tv Bloomberg West Bloomberg September 17, 2014 1:00pm-2:01pm EDT
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>> live from pier three in san francisco, welcome to "bloomberg west." i am emily chang. apple says it is the biggest ios release ever. it is now available for download two days before the new iphones come out. from updates to messages to photos to integration between apple devices, we look at what is developing for ios eight and what it will be like. should start ups seem more like calls? when will we colonize mars? these are questions i put to peter teal. here his surprising answers coming up.
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if you hit the roads in california, there may be a self driving car in front of you. regulations went into effect allowing automakers to test autonomous vehicles with the proper permits. an inside look into the program. to our lead. bloomberg businessweek sits down with apple's executive team. we will tell you the real story behind the apple watch coming up . also ahead of the iphone, apple's latest mobile a system. overhaul a complete and ios eight is a refresh of the new design with a lot of updates, including apps, keyport options, messenger app, easier integration, updates, and more. downloads could take a while
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with a massive spike in the ios 7 release last year. what will it be like developing for ios? now, -- thank you both for joining us. you have already gotten to see it. what is it like? unlike the ios 7, a refresh of the operating system in the u.s., these are just a lot of fun little things that make it more enjoyable to use. the syrian integration finding out what songs are playing. thes really fun and makes os a lot more interesting to use. >> how is it different for developers and will it be different for users? >> yes. it is awesome. in a matter of a few weeks, a
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few modal apps. -- mobile apps. it is a way to get knowledge and information. >> isn't ios's biggest release ever? it does not look different. >> it is all little things that are really fun. predictive texting. all of the things that make it great. we are very excited about two different areas. hotel tonight a couple of hours ago and he confided in the app store. it shows you the best deals around zeal. it pulls information to you in a different way and allows users in a holder for way.
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>> it is really amazing. you can share things between different apps. let's say you find an amazing presentation to help you get better at the job you are doing today. tonight anda place you want to share it with your friends. >> what was it like? it was a lot bigger. >> a lot of work up front for us to move to a development framework. we did all the upfront work and it will now save us time going forward. new sizes are great. they merchandise our hotels that appeared we have beautiful pictures of incredible hotel properties. the bigger the screen, the more you can see.
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we are happy about developer support for making it easy. >> apple or android? >> presentations are going to look beautiful in most devices. we think about every single device, how the interaction is and how it looks and feels in every device. that is important to bring users the experience for different platforms and devices. >> it is a loaded question. >> what does i wait not have? -- io8 not have? you want?do >> i need to spend time with it and see. there is so much in there i will discover in the course of using it that it will take me a while.
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i saw them and i was like, that is great. >> it is really hard to say. one of the things within ovation, you never really know how users react to it. a lot of new and exciting features. it is really hard to say. >> what do you think about the watch? >> it is not something i have been saying, i really need a watch. i am excited to see what it .ooks like the same whale is not sold on the iphone when i first heard about it. then i used it and it was irreplaceable. i would imagine that would be very similar with the watch. >> i was super excited about it. it is beautiful and i was excited to use it. getting information timely and in a great manner, that is probably what the new iwatch is about. >> should we wait to download it and get the bugs out or right
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but first, in china, demands for luxury is rising. chinese consumers are the biggest buyers of luxury goods locally, making up 29% of all purchases in 2000 and 10. york, ame now from new site that sells luxury goods to the chinese market. thank you so much for joining us. and oh you have done a lot of research on the market. what exactly is the demand for luxury goods in china? >> thanks. we have the consumer side that helps sell goods but we also have the intelligence side that helps brands understand the consumer better. is tremendous appetite by consumers for western luxury goods in china and a booming business for the goods. the irony is the brands are doing very little to promote themselves today.
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>> you know, i lived in china for many years. there were many luxury stores. yet, many times, the malls were empty. are people buying these things online more than in person? >> question. about two thirds of all luxury goods chinese consumers buy occur outside of china. the online market is growing quickly but is primarily driven by retailers who are selling products they buy in the west, products they report to buy and the west that they actually have made in factory in china but they're showing it on the market in china to the chinese consumer who understands buying abroad or buying from a retailer is much likely to be more cost-efficient than buying from one of the brands directly. done -- did ay study focusing on jewelry or what are the most popular brands
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in china? >> the brands that are making the largest impact are some of the usual suspects we focus on here on the states or in europe brandsrberry, chanel, more popular in china than the united states. brands like coach. one of the ironies we found was only a quarter of these actually are directly sold online from consumers. >> how well is alibaba meeting demand for luxury goods? what else should be doing? >> it is crushing it right now as it relates to the chinese consumer and luxury goods. it is not being sold directly from the luxury brands. while the brands themselves have advocated their position, alibaba resells the product.
