slowing to some extend and we expect to see more stimulus. Whats going on in hong kong is only likely to exacerbate that but i think feeds into the trends that were seeing which is relative strength in the u. S. Versus asia and europe, and the performance of the euro today i think down after a percent i think this morning 126. 07 right now. On inflation, i think its a good indication of that trend. Rob, very quickly, what do replacing the central governor . I dont think we have any insight there, but we think the economy clearly needs stimulus. In our view, low innation in china gives them the ability to continue to lower rates. We know they need to free up the Financial System to support growth. And also to support popular demand. So, we think they will ease policy and response low inflation. So easing is on the way, at least at some point. Certainly with the markets on the move today, futures up 7, but euro again crushed this morning. Coming up, the indian Prime Minister promises job creation. Well talk about the nuances of indias democracy. Good morning. Our question of the day to the banks still need to answer for the financial crisis . Talk about upsetting the cocktail party. Do they still need to answer . A lot of people are asking this. It is a worthwhile question. We need your responses. This is bloomberg surveillance. Is top headlines here adam johnson. A fragile truce threatens to collapse. At least nine ukrainian soldiers dead after russian fighters launched attacks. It was the highest casualty count since a peace deal was signed earlier this month. Kim jongil and is in the hospital. It is happening after he underwent surgery on both ankles. He cracked bones in his ankles after sustaining undisclosed injuries in june. He has not been seen publicly in nearly a month. Microsoft is Building Data centers in india. To offer 365 services. Satya nadella he said that both will be available for the end of next year. Those of the top headlines. Your the idea of india in 10 years or 20 years, where will it be . Yearsking about 10 to 20 is easier than talking about where will be one year from now. There are a lot of uncertainties on whether or not he can implement many of the promises he has made. The indus in the indian bureaucracy would allow him to do that. They have a young population. They have a vibrant demographic outlook. It isnt one country, but they require the british to make it into one country. Before that, they were a series of kingdoms fighting with one another. Despite the differences and some 25 different languages, the. Ountry comes together heres the question. Theything he has done over past week has captured our attention. What is his goal . To modernize the country reduction in corruption, but he wants to get out of that country a really modern country. He said he was emphasizing the , democracy,ds demography, and the demand coming from the huge population. He has to get to a whole lot of infrastructural problems with the corruption and red tape among us. Tohas he come to the u. S. Say i need your help to get this done . Mutual. It is a you talked about him being everywhere and making presentations, the president obama and secretary kerry are quoting him for his support. He was treated like a rock star. Here is a spectacular view. It is my morning mustread. About our to care relations with india to read about it this morning. Thoughtful he brought a ball he would fannie c2 Prime Minister<\/a> meets secretary kerry in washington, hes really doing a fullcourt press. From Madison Square<\/a> garden to central park to dinner last night with the president. Where he drank only lem none water. A hearing in washington on those White House Security<\/a> breaches and finally just want to point out microsoft is introducing windows 9 in india. Weve got him here in the u. S. And microsoft c. E. O. In india opening up a new data center. The white house breach is something. How did they depth that far in . The damage of it, like everybody else ive opinion in the green room whos done a tour of the white house and its spiritual, its part of america that this guy got into. Have you been in the lincoln bedroom . No, i did not sleep in the lincoln bedroom. Clearly you didnt give enough money to the clinton administration. 47. Hillary said to me something, tom, youll love it. Let me do a data check right now and were going to Double Barrel<\/a> the terminal with the euro and the move, futures up 7. A higher yield, that euro we add 125 plunging euro. Onto our next green quickly, 39. 4, some stability, Rocky Mountain<\/a> and gold again threatens 1200. Im going to do two monitors today. This is for you scarlet. This is the comparison of hong kongs g. D. P. With china. Heres the insent of hong kong, heres chinese independence in 1997. Then here is that improvement in mainland china. And theres the steady decline. The dissatisfaction rising. This is the tension here. But this is still five times the per capita g. D. P. In hong kong versus the mainland. Hong kong is very wealthy and not equivilent to china. On a per capita basis, but the wealth gap in hong kong is pretty extreme as well. Markets on the move, i can do this, adam, you can type it in. Heres the euro coming down bam and thats it, Economic Data<\/a> that you talked about. Mario draghi i guess is happy. How can you be happy over Economic Data<\/a> thats lousy. In heory, you asen experter europe in theory. There it is. Lets go to front page. We go 12 time zone hours away. To hong kong, a warning from leaders, they say the demonstration will escalate if demands are not met. Another night of protest, but peaceful. Police did keep their distance. Tomorrow is national day, october 1, the 65th anniversary of the founding of peoples republic of china. Theres a lot of anticipation of what could happen tonight into tomorrow. Demonstrators are still blocking road in some parts of town. Sfrans, next to the Central Business<\/a> district. The index down once again, the biggest decline since february. Well, theres so much unrest, so many questions, its hard to put capital to work in china right now. The chief executive, protesters want him to resign. He has actually just spoken out insisting that protesters go home immediately. Within your perspective, what is the power of the students right now . Its not clear because theyre younger, university and high school students. Theres that contingent versus democracy veterans. Well be speaking with the founding chairman later on. You know whats amazing to me. You pointed this out yesterday, scarlet. The residents of hong kong have never been able to elect their own people. For 156 years, it was appointed by the queen or king, and now more recently under chinese rule, its a central committee. A lot of grievances according to the people of hong kong. The u. S. Is said to become the worlds leading producer of liquid patroleum. This is on the cover of the f. T. In june and again in august, the u. S. Is in a virtual dead heat with the saudis. Isnt that incredible. We produce more oil than saada arabia and close behind is russia. Were not there yet and saudis point out they can boost production. In theory they could boost it up to 15 million a day, which we cannot do. Weve seen oil prices have stayed stable even with all the crisis. Third front page story, company news story, George Clooney<\/a> is not company news story, hes all encompassing. Shares of ford falling 8 . It will miss its 2014 profit forecast. Weakening sales in russia. Deflation in south america, 900 million loss larger than forecast. And recall expenses in north america reducing income by more than a billion dollars. Yeah, its a soberering reality check from the new c. E. O. 7 down yesterday afternoon. You wonder how many other multinationals will be coming up with ideals like this. Currently in europe well be looking for those. Absolutely. Those are front pabling stories. There it is, september 30, Third Quarter<\/a> ends with a new global distraction, student leaders draw a line across a cause way in hong kong. The u. S. Is the locomotive. Us l strategies, he joins in this hour, i guess as we look at hong kong. How disruptive can this be to some form of asian economic growth, thats been obviously evident . I think hong kong, if that was a window to which china looks at the rest of the world, tom. From the rest of the world, china is actually a magnifying glass. Hong kong is what youre looking through when you look at china. So the things that magnify and even though as adam said before, china and hong kong have been together and in the last 150 years, hong kong has not had free press. Keep in mind, those that are protesting, many of them were not born in 1997, so theyve seen a fairly smooth Movement Towards<\/a> democracy and theres dissatisfaction because the chief executives who have been nominated by china since 1997 have not been much to the liking of the public. Does hong kong and the others change the strategy, rob . Well, i think from our protective what were looking in hong kong is to see what the reaction is by the Chinese Government<\/a> in the developments in hong kong. Very important to us that hong kong remain a vibrant Financial Center<\/a> and a gate way to china. We think thats a key part to the current financial set up. To the extent we saw that come into question through actions by the government, that i think would be a major event that would impact our view on china overall. Within your deployed assets, how do you respond to the idea that hong kong could be shang high. Is that feasible . Clearly the it is to get shanghai more like hong kong. We dont think youre at the point where you can really repress hong kong from a Financial Center<\/a> perspective. We believe hong kong still has a vital role. We should mention that these are live shots of the the admiral t. District. 6 00 on a tuesday night. Its not dark yet and the buildup continues as we head into national day for china. Into their midnight is the beginning and a National Holiday<\/a> in hong kong. Now in its second week of protest. Certainly after a violent weekend. Rob, heres the one thing. We look at these pictures live from hong kong, we talk about whats happening there. Theres isis, et cetera, but we bring it back to the u. S. Where g. D. P. Just credited 4. 6 . How long can we have a situation where all this concern about whats happening around the world has pushed people to buy 10 years and yet weve got strong growth. When does that push yield back to both 3 . I think thats a great point. We think theres a couple of factors going on here. One is the Global Growth<\/a> outlet keeping it slow. We also think the long term trend growth rate for the u. S. Is below where we are now, so closer to 2 . That long term trend rate is very important for long term rates which is certainly keeping rates down. We ne of our viewers today, see 4 luss g. D. P. Looks for 3. 3 g. D. P. For the quarter ending today, you dont agree. I think it is going to be elow 3 for the quarter today. One reason is what adam talked about before. Global growth is slowing everywhere. The United States<\/a> is not an island. We cant continue to grow here. So what we saw with ford motor well see affect individual companies. Over to america and then again to be seen in future quarters. And what youre also saying then is 4. 6 g. D. P. From the Second Quarter<\/a> was a one off. It was a one off and when you consider that the First Quarter<\/a> drop was much more than has been anticipated, adam. The pull back was not as much expected. Ok. Well continue with our guest hosts for the hour. Coming up, pro democracy protesters continue to take a stand in hong kong. Well be speaking with the ounding chair of chinas democratic party. Well be right back. Good morning everyone, coming up, he did not get married in venice but weve got another great actor for you, kevin spacey, at 1 00 p. M. , on some of his interests and what they have to do with technology. And house of cards. He was not the actor alma married. No, hes not. I got that straight. Hong kongs chief executive has spoken making his first public remarks since the citys pro democracy protest turned violent. They gathered in the Central Hong Kong<\/a> district today earlier today. Protests swelled overnight. They called for demonstrators to go home immediately on the eve of chinas national day. Where does that leave the moment. Joining us is the founding chairman of the citys drt democratic party. The shock of Hong Kong Police<\/a> using force against demonstrators capturing the worlds attention. The fear is there will be a violent crack down similar so what we saw 25 years ago. What happens tomorrow . Will protesters go home as he has urged . No, unless they deliver something to hong kong people. Actually, what were asking for is already promised to us, we just delayed and delayed and delayed. So were asking for something which were entitled to. And its up to our chief executive to get it for us. But also denying it to us. Thats why the people are clamoring for him to step down. A very reasonable request. Theres no indication that he will step down so far. Is there any evidence that beijing directed the use of tear gas on the protesters or the chinese p. L. A. Are involved . I cannot believe that the decision was made by the senior officer in charge at the scene. No way. Such a decision could only come from beijing. Theres no doubt about at all. Nobody in hong kong dares to make that decision. That being the case, i want to put this into context because student led protest tend not to end well. How do you project this playing out in the next few days, beyond october 1 . Well, the world has seen how peaceful our demonstrators are. I mean, they raise their hands, and the policemen are fully armed. Many Police Vehicles<\/a> were abandoned and surrounded by the protesters, anywhere in the world they would burn the Police Vehicles<\/a> or turn them upside down. But these vehicles in hong kong were not even touched by the people. Theyre such a peaceful, loving crowd. They just want democracy and they have demonstrated with peace and love as they were taught to do. Certainly the decent thing for the chief executive to do is to sper swayed beijing to deliver democracy in hong kong as promised and hopefully one day china will take that route and the world will be a much better world is china is democratic. Mr. Lee forgive my ignorance speaking as an american and looking at these images of tear gas being shot at the public, you yourself, have been hit by tear gas. Why is it that chinese leadership is not willing to grant citizens effectively the right to elect the leader of what is effectively traditionally been a much more democratic type of society in hong kong . I think for two reasons. One is Hong Kong Government<\/a> is not on our side and the International Community<\/a> has not spoken up in our favor either. I think the international for us to speak up because both beijing and london appeal to International Support<\/a> where the joint decoration was announced in 1984. International community did give them its support. It is up to britain, up to the rest of the world to speak for the hong kong people and they have seen how lovable these otesters are, young and keen and peaceful. Certainly the International Community<\/a> should speak up. Mr. Lee, our guest host has a question for you. Mr. Lee, now youve had 15 years of this situation with three different chief executives. How happy have you been with the transition. Or do we have this long time coming. The question with the chinese main land often says, after all hong kong people have never had democracy more than 150 years, why should they be changing now . What would you answer to that . Simple, the British Government<\/a> never promised us democracy. The Chinese Government<\/a> did. It is their obligation to give it to hong kong instead of postponing it. Nd instead of moveing the Chinese Government<\/a> made it its commitment to give hong kong democracy. Martin lee, thank you so much for joining us this morning, this evening your time. The founding chairman of the Hong Kong Democratic Party<\/a> joining us live from the city. Coming up, actually i think it will be in the next hour, well be speaking with the congressman about his unique relationship with the indian Prime Minister<\/a>. His by the way was the first again y. The first 30yearold elected to the house of representatives. Hes a kid and hes got a