>> from bloomberg world headquarters in new york, i am mark crumpton. this is "bottom line," the intersection of business and economics with a mainstream perspective. -- main street perspective. the first case of ebola in the united states. so what happens next? the first anniversary of obamacare enrollment and hong kong protesters threaten to occupy buildings as demonstrations reach day six. to our viewers here in the united states and those of you

joining us from around the world, welcome. we have full coverage of the stocks and stories making headlines today. 20 yeardetails of a dispute over cotton. michael mckee looks at why oil prices have plunged and why it matters to you. we begin with peter cook and questions over the first documented case of ebola in the u.s. peter, good afternoon. >> good afternoon. we have learned more about the patient at the center of this case in texas, dallas, texas, and whether members of the community may have been exposed to the virus. the patient himself is in condition atstable texas health presbyterian hospital. they are treating him in an isolation ward at that hospital. he showed up there on the 28th. separately we have learned from

texas officials and local health officials five children may have been exposed to the ebola virus by being in his presence over the weekend. peoplee five of 12 to 18 who may have been exposed to the patient at the time he started to show symptoms. those children are being asked to stay away from school. as you can imagine, the local community has raised alarms, certainly concerns on the part of parents worried about the health of their own children. officials alll say this can't be contained. we just heard from governor rick perry talking about exactly that -- state and local officials all say that this can we contained. >> rest assured our system is working as it should. professionals on every level of the chain of command know what to do to minimize this potential risk to the people of texas and out this country, for that matter. we learn more details on the

patient's movements before he was diagnosed and there is new information here. as we have been reporting since fromyesterday, he flew liberia. we now know that he flew through brussels before arriving in dallas on the 20th. he started to show symptoms from the illness on the 24th and on at this, he sought care hospital. he spoke with an emergency room nurse who asked if he had been traveling, and he said yes. that information we are now learning regretfully was not shared. he did not display openly ebola symptoms i was sent down -- was sent back with antibiotics. back toance brought him the hospital, the first nation ever diagnosed with a bullet in the united states.

>> peter cook, thank you. is withcs is samaritan's purse. the north carolina organization helps to run a hospital in liberia and has taken a key role . he joins me on the phone from boone, north carolina. sam farr thank you, mark. >> when we last spoke on the phone, that there were no confirmed cases in the united states. what was your reaction? >> it struck me that there were ways -- similarities and the ways that ebola was identified in the u.s. and in liberia. ist is the disease insidious. it is slow and means to do harm. essentially a man presented himself to the hospital. the disease was not recognized. he left, he came back later when he got sicker and now the

investigation case has spread out to 18 or 20 people who have potentially been contaminated. >> mr. isaacs, bloomberg news spoke to an emergency position in new york city and he said, quoting here "any infectious disease is just a plane ride away in our society now." humanitarian crisis of this magnitude, what do you think the protocol should be or people traveling to and from an area that has been ravaged by disease? a great question. i know there's a lot of concern whether or not the disease may have spread in the airplane. my education and my knowledge of it is if he was not symptomatic, did not have a fever, he could not be shedding virus while in the aircraft. the problem is, we do not have a rapid test for the disease. the only way they can test is after you become symptomatic. there is this time a

vulnerability where a person can travel and be carrying the , but not the infectious and not be detected. >> i am speaking with ken isaacs, vice president of international programs at samaritan's purse. mr. isaacs, how do you a lady he pulls fears and prevent a panic yat could -- how do you allay and prevent ars panic that could prevent you from doing good? >> we understand there are ways the disease has spread and ways to protect ourselves. quite honestly one of the easiest ways to protect yourselves is hygiene. wash your hands, wash your clothes. here.very normal, simple in africa, it is much more relevant. messages do health

not change depending on where you're located. >> you testified back in august that the world did not pay series attention to the ebola virus until two americans became infected. dr. kent brantly was working with samaritan's purse at the time. your organization has other members on the frontlines of this disease. what are they telling you? >> they are telling me the situation in liberia is bad. it is chaotic. we expect the disease is going , as you hear the projections. 1.i do want to make that i think will be encouraging to everybody make ipoint i do want to think will be encouraging to everybody. we have about 340 people there. none of them, none of our staff, none of their extended family have gotten ebola, and the way

they have not gotten ebola is simply being able to recognize the disease, keeping themselves away from it, the men themselves clean. i understand the cdc is concerned about panic. i understand the governor is concerned about that. it is a serious disease. once you find it in your midst, it is a little bit late then. unfortunately the man said himself -- the man or the woman, i do not know what the gender is -- was released in the ambulance people who took him to the hospital two days later did not recognize the disease and now they are all under isolation. >> ken isaacs, vice president of -- atational programs and samaritan's purse. thank you for your time. we appreciate it. >> thank you, mark. >> coming up, the obamacare one-year year anniversary. we take stock of the health care act. we speak with former senator