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is looking to work more closely directly with the brand. they have a multibillion-dollar business both on top of the retailers. earlyuite this to the 2000. if you look at the music industry or napster or the it is a time when these grants will step up and owning their own channels of distribution and also partnering with alibaba, or they will get is thisby the way that massive company. >> anyone who shops in china knows you could go to any market and find counterfeit luxury goods of any kind. sometimes, they look at a good. how much does that hurt alibaba and ultimately the brand? >> it does not hurt alibaba right now because they have a multibillion-dollar market selling both unauthorized and black market to the chinese consumer.
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stories ofcdotal chinese consumers coming in, chanel salesto the associate. alibaba is doing fine. it is the brands taking a hit. we are recommending and focusing on is helping the brands understand better working with alibaba but also working on their own so they can grow the business. >> all right. thank you so much. a quick programming note. we will bring you a half-hour and al, the alibaba story documentary about alibaba and the former coo of yahoo! who struck the deal with alibaba many years ago. that airs tomorrow. a new apple watch. legacy products for ceo tim
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>> many questions were just last week when tim cook took the stage and laid out much of what apple has been working on over the past three years. the apple pay, apple watch. the apple is now swamped with pre-orders for the new iphone but the real test could be when the watch hits iphone stores next year.
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the changes tim cook minute apple, will they cement his legacy? we spoke with the executive team at apple, rare one-on-one interviews here. brad, i will start with you. who exactly did you speak to in what sense did you get of how well the team works together? let's we spoke with tim cook, johnny, who ran the eye team behind the iphone 6 and apple watch. board members like bob iger and sue wagner. you do not get that kind of access from apple usually. they were trying to make two points. they are proud of the product this week and very much in apple style, they wanted to take their victory lap. they also want to impress there is a new openness at apple. tim cook uses the phrase, defaulting to open. they want to be transparent about product plans and want to know, this will be part of his management style. >> the company was very
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secretive and opaque under steve jobs. would you say it is indeed a new era? >> there is a little bit of a change. there is a little bit they are trying to capitalize on having the new product come out. they are trying to make it as big a deal is possible. more,is a little particularly in areas like corporate responsibility. they will give you a little bit more. this is a big moment. they have been facing a lot of criticism or questions over the past several years. they are ready to come out and say, companies are ready to innovate and there is a lot to look forward to. >> it seems the apple watch could be the product that really defines tim cook's legacy one way or the other. what do you get behind the making of the watch, how does this happen, and he is he the one trying to push this through?
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>> with the watch, they were looking to the past. , as theysting tidbit kept bringing in watch experts to give them lectures about why clocks migrated from towers to our wrists. johnnie was really trying to understand it. they had to go on a journey to get things like the additional crown, the zoom scroll wheel on the side of the watch. they are quite enthusiastic about it. tim said he already feels like it is a success. there are a lot of questions. up. and it might go way we do not know how pricey it will get. it is not clear what the killer app is. it is a question on the watch. >> you really want to upgrade your watch every year? how much money do we have? come on.
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do we want this while we are in meetings or driving? >> there is too much on it at this point. >> yes. the battery life is part of that. >> charges really nicely. we do not know. we have not road tested it yet. about the feeling at apple? your story talks about nervous energy and things are much more tranquil these days. a rising up of new executives taking on more responsibility. someoneg we learned is tim cook has been relying on heavily, ted williams, a behind-the-scenes guy, a lot like tim cook. tall and soft-spoken. they both went to duke and had early parts of their career at ibm. he is the person tim cook tapped when he really wanted to go
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forward with the watch. he is the one he put in charge. bit of leaders coming up in the company. >> you get the sense tim cook and johnny were in sync, as johnny was with steve jobs, as far as we know. >> absolutely. it is hard to tell. apple is good at crafting their own narrative, showing journalists what they want us to see. every indication we got, of course, we are pesky reporters. you find out he acquired steve jobs's private jet. he designed the airplane and now he owns it. but look. he just hired his friend, a celebrity designer. they like to work together. this is a team that is not going anywhere. i get the sense they love working with tim and they are protective of him. , isre all buzzing around
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tim cook as good as steve was, eddie in these guys, they want him to get the credit. >> interesting. one thing we also learned is that tim cook has left steve jobs office as it is. enshrined forever. >> the fourth floor, any of the loop that headquarters, it is something tim cook has left in place, not as some sort of trying necessarily, but it is something he did not think should be touched. it is a not to the past as they tried to move forward. continueon -- will it to stay on top, the brand? >> absolutely. x essentialrger questions about growth rate and stock price, but if you're looking at the franchise, it is still healthy. iphone 6, record orders, their beautiful products. we do not know about the watch, but the ecosystem itself is very healthy. about tv?g
