universal suffrage. a man in critical condition with ebola in dallas. we speak to an expert on tropical medicine. and don't blame wall street for the crisis. america.n failed good morning, everyone. this is bloomberg "surveillance," live from our headquarters in new york. it is wednesday, october 1. i'm tom keene. joining me, scarlet fu and adam johnson. october 1, amazing. >> the year marches forward. >> we have some action in the currency markets. the yen weakening for the first time in august of 2008. that is significant. the euro, by the way, briefly 1.26 for the first time since 2012. was it 3:00 a.m. or earlier than

that? >> it was earlier than that. yesterday afternoon that drop-off in oil was stunning. >> the one thing that has not fallen yet is gold, hovering at 1200, but that is the critical spot. >> we will do a data check in a bit. factories cut prices the most in a year. you can see why the euro is down given that action. change atployment one thirdcuts about of the paychecks for workers. when you factoring and construction data -- manufacturing and construction data, and throughout the day we will get auto sales figures from the auto companies around the world. obama hosting benjamin netanyahu at the white house, and secretary of state kerry

will be meeting with his chinese eng yirpart -- w . below 17to sales, just million. let's do a data check. there is a lot going on here. futures at negative two. it is grinding in to four digits .ow, 2.4789 that bears close watching. there is the euro that adam was 1.2615.about at at 91.610. the vix showing a relatively resilient equity market. 109.78.

it really gets your attention on the bellwether for global oil and gold. you cannot get to 1200. that bears close watching as we go to the jobs report friday. here is oil with the volatility of oil, and you can see the tight trading range in the last year and then, loops, i would say within the microeconomics, where is the demand going to be along with a fair amount of supply coming on? >> and also the dollar pushing pricing dollars of commodities lower. >> this is ugly. this is really a market trying to find it did -- trying to find a bid with it going down, going up during we have seen this before. the set of this is worth paying attention to across our stocks, bonds, commodities, and

currencies. >> three things are going on. number one, a demand slowing for .il, two, the dollar moving up >> that will continue to be the case. let's get to the front page. these are the stories we are keeping our eyes on. the first case of ebola diagnosed in the u.s., specialists from the cdc going to texas to try to track down anyone who had contact with this patient. the man is being kept in isolation in a hospital in dallas. he traveled from liberia, arrived in the u.s. on september 20, began to show signs of the disease on september 24 and is in the hospital in critical condition. a handfulosed only to of people while he had symptoms. the cdc says there is limited risk of an outbreak. >> it is certainly possible that someone who had contact with this individual -- a family member or other individual -- could develop ebola in the

coming weeks, but there is no doubt in my mind that we will stop it here. texas doctors are talking about using experimental drugs as a result. is thethe comment there cdc effectively is saying we will stop it here and they have no doubt. from cook is joining us washington. what makes the cdc so sure that it stops with this one individual? >> them of that of course is the confidence the cdc has in its own protocols and in the doublet health infrastructure in this country. that is what makes it so different -- and in the public health infrastructure in this country. that is what makes it so different from other countries. to be able to isolate this patient, to trace the people he came into contact with, and to break it down from there. it is a level of confidence that not every country in the world has, the united states has its public health system.

and controlling any risk of hysteria. >> nigeria is trying to be like the united states with a better infrastructure. the mystery to me, heater cook, , is which- peter cook airport this guy came through. we do not know that, do we? >> we do not know that. we don't know the character -- we do not know the carrier or if he stopped in any cities along the way. the director of the cdc says it does not matter because he did not show any symptoms before he was on the plane or when he got off the plane. he had his temperature taken before he got on the plane and he had no temperature. display that he did not any symptoms before the flight, that suggests that no one on the flight or the airports that he traveled through faces any risk of exposure. it was not until four days after

he arrived in dallas that he showed symptoms. the one real question mark is when he walked into the er on the 26th and complained of symptoms, did not feel well -- apparently at that point, no one asked if he had been traveling to africa or if there was any risk you was suffering from ebola. two days later he came back in an ambulance to the hospital. you are inize washington, this patient is in dallas. any angst or concern? i know i would be scared if i was in dallas. it is just kind of a reaction. >> there is one factor that is worth considering. one of those doctors who was -- who initially came down with a bullock, ken brantley -- with ebola, kent brantley, came down

with ebola and lived to tell the tale. that has made a big difference to people in the community. they followed his case so carefully, and they know you can survive. notn, the risk, if you were exposed to this person in direct fashion, little risk to anyone in the dallas area. >> coming up on "bloomberg surveillance congo we will speak with the -- "bloomberg surveillance," we will speak with more experts on ebola. let's get to our second front-page story. hong kong, perhaps the biggest yet because of the national holiday. hong kong house chief executive was jeered as he arrived for ceremonies marking the 65th anniversary of the people's republic of china. beijing'sse defending plan to allow people to elect the chief executive, but only those that it by beijing -- only

ed by beijing first. >> what are the distinctions that you see over the last 24 hours? >> protests turned violent over the weekend, but since then it has been quiet. andrewg kong reporter, davis, said there is a festival-like atmosphere. >> is that still there? >> apparently. >> it seems like a strange characterization, a festival-like atmosphere, and yet that is what he said, with images of people who were interacting with one another as though they were on a picnic. >> is very orderly, people going to the grocery store, getting water, recycling, meeting up after themselves. our last front-page story, deutsche bank set to suspend bonuses for top managers.