judd gregg. ♪

>> welcome back. student leaders of pro-democracy protests in hong kong war and that is the city leader does not resign by tomorrow, they will step up their actions including occupying several important government buildings. this adds additional pressure on the chinese government, which so silent remained mostly and preferred to let the chief executive deal with the crisis. protesters. ofy the heckling came as the city of protest.th day today marks a one-year anniversary since an moment in obamacare began. a survey found that $2.1 billion had been spent on the federal health care exchange so far. former senator judd gregg is cochair of the campaign to fix

the debt. welcome to "bottom line." thank you for your time today. >> thank you, mark. >> sir, the rollout of the health care act was a mess. that fact is not in dispute. one year later, how would you assess how the law is working? >> not very well and the final conclusions cannot even be reached because a large portion of the most important part of the law relative to its impact who havee people insurance through their employer has not been instituted because of unilateral delays put in effect to the president, specifically the employer mandate language. once that kicks in next year, i think you will see a significant shift in people from private insurance plans where they have lots of choice and get to design it according to their interest into exchanges where their choices will be limited and

where the subsidy of the .axpayer will jump dramatically where an employee, for example, has there insurance covered by a private employer and that costs the private employer on average $12,000. that employee goes to the exchange, the employer pays a penalty and the taxpayer picks up the difference. you can see the number, $10,000 per employee on average, will be huge when it starts to hit the taxpayer. there is a lot that still has not happened. a lot of shoes that have not dropped. the process is inconclusive. website the hill says an majority of those who apply for insurance coverage under obamacare are satisfied and 307 million people have signed up in the last year. do those number satisfied you given that critics contend that the law is an abject failure?

act whatyou have to was the goal? the goal was to get 40 million uninsured covered. if 7 million have been covered so far -- whatever it is, trillion dollars, billion dollars -- >> billion. >> yeah, really you're not making a whole lot of progress in my opinion. the fact that people are getting coverage but did not have it before, mostly through medicaid expansion is understandable. that is a plus for those individuals. but we still have an uninsured population that is in the range of 40 million people with a massive disruption of the health care delivery system being put in place. it has not really accomplished its goal, which was to ensure the uninsured. >> senator, a rasmussen report last month showed 30% of likely voters still want congress to repeal obamacare in its entirety, but 47% one congress

to go through the law piece by piece and improve it. do you favor either of these approaches? >> i think an outright repeal is unlikely improbably won't accomplish -- and probably will not accomplish all that much. the law is in place. some of it is working well. i will give credit, for example, for the insurance coverage for young people up to 26 who can plant. their parents' we also have pre-existing conditions being muted as a reason for not getting coverage. taking the areas where it is not working and improving on those is the right approach. itm for replacing parts of with something that works better. >> such as? >> for example i think we need to significantly encourage the delivery system to move toward a

capitated system, where basically you are in shoring, where the people being covered are covered to a certain amounts , the providerry essentially has to take care of that person within that amount. and the reimbursement for that amount equally should be the choice, basically, of the patients or the groups insuring the patients, that you go to the insurance companies or through these hospital groups. it should not be either/or. it is basically an outcome-based system where you get better value and better outcomes by not doing a utilization system, which is what we have today. arguably, obamacare tries to move us in that direct in, but it does it in a way i do not think is effective -- in that direction, but it doesn't anyway i do not think he is effective, forcing people off private

insurance into these exchanges. >> former new hampshire senator judd gregg, cochair of the campaign to fix the debt, joining us. always good to have you on the broadcast. thank you for your time. >> thank you. >> a reminder, we are four days away from our new politics program "with all due respect." it will be launched at 5 p.m. new york time monday, october 6, only on bloomberg. and we will have the latest on the markets update when "bottom line" continues in just a moment. ♪

