>> i'm mark crumpton. the is "bottom line," intersection of business and perspective. more colleges scrap standardized test, as an admission requirements. resilience head to the polls for this weekends presidential election. had to the polls for this weekend's presidential election. to our viewers here in the united states, those joining us around the world, welcome. we have coverage of stocks and

stories making headlines today. previews elections in brazil. and peter cook digs into the political and economic impact of the september employment report. michael joins me in studio. you were on the air with tom keene, bloomberg "surveillance," and you noted before these numbers came out that there was going to be some movement. what happened? was athought if there potential for surprise, it would be in an employment rate. so much depends on the labor pool. there was a downside risk today, it was a five handle. we got that, 5.9%. >> peter cook, what is the white house saying about this report in light of the president's speech yesterday at northwestern university in illinois? spokesmante house said that today's numbers were

consistent with the presidents talking about the u.s. economy, it's improving. it's doing better than americans think. but at the same time, if you look further into these numbers come you see their wages did not rise last month. that is what the president talked about last month. for some americans, it still feels painful. they are still hurting. that is why not everyone is on board with his recovery. >> speaking of not being on board, there is over 9 million -- 9.3 million americans who are unemployed. >> and the question is why? >> they want to be employed, they want to find jobs, and that means there is still a lot of slack in the economy. from thebeen arguments former chairman of the economic advisers, it's demographics.

baby boomers are leaving the labor force, they don't want to come back for one reason or another. we saw a number of discouraged workers fall by over 100,000 this month. it is getting to the point where it is beginning to look a lot more structural than cyclical. if that is the case, it may explain why we are not seeing as much of a rise in wages as we would like to see. but that was the missing piece today, the wages. almost everything else in this report is good to fed officials i talked to say they expect wages to rise by the end of the year. that would really put the icing on the cake if we keep going down at this rate. then you will be able to say the labor market as much health your -- healthy or. >> you also did mention to keep an eye on how gold was going to react. there is always that safe haven expectation. but not with jobless numbers, when they are dropping like this. strange because gold has normally reacted to

everything that is going on in the world. right now, it appears the u.s. economy and the fed are driving everything. the fed is considered more likely to raise interest rates right now. you don't need to go into gold to protect your assets. ,old is trading at the moment at about a one-year low. ofis this -- within a dollar a five-year low. >> will this help democrats in november in the midterms? plenary goes a down, it will help the party in power. democrats.news for 5.0% to something they can talk about at home. we are so close to election time, it is hard for anyone report to have that much of an impact on the election. you have your member the president is still trying to overcome on the wage front. it will help democrats on a net basis, but only so much going into election day. go mickey, you alerted --

tohael mckee, you alluded numbers. what is going to move the number? >> have a way nothing. we will have more people come back into the labor force. want toe people who school because they couldn't find a job. they will come out and try to find work. it is beginning to look like this is the retirement of the baby boomers. this is been expected, protected for a long time it. because of the crisis, may be happened a little faster than we anticipated. going to see the dissipation rate rise for quite some time. the interesting thing we don't have at this point coming out of this is the rise along with regis -- wages and consumer confidence. that is the missing piece. to sure what it will take click in for americans to say i'm going to have a job, and we are going to be hiring more people in my company. it is ok to go out and spend again to.

that is the part that is missing. >> michael mckee, joining me here. in washington, peter cook. derailment, thank you. of "withr, the debut all due respect," is monday. we launch the new show at 5:00 on bloomberg. that means "taking stock," moves to 5:30. that starting on monday. coming up, september's hiring surge. we take a look at whether these hiring gains will lead to a faster wage growth and a stronger economic recovery. stay with us. "bottom line," continues in just a moment. ♪

report.is a mixed the most disappointing aspect is the one we have been talking about the last half-hour, wage growth. wage growth simply is not the

area. andhat was mohammed a larry , the former ceo of pimco. welcome back to "bottom line," i'm mark crumpton. to my guest,k welcome. is the ball in the fed's court? >> i think the fed is going to be looking at the number and digesting it. i don't think it is going to move that much one way or the other in the short run. of targets, and they are going to be focused on what is underneath those labor market numbers. >> david, what more information to they need? >> they probably need a string of six months with revisions. the key about this report were the revisions. the revisions were prior to three months, they were good.