very unique relationship with the indian Prime Minister<\/a>. We will discuss ahead of his time. Which you are watching on bloomberg television. Perhaps you are even streaming it on your phone or tablet. Well be right back. Good morning everyone, new york city, the fashion capitol of the world. Whos celebrating this morning as we look at a gorgeous end of september morning in new york city. That would be one oscar dela renta. She wore a dela renta dress. Oscar takes the trophy at top of the fashion industry this morning. Not wearing dela renta, scarlet few is. Were going to stay with hong kong democracy protesting because he says why shanghai wont replace hong kong anymore soon. China should be learning from the first world institution. It should emulate the rule of law and free willing media environment that under pin hong kongs success, not stamp them out. Thats a curious interpretation. Rob wilder, help us understand about a 30 year capital deployed overseas, chinas down periods. Opportunity or just too cloudy and need to stay away . We think there are quite a few opportunities in the Global Market<\/a> and china is one of the drivers of those. If we think about rates and currency overall, clearly and i think we reference this earlier the u. S. Economy continues to have momentum. We see it slowing to some extend and we expect to see more stimulus. Whats going on in hong kong is only likely to exacerbate that but i think feeds into the trends that were seeing which is relative strength in the u. S. Versus asia and europe, and the performance of the euro today i think down after a percent i think this morning 126. 07 right now. On inflation, i think its a good indication of that trend. Rob, very quickly, what do replacing the central governor . I dont think we have any insight there, but we think the economy clearly needs stimulus. In our view, low innation in china gives them the ability to continue to lower rates. We know they need to free up the Financial System<\/a> to support growth. And also to support popular demand. So, we think they will ease policy and response low inflation. So easing is on the way, at least at some point. Certainly with the markets on the move today, futures up 7, but euro again crushed this morning. Coming up, the indian Prime Minister<\/a> promises job creation. Well talk about the nuances of indias democracy. Good morning. Our question of the day to the banks still need to answer for the financial crisis . Talk about upsetting the cocktail party. Do they still need to answer . A lot of people are asking this. It is a worthwhile question. We need your responses. This is bloomberg surveillance. Is top headlines here adam johnson. A fragile truce threatens to collapse. At least nine ukrainian soldiers dead after russian fighters launched attacks. It was the highest casualty count since a peace deal was signed earlier this month. Kim jongil and is in the hospital. It is happening after he underwent surgery on both ankles. He cracked bones in his ankles after sustaining undisclosed injuries in june. He has not been seen publicly in nearly a month. Microsoft is Building Data<\/a> centers in india. To offer 365 services. Satya nadella he said that both will be available for the end of next year. Those of the top headlines. Your the idea of india in 10 years or 20 years, where will it be . Yearsking about 10 to 20 is easier than talking about where will be one year from now. There are a lot of uncertainties on whether or not he can implement many of the promises he has made. The indus in the indian bureaucracy would allow him to do that. They have a young population. They have a vibrant demographic outlook. It isnt one country, but they require the british to make it into one country. Before that, they were a series of kingdoms fighting with one another. Despite the differences and some 25 different languages, the. Ountry comes together heres the question. Theything he has done over past week has captured our attention. What is his goal . To modernize the country reduction in corruption, but he wants to get out of that country a really modern country. He said he was emphasizing the , democracy,ds demography, and the demand coming from the huge population. He has to get to a whole lot of infrastructural problems with the corruption and red tape among us. Tohas he come to the u. S. Say i need your help to get this done . Mutual. It is a you talked about him being everywhere and making presentations, the president obama and secretary kerry are quoting him for his support. He was treated like a rock star. Here is a spectacular view. It is my morning mustread. About our to care relations with india to read about it this morning. Thoughtful he brought a ball he would fannie c2 Madison Square<\/a> garden. Tapped into the insecurities of indians with the potpourri fantasies with defiant if undereducated hindu nationalism. This is an emotional oped piece about Indian Americans<\/a> and how they look back on their india. Mr. Modi andreat the future of their nation . You talk about it being divided in terms of languages and religion. Many of them have americanize themselves. They are settled. They have very little to do with the whole country, or some of them, especially children born here have very little to do with it. On the other hand, now that the country is opening up, a lot of them are looking back in terms of investments and then going back. The situation is changing over the last 10 years. It is hugely dynamic. This is and influential diaspora. He was speaking to them, but how does he lever that . He is asking for two things. Give a good part of your investments into india because the Indian Americans<\/a> are among the higher income groups within the american population. He wants the money to go back. For everyone of you, and if you know a couple of americans, send them to india. We need a tourist money. Those of the different ways in which he is hoping to tap into a. Are you sold on it . I am sold on a. A 10 yearon it over time horizon. Is this a nation that has moved on from the Congress Party<\/a> and from the paternalistic view of the gandhi family and their supporters . The country is decisively move. Thisis with the elections year showed. There was so much corruption and bureaucracy with the previous government. I used to think with the Previous Administration<\/a> that the indians learned iraq received from the british. How should we treat the Foreign Policy<\/a> between india and china is to mark the borders are controversial. The u. S. Advise or assist or get out of the way of indochina relations . You said something critical. Stay out of the way. If you look at recently in the last 10 days, at the same time, Chinese Forces<\/a> were facing each other. The amount is investments that he wanted to make into india was just about a fifth of the amount he came in with. I think there is an economic militarywise, theres more discord between the two countries. The best thing american do is let the two powers settle it and stay out of it. You can understand why he is meeting with john kerry today. There is pakistan. It is more complex than wanting to port u. S. Business. You are right. If you look at the times today. They have had a serious objection to what he is doing. It is clear it is not going well in terms of dealing with pakistan at the moment. A lot of ambivalence. I want to break some news. This headline just crossed. This is the publishing unit of news corp. That Rupert Murdoch<\/a> owns. They are buying move. It is a leading online real estate business. This is for 21 a share. That is a premium over yesterdays they are paying with cash. Rea group will own the remaining 20 . It is an online real estate company. We know that new score, despite the deteriorating business overall, there is very steady cash flow. Thinkers look at the and the others, as we go when saddam, we will talk to Gerard Cassidy<\/a> about banking. Within newspapers, there is a new panic going into this. A lot of newspapers for sale. New sweat out there right now. We will keep you posted on this. Coming up, china clamping down on online conversations as prodemocracy protests gain ground. Good morning, everyone. Lets get to our single best chart. Working