>> fannie and freddie stocks are taking a hit today. shares are down after a judge ruled against fannie and freddie and investors who claimed that the government changed the terms of the 2008 bailout. among these, richard parry of care he capital and bill had and -- of care he capital bill ackman of pershing square. thank you. what is this all about? >> in 2008 the government bailed out fannie and freddie. the government changed the terms of the bailout. the initial terms were of the government would get 10% of the dividends from fannie and freddie. in 2012, they change the terms

so they would die per 100% of the profits to the united states government -- diverse 100% of the profits to be united states 100%.ment -- divert >> there were some amendments to this. what exactly happened? the government said it had the authority under a statute enacted in 2000 and eight. that statue created the federal housing finance agency. the government, united states thesury said they had authority to change the terms of the bailout and divert the profits to the united states treasury. fannie and freddie shareholders or upset by that. there are more than 20 cases that shareholders are filed against the government, arguing the amendment that change the bailout was unconstitutional, was a breach

of contract. yesterdayjudge basically said the government does have this right. when congress created this agency, congress granted the treasury this authority. >> it is very interesting. amendmentsaid this raises some eyebrows. the issue may be a moral issue or a policy issue, but it is not a legal issue. the judge said, your beef, shareholders, is with congress. they enacted this statute that gave the government authority to preserve the mortgage market and the judge said the government was within that authority when they amended the terms of the bailout. >> that's funny. when i saw that, it reminded me of something that chief justice roberts said about the affordable care act. your opponents, he said, your beef is with congress. it is not up to us to legislate

something congress should have taking care of. what does the ruling, the dismissal mean for shareholders? >> it is a setback. the shareholders would have wanted a different ruling, but the fight is not over for them. they can appeal this decision, and i expect them to. although they have not said they are going to yet. they probably have until the end of the year to appeal it. is for three cases. there are approximately 20 cases that have been filed, or including a slew of cases in new york city. that court will be a different judge. she does not have to necessarily follow the decision issued yesterday and she has made some rulings that favor the shareholders. seconds. where20 do shareholders go from here? >> i think they appeal the decision and a shift their focus to another court. >> so they are thinking they can get some rulings there? >> this case is not over by any

stretch of the imagination. >> to be continued. elliott stein, thanks so much. coming up, bloomberg is on the markets. down across the board, a day on the street. >> you can see, you you have tumbling after manufacturing was weaker than expected. not just large cap. no, take a look at smaller companies. correctionin territory. a 10% retreat from the all-time closing high on march 4. big movers. we arelook at other ones following. ford and general motors out with september sales. ford missed estimates. meanwhile general motors had a suv'sin on its demand for and trucks. also drugmakers in focus, the

next green on the board. the leading developers of the experimental ebola treatment is higher following the first reported u.s. case of the deadly disease. we are on the markets again in just 30 minutes. ♪

>> welcome back to the second onf-hour of "bottom line" bloomberg television. i am mark crumpton. thanks for coming back. my next guest says regulations coming out of washington has made it more difficult for americans to qualify for mortgages. form of oklahoma governor frank keating is the president of an association that represents the $13 trillion thinking industry. governor keating, welcome to "bottom line."

thank you for your time. >> thank you for having me. >> is the linchpin for a full-fledged housing recovery really the jobs market? >> it really is. people who do not have a certain long-term employment opportunity or people he do not have what they think is a pretty good salary or income, -- who do not have what they think is a pretty good salary or income, they will be hesitant to buy a 30 year obligation. also student loan debt is something that did not exist in my generation to the extent it does today. that is an inhibitor to an individual wanting to buy a house. and the mortgage rules, 40% debt to income, the level of down payments required, things that are still not bad -- you have to have the assets to buy a house, but there are a number of issues out there that discourage people from wanting to buy a home. >> yesterday i spoke to michelle

meyer, the senior economist at tank of america merrill lynch. she answered a question i want to pose to you. why is credit still so tight? oh -- >> unlike the credit that my banker twin bill are provided or my grandfather provided, you had to have assets to income. we were spoiled in the last decade where people with a very marginal credit, very spotty job records, very little assets or income were able to get credit. be careful.o lending institutions have to be careful. why? if you do not pay, they cannot loan to somebody else. that is part of it. also the rules are pretty strict. 40% debt to income so as to our friends in puerto rico, that is going to be tough. that is a lower income decided. our friends in florida, that is going to be tough. why?

the snowbirds from the northeast, they have assets, but they do not have the income they had when they were working. >> governor keating, do you believe there is excessive caution -- you believe there is excessive caution, but is that caution warranted? what is the current environment doing to impact banks, not only here, but internationally? >> i mentioned the ability to repay rule, the mortgage role that came out two years ago. some of that makes good sense. artificial box you has to fit yourself into, it is basically a fence line loan document. there is very little character lending. house i bought, the bank said, have your father signed the note.

no. said, have them collateralize the deal. that loan would not be made today. recognize, if a house is the most important part of an individual's financial security, it ought to be reasonable. there ought to be character lending, there must be some flexibility, subject to solid underwriting of course, to enable someone like me to buy a home, to enable the next generation to do the same thing. >> community banks are having a hard time because the rules that apply to the banks apply to them. has that dynamic changed? our community banks at risk of being obsolete? >> mark, i am using a gross number here, but it is good to put it in graphic form. since the fall of 2008 we have lost, five days a week, every month since then, a community bank. that is a gross number.