the revisions give you some additional confidence that we are creating jobs, that to a thousand plus, and the momentum is likely to continue. >> do you always take a report like this with a grain of salt? for the past couple of months we saw those numbers. let's keep in mind they are probably going to have to make revisions, that could change things. >> we talk about confidence. this, thecase of confidence will suggest plus or -90,000 on job creation. it's not significant from zero. you have dad plus earn minus -- you have to add less or minus. >> if i could have the revised number on the day of the report, i could make $.50 in this business. [laughter] is 5.9%.adline number it doesn't tell the whole story.

michael mckee was reminding us 100,000 americans stopped looking for work. pushed the labor force for dissipation rate down to 62.7. it hasn't been at that number since jimmy carter was in the white house. does this fly in the face of the strength that we saw today? >> there is a part of that. the best thing to see from a market side -- he can comment on the policy side. but the best thing to see would be a falling unemployment rate and a rising participation rate. get to that, and you have a climbing unemployment rate, and a rising participation rate, you are taking steps that will lead to a falling unemployment rate, which is believable. now you open it -- now you have a falling unemployment rate, and a falling participation rate. we don't know what the equilibrium participation rate

is. if you look at history, it was climbing right up through the mid-1970's. it was a very healthy, high we talked about. women coming into the labor market. now we have a structural issue. baby boomers are leaving. there are huge structural issues. we don't know what the equilibrium rate should be. ours is much higher for europe. >> an estimated 3 million people have been out of work for six months or longer. paycheck.t getting a how long before they take part in the hiring gain? aret is hard for people who unemployed to get back into the labor market. in thell probably end up lower paying jobs to start with. take a wildto before those jobs start to appear. and they can actually take advantage of it. >> we are talking about people who will be taking jobs at a lower pay scale. -- orabove their experts

below their expertise level. >> that is why you don't see the kinds of income gains you would like to say. >> when will that change? you talk about structural, michael talks about structural. structuralhose impediments to this economy moved out of the way so he can start going forward? >> that is the six to $4000 question. $64,000 question. with the dynamic nature of how the economy is changing, there sorts of reform going on. casino closes in atlantic city, 5000 hospitality workers who have skills in the casino industry best they know what a deal, they know how to do surveillance, they are out of jobs. they have been there for 10 years. where did they go, how do they get a new job, what retraining has to happen? you have a clonic -- a chronic

local situation. number oficated in a places. >> the and rate keeps falling, but wage growth is virtually nonexistent. is there enough momentum in the labor market to turn that around? >> i hope so. hope is not a strategy. the federal reserve knows it is not a strategy. we expect them to go very slowly. take a bash it is going to stronger growth before you can see that kind of problem remedied. does today's news made the annual pace of growth will remain above 3% for the remainder of the year? >> i think i am looking closer to 3%. not necessarily above 3%. >> what is keeping you from going above 3%? -- >> i amlooking at looking at things like manufacturing, and why it hasn't been growing in a stronger rate.

most of the growth has been in the service industries. i think it is going to take a while for that to work itself out. >> i'm in the no smiling section of the airlines. i am under 3%. i think stronger dollar is at work. that might be a sustainable trend. a stronger dollar, if it is an ongoing trend, means exporters in the u.s. come of u.s. manufactured goods, get a little slowing pressure. cks out of the gdp. >> there is still uncertainty. as markets arer concerned, both in europe, latin america, and the middle east, are all things that cause people to be cautious. >> we have to leave it there. gentlemen, it is always a pleasure. they give free time at. coming up, there is good news for those who get in just about sats.

more colleges are saying you don't need them to get in. ♪

>> welcome back. let's check the top stories. an american working for nbc news is in liberia, but has been diagnosed with ebola. the 33-year-old cameraman will be flown back to the united states for treatment. the case comes after a traveler from liberia was founded to have him the texas, making first to be diagnosed in the country. at least 38 workers have been evacuated u.s. hospitals, treated, and discharged. and yelling, hundreds of hong kong residents trying to force pro-democracy accu --

activists from the streets. tensions rose in a weeklong protest that shut down part of the city. scuffles were the most chaotic sense policed used tear gas and pepper spray last weekend. registers are pushing for greater electoral reforms. the student protesters say they are shelving proposed talks with the government after they were attacked by groups of men opposing the demonstrations. it is october, at it is roasting in some parts of california. the national weather service says the state will see temperatures in the mountains and valleys between 100 and 106. the heat may play a factor in the national league playoff game between this it was cardinals and the los angeles dodgers at dodger stadium. that's a look at the top stories in the news this hour. a trend in higher education -- more and more colleges are doing away with sat scores. schools are saying there are better ways to evaluate prospective students.