this has to do with the deferred bonus awards given to seven top managers in 2011. four of them are still working for deutsche bank, including the co-ceo's. the most senior guys. they took the action because of the bank's widening legal bills. they have been battling several thelems in europe and in u.s., including allegations that they are manipulating benchmarks for interest rates. >> the bonuses actually go back to 2011. >> absolutely. and wells fargo will be reporting on the 14th. we will head to that without guest host. >> bill isaac's joins us, the former fdic chairman, and geoffrey dennis is not scathing on washington. he looks at emerging markets. there seems to be a correlation

going on. do you see a new, more urgent linkage between commodities and currencies that can lead to trouble for equity markets echo >> with emerging markets you are having that trouble already. we had a huge selloff in september. all the gains we had yesterday, only about 10% at one point, have pretty much disappeared. >> does that follow into the major markets? >> i don't think so. given the economic challenges in europe and japan, the weaker currencies are helping. of course, the u.s. economy has the benefit of a decent growth. >> part of that is a strong banking system, to push against you. the banks are better, aren't they? >> yes, they are, but i am not happy with where they are. i think our regulatory system and monitory -- monetary

policies are causing a lot of problems and slowing growth. really harsh, a critic of dodd-frank. >> especially in his new book, " washington failed america." our twitter question of the day is brought -- what could trigger a selloff in u.s. stocks? tweet us your thoughtful @bsurveillance. >> let's give you some live pictures of what is going on from hong kong. we will bring that to you shortly. but when we come back, we will talk to hong kong's democratic chair. this is "bloomberg surveillance ." ♪

>> good morning. take a look at these live shots of hong kong's admiralty district where the government offices are are located. protests are intensifying today into the night in hong kong as today marks the 65th birthday of the people's the public of china. us to discusss what is next. the question for observers outside hong kong is how far will china go and protesters stand their ground? how far will the protesters go to make their point? >> i think the protesters are very determined, and they are very young and very peaceful. this is something quite remarkable, to see all the bloodshed and slaughter around the world, and in tiny little hong kong we insist on fighting

for democracy in such a peaceful and orderly way, which i hope will create an impression on many people. so we certainly hope that , andng will listen to us our demands are very modest and very reasonable. now the ball is in beijing's court, so let's see what beijing will say. >> a ball is in beijing's court, as you said. legislator, you have been out in front of this one country, two systems principal. -- help us understand why beijing's decision to limit candidates for the 2017 election is causing so much disappointment. is it consistent with everything china has projected? >> the hong kong people used to not pay too much attention to

the fight for democracy here, but this time around, i guess the main difference is that beijing has actually made a promise that we can elect the chief executive that is the head of government by universal suffrage. and now the student movement is very strong, both the secondary school and the university .tudents leading the movement they have galvanized. many of the young people. galvanized many of the young people. the fact that raging -- the fact that beijing has reneged on its promise and the young people feel this is their home and have to fight for this -- fight for their future, there is this outpouring of support. >> you mentioned young people. 17 and 18-year-old students are leading the protests. democracy veterans like

yourselves -- democracy veterans like yourself, how do you fit in with this young leadership? >> i think we work together quite well. we know the students are our future. so if they want to play a big risks,hey want to take we think, ok, go ahead. this is your life, you hold it in your hands. we are not going to stop them. many of the young people feel very much energized. this is something we have never seen before because in the past they always say, oh, the kids do not care about politics, they do not care about anything apart from their own well-being. now that has all changed. it is good for all channel -- it is good for hong kong and good for china. >> i can see what you are saying about the 17 and 18-year-olds and their views on this. much,lau, thank you so

chair of the hong kong democratic party. china,heritage of ubs in johnson anderson wrote trenchant essays about china. how does this fall over into the geo-economics of china? this cannot help, can it? >> it absolutely cannot help. it is more the geopolitical issue here, the protests that comparisonn, the with the genoa scourge. that this will blow up the economy and cause the gdp to fall sharply. we expect growth rates will continue to fall below 7% next year, but i am not sure this has -- unless you continue on for a long period of time. >> if you have a conduit to hong theyor the united states,

made a bid on your condo yesterday, right? >> that is a great point, to what extent does this distract the leadership? >> it does distract the leadership because this is a big challenge. i agree with the comparisons with 25 years ago. so economy has fallen sharply, the amount of policy stimulus put in place has been a surprise to us. they are trying to manage the slow significantly. so far they are kind of doing it. we had weaker data over the summer, but we think it is on track at 7%. but this is a distraction. 7%.hina, gdp falling to you have the euro falling below 1.26 for the first time in a year. what could question,

trigger a selloff in u.s. stocks? tweet us @bsurveillance. ♪

>> good morning, everyone. "bloomberg surveillance." a very difficult afternoon for oil. futures at negative two. >> i am going political, thanks to fred arnzen of "the weekly -- fred barnes of "the weekly standard." "i have never seen anything like this keep senate control.

if mr. reid and mr. obama save a senate seat or two, their strategies will be copied campaigns will come." it is getting nasty, bill. you ran the fdic. how much nastier is washington now than what you were dealing with, when you were dealing with people on both sides of the aisle? >> considerably. we have so many safe seats for the incumbent. the thing they fear is attack from within their own party. so the liberals will not move to the middle and the conservatives will not move to the middle because in either case they will be challenged in their primary. as a former clinton strategist told us, in the middle you only get 22% of the vote. so you have to go to each side. >> i think the incumbent, the

way they had gerrymandered the oftricts, are safe in 90% cases. so there are only a few seed up harsh -- so there are only a few seats up for grabs and the incumbents are worried about a primary challenge. look at mitch mcconnell. it has become much more partisan than it was when i was in the government in the 1980's. >> bill isaac, former fdic chair, one of our guest hosts for the hour. don't miss bloomberg's show "all due respect." this is "bloomberg surveillance ." ♪

on "bloomberg west," two interviews you will want to see today. hurd, and mark be, the ceo of oculus. >> at start with a $2.7 billion ipo in amsterdam. than $3aised more billion and will have a market cap of $6.2 billion when shares begin trading.

job cuts coming at general mills. the company says it will eliminate up to eighth in salary positions in addition -- up to 800 salaried positions. it is trying to reduce expenses because of flagging sales. hopes to raise more than $350 million and will offer 11 million shares at an expected price range of $25 to $28 apiece. that is the latest company news. >> of course, our goal is to give you some clear thought on ebola. there is no vaccine. penicillin will not do it. with the first case of ebola in the united states, there is heightened awareness of what could come. it is suggested the virus will not migrate from the tropics to the northern latitudes, and yet peter cook says the president of is arguablynstitute

confident -- how do we contain our ancient worry about these viruses? is a scary disease. it has a high lethality. but we have to remember the situation we have in the united states is so different from what we are seeing in liberia and guinea and sierra leone. this is a virus that is not easily transmissible. we have a health care infrastructure and the risk of an epidemic occurring like we are seeing in west africa is practically zero. >> i think of your work in biochemistry, molecular biology. from theour wish list government?