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i do not want to hear that it is interesting. >> i feel like we did get a tape -- a tidbit. about projects they killed inside apple and he said, we have killed products where we do not feel we have enough control over the ecosystem and he said, taught -- sounds like you're talking about tv. there was a long pause and it was said, the interview is over now. liked that he was looking he was working on an interesting answer and he said, is working on interesting eve asian. they do not have enough control over the content. >> it has not been killed, it has not not been killed. basically. us.k you both for joining it is a great read. coming up, silicon valley's most audacious investor, we talk apple,oogle, facebook,
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>> from google to facebook to apple to amazon, conversation in silicon valley is intense. which of the four companies is the most dominant in tech? will they be as dominant as they are today in the future? i sat down to pose these very questions on the latest edition of my new show, studio 1.0. the book is out this week, notes on startups and how to build the future. here is a sneak peak of what he told me. >> do you have concerned that
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companies like google, facebook, apple, amazon, could ever become too powerful that they stifle innovation? >> i tend to think that does not happen a lot because there is always enough innovation to keep things flowing. >> that means someday you think google, amazon, apple, will not be as dominant as they are? >> i think they will be dominant for a while. they are great businesses. but i do think they will be dominant forever. >> d.c. anyone or the other becoming more dominant? >> it is difficult to justice. -- judge this. i tend to think of google as the one on an incredible arc at this point. search monopoly is powerful and they are trying to extend it in two other areas. -- into other areas. >> they are exploring other things, self driving cars,
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google glass. >> vasily. as a businessman, these are attempts to extend the monopoly. i think self driving cars would change transportation may be as development of the car itself. >> when it comes to startups, you compare compelling startups to colts. should they be more like colts? >> they should not be in the sense that believing something that is wrong. but it is always a good sign there is an intense understanding of something true that very few other people do him -- do. musk's company is motivated by the yeah -- the idea that they wilil messed up start up be fixed. hinglse you say is a why not? >> foundations are important. the first some of things wrong, it is hard to
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recover. >> i guess you do not think messed up tech out pennies beger than startups can fixed either. ken yahoo! and hp be fixed? and yahoo!argue hp are not really technology companies at all. technology companies in the 70's and 80's of hp and the 90's with yahoo!. even though the companies were technology companies and 80's and 90's, they are technology against innovation. >> even though they are not technology companies, ken yahoo! and hbv the fix? fort is probably a mistake them to radically try to reinvent themselves and become technology companies again. >> you mentioned marissa mayer. what are her chances of really turning around? the best ceofar yahoo! has had in a decade. she should not be evaluated on whether she that -- invent something new. that is setting her up for
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failure. existing businesses are really big. if you could improve those incrementally and make them work, that is fantastic. is, we wantedophy flying cars and instead, we got 140 characters. tofacebook changed the enough take our civilization to the next level. facebook is not enough. we need many different kinds of things. flying cars alone are not enough either. >> is facebook a monopoly? not as much as google at this point. there are still emerging competitors in the social networking space that come up every year, twitter, snapchat, all of these companies emerge on a continual basis. >> do you worry facebook take it distracted joan companies, virtual reality question mark >> it is always a challenge.
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you have to do some new things, because you are not in a static world. you do not want to do too many. you want to do just the right number of things. craziest sector you might enter that we would not expect? >> there are all these different sectors we have looked at and we are tempted to do things in. one that we have started to look at in the margins that is wildly out of fashion is the nuclear power industry and is it possible to build safer, cheaper, better reactors with all the new technologies. when you look at the technologies, it looks like the answer is definitely yes. >> what is the most audacious about howave pondered humans could potentially survive in the future? >> we should give nuclear power serious considerations. it does not emit greenhouse gases. i put the date in the second
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half and the 21st century, a little bit further in the future. but it will happen. >> will march the first? last there are a lot of things about mars that make it the natural other planet in the system. yes. >> for more in my interview, tune in to studio 1.0, coming this october. the space race is on. there are major developments involving big tech names. we will find out what it means for nasa next. ♪
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this marks the first time astronauts will be flown into -- into outer space since nasa retire the shuttle fleet in 2011. what does it mean for the future of space travel? i'm joined now by the former currentlyy director, the general manager of the airline pilots association. thank you for joining us. all, lies nasa signing the contract now? >> this is a path we have been on for quite a while. it is an exciting way to progress in the space program. we should have been doing this earlier, the space shuttle itself was an amazing technology when developed in the 70's. 30 or 40-year-old -- years later, we spend about 3-4,000,000,000 dollars a year and these programs will come in significantly less and be able to allow us to compete internationally again.