janet laurent joins me now with more on this story. ?anet, wire colleges doing this >> we've seen schools decide not to use sat scores. admissions become more credible with recommendations and essays. saying the high school transcript gives them good information and predictive information. if the kid does well in high school, chances are he or she will do well in college. also, they can judge rigor. are they taking difficult classes, and so on. >> who are some of the colleges leading the way here? >> wesleyan, brandeis, bryn mawr, it's not really tiny colleges. it has become more widespread. temple, which is a pretty big

school in philadelphia. >> timing, what is with the timing here? >> more schools are feeling comfortable, and is there years peers are more credible, there will be less 17-year-old and 18-year-olds applying. it becomes a competitive advantage. >> you wrote this story on two admissions deans said they wanted to see grit. >> they want to see resilience. how do kids do when presented with a situation that is not necessarily going their way? how they adapt? they are not adjusted in the greatest kid in the class, but the kid who is going to work hard. the kitty was going to participate. who willan a smart kid not try as hard. >> how do you see that in an application? >> good question.

a kid doesit as better from a kid does better from the freshman year to the senior year. a recommendation from a teacher saying maybe this kid didn't start out so great, but really made a tremendous efforts to , and the improve teacher was impressed. >> there is a cultural angle to this. and it is diversity. how is this move improving diversity? admission deans say a high test scores equal high income. you can afford test prep or retake the test. that gives students with lower income background a disadvantage. of study in february says colleges that did have these test optional policies, they tended to do better with attracting lower income students, women, and other groups. >> janet, we talked for you can on the air. some of us who took the sat, we

sweated, we strained, we stressed over this. is this something that has been years in the making, or is this a new phenomenon? >> you have seen colleges, voting goes back to 1969. it was really an outlier then. i think as more schools have become comfortable with looking at the transcripts, looking at the essays come at the recommendations -- you may see more. 40,000,re getting 50,000 applications, schools may need some way to distinguish others. it is a standard. >> jannette, about 30 seconds come i have to ask, are there colleges who say we want to keep the status quo? >> a of colleges have kept the requirements. the ivy league schools still keep them in. they get a tremendous amount of applications. it is the standard metric. harvard to drop the sat subject test. >> her story is on bloomberg.com

, about some schools scrapping the sat. janet, thank you so much. >> think for having me. >> it's 26 minutes after the hour, which means bloomberg is on the markets. >> take a look at where the trading after the job report this morning. the market liked what it saw. not concerned about janet yellen raising rates as unemployment comes down below six percent. we had a 5.9 read there, adding -- 248,00000 jobs jobs. the dow jones of over to did points at 17,017. movers, of individual from underperforming to lower prices. deutsche bank added the stock to it short-term buy list. a generic drug maker boosted its outlook for the year.

they had a better-than-expected quarter thanks to multiple drug launches. we are on the market again in 30 minutes. more "bottom line," on the other side of this break. ♪ . .

>> welcome back to the second half-hour of bottom line on bloomberg television. i am mark crumpton in new york. thank you for staying with us. israel wants to aggressively transform the way early stage startups are getting funded. just a good let angel investors write off 100% of -- bill would let angel investors write off 100% of their investment. they began by discussing the

outlook for israel's start up industry. >> israel's high-tech market is at its all-time best. we have a number of companies at an all-time high. we have 1000 new start up companies in israel every year. in all categories. everything from securities to consumer companies, everything. i think the world is really noticing what is happening in israel. is chasing start up companies for funding but also helping us fund some of these companies. returns have you been generating? >> great returns. about 200 million dollars in each fund? >> something like that. i think that's the right number for israel. i think we can find the best grownies and help them

with that funding. >> you guys drive a much harder bargain. you have much better competition and get much better stakes than perhaps in silicon valley. how do you respond to those suggestions? >> for our investors, effective valuations in israel are more modest. i think we can generate better returns for them. we think there is a fine line to have, or balance to have, which is enough equity for the entrepreneur and enough equity for us. in the end, everybody wins. we are not trying to squeeze them to death, but to have a win-win situation. >> what in the israeli high tech scene has been your best bet? what has been your worst bed? >> the example i gave you before is probably one of the better companies i have invested in. came in early, great

entrepreneur, really understood the market. i have had a number of failures. one was called support space. great team, good vision, but the market really didn't happen the way we thought it would. that's the business. when some, -- win some, lose some. that was daniel cohen speaking with bloomberg's middle east editor. up next, we look ahead to a busy weekend in brazil. voters there looking forward to a very important election. ♪