overtime to suppress conversations on hong kongs prodemocracy protests. This is our single best chart. It is the censorship monitoring project. It goes back four months. The july 1 protest march the establishment as a region. Central protest, which has spiked up. It is the growth of social media. Posts. D allow some such as those critical of the protests. There are ways around this by codifying what youre are saying. People get around the censors by coating coding what they say. You might use a series a , a character, a semblance of words that does not look like his name, but has a secret message. You wonder what else is happening. Talk of the whole shadow lending in china. Are there two systems . You have lending, shadow lending, you have what you can fan what you are codifying. And there are various things taking place. It is the chinese system. You have one that is official and one that is very significant. The problem is when it comes to is not ast significant overall. The shadow banking in the big expansion, it becomes an economic issue. The chinese have to be concerned about the domestic situation. Go around the world. Afghanistan. And very emotional issue. We consider were doing in syria and iraq. This is a signing between the fored date in afghanistan troop reductions of the United States<\/a> of america from 100,000 the number of years ago to 24,000 troops right now. This agreement will take American Forces<\/a> down to 9800. Pastis on a presumed the 20. That is from afghanistan. The administration has no intention of doing that, it is the critics who are saying the former secretary of state commented in retrospect, he thought it was a mistake to pull the u. S. Troops out of iraq. That turned a lot of heads. You ready for photos . Please. We have three of them. This is celebrating the Upcoming National<\/a> day. These flowers you see in this huge it is not a float, it is a sculpture. They were 3d printed. That thing looks ginormous. A 3d everyone who thinks printer can only produce a little part, think again. Such a contrast to what we see in hong kong. Two, ash atop the cottages of the mountain. Recovery efforts have been suspended. We have been talking about eruptions from the volcano. 12 bodieskilled, retrieved. Unknown people missing. This is different than iceland. Plates are butting together and bam, explosion. We are going to bring it back to the u. S. How do you like that . You can take the Campaign Staff<\/a> and move them aside. The former president with the former secretary of state and ir new grandchild. It is reminiscent of the duke and duchess of cambridge. Baby charlotte. English name, isnt it . Im going to go with that. She is even wearing a blue dress. There are more cameras here for charlotte clinton. Pimco, they will consider their future without mr. Gross and how the bond market adapts and reacts to redemptions. Surveillance. Look for our videos. Bloomberg politics coming october 6. Good morning. This is bloomberg surveillance. This is the capitol building. Are we less than 40 days away from the midterm elections . 34 days. John kerry, he will be meeting with the Prime Minister<\/a> of india later today. Time for our top headlines. Detroit nearing a deal. Usa today citing a person familiar with the matter saying the city is in talks with a bond insurer for a 1. 1 billion claim. The settlement will be a major step ahead for motors to the who is defending its bankruptcy exit plan in federal court. The days of blacked out nfl games could be coming to an end. Since 1975, the league has kept games off the local tv when games are not sold out. A ruling on the policy is expected today. Pay attention, scarlet fu. To crouching tiger, hidden dragon. The movie will be released globally in select imax theaters. Simultaneouslye released on netflix. She does it without paying attention. The single most stunning headline here a bloomberg. Joins janusoss capital. I did not believe it. There was the headline. The ramifications reverberate. The fixed income industry and to you as we figure out what to do with our fixed income investments. We should say, i am doing an in fullth invesco, disclosure. We should also say that you are not an executive of invesco, you do not speak for management. Should our viewers be worried about volatility wherever they own the fixed income . I am not an executive. I am the strategist. When we think about markets, we would like to take a step back. There is the diversions of Central Banks<\/a> and the economies. We think of that as continuing to have impact on volatility going forward. Expect volatility to be higher. They are written by media people and they are responsible and important. Have you seen changes in the last 48 hours . We have seen credit sectors underperformed. If you look across the financial markets, high yields underperform relative to normal volatility. You cannot subscribe to that any particular player. Fundamentals are positive. Heres the backdrop. This chart speaks to the we forget what it was like for rob at invesco and mr. Gross said janice i cannot believe i am saying that. Great moderation of lower Interest Rate<\/a>s. Six months ago, mr. Gross said the great bull market that has powered my career is over. That, is this a coupon market . Going forward, we are relatively positive on fixed income. The key messages over the last 30 years, you had coupons that average about 2 . We think it argues for taking a much more active approach. You take the coupons out of the equation and there is a stealth market. Thank you. We appreciate it. We greatly appreciate that. The forex report, the euro on the move. This is something to watch. Weak Economic Data<\/a>. Oneearnings announcements,. 2594 on eurodollar this morning. Do banks need to answer for a financial crisis . Tweet us. This is bloomberg surveillance. Student leaders say their protest will spread if their demands are not met. For now, it is quite in hong kong. Retail america well, they face megadestruction. Garden. Adison square minister modi reaches out to thpeoria. Good morning, everyone. This is bloomberg surveillance. I am tom keene along with scarlet fu and adam johnson. We have Gerard Cassidy<\/a> of rbc. Lets get to our morning brief. Here is adam johnson. A lot happened overnight. Japans industrial output falls unexpectedly. Chinas manufacturing covers and european inflation just. 3 . Meanwhile in the u. S. , we have three key items. Case schiller home prices at 9 00, Consumer Confidence<\/a> at 10 00, earnings one of note, walgreens at 7 30. We will bring that to you. Indian Prime Minister<\/a> modi of stateecretary stat carry in washington. Mark soft introduces windows 9. This is breaking news, scarlet. A huge deal, something activist investors have really pushed for. Ebay will be supporting ebay and paypal into two separate public independent company starting in 2015. They will be separately traded. They will be public and independent of one another, so giving in to what activist investors have been pushing for. And we have the right guy with us. Exactly of Nyu Stern School<\/a> of business. This is a juggernaut. Ebay is one of those conglomerates. Investors will find the least attractive business and a sign that valuation to the entire thing, so i spending spinning paypal, you have the whole, not some of the parts. Here is the headline, folks. Success. Google, success. What with the continued track record for ebay, does anybody know gekko 1. 