>> i think right now what we have to put a lot of emphasis on to contain the epidemic in west drugs, newo get new vaccines out there as quickly as we can. ebola is a tropical disease. we make vaccines from neglected tropical diseases. our technology to make these products has outpaced our social and political institutions to get out there, so we have to accelerate their development. >> the history of penicillin and the ramp up we saw in antibiotics -- how close are we to a broad is to be ocean of therapy for western africa? >> that is a great question, and that is the question everybody wants to know. what we have is a promising drug being produced by the chemical subsidiary of fuji film in japan. we already know it is safe in human trials. it has great activity against ebola in animals.

i think the company says there are 20,000 doses ready to ship out. it is one we have to move on very quickly. we also have two or three promising vaccines. the most promising out of the gate is by glaxosmithkline and nih. >> speaking as a doctor, can you help us understand what makes the protein of ebola so difficult to block? well, it is not that difficult a target in the laboratory, and that is why we have a lot new promising products. the problem is there is no commercial market for these neglectedlike tropical diseases. so the major pharmaceutical companies have not had the incentive to develop it. the technology is there, we just have to put the funding in and introduce these products into liberia and guinea and sierra leone.

that is not easy because it is a chaotic situation right now, and that is why i am excited that president obama it is sending 3000 troops to create a health care infrastructure. >> the heart of the matter is that these are societies that do not have the infrastructure to begin to contain the virus. how close are we to an epidemic? in an epidemic situation already in west africa. remember, these three countries that are effected -- that are affected have only recently andged out of horrific war civil conflict, and the first thing that suffers is health care infrastructure. when we talk about the neglected tropical diseases, the tropical part is a misnomer. these are diseases of poverty and conflict. >> peter hotez, thank you so much. an honor to have you with us

today. he is at baylor university and the national school of tropical medicine's. >> we take a look at the threat of capital controlled in russia. reinstating capital controlled. and that brings us to our critical -- to our twitter question of the day. what could trigger a u.s. selloff? stocks remain i would not say elevated but resilient. tweet us @bsurveillance. ♪

morning, everyone. wednesday, october 1, 6:39 p.m. in hong kong on a national day for china. the crowds are ever larger. scarlet, you is he just these are new large sizes -- you would suggest these are new large

sizes? >> the student leaders driving has made the demand that the chief executive resigned by tomorrow. >> as we capture this image of happy disobedience in hong kong, we wonder how long this will last. >> it has been very festive, very peaceful, as opposed to the teargas attack over the weekend. storywill follow-up on a reported yesterday. the fcc eliminated a federal tv blackouts of nfl games when seats do not sell. roger goodell was protecting the owners, as he did in the ray rice disaster initially. regulators voted 5-0 two eliminate this rule. well, it is close. >> and roger goodell opposed it. julie pearson was grilled by

lawmakers yesterday, and several congressmen said they lost faith protectecret service to the president and his family. and a former u.s. president marks a milestone birthday. jimmy carter is 90 years old today. happy birthday to the president. he is not the oldest living x president. -- the oldest living ex-president. that goes to george herbert walker bush. >> what happened to the most popular ex-president? >> it is just great to see them longer. president obama will be so young when he leaves office. >> he will have time for a second career. >> is is not an editorial, just an observation. i could not believe the head of the secret service did not resign yesterday. >> the disclosures just got worse and worse. >> it is bad. without editorializing. >> it is bad.

>> the secret service in russia is more organized, right? >> under vladimir putin, i would guess so. flow of money leaving russia -- this is a normalized chart we will show you where all the assets -- in this case, declining. the white line is the micex index. the yellow line, the local sovereign bond index. it tracks credit in russia. and the red line is the russian ruble in u.s. dollars. we have inserted it. it is not conventional. in this case, the move lower indicates a weaker ruble. at a oh on speculation that moscow is considering -- on new speculation that moscow is considering new capital control. that you had announced

they would take money out because of capital control, i think it is counterproductive. russia loses money consistently on a regular basis. all that has happened this year is that some of those capital outflows have accelerated because of the crisis. when i was in moscow, everything seemed kind of normal with people going about their business. but in our business, some of those no flows are coming in and people are negative about the outlook for assets. they bring panic. geoff, you are one of the people i thought of first. the idea of seeing these headlines -- is it the first and --n the dyke of food of vladimir putin's --

>> the capital controls have been going on for a while. the issue for vladimir putin and russia and is very high approval rating following these events in the ukraine is, what does the economy do? if you start to see a weaker economy such that the man on the street starts to suffer and you see higher and employment -- higher-and employment, that is the potential crack. >> or were protests on the streets about mr. putin last week. >> then there were protests of the protests. i am lost. we go to a chart when i am lost. this is commodities prices, the cr be bundled index, the view from 35 thousand feet. it is a fascinating chart showing the china boom, then down we go and we rollover. it is not that we are at the precipice, but it is like gold, sort of.

we are there. observing link commodity disinflation with what we see in russia? >> lower oil prices are a problem at the margin for russia because of the huge amount that they export. what is going on with commodity prices is telling me perhaps that the global economy overall is weaker than we all anticipated. the numbers you're getting out of europe and japan, the big downgrades to emerging market growth this year -- maybe that will be reflected in commodity prices. trop -- the $20 drop in the price of oil since june has anticipated there will be supply disruptions because of the events in the middle east, and that has not happened. going down the way they are tells me people are nervous about the global economy. and maybe rightly so. >> none more so than nouriel roubini.