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and we have to spend our own tax dollars sending our money to the russians for astronauts to go to the space station. a great move for nasa. >> the u.s. put sanctions on the russian space program. the russian deputy prime minister tweeted in response the u.s. should consider -- >> we have been on the path for a while. we would have been here earlier if not for politics. big government programs, with that comes little support. support for doing things the own way -- the old way was strong. it was difficult and has taken an evolution of thought for some politicians but they are seeing in status ending money in russia, we should keep it for the united states. we started the programs in the bush administration and continued under obama, strengthened under the obama administration.
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american.rtisan and it is the right way to go. we have counted on u.s. airplanesto travel in for over a century now. we can do the same in spaced. for elon musk's spacex peer i'm curious how he is perceived within the space community and what are his relationships with your community like? >> he is perceived very much, as i read from the other communities, the same. when you're taking on big business, it is the same. a lot of entrenched and self-interested folks not happy with elon musk. the -- for people who want to see people go to space and want to advance space, including myself, could not be more thrilled. launches.s. is getting that would have gone overseas, to france, russia, and china, that will be in the united states, launching satellites,
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and now with people. it is the kind of thing the country is known for. out innovating the big guy. we are thrilled there is a big guy in it as well. having boeing there with spacex will be a great competition to watch. >> you have been inside spacex's cap so. sets it aparty from what else is out there? >> of course, utilizing the latest technology is allowing to wait, they have to work on reusability to reduce cost. the shuttle was developed so long ago, there are just in measurable differences. the competition is all doing the same thing. i think what elon musk and spacex have done is to be up to integrate everything themselves, to be able to really lower cost and increase the amount of time they could get it in.
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it is unheard of to have something like an anomaly and turn it around 24 hours, think that would have taken the government and contractor weeks to do. a lot of that innovation is in operation in technology and frankly in a culture that is really driving to do things differently. -- jeffabout just bezos, the ceo of amazon who has --y private base operations aspirations. does he have nasa's year? >> yes. i'm equally bullish on jeff bezos. a number of visits as well. site, in texas, they have got a tremendous capability. they are less flashy publicly. the announcement today will be a big step. that is what is exciting, when you get some of these more workingce companies with new innovators, where you will see a lot of advanced.
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you really -- advancements. people on theese cutting edge technology interested in space again. it has always been seen as cutting edge. i think that what -- that is what is exciting here. a friendly competition between all of them is what we believe will make everyone better and make america continue. i think we are first, but continue. all right. exciting stuff. thank you so much for joining us. check on stories making headlines with mark crumpton in new york. what is happening? >> thank you. president obama is reiterating he will not and u.s. ground forces to combat in iraq to fight islamic state militants. his comments at central command, day after a top general said ground troops may ultimately be
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needed. a u.s. senate invest -- investigation found chinese into companieske responsible for transporting u.s. military personnel and weapons. the report says there were 20 from juneau to 12 to may of 2013, giving hackers insight into military logistics. he did not save any information had been stolen. nike has suspended its contract with running back adrian peterson. the vikings have reversed course and the peterson will remain off the field until legal issues are resolved. he is accused of striking his son with a small tree branch. back to you. ? , what is coming up on bottom line otherwise? >> it is all about the u.s. federal reserve. coming up, we will get a statement on interest rates, pre-and post-analysis from our round table. michael mckee, lisa abramowicz
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of them are news economist of andrnative investments director of u.s. rate strategy at credit suisse. we will also get wall street's reaction from bloomberg senior cores mark -- market correspondent julie hyman. then fed chair janet yellen will hold a news conference at bloomberg television will carry her remarks live in their return -- their entirety. coverage begins at the top of the hour. that's you in san francisco. >> all right. thank you and we will see you in a few minutes. california's first self driving car or mints are in effect. find out what it takes to get an autonomous vehicle approved coming up. ♪
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permits for 29 autonomous vehicles. google among the first manufacturers to get approval. carsg to test self driving in california. ensuring the cars for $5 million a piece, using specially trained tests. -- test drivers. pre-orders, 24-hour apple sold -- customers have to wait. if -- is the iphone 6 plus worth the wait? take a look at the pros and cons. ♪ >> i have to confess something. when i first saw the iphone 6 plus, i thought it was bonkers. i get it. people seem to really want larger phones and apple does not