9 for the year. Does this all for this moment for ebay. Paypal has been a massive over performer. There are very few companies in what we call the new economy that are as dominant as paypal. Has 800 million credit cards. Nobody has been able to touch paypal. This will be much higher than ebay. By the way, one third of what was the overall ebay business. Is this also an attempt to go head to head with Alibabas Alipay<\/a> . Absolutely. It was a third of the overall business, it but i would bet and we will get more stats throughout the morning i bet it was more than halve or maybe twothirds of the growth. This is a threat investors see as light. They like to be diversified with a number of assets. Investors do not need ceos to diversify for them. They can diverse a fight on their own. They need to be accountable for one business with one core mission and one quarter brand and let the best assets go out in the marketplace and could be shareholder return they deserve. Who are the biggest winners here . Carl icahn because he will do a victory lap and then those who work specifically on paypal who will now get options on paypal stock. What does this mean about using off forecast because that is a big issue for not just ebay but all of these companies you go finding out a way to use this cash that they have built up overseas. They should jump on the grenade and that is paid taxes. [laughter] cassidy, mr. Shulman will join from American Express<\/a>. It is different from the Banking Industry<\/a> you cover. American express is really a travel card Company Transactional<\/a> business. You got it. And their credit outstanding is nowhere near the level of a typical bank. They do have some cards like regular credit cards, but it is a transaction business. Dan shulman will join Scott Galloway<\/a> and really get out front with this announcement with a major executive change to lead paypal forward. Review for us right now who paypals competitors are. They have a lot of people, whether it is square, the payment systems. Probably the scariest brand right now for paypal is apple. , 250 million credit cards on file. Apple 850 million they have been collecting with itunes. That is exactly where i wanted to go. I think sam grobarts work on bloomberg businessweek, on the executives of apple did tim cook and his Team Jumpstart<\/a> this the combination at ebay . That is the most under hyped announcement of apples big announcement is that they are getting into payments. That is probably the most powerful part of the ecosystem. We have been fixated on the size of beef on. That is not a full stop it is iwallet. Management with ebay have been telling positional potential candidates that they will split up the two companies. This preceded the actual apple announcement will stop having said that, they all knew that apple while it was coming out at some point and would be a big threat. Gerard cassidy, this goes to what you study, since Andrew Jackson<\/a> in the failed bank of the second United States<\/a>. These executives at ebay, they have to respond to activists. Large,ve to respond to institutional shareholders looking at 1. 9 per year. I think that is absolutely true and you will see more activism in the u. S. Banking industry, particularly amongst our universal banks if they are unable to deliver return on equities greater than their cost of capital. I think thisll be a big story. Scott, you teach at nyu sterns, this is almost a new finance in at there is a new group of people making the rules. Carl icahn to some extent makes the rules. Yeah, these guys have been the rock stars, and you also have ceos with tremendous pressure to perform. I also think activists have gotten smarter. I think they are trying to be more constructive. If you look at the returns come activists have outperformed the rest of the marketplace. We talk about splitting the two businesses and where the growth has been coming from, scott, you made a point. A pell since 2011 has grown 50 whereas the rest of the business only 30 . To visa, do you cover visa . Yes, we do. Ex is paypal a threat to visa and mastercard . It is something they have to be conjures up and as paypal continues to grow, i think that whole payment space is in great turmoil. Ask if i buy 100 at amazon, i want to get scarlet something if i want to spend 1000 on scarlet so she can dress like who is the actor . Mrs. Clooney. How much does visa get on 1000 . It is a processing fee, and every merchant has a different one, but it is a very small percent come anywhere from 2 to 4 . X does paypal get less . Paypal has negotiated a decent deal. But you know who has the best deal . Apple. Apple has no shoe to some of the best terms of credit cards of any brand in any retailer. It shows you the power of apple. Who is the first person to get onnew york times on itun itunes . It was apple. This is what we invented bloomberg surveillance to be. Galloway and cassidy. Awesome. Youo dress, but we will buy coffee. Ebay has given in to activist that will demand separate ebay and paypal into separate, independently traded companies in the second half of 2015. And the American Express<\/a> chairman will be joining paypal as president and ceo. You will get shares in both of these companies, 4015. Ebay shares were suspended from trading. We will keep you posted. Surveillance will be right back. Bloomberg surveillance good morning, everyone. Good morning, everyone. Bloomberg surveillance. Ebay will split u apart. Expressman of american will join paypal. Adam, you mentioned, this is a taxfree transaction. If you areans currently in ebay shareholder you will ultimately be a shareholder in newco, the new paypal. Well as dramatic news in hong kong. Scarlet has it for us. We have tens of thousands of protesters continuing to gather in the Central Business<\/a> district in hong kong, taking to the streets earlier and continuing into the evening. Hong kongs chief executive making his first public remarks since the citys prodemocracy does prodemocracy demonstration turned violent. Newse, Bloomberg Andrew<\/a> davis joins us from hong kong. Mood, at mr. Over the weekend to something more foreboding. What is the sense, what is the feel out there. Our people worried about a a tiananmenere squarelike crackdown . No. The tear gas was two days ago. Last night, they let the protesters have their way in three parts of the city, and the protesters unlike the demonstrations we tend to see in the europe or u. S. , they are not looking to provoke the police at all. There was no violence. Festive last night as a matter fact and people seem to be having a good time and the police were nowhere to be seen. Tell us about the character of the protest and the protesters. These are university, high school, and college students, but also some of the veterans of the democracy movements in the past, refreshers, politicians who make up occupy central have now joined them, havent they . Yes, this occupy Central Movement<\/a> means they were going to begin their occupation of central tomorrow for the holiday. The students got out ahead of them and the students are the ones really bringing the numbers. Occupy said initially they hoped to get 10,000 people. Last night there were probably more than 100,000 between the three different points and that is mostly because of the energy of the students. What i saw last night when i was out there in the main protest area it was overwhelmingly young people. The complexion could change a bit more tomorrow because it is a holiday both tomorrow and thursday, so more people that may have been in their office that might have wanted to participate may very well be out there tomorrow. If it stays calm like this, it could see quite a turnout. Andrew, your description as the last few hours being an almost festivallike atmosphere is an obvious contradict into what we saw 36 hours to 48 hours ago, which was tear gas. Why did Police Change<\/a> their tactic . They saw howcause miserably it failed and how quickly it turned the public against them. The Hong Kong Police<\/a> there is not a lot of resentment toward the police here. This they very low crime city. There is not a lot of violence. There is very little violent crime. There is not a lot of antagonism generally with the police will stop they are seen as civil servants. When they fired tear gas, and made a lot of people think that those orders must have come from beijing because the Hong Kong Police<\/a> would never do Something Like<\/a> that on their own. That remains to be seen, but it really change the tone in the complexion of the demonstration. They realized and quickly backed off. Lee said the International Community<\/a> has not spoken of in favor of hong kong. Who within has not spoken up in favor of these protests . Who is holding back their support . I am not quite sure if it is so much that people have not spoken out. We saw the white house make a statement, cameron made a statement in the u. K. , other countries have spoken out, but i feel like the democratic voices here feel