he was writing about the market's racket -- he was writing about the market's radical complacency. he said the weakening of china's economy could trigger global financial panic -- global financial havoc or the fed could spark financial contagion by exiting zero rates sooner than markets expect. is he being too pessimistic? very thek he is markets are down heavily in certain parts of the world, including my world in emerging markets. the first comment he made our inconsistent. if you get financial concerns itause of hong kong -- what does is put the fed on hold for a while longer if it worries investors. there is no inflation out there to speak of. the economy is moving along nicely, so i think those two comments are inconsistent. it is more the case of the

laundry list of things that could go wrong. any more in other markets. we may be in the u.s. markets. >> is the fed getting away -- getting in the way of your bank's ability to generate income? >> i think the fed is in the way, dominating markets for five or six years now. i don't know what the markets really are right now. without the fed support and other central banks around the world. the trouble something is, have they used all of their ammunition? do they have nothing left if some new crisis occurs? i think that is the most troubling thing. want tois something we explore, the linkage between washington and the banks. bill isaac is the former fdic we will and also discuss this with him. you are watching "bloomberg surveillance." ♪

>> our twitter question of the -- what could trigger a selloff in united states stocks? @bsurveillance. our twitter question of the day. richard frost in hong kong protestersthe mix of and -- we thank richard frost from his room -- for his reporting from hong kong. that's get to company news with scarlet fu. >> we start with apple.

the company will add the new ,olor option for its ipads according to people familiar with apple's plan. the strategy is aimed at boosting shipments. ipad for tom keene. sayswall street journal" they are offering busy dvd titles. overn is negotiating pricing. a pay cut for the ceo of cisco systems. john chambers getting $16.5 million in compensation for the latest fiscal year, a 22% decline. that comes after cisco fell short of its revenue for operating targets. >> can i give john chambers a victory lap? i have been one of his harshest critics. 25 and has to sustained there in the tech

rally. cisco toracle to microsoft -- >> i don't mean to interrupt, i just think that john has done a pretty good job. >> opening arguments in the government-aig trial. meanwhile, tapes recently made public raise questions between the relationship between goldman sachs and the new york fed. our guest host bill isaac was chairman of the fdic. he did not run it. he was the chairman. of also were the chairman bank, and in your book you say the government has failed. what is this new generation of regulators still getting wrong? >> they are not getting much right, in my view. they have got things backwards. bank regulation really needs to be countercyclical, not

procyclical. you need to go against the prevailing wind, and they are not doing that. they were feeding the beast during the 2005-2006 period, 2004. lower capital requirements, lower reserve requirements, creating a lower speculative bubble great in the last five or six years they have been in the opposite direction, trying to raise capital requirements and raise reserve requirements and clamping down when you really need to be lifting them up. you need to let banks have some freedom so they can get the economy going. the economy is not going anywhere without the banks. so they allowed things to get way overheated, at now they are camping on the brakes, pushing on the brakes too strongly, and that is why we are having this really sluggish -- probably the poorest recovery since the great depression. we have not seen anything this bad. >> although it seems just

unpalatable to say you have to be kind to the banks right now. >> i agree, because the passage of tarp, which i strongly up rose to -- which i strongly opposed -- if they use taxpayer money, we would have this political firestorm. that is what is happening right now. it really is him petey the recovery, in my opinion. impedingt really is the recovery, in my opinion. >> are we overbanked? >> i don't think we are over banked. , but over00 banks half the industry, two thirds of the industry is controlled by 10 banks. i do not think we are overbanked . we have a lot of community banks, and frankly i would like to see more of them.

but it is a pretty concentrated banking industry right now for a country of this size. >> it is also concentrated for fannietgage financiers, mae and freddie mac. setback the corporate get in the way of fixing fannie mae and freddie mac? >> any you do something like you did with freddie and fannie, the government -- the markets are going to be a stressful of the government. in the aig case and the litigation regarding fannie and freddie, these things are not helpful to the free enterprise system. the u.s. really has to bend over backwards to be a country of law , and we broke a lot of laws, a lot of rules during the crisis. >> bill, thank you so much. "senseless panic" -- don't write that around the wet socks -- don't write that around the red

sox. the canadian dollar, a 1.12 handle. we say good morning to all of you in canada. >> when we come back, we will discuss it below arriving in the u.s. ♪

but good morning, everyone. we take you to hong kong at this morning -- this moment. there has been, some say, a happy disobedience. picking up a little bit right now as the cell phones are out in unison and in support of the this, onracy movement national day, and china. this is wednesday, the first day of the fourth quarter of 2014. >> we will go straight to hong kong right now. davis,g in with andrew joining us live from our hong kong studio as the protesters gather outside. what is different about today's protest? i know it is a public audit and more people are attending. is ahe tone changed -- it public holiday and more people are attending. has the tone changed? the streets are relatively

calm and festive. i was speaking to one of the leaders of the one ago and he seems to be trying to ratchet up the pressure a little bit, basically saying that if chief -- didve loon didn't not not resign by tomorrow, they plan to escalate. but they didn't say how. now they are saying that they may surround his official residence and possibly try to occupy government buildings. that would clearly set off some kind of confrontation with police. >> so there is a hard deadline in place here. >> yes, but they said yesterday was the deadline. they are not sincerely speaking with one voice. knowing howway of big this was going to get, and i'm not quite sure they know how to get out of the situation either. >> as the protest got larger, especially today into tomorrow which is another public holiday, do you see an agenda changing? have the student leaders changed

what they want? >> i think their goals have not changed. they are trying to figure out how to achieve them and it's not easy. the main goal is to get beijing to get -- back down on its plans when therecandidates are elections in 2017. beijing's position is, hey, we're giving you an election. hong kong has never had an election to my not under the british and not in the post-handover timeframe. will have a screening committee for the candidates. >> what can you tell us about the student leaders here? because it's a market difference -- a marked difference. you have 17-year-old an 18-year-old children, some might say, calling the shots. >> yeah, it's very interesting to see how quickly this got out