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want to leave any money on the table. have you seen this thing? here is the iphone 6. the size is due to a display that is larger than anything that is ever a. on an iphone before. such a big screen makes for an unwieldy phone. even with apple's clever reachability screen shrinking feature, it can be hard to handle if you do not have giant hands. putting it in your pocket is another issue. 71 millimeters thick, it is then enough to fit in your pocket, kind of. if you're into that sort of thing. but do not try sitting on it unless you like the feeling of a two by four strapped to your behind. here is the newsflash. larger things are more cumbersome than smaller things. those were my first impressions and i stand by them. but there is, i discovered, a
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different way to think about it. that started happening when i used it like i started using my regular iphone, watching videos, replying to e-mails, reading things off the web. that your screen is nice. has usefulpps, it viewing modes when you turn it on its side. e-mails and messages took on a sufficient layout. the keyboard has dedicated keys for copy and paste. means a size also larger battery. the iphone 6 plus can do 12 hours of browsing, or 16 days of standby time. here is another thing about the iphone 6 plus. it has the best camera apple has ever made. it can focus fast like adsl are and should super slum of india, but it is also the first iphone
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with optical image stabilization. it means the lens actually moves around within the device to counter any shake you might create while holding. the result is better performance and video that is smoother. what is the verdict? it is tricky. issues ares, the more philosophical than technological. if we think of it as a phone, it seems sort of large and cocky. the standard iphone 6 does many of the same things in a much smaller and more convenient package. but maybe phone is the wrong word to describe this iphone. what we actually have here is a tablet, aketable killer camera, a great display, and, it will even make phone calls. >> you decide if it is worth the wait. time now for the bwest byte, where we focus on one number that tells a whole lot. brad stone of bloomberg
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businessweek is here with a special bike today. what have you got? >> 80,300, the number of apple employees at the last year. it is about twice what apple had three years ago at the beginning of the tim cook era. they're adding 30-40 retail stores worldwide. also, tim cook is bringing in a .ew kind of employee the beat acquisition with dr. dre. he is really interested in bringing in a new perspective. part of this is obviously selling watches, understanding fashion. but tim cook wants diversity of thought. think apple employees have doubled, and yet, they cannot get the iphone 6 -- fixed. >> maybe it is a function of high demand and other suppliers. apple is doing a lot more. when we think they have got two mild -- models of iphones and
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ipads, they're making more products. he used to be a look at them all on one quarter of the table, and they are gradually now doing more. >> one of the things i have heard is that some people do not think working at apple is as cool as it once was. what sense have you gotten from people? >> it is a different kind of employee now. apple is a fashion brand. cool and mainstream. the algorithmic engineers, chip, maybe they're looking at google. apple is probably attracting them as well. but it is a different stage of maturity, less pushing the boundaries of science, more pushing the boundaries of taste. >> all right. thank you so much. thank you all for watching this edition. we will see you later. ♪
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>> this is a special edition of "bottom line." in just a few moments, janet yellen and the federal open market committee, will release the monetary policy statement and the forecast to reduce monthly bond purchases find additional 10 billion-15 billion, keeping it on track to announce an end to the program in october. the statement is released at 2:00 p.m. washington time. janet yellen will hold a news conference at 2:30. we will have live coverage of post. let's set you up on this fed day. we will hear from peter cook at the fed in a few minutes. joining us this afternoon from los angeles, chief economist of -- of alternative investments. may, irark, here with jersey. michael mckee, lisa abramowicz, who covers the debt market for bloomberg news. thank you so much. and julie hyman will also join us. michael, let me start with you.
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what are we expecting in a couple of minutes? >> do they drop the considerable language, suggesting it will be a long time after qe ends, and what will they do for when they start raising rates and how high they will go. we will see if the time moves up in the rates move up or down. they also will talk about the exit strategy. do not worry about it. >> is too much being made of the nuanced language? >> i think it is not. expecting not really any significant changes to the statement. if they do, you could see a lot of market movement on it and request what is the market looking for? what do they wanted here? ? to hear the timeframe of staying in place. we're looking to really, the new projection will come out from the fed. there is fed fatigue going on where people are saying, we will just look at the data here that
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yellen. here is peter cook. >> a lot to go through in the statement. multiple press releases here, including an exit strategy. the statement that it does not include any major changes. you look at the forecast for where it rate -- where the interest rates are going. there is a contradiction that policymakers do see rates at a higher level at the end of 2016 than they had previously. a separate statement on the exit strategy. other technical data to go through as well. in the statement itself, bond buying will come to an end, according to the fed. his incoming information broadly supports the expectation of
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