like there has not been enough of a response, not just in the protest but the whole runup to the decision by beijing to kind of vet the candidates for the next election, particularly u. K. U. K. Was involved in the handover. It prices often being one of the founding democracies in the west and they really have not spoken plainly. Hat all right, andrew davis, thank you for joining us, your evening, our morning, andrew davis of bloomberg news. Big news of the moment ebay is going to split off paypal. This is going to happen in 2015. There will be a separate paypal stock. It looks like mr. Carl icahn, activist investor, is getting his way. He has been calling for this will stop in theory, this will unlock some valley. We will be right back. Ebay will resume trading at 7 30 a. M. This is bloomberg surveillance. I am scarlet fu here with tom keene and adam johnson. In case you are just warning us, the breaking news this morning is that ebay has announced a plan to separate its payments unit, paypal, from its ebay main business, so there will be two separate publicly traded company starting in 2015. We want to bring in erik schatzker, host of market makers, to join us in this conversation. Activist investor carl i for this. Ush ceo john donahoe had resisted. Agitated, very aggressively for a spinoff of paypal. He and donahoe sorted out their distances. Their differences. A dinner was brokered at carl icahns apartment where was decided that that the chairman of cvs caremark would join ebays board as an independent forctor and mollify icahn the time being, but it appears that carl icahn gets his way even if it takes several months to happen postup he remains one of ebays largest shareholders. Several things that happen in the intervening months to up explain why donahoe you are looking at a lot of the people involved. Well, david marcus used to be the paypal president. Highly regarded. He left a couple of months ago to go to facebook. In july, ebay warned thirdquarter shares would fall short of estimates, and it does appear that that is largely related to ebays marketplace, you know, the online this is as opposed to the paypal business, which continues to grow at a 20 clip. More and more it looked as if there was value in paypal that was not being realized in the ebay stock price. That needed to be unlocked, as they like to put it. It was a day early in august 4 the stocks short of on speculation yes, and at the time, the Corporate Communications<\/a> person from ebay said we will look at all possible alternatives. Anymore that kind of thing happens, the more kind if pressured the ceo comes under to make the decision that the market clearly wants. Scott galloway, you are nodding your head activist investors and what they will get out of this. Listening to erik, carl icahn is going to get credit. He catalyst if anything is a jack ma of alibaba. Nothing will shoot a stock of more than a suitor out to dance with a lot of money. We have alibaba with a stock price that cannot be supported with its organic growth for stop it has got to make acquisitions. Both of these things are more adjustable as separate companies than they are together. Isyou are saying that ebay setting up to have paypal bought by alibaba . We are here. Lets not forget apple pay also lurking in the background. Was the first payment alternative to the visa mastercard, you know, bank oligopoly. It has never fulfilled its promise. Could have become the bitcoin of the 1990s did not happen. You have the background apple paymentpay, alibabas business not included in the ipo. They have just thrown into sharp relief what ebay, web paypal could have been and has yet to become. What does this also really mean for your banks, cassidy . Avery has processing sides that would be impacting by this, but most of the Bank Profitability<\/a> is driven by good oldfashioned lending, and that is the real driving for the Banking Industry<\/a> rather than these processing numbers. Right now from rosenblatts security, somebody that follows blackberry, apple, brian blair joins us. Where will ebay stock open . Us about away told premium. 52, 53 close. Where will you presume to put a valuation combined ebay this morning . Toughs is going to be a one because a lot of people have been very bullish about the paypal business given the growth rates we have seen over the last five years. I think there are some new competitors in the market right now. Ebay is clearly going to trade up several dollars on this. This is a huge positive. A lot of investors have wanted to see this, but there are new competitors. He mentioned earlier apple pay. Bitcoin has made some headway into the Digital Payment<\/a> market. Is becoming very meaningful in asia that could spread around the world in years to come, so while there is growth and opportunity still there, there is competitors in the market, five think the valuation is going to be a little lower than what it would have been 20 months ago. When you write your research, are you willing to say that tim cook caused this decombination . I will be willing to say it certainly influenced it. Landscape seen the changing, and that has marked a significant change and the ability for paypal to raise some money and to try and grow right now ahead of apple pays launch i think is the right move, but yeah, definitely influenced it. Does a paypal trading on its own look more like an amazon, which trades at two times shares or alibaba, which trades at 18 times shares . I think it probably looks more like an amazon. I dont know if it is going to garner a premium that we have seen with alibaba. It is not growing at the same rate. The opportunity does not feel quite as big because of the competition. Alibaba in many ways within china has no competition, so i do not think it will garner that same type of a premium. Brian blair with rosenblatt security, thank you. I want your comments on the idea that ali baba can jump in here. Marry twins. Ts to conglomerates are hard to take over. You can valuate them on their own merits. Paypal despite the competition is the leading brands 20 . That is a good rep. Does this mean the end to several companies that have several businesses under one roof . It means ceos are going to have to earn their money look at the value, single brands with a focus and a mission google, apple. The conglomerates of the world, they are, the pngs, all splitting apart. We are continuing coverage this morning on bloomberg paypal. On on ebay and erik schatzker, thank you for joining us. We will be back with more bloomberg surveillance. Ebay sales suspended following the news of the split. Good morning, everyone. Bloomberg surveillance. We await premarket trading on ebay. They will separate paypal. Scarlet fu looking for that first and trade as we begin the 7 30 half hour here on bloomberg surveillance. It just happened, last trade was 58. 50 a share. 58 a share . Up 10 . There it is. We will go to washington now. Of course the Prime Minister<\/a> of india greeted at the white house. He had an intimate dinner. The major theme of mr. Modis trip as investment. Caterpillarhoulip more bulldozers. A revolving continent from. A republican congressman from peoria has been an early supporter of new indian relatives. Congressman, lovely to speak to you this morning. What is your fondest wish of this trip . A script to write two days, three days from now, how would you want this trip to and . Things, americas commitment and the primates ors commitment to work on longterm trade agreement with india and the United States<\/a> will stop india is the largest democracy on the planet. Over one billion more people than the United States<\/a> will stop 800 million of which are in poverty moving into the middle class hopefully in the century, and they provide a lot of households for us to seed and sell American Products<\/a> two. India historically has been a very protectionist country, but Prime Minister<\/a> modi made his mark as chief minister of gujarat as being a very protrade, probusiness guy, cut out the corruption. He can do the same thing nationwide in india, it will be a huge boon to the Indian Economy<\/a> and american a economy as well. Mr. Schock goes to washington, and any american would congratulate you