of the hands of occupy central, which is the most -- more established protest planned for today and tomorrow and then go home. a lot of this had to do with the police reaction and the use of tear gas. of they do not have a lot experience running an organization, the students. and the numbers are topping 100,000, possibly 150 thousand last night. who knows what it will get to tomorrow. >> martin lee was talking to us yesterday and telling us about how beijing had to be behind the tear gassing of protesters. do you see any evidence that the pla or the chinese soldiers, chinese authorities are out there? >> no. i suspect they are out there. i'm sure there are plainclothes people observing this on some scale. but since the incident with the

tear gas, the police have almost been invisible. they are there providing public safety, but really at a distance. that is one of the things that has ratcheted down the tension so much. there is very little police presence and you don't see any riot police at all now. did a decision like that could not be made and would not be made without beijing's knowledge. it's hard for me to say. you would think that they have been preparing for this confrontation. everyone knew it was coming. maybe not on this scale, but everyone knew that this week, occupy was going to happen. the police have been preparing for it. if they were going to go out and used tear gas, it must have been discussed in advance. david, thank you for your perspective on what is now a very large protest gathering. >> as david just said, 100,000, maybe even 150,000. let's listen right now to

central and the causeway in hong kong. >> and of course, those are people's smartphones lighting up at seven of 4 p.m. local time in hong kong. , thesething that he said are young kids wrestling an elephant. >> this is connected with some other news as well. down again is a weaker yen. that is favorable for all at 109.ant -- favorable the cdc confirmed the first ever case of ebola diagnosed in the u.s. a man traveling from liberia with no symptoms two weeks ago has been placed in the dallas isolation unit.

peter cook is in washington. we wrestle with the inevitability of this, but on the other, what is the cdc doing to ensure the race -- ensure the safety of the rest of us? >> there were some at the cdc who saw this possibility as likely and were ready for the event. the notion that someone would come down with it in this country, given what is happening in west africa. what has the cdc done? it has basically kicked in its protocol in dallas. this is a sophisticated hospital, and community that has an excellent public health system. they have already tracked down about 12 to 18 people with contact with this person who are simply being watched at this point as to whether or not they have been it goes. you have three people in an ambulance to transport or this person. they are not on the job anymore,

just keeping track of their fever. the cdc said this could be stopped in its tracks in dallas. for the most part, the people in dallas had the same confidence at this moment. americans confidence might be shaken at that point. >> absolutely. we thank you for your coverage and the lack of hysteria. what does this do in the changing of the dialogue in how we deal with western africa? we have the immediacy of dallas. does that change what we do in sierra leone? >> i think what we're doing in sierra leone is already changing, thanks to what president obama just announced david and weeks ago. they are creating a logistical infrastructure to try to deal with the virus in west africa that was not there before. no other country has committed that kind of resources to this effort so far.

people said america could watch from a distance. obviously, that is not happening. this decision from the obama administration, and a decision was global health implications that if the u.s. doesn't do it, someone else needs to do it. but with the u.s. three -- with the 3000 u.s. troops, we will make a difference in this fight. >> one of the things that is a bit strange is that the government has not told us which airport he came through. justs the government not saying, he landed here at this time, etc.? >> the government knows and the cdc knows where he came from. they know the flight he arrived on. they know his travel route. cdc we heard from the director tom friedman yesterday is that there is no need to disclose that information right now to unduly make people never sit out a, because he did not display any symptoms during the course of his trip. if you don't display the symptoms, you are not at risk of exposing others to the ebola virus. symptomst display

until some four days after he landed in dallas. that was on september 20. that was when he first started to show some symptoms. that is why we don't know the carrier or the route he took. but you can be sure people are asking questions about it, and certainly a lot of folks on the plane would like to know whether or not they have been exposed. at this point, the cdc has decided not to release that information. >> peter cook, thank you. --we enter the first quarter the fourth quarter. it has been at tumultuous 2014. place for growth is china, according to our guest. he is long and big on alibaba. they've never done a high-tech ipo for years. the transnationals and go

abroad and all of that. >> and ready visible financials, a pretty visible growth path. and alibaba, i think was so afraid of the facebook phenomenon. well.ey priced it ready and we think there is pretty good value. >> i had no less than three people ask me if i buy -- if i will buy alibaba. of course, that is nobody's business. do you have your shares yet? >> we are the guys big but -- we are the guys that bought goldman sachs and j.p. morgan. there's somewhat of a leap of faith in what you are buying. it is a leap of faith, but i think we've never done it before the chinese company. >> you are long on the u.s. equity market. >> we are.

behind us, butas you can still make money. >> chris grisanti is with us. >> a lot more to talk about on bloomberg surveillance, but as we greet the next segment, we just want to show you these pictures of what is going on in hong kong. it is national day right now. you can see the crowd gathering. there is cheering. than 100,000, according to andrew davis of bloomberg news. >> and peaceful. >> in contrast to the tear gassing. >> and the police have not been involved. >> we will continue to monitor this. ♪

>> this is bloomberg surveillance. i'm scarlet fu with tom keene and adam johnson. after months, we broke this news yesterday. carl icahn get his way. ebay and paypal are another notch in the belt of this investor. to spinany has decided off its payment unit. as the company looks around to decide who is next, we ask, how do corporate boards respond? how do they preempt a carl icahn coming in? we turn to robert kaplan, former vice chairman of goldman sachs and professor at harvard business school currently. he joined the -- joins me now. do they even have the luxury to do that, given the track record of carl icahn and other activist investors? can they shrug them off? opec they cannot shrug them off, but -- >> they cannot shrug them

off, but they will look at their company differently before carl icahn shows up. but once carl icahn or a dan loeb shows up, you've got to do the analysis that they do and see if you agree. >> splits are very much in vogue right now. but not so long ago, it was -- it wasinging touted in the valley to bring companies together. is it about compensation? >> i think there has been a that aince the 1980's clear focused company is easier for wall street to understand and tends to be valued more highly. flows -- thebsent flownce low -- the ebb and in the last 30 years, there have