lost 1500 community bank since the fall of 2008. some were closed because they were simply not successful. but many were merged or sold because the regulatory burden, incomet of operating going into compliance, bankers, particularly in small towns, threw up their hands and said, i cannot do this anymore. that is silly. i would hope the regulators would recognize underwriting is one thing, but to stifle a vital part of the financial service marketplace, namely community banking, is not in the community's best interest. >> governor, we just have a minute. you were the associate secretary of the treasury. you oversight agencies including the united states secret service. should be current director lose her job because a man jumped the

fence at the white house and made it into the building before he was stopped? mark, that the united states government does not have enough willingness to dismiss people. you remember the crash. the head of boeing did not resign. in this culture, you have guys going after prostitutes, people being found facedown in a hotel. that is completely unacceptable. the uniformed service is the step system -- the stepchildren of the agent community. i think she will have a lot of explaining to do because this is completely unacceptable and unprofessional. >> we are hearing reports that new york's senior senator chuck schumer will call for her to step down later today. joining frank keating, us from washington, always a privilege to have you on the broadcast. thank you for your time.

>> thank you. handshake. million why the united states is paying brazil hundreds of millions of dollars over cotton. alan pearson joins us when we continue in just a moment. ♪

>> the price of oil -- at least the american benchmark -- fell by five dollars a barrel, the a year. bloomberg's economics editor michael mckee is here with the real deal on why oil is plunging. >> we can go back and forth, but the bottom-line is, they are all going down to one degree or another. two things. supply is going up faster than demand and the dollar is going up, period. a dollars story. oil is priced in dollars worldwide. you can see the effect here. just to make the connections

more obvious, here i have inverted the price of oil. it is basically a complete correlation. but it is also, as i said, and matter of supply and demand, because of fracking in the u.s. has vastly increased the supply of oil. all of the international stuff that used to be shipped here to the u.s. is not needed anymore. producers at the north sea and nigeria and angola, they are selling their oil in china and asia, which increases the supply there and pushes down on the global price of oil. until recently that supply was offset by growing global demand, which is why prices were so stable for so long, but europe, emerging markets, and in particular china have began to -- have begun to slow. >> what is the impact on the economy question for example mostly all to the good. gasoline stocks are up. gas prices have fallen to about

$3.33 a gallon, the cheapest since last february. do not forget, natural gas has been boosted by fracking. its price is dropping. that pushes down on inflation, which, if it does not go too low , is a good thing for consumers. and you can spend the money that you did not have to put in your tank. majors got whacked yesterday. so did drillers and oilfield service companies. >> the oil what? >> the oil bidness. bidness out in oklahoma . >> our economics editor michael mckee oh with the real deal. thank you so -- with the real deal. thank you so much. it is time for the latin america report. a dispute her expect to a world trade organization complaint filed in 2002 by brazil over

u.s. subsidies to its cotton growers. alan pearson joins us from washington. what is the significance of the deal and what risk does it take out from the market? today'significance of deal, mark is after more than a decade, you do not have the threat of retaliation from the ranchers.g over this goes back to the mid-2000's where theywon a case said that subsidies were actually hurting worldwide cotton farmers. the wto levied penalties against u.s. companies. that threat is now removed because of the settlement in which the u.s. essentially said, we will give you $300 million and in return except our new farm bill and that our subsidies r.o.k.. >> you mentioned cotton farmers, but potentially it affected a

lot more than that. who else is watching this case question mark >> frankly a dispute over agricultural producers in two different countries may not get a lot of attention, but let's talk about apple for a moment. these levies included areas like intellectual property. section ofch broader penalties and that is why there are sighs of relief around town today. >> you mentioned over a decade, 12 euros. why did this take so long? was not the jobs program. you saw several phases in this. when the wto made its ruling, the u.s. said wait a minute. we can change our foreign policy, but you have to wait for hunger is to pass a farm bill. that did not happen until this february. can change our foreign

policy, but you have to wait for congress to pass a farm bill. brazil actually is saying, we are going to impose these duties. that and the farm bill finally brought a resolution today. >> we have about a minute left. during the time this dispute was going on, global markets have changed a lot. are the issues brazil was stilld about in 2002 relevant now? >> it is interesting when you look at commodities during that time. everything that is old does become new again. you had commodities development making world farmers go out of business. in there -- and intervening time, you had a big spike in cotton prices where everyone was making money, subsidized and unsubsidized. we will see what action is taken in years to come. >> very good.