for that. As a member of the legislative branch, what production would you like to see from the president and the secretary of state . How urgent is it for them to go to india and continuing to advance this theme . Number of reasons number one, in that region of the world, it is not only important for our economy but also for our national security. When you look at the other players in the region i was in asia earlier this week. Japan, our closest ally over there and south korea are very worried about the puffing of the their the spreading of wings in the asiapacific, and india is a great counter balance to them as a member of the brits country but also as someone who borders afghanistan and pakistan, the largest democracy seems to be a much more able ally for us, and that matters to us from a military, geopolitical, strategic standpoint for us to close in our ties and build better foreign relation bridges of their as well. Economically, the president thes to go there and tell Indian Community<\/a> that if we can level the playing field, if we can truly create free trade, we can look up people in india to the middle class and beyond. Certainly they have a lot of folks who would like to come to work in the United States<\/a> and around the world, and the Immigration Law<\/a> that passed out of the senate would be very harmful to the Indian Economy<\/a>, and Prime Minister<\/a> modi i know has not only spoken to me personally about that but i believe will speak to the president about that if he has not already during this trip here it he hopes that if the house of representatives passes a similar immigration bill, it would be much more generous in its work visas and allowance for Foreign Workers<\/a> like those from india to come to the United States<\/a>. Congressman, with one of the reasons you have a unique view and relationship with Prime Minister<\/a> modi is that caterpillar is in your home district in peoria, illinois. Can you speak to how Companies Like<\/a> caterpillar can do business in india whether they are getting assistance from the politics . Andt is a great question, it is one that modi ran on when he ran for Prime Minister<\/a> of india, and india, if you know of any u. S. Businesses in particular that do business is in india, they will tell you it is extremely bureaucratic. There is a lot of red tape but also a lot of corruption. When i met with the head of ford india, which is headquartered in modis home state of gujarat, i met with the heads of laboratories, and they said they located in gujarat primarily because of modis leadership. He said he is a straight shooter. He capped the electors young, built the roads he said he was going to build, and in much of india that is not the norm. If we are going to build more infrastructure to sell more caterpillar tractors, we need to have more certainty in the court, more certainty with intellectual property, certainly in india a democracy is much more certain i would argue that even china, which has less property rights, human rights and the like. India has so much potential if they can create some certainty in the rule of law and courts. Congressman, thank you so much, republican from the 18th district in illinois, aaron schock. Scarlet, we have two corporate stories. One is a front and back of the store as well. Walgreens. Which did not go for the taxing version has just reported the tax in version just reported earnings. Sales of 19. 1 billion in line with what analysts were looking for. Comparable sales rising 5. 4 , which is actually lower than its initial preliminary report of a 5. 6 increase. I do not see much forward guidance. Maybe we will get that in a little bit. The other thing we want to highlight his shares of ebay are trading in the premarket after eb announced it will split its business into ebay, the pure marketbased business, and paypal. Ebay shares are rising. 52. 66 yesterday. It rose to as high as 59 in the premarket. We will continue to monitor those headlines for you as well. A lot happening this morning and some the very important happening later today, football fans. Today is your day in court. The sec commissioners may finally vote down the 1970s blackout rule which prevents Football Games<\/a> from airing when the games are not sold out. Scott galloway founded ellison partners and also teaches marketing at nyu. Viewers like me want to know what it took so long to strike down such an incredibly artificial barrier . Business, 9 billion which have a lot of power in washington here it this is archaic legislation. It will die a peaceful death. Good riddance. Nfl sunday get ticket on my phone for 300, watch any game all season long. That is cheaper than taking a family of four to the game. Have owners price themselves out of the market . Is that part of the problem gekko when the legislator when you do affect 40 years ago, ticket sales, gate sales were the lions share of revenues. Now they are not meaningless, but nfl equals tv. Do you know how many games were blacked out last year because of this . Ee. Two or thr it is meaningless legislation and it is time to go away. The yellow line is the new york jets [laughter] the white line shows monday, sunday night football, live games. Football is everything. Gerard cassidy, you are smiling. That his rifles although i live in portland, maine, i grew up in new york, so i am a giants fan. That would make a lot of us happier if they could do better. That is for sure. Scott, it is her mark what what has happened in the last four years or five years. Why is sports on tv . Is it just that hunger for the immediacy of it . That is exactly right, tom. What is the last time you bought breaking bad or house of cards . You cannot even watch house of cards live . There is on the about trying to on ears onands your way home. People watch the world cup at 3 00 in the morning. It is the only time we watch commercials anymore, sports tour to that is true for stop what about Roger Goodell<\/a> . He shouldquestion as step down in the league go through a challenging period because of all of the demented abuse scandals how does this fold in, the decision . I do not think it is a big event. They have much bigger it issues to deal with. They have their lobbyists on it. Ity have commissioner saying will go away. If the Biggest Issue<\/a> is the Crisis Management<\/a>. They violated the number one of Crisis Management<\/a> that is they did not acknowledge the problem and they did not over correct. We love to forgive, but you have to apologize, and the nfl did not apologize quickly enough. Scott galloway, one of our guest hosts of the hour along with Gerard Cassidy<\/a> of rbc capital markets. A quick note, ebay shares rising 11 . The galloway affect. After announcing a plan to separate its payments option, paypal. Bloomberg surveillance will be right back. A good morning. We are watching shares of ebay climbing almost 11 in the 58. 40et right now to after eb announcing it will split up paypal in 2015. I bought on the close for like a dime. Alibaba shares also trading higher, 89. 