been cleaner takeovers. activism has gotten engaged in earnest in the last few years. maybe a little bit of discipline broke down, you could argue, in the past five years, and you have some companies that build conglomerates. i think you are getting back to the natural trend, which is focus. sometimes management has blind spots and tends to overestimate the ability to run different kinds of businesses and the synergies that come from running them together. what an activist does is force them to face the blind spots. but what about the broader environment -- >> what about the broader environment? a lot of people say that this is good for activist investors. what does this mean for the carl icahn's of the world? >> i think the bigger trend is in the debt and i could he world. when you look at the rise of exchange traded funds, it is harder for mutual funds and even

hedge funds to outperform the market. activism is a new form of investing that so far, by and large, has outperformed. as money managers look for ways to differentiate himself, i think activism is here to stay and will probably grow. mainly, it's hard to outperform the equity market and that is the predominant challenge. >> chris christie auntie, i think he just hit -- chris christie auntie, i think he just hit a key point. you have to become an activist if you want to create value for yourself? >> less evolution and more revolution at companies. the tough thing at ebay, for example, is that you're giving away the crown jewel. give away the highest growing part of our company? >> the same thing if yahoo! were to sell its stake in ali baba. what would be left? >> exactly. 15 years down from -- down the .oad from the internet boom

>> i like that, evolution and not revolution. robert, i want to go back to the first point you made, which is what boards do to deal with activism. what are the best kind of board members that are equipped to deal with activist investors? is it the ceo? >> you could have various kinds of backgrounds, but you need to have a mindset on the board that we want to look at ourselves like an outsider would. in my experience working with boards 25 to 30 years, a good board, regardless of the backgrounds, will want to get an outsider to take a hard look at themselves and say, where would an outsider look to find value? figure in the capital allocation, the construction of our business portfolio, or even in the margins of our business the criticismse from outside? whatever your background, the

need to look at that from the outside. those that do not, they will probably have to look at their board competition and get a group of people that will think that way. composition and get a group of people that will think that way. >> the ceo resistant initially what carl icahn wanted and then did give in and will not have a role with either ebay marketplace or paypal. >> right. and you see, the tricky thing -- and your host their mentioned it. the tricky thing is the actual financial bump from spinning off there is going to be a bump and you already saw the stock trade off yesterday. it will not be that compelling. when they did the analysis, i would guess that they said, yes, there's a bump from spinning off paypal, but it's not overwhelming. i think the reason this board

finally changed its mind, in addition to pressure from activists, if they realized strategically, paypal may in fact be run better if it's not part of the day. ebay. part of blind spots,bout it's hard for management to accept that they have to give up the so-called ground -- crown jewel because it might be better run if they are not running it. that might be hard for the board to come to grips with. >> robert kaplan, thank you for your perspective. >> on a day when stock futures are flat, but we have the euro breaking 126 for the first time in two years, the yen going up 1/10 for the first time in about six years, our twitter question of the day -- what could trigger a selloff in u.s. stocks? tweet us. we'll be right back with chris grisanti of grisanti capital. ♪

>> good morning, everyone. i'm tom keene. scarlet fu with me and adam johnson as well. we need to our next idea on ebola. his terrific perspective has assisted us in three nations in west africa, and now dallas, texas, confront the virus. anthony foxx he is with the institute of health. is with thechi institute of health. in this changed epidemic with the news from dallas? tells usws from dallas what we been predicting for some time now, that when you have a massive outbreak in a country

like be a west african countries with transportation back and forth throughout the world, it's inevitable that someone would be this case,d it -- in liberia, and get off the plane feeling perfectly well, but then get off in a developed country. it happened to be the united states. and then once you are in the country, you start to develop symptoms, gets sick, go to an emergency facility, and wind up in the hospital, which is what happened with this person who came from liberia and landed here on the 20th of september. in theson is here hospital now, being taking care proper infection control conditions. but the task now at the cdc authorities and texas health authorities will be doing is called contract -- contact tracing. in order to make sure it does not spread, you want to identify the people who came into contact with this person. that is the critical thing that will prevent further infection in this country.

but you are arguably our greatest opponent -- proponent -- youmining medicine are arguably our greatest opponent of combining medicine with policy. affectl this in dallas this dynamic echo >> the critical thing is we need to stop the outbreak in these west african countries. when you do that, there will not be any exploited cases. the policies in place are those that we decided on a long time ago. we have the capability in this country to handle cases that come over, as was shown in a number of cases, and as you will see with this texas case. but there is no major change in policy. >> we have a coalition, i believe in a rock and syria -- in iraq and here he. and syria.

do we need this as well with ebola? >> president obama address this in his address and said that we, the united states, have put resources in place to try to help the control of the epidemic in west africa. but no one country can do it alone. we need the united nations, the who, and a variety of other nations to step forward and put resources toward controlling the epidemic in west africa. >> within the mathematics of the withmic, 3000 and some ebola, do you have a trip point number? hurdle rateuci where even you become concerned? >> well, no. i don't want to give a number, but we do know from mathematical models -- and the cdc came out with this a week or so ago -- that if we do not accelerate, and when i say we, i mean the world community, not just united states.

if we do not accelerate our efforts, then we could have an explosion of cases to the hundreds of thousands and beyond if we do not accelerate our efforts. >> again, anthony fauci, we appreciate your efforts. >> the u.s. reporting more than 300 children in west africa have died because of the ebola epidemic. had a parent die because of the ebola epidemic. guest runs and orphanage there. we can talk about what is happening in dallas or what the cdc is doing, but you are in the thick of it. what is it like right now in liberia? likes it is terrible. everyone is so afraid. everyone -- >> it is terrible. everyone is so afraid. we are all very scared.