bjerga joining us from washington. does the fed have an over sharing problem? that story is next. ♪

>> what the silicon valley get that other industries do not get? >> emily chang sits down with the biggest influencers in media. >> it was all a big experiment. >> i have a little paranoia of not being needed or wanted, i guess. >> for candid commerce agents about how they made it and where they are going next. at the nextow that fomc meeting, policymakers will be keeping interest rates at an all-time low. how do we know? janet yellen said so.

tothere a downside transparency? trish regan joins us. you wrote an op ed on the communications strategy. >> in usa today i did. too much information. normally journalists recognize the value and all that communication. we like that. but we are in a situation now moving basedket is on what they think janet yellen is doing, and not even what they think. they know. it is being telegraphed so far ahead of time. what i am asking here is, why not have a little mystery between the markets and the fed? it is very interesting, mark. prior to 1994, the fed never told anyone when it moved on its interest rates. you had to gauge it based on what happened, and in the market the next day. we do not want to return to

that, but it seems since and continuing with janet yellen, there is this desire on behalf of the fed to give the markets so much information. --ok, then is it the market' problem based on how they are interpreting it? >> you have a market that, i think, is overly dependent on the word of the federal reserve. i am going to value this market based on what i really think it is worth, knowing the fed could tug the rug out from underneath me at any given moment -- they are instead valuing its based on the fact that the fed will continue to be there, continue to be supported with record low interest rates. i think it is time for us to question whether or not and investors are properly valuing assets right now or whether they are saying, hey, you cannot .ight the fed

you've got to keep dancing as the music is playing. right now the fed is the one thing the music. >> and your op-ed is in "usa today." and coming up on "street smart," you have larry flynt. >> yes, a lot of competition in the pornography industry. he is looking to raise money to go public. the question is, would investors buy into this given the changes in the industry these days? there are lots of funds that say we do not want to go near this thing. >> all right, "street smart," trish regan, top of the hour. >> see you then. >> another check of the markets on the other side of the break. "bottom line" continues in just a moment. ♪

>> get the latest headlines at the top of the hour on bloomberg radio and streaming on your tablet and bloomberg.com. oft does it for this edition "bottom line." on the markets is next. i will see you tomorrow. >> it is 56 past the hour which means bloomberg television is on the markets. let's get caught up on where stocks are trading. political turmoil around the world. alsos on the russell 2000 having losses.

it is officially in correction territory. for more on today's selloff, i am joined by bloomberg news. editor mike reagan. mike, take a look at the russell 2000. what is the impact? >> it is something that people look at and worry about. obviously from a technical perspective, analysts like to see confirmation. the s&p 500 at a high, they like to see transportation at a high, small cap at a high. --ll cap is a sick lee a basically a proxy for risk appetite. whenever you see them down, there is concern. beating the s&p 500 by a wide margin in the first five years of the bull market. the index was up 250%. an analyst from wells fargo

had an interesting note. he said that it is late in the economic cycle. he said maybe it is time for small caps to underperform large caps. others are wondering if there is more to it. >> what are you hearing from analysts? thing, obviously a small caps are much more weight sensitive than large caps. for one thing, the dividend yields are much lower than large caps. as rates potentially go up next goingthose dividends are to be a lot less competitive than let's say large caps and also small caps tend to rely more on financing. >> so the ship has sailed, it seems like, perhaps for the small caps. let's look at the large ones. is this the worst we have seen so far? >> for the year -- we have had about four dips like that this year. january into early february was

the worst, almost 6%. almost like clockwork you get it every order. july going into august there was into earlyate march april, there was a 4% dip. and seey we will wait what happens with this one, but it is not really a superlative level retreat for the s&p 500. >> this year, the fourth quarter, what sectors does it look like they will give the most to? is interesting to look at our the interest-rate sensitive stocks. a lot of people believe that financials will benefit if yields go up. and then you have your andities, reads -- reit's, small caps would be more sensitive, too gridlike every stock market story, it all depends on what the fed does, and the dollar's strength is

really a concern for the large multinational corporations. is most to look at who exposed to currency problems if the dollar continues to appreciate? who will have sales hurting in europe or asia because of these strong dollar, and importers, what retailers are going to benefit from the stronger dollar? it necessarily time to look at sectors but time to look from a macro level who stands to benefit garrett >> what is really driving this down , is it what is happening in hong kong? >> it is one of those days where there are some million catalyst. everyone has been preparing for the federal reserve policy to change next year. they got comfortable with the timing of it. as we get closer, we have russia -- >> i will have to leave it there. thank you. street smart is up next. >>