29. Guest host,ay, our saying maybe Alibabas Jack Ma<\/a> looking at paypal. Walgreens topline, five point something percent. Bank managers are planning to plan for calendar year 2015. Can they assume of banking is normal, or will the disruption, the rightsizing continue . Has seen all of this before and he knows the prices of lobster in his portland, maine. You have written courageously. We will give back to normal. Is normal finally here . Not yet. We need the Interest Rate<\/a> environment to really bring back normal, so should the fed start raising rates next year, tom, i think over the next two years with a steeper yield curve, that would be normal. s energizing, rightsizing will layoffs continue, particularly in new york wall street . That is steadily one of the things we have to watch carefully because the Revenue Growth<\/a> for the industry is not that dynamic, so driving probability. We are talking about the paypal and earlier today, the mobile technology is going to revolutionize retail. Full disclosure, you used to read cassidy like this, trying to front run all his mergers and acquisitions. That was a great party. Why are we seeing more m a now in small and midsize banks . The m a party was enormous in the 1990s. You and i both remember. One of the reasons we are not seeing it today is the Federal Reserve<\/a> is suggesting they are not certain if they want it is also a Technology Issue<\/a> because of the Bank Secrecy Act<\/a> and antimoney laundering, the banks have to get over this hurdle to make sure that their systems are in place. As we have seen up in buffalo, new york, amity bancorp is going on almost its heard youre trying to close this deal in new jersey because of aml issues. That is a big constraint right now you know monks the smaller banks. Now even amongst the smaller banks. What you see from portland, maine that analysts here dont . I grew up in long island, new york. There are two words metro new york and the rest of the United States<\/a>. I see a lot of mainstreet if i stay where i grew appearance huntington, long island, i would have been caught up in the new york rush. By contrast, what do they worry about . That you do not see as an issue for the industry. Our business, the daytoday trading volumes, the day today him in a activity. There . Oan demand loan demand is picking up. Credit card outstandings have turned up for two consecutive months, and if the consumer can come back ok, but scott, are they at risk because of paypal . Or what is it called, iwallet . Apple pay or alipay. The credit cards are for our largest banks. I do not have my wallet on me, but if i used a blue card last, that means apple wins, right . At the and of the day, arent most of these guys putting out loans . Isnt that the white meat of their business . Absolutely. That is the basic backbone of banking, the spreads, and 70 plus real quickly, would you allow only regional banks out there in indiana making loans as opposed to Money Center Banks<\/a> doing wall street stuff . Weaver for the Money Center Banks<\/a> because they are cheaper and when rates rise, they have multiple ways of generating revenue where is the regionals are primarily spread. We await these surveillance hat tricks by Scott Galloway<\/a>. The white meat of their business. I have a better question we have talked about credit card fees, who uses the discover . Sears. And the sears made the same argument donahoe has been making to hold onto paypal, and that is to have a captive customer. It made no sense then come a makes no sense for paypal now. Then ebay shares in premarket. We will continue to monitor that development. We will be right back on bloomberg surveillance. Good morning, everyone. Bloomberg surveillance. Ebay capitulates. They will separate paypal. Premarket up about 10 . This is bloomberg surveillance. Lets get some other techylike company news. We will start with apple. The new apples got the the new iphones got the greenlight in china, that smug after agreeing to enhance User Security<\/a> and privacy. The devices will hit the market october 17. Netflix enters the world of feature film production. It is teaming up with the Weinstein Company<\/a> to release a sequel to the oscarwinning crouching tiger, hidden dragon next august. The movie will be released globally in select theaters and also on Netflix Streaming<\/a> service. Microsoft plans to build data centers in india. This Initiative Comes<\/a> as the company hold an event in San Francisco<\/a> today to raise the curtain on the latest version of its windows operating system. That is the latest coupling is from the files of bloomberg west. Now we go back to paypal. This news it on is spinning off paypal in 2015. As it turns out, our very own emily chang actually spoke with the founder of paypal back in august. Here is what he had to say about a potential spinoff. Should paypal be spun off . There are large and synergies between paypal and ebay and maybe it is something ebay should consider at some point in the future. I think ebay was right to resist carl icahn. We do not want them to be dictating what Silicon Valley<\/a> does. Groups, it turns out that oops. It appears that carl icahn got his way and since the stock is up 11 , he was right. Take a brand like williamssonoma. You see a lot of counterfeit on ebay, and that has been primaryrs and brands concern with ebay because they do not respect brand integrity. Who do they not work with to punish ebay . They dont work with paypal. Within three month at this span, you will see huge retailers decide to accept paypal and their growth will celebrate. Donahoe sojohn resistant to the idea of spinning off paypal . What was his argument . It is the reason you probably own more than one stock diversification is the right strategy for investor come in if you are a ceo, you would rather grow 8 one year than 12 one year and 4 the next. 1. 9 perd point out, year return for the last 10 years. You wonder why the ceo is still the ceo. How are you teaching this in your classroom at New York University<\/a> . Everybody ate and what you used to go to Gerard Cassidy<\/a>s business come out the door to banking, American Express<\/a>, or hulmans company . Do you know who the number one employer of m a graduates are now . Tech. The number one is amazon. I am glad you bring this up. I thought of it earlier how does mr. Bezos react to these transformations in the business . He does not have an iwallet, does he . Amazon has been rewarded with more access to more chief capital than any company. How can they be a chief stock echo data not make any money. I am saying access to cheap capital. Two times sales versus four times sales. As a multiple, we never see any retailer trade like that for this long. The strategy is simple every nyu stern graduate, every mobile phone, 40 off for amazon because they have access to cheaper capital than anybody else heard amazon is doing more revenue now than walmart was in 1990, and it can issue 1 of the company, and get what, 1. 6 billion . Anderard cassidy visa American Express<\/a> the big banks, how does mr. Bezos in ventas paypal or his iwallet . Even if he does not, he will get the best of terms. He does not need to do a paypal . They seem to be on a collision course reiterating around each other. ; amazon has one click pay. I think it is great. I use it too much. Are you a dinosaur . It is likely summer for a 14 is the summer of dinosaurs. We are finding dinosaurs everywhere. Are you a dinosaur . I dont think so. The Banking Industry<\/a> is being attacked by technology, you are lending money and taking in money and is positive and you live off that spread your it it has been around since even before i was. Around hockey at the weekends, i still using my bank card. You are a dinosaur. Thank you. The secretary of state with the premised are of india. Mr. Modi, mr. Kerry. That is on my agenda. Kong agenda, the hong prodemocracy protest taking place. National day is tomorrow. Ebay. That is it. You look at the Analyst Coverage<\/a> 29 buys, 19 holds, zero sales some the stock is up 11 . Buy here, Scott Galloway<\/a> . What did they think the value on paypal will be . Scott galloway, thank you for joining us as guest host, Gerard Cassidy<\/a>, thank you for joining us from portland, maine. In the loop on bloomberg elledge and is up next. Greg good morning. You are in the loop, and im im betty liu. After denying this breakup for the better part of the year, ebay has made a full about safe this morning, saying it is putting off paypal. It is a big win for carl icahn, who earlier this year settled with ebay after lobbying for this exact split. We will be staying on this story, and bring you the latest headlines as well as guests to talk about this transaction. In other top headlines, prodemocracy dead them as traitors in hong kong prodemocracy demonstrators in hong kong. Chinas government has given apple the goahead to start selling the iphone 6 and the iphone 6","publisher":{"@type":"Organization","name":"archive.org","logo":{"@type":"ImageObject","width":"800","height":"600","url":"\/\/ia903407.us.archive.org\/3\/items\/BLOOMBERG_20140930_100000_Bloomberg_Surveillance\/BLOOMBERG_20140930_100000_Bloomberg_Surveillance.thumbs\/BLOOMBERG_20140930_100000_Bloomberg_Surveillance_000001.jpg"}},"autauthor":{"@type":"Organization"},"author":{"sameAs":"archive.org","name":"archive.org"}}],"coverageEndTime":"20240621T12:35:10+00:00"}