>> has it shut down the ability of people to interact with one another, to shop, took a water, etc.? >> absolutely. touchy people.ry we are always shaking hands, hugging, and you see friends on the street holding hands. today, we are told not to do that. we don't know how to interact with each other anymore. >> are children able to play with one another? i know you had to send kids to the countryside to keep them safe. can they play with one another? are they quarantined inside their homes at all-time -- at all times? >> they are pretty much quarantined at home and they are told on a daily basis, do not touch your friends. do not get close to your friends. if there is any rumor of a , whethering sick anyone here is sick or in

another county, kids are told not to touch that person. >> do you have any confidence that the 3000 u.s. troops on the ground will change the lives of the children directly involved in liberia, or their parent? >> yes, we are hoping. those soldiers in the communities right in your villages. but we always appreciate when americans come over. -- >> we always appreciate when americans come over. when americans come over, something good is going to happen. they are -- we are appreciative of the 3000 troops. hospitalsght now, the are shutdown. nobody wants to go near it. >> what is life like? are there shortages of food? do you feel comfortable going after food or water? and i assume there is no other life, like restaurants and movies. everything is shut down. >> right now, there is a food shortage. rings are extremely extensive.

-- example, a bag of rice liberians eat a lot of rice on a daily basis. a small bag of rice was 15 u.s. dollars. now it is $40. of -- we had a civil conflict for 14 years. it kind of brings that back to memory again. we are very insecure place right now. life has changed overnight for all of us. in february, when we first heard the news about ebola, we thought it was comical really. what is this ebola thing? and then we sorted doing research and found it was in the congo. and we thought it could never come here. >> when did it start to become serious? >> not until the first government official went from liberia to nigeria. that is when he took it seriously. >> it was a frightening thing, because you have these educated doctors who took -- who knew the cautions to take and they got

sick. >> but it goes back to the way liberians are very touchy group of people. doctors would not want to make their clients or colleagues feel indifferent. knowing it was ebola, they would still get close to you, just to show "i care for you." and a lot of the doctors that went there were humanitarian doctors. americans go to monrovia and they say, i went to liberia. but that is not necessarily the truth. if you got -- if you go south and east to fishtown, down the coast of these smaller communities, how different is that from what the media are observing in monrovia? >> it is night and day. fishtown is a very impoverished area. there are some extremely hard ghettos and slums. that is the african experience. everyone has their thing to go

, whetheror in africa it is to stay in a fancy hotel and pretend they went to do humanitarian work. >> for those of us who want to help, how can we help? >> we need help with -- i work with children and right now, they are living in foster homes. to educate those communities so that our children are not affected. right now, people are still touching each other, still keeping the dead in their homes, keeping sick ebola patients. we are working to educate these individuals. want to support that effort, how do we do that? cooperte to the macdella foundation, or the one of your choice. >> red cross and unicef as well

yet complex absolutely. red cross and- > unicef as well? >> absolutely, and to cdc research. are down ever so slightly. the u.s. 10 year yield is trading at about 2.5. meanwhile, crude is up about $.60. our twitter question of the day, given all of these issues, whether it is ebola, isis, ukraine, etc., what could trigger a selloff in u.s. stocks? tweet us. >> in the meantime, let's get to company news. we will start with a fund managed by investor bill active in -- activist investor bill ackman. online retailer wayfarer hopes

to raise more than $350 million. the boston company will add 11 lien shares at an expressive -- an expected price range of $20 apiece. that will be tomorrow on the stock exchange. and deutsche bank has the 20 top managers from 2011, payments are on hold because of legal fines. four of the executives are still employed by germany's biggest bank, in coding the -- including the co-ceos. .> our guest is chris grisanti these in search of value. that means when do you sell as much as what to acquire. describely begins to his scrambled bank stocks. someone say it takes courage. i thought we were in a recovery.

>> we are in a recovery. we don't see an imminent financial crisis. we just think that stocks have returned from crisis levels that were half of tangible book value. now we are seeing one another have times tangible book. that is what we do. cash flows of rising and dividends. >> things are about as good as they are to get at the banks. much more regulation than 10 years ago. they are back to normalized valuation. it is just not a good value anymore. maybe you don't want to own it to home, maybe you want to sell at third base or shortstop. where is the value? values is a grisanti story. things are very different -- we actually talked about airlines. now they are about 20% down from

two or three months ago. maybe that is the expectations of a next the -- economic slowdown. >> maybe to do with downstream oil? >> that is the big issue that is looming here. but the big deal is the cheap oil coming from the country. we need a new industry that has never before seen this competitive advantage. >> how do you play the daily thing that we observe in surveillance of lower corn, lower iron ore, lower gold? complex justy comes down. is that a bad thing or does it create opportunity? >> i think it is a great thing. even slowing china, if you think about what the federal reserve has to face, the federal reserve does not want inflation. they keep rates low and it is through thick for the market. plus, lower gas prices puts money in the consumer's pocket.

retail prices are cheaper. we have bought target and bed bath and beyond. will we stay away from his commodities. will stay away from is commodities. >> you are buying in a correction right now. >> yes, our virtual link timeframe is three years. chrisis chris on d -- grisanti, thank you. our guest host. kong,rs away in hong wednesday evening, and ever larger crowd. there foris is bloomberg news. happy disobedience. ♪

>> this is bloomberg surveillance. i'm scarlet fu here with tom keene and adam johnson. a fellow bear is sounding the alarm. here liu of in the loop is with us. some very pessimistic productions in the past. >> always. he and -- the two of them are fighting for the crown of who is the gloomiest person on this earth. you know mark farber has spoken out about how he thinks we are headed toward another global recession. we took a look at his bold calls that he made earlier this year on the u.s. he said number one, we would come off of our november highs in u.s. stocks -- november from

last year. and where are we? >> we have maybe 35 or 36 record highs in the s&p this year. >> exactly, we are up. he also said to short, majorly short some of the big tech stocks like facebook, twitter, netflix, tesla. he said they're all going down. where are they? >> they are up. >> almost all of them. twitter is the only one that you might have made money on post of it is down 20% year to date. but tesla is up, facebook as well. >> it sound like an ambush for mark faber. >> and he also said to buy gold. in its hovering at $1200. if that breaks, that's ugly. >> absolutely. he said go long, go gold. -- go long on gold. he has spoken out that the fed policy is wrong and they need to hike interest rates. where is the inflation? we have not seen it all year

long. in fact, people are talking about disinflation. we have seen gold trashed essentially in the markets. you would have not made a lot of money if you had listened to dr. farber. >> why are they saying they are not wrong? >> it always sounds wiser to be pessimistic. , we areoming out saying very optimistic about the markets, people would say i'm pollyannas, naïve. you are pushing your stock. what they have gone wrong is the resilience of the u.s. economy, and they have gotten that wrong for 50 years. >> and the donation of central banks as well. >> that is a good point. to marty'sgo back 101, which is don't fight the fed, don't fight the ecb.

i miss critical as anybody who gets it wrong, but, betty, i would be a lot more gentle on mark faber. >> are we picking on mark faber? >> i think on a statistical basis you are being hard on him and on the distributional case. the distortions of a guy like .risanti have to run every day i don't know if i could do it. >> if you have to come out with calls all the time and you're wrong -- like >> i completely disagree. people abouthave with calls and they are never called on that. -- >> it'srd to be hard to make calls when you are actually investing. >> the single distinguishing issue here is commanded keeps coming up month after month, the

said, the ecb, the bank of japan, etc., supplying incident cash. that is what makes that trend very difficult. every time you think the fed is going to pull away the punch bowl, you see the markets go down and they keep going. it's hard to make these calls when you have a fed that is paying attention to market movement. >> i would be curious to hear what mark faber has to say about what the fed does next as well. loop"liu on "in the begins at 8:00 a.m. thanks for joining us. >> our twitter question of the day -- what could possibly trigger a u.s. selloff? obviously, we are talking about u.s. stocks. these thoughts we got -- please tweet us. ♪

>> good morning, everyone. news.get to some company >> we start with apple. the company is going for the goal. -- gold. the company will add the color as one of its options. sales of the ipad have declined in the past two quarters after producing three $2 billion in revenue last year. and ready to kiss and make up, the wall street journal says disney is offering titles for pre-order. they had been removed from amazon because of pricing and negotiation issues. and finally a pay cut for john chambers, receiving $16.5 million for the latest fiscal year, returning a 22% decline. it comes after cisco sells short of its revenue targets. -- fell short of its revenue targets. currencies move, folks.

we've seen that this morning. the yen has moved a fraction. challenged by opec. challenged by a rock, syria, libya, two of those are opec nations. big oil is challenged by russia. maybe it is time to revisit the financial company known as exxon. , let's goanti upstream right now. i have not had an intelligent interview with a big oil analyst in i would say, five years. why have we lost this ability on these big companies? think growth is slow. we are talking about alibaba, the airlines. is 1% or 2%or exxon if they are lucky. companiesld those

respond if they have ample cash flow and they can buy back dividends? >> in the next three years, i predict they will come back into vogue. they will produce 3% dividend, 4% share prices. it has not been all that attractive, but in the next few years it might well be. >> it is interesting that you are saying they are dealing with slow growth. our the ceo's of these companies -- are the ceo's of these foranies doing enough investing? >> i think there is more and more oil -- of course, we have the american oil renaissance, but that is the tip of the iceberg in a sense. once other countries see how hydraulic fracturing has been, you will start seeing it in more places. >> the correlation is perfect. export -- exxon has had 9.2% growth in the past 10 years

while doing 10% dividend growth. >> yes, paying out the well. and no one gets credit. and actually, it was the heirs ironically,fellers, who pulls money out of fossil fuels. should we be finding -- should we be buying the refiners? because as the price of crude drops and the product stays up here, that widens their margins. >> absolutely, because tom and i walked -- talked about a while ago that commodities are going down. the price is going to be lower. we clearly see wti a lot lower and we think it will still be lower. those who gain from the price of oil, critically the refiners. and the refiners also have the advantage of low natural gas. upstreamare you

production? where is russia drilling? >> the kerosene. kara sea.ana see -- i see the complications, the technical difficulties. -- i would stay away from the upstream. you will not see the kind of returns that we want to see with our clients. >> can carl icahn change this debate? can activism coming to jumpstart a more intelligent -- like >> you see carl icahn in that space for a good reason. you cannot change the secular dynamics of more and more oil coming out of the ground. something we thought would not happen 10 years ago has caught up with us. >> even carl icahn cannot change that. we asked everyone what could trigger a selloff in u.s.

stocks. we have not had a lot of correction in three years in the s&p 500. >> correction being defined as what, 10%? >> 10% decline, yes. let's get some answers. year to date growth is not a cut with stellar. change in employment sentiment. >> i would switch that around. pre-symptom a good news. if you have a good unemployment growth, the fed will raise rates. all of a sudden, the biggest bogeyman out there is higher rates. >> ok, got to. -- gotcha. next answer. >> mario gabelli? >> mario draghi. and the last question. activist investors. could they trigger a selloff? >> no, i don't think so.

if it is something we just bought, and let's say, we just bought ebay because it is a 3% hold. but we are buying that for 50% to 70% gain over two or three years. and we don't want the management to be short-term, which many activist do. let's move to our stories of the day. >> ebola, no question about it. i'm watching the count in africa. it's as simple as that. not the daily migration, but i want to know every week, everyone -- every month, where's the count from 3000? >> i'm watching hong kong. there is another public holiday tomorrow. expect these gatherings to increase, perhaps. so far, barely peaceful. -- fairly peaceful. that is a live shot right now. there is a g.m. analyst meeting today and we will see if they say the same thing report said. highestsales are the

since january, 2006. can they keep doing it? with an agendati item of his own, too. like that is right. and tomorrow, going to the paris auto show -- >> that is right. and tomorrow, going to the paris auto show as well. and tomorrow, tom will be speaking to christine lagarde. ♪ . .

>> good morning. it is wednesday, october 1. we are live from bloomberg world headquarters. you are "in the loop." i am betty liu. i cannot believe it is october. the dollar.ighs on we will bring you coverage with and later, michael holland, who just came back from china. are activist investors on a winning streak? we will dig deeper. really --empire state realty trust. -- one year after taking them public, how is life changed and how -- why he would not rent to a company like uber.