>> it is time for today's latin america report. brazilians will be heading to the polls on sunday to pick up president. we have a preview. last night, the last televised debate. how did the leading candidates fare? >> the big focus was corruption. both of the challengers really

went after the incumbent president about corruption during heard ministration. she fired back, saying i have been stronger on corruption than anyone in history. investigators say this is not something people need to worry about. shellout last night says has a very commanding lead by about 40%. 21 for her first challenger, 21 for the other challenger. those are similar numbers to a couple of days earlier. command 50% of the ballot votes on sunday, there will be a runoff later in october. in the runoff, she looks to have a lead of about 48-41%. >> how do the markets respond to this? >> not very well. they do not like her. when the polls show she is up, the markets of gone down very dramatically. in the context of her presidency, we have seen the

brazilian currency dropping very dramatically, about 33% against the u.s. dollar. we are looking at increased inflation, gdp dropping dramatically. e unemployment have gone down in wages have gone up, so in a certain segment of brazilian society, she has supporters. with she and her predecessor, 35 million brazilians have been taken out of poverty. >> the issues that mattered to brazilian voters -- you and i were speaking earlier. one of the things that caused a people wasong the the money spent on the world cup. are people still holding her responsible for that? >> i think some are. and with the olympics, there's going to be a lot more government spending, although a lot more has been privatized.

that has been the big concern for a lot of people in the professional class in brazil that the government has been very wasteful with spending. that is something one of the main challengers, silva, has promised to change. >> let's talk about ms. silva for a moment. she came to prominence because of the death of her running mate in a plane crash. how have brazilians taken to her and her message? she has been on the global radar. she was an number and mental minister before. herplane crash killed running mate and she saw a huge hugep -- a huge serve -- surge in popularity that has now dropped dramatically. people connect with her emotionally. she has an incredible back story. she grew up in the amazon in a rural part of the country and she is made her way onto the main stage of brazilian politics. >> how is president roosevelt and relays and -- how has the

president done in relation to her predecessor? >> i think the brazilian market increased six fold under his presidency. he was residing over a huge commodities boom. she has not seen them. a lot of people have said she has been mismanaging the economy for the last four years. she does not live up to the reputation of her predecessor. >> you are heading to brazil this weekend. thank you so much. we appreciate it. breaking news to tell you about before we go to break. according to people with knowledge of the matter, the new york state attorney general, eric schneider, is investigating standard & poor's to determine whether it failed to follow its methodology in rating commercial grade mortgage bonds to win business from banks. according to those people with

knowledge, the union of broad hill financial is facing scrutiny on six such deals that it graded in 2011. office declined to comment. this is at least the third investigating s&p's business of grating mortgage backed securities when banks put together loans on properties such as shopping malls, hotels and skyscrapers to create securities that are sold to investors. we will continue to follow this story. more coming up at the top of the hour on street smart. autumn line continues in just a moment. ♪

>> they have only one focus, motorcycles. when they are not restoring vintage bikes, they are custom building them from scratch. take a look. >> it's the feeling you get writing these old machines. the smell, the vibration. you know you are on a handbuilt piece of machinery. my name is justin kelm. kori works builds motorcycles for the motion picture industry. we are brought into a film really at the beginning. the director and stunt coordinator will say we need to jump 50 feet. we need the bike to do this. i say absolutely we can do that and then i come back here to the shop and we figure out how to bridge the gap and make it functional and follow all the

design and form and tell the story. we did oblivion for universal pictures and tom cruise, and that bike folded out of the suitcase and came out the back of a spaceship. that was fun. a couple of weeks, we will crash this on film and then we will put it back together. the builds are hectic. ist we are usually doing building five motorcycles in six weeks, and we are fabricating parts. we are building electrical systems. we are, in a sense, building a prototype motorcycle the doesn't d.t a testing perio it goes into immediate action. when we are not on film, we restore vintage bikes, and that is how we lose all of the money we make in the film industry. this is a typical california desert racing bike.

it's an old machine. it was never intended to do what it does. out, it gets goes blown apart. right now what we are doing is ready to go out and be broken again. there's not a lot of practicality or common sense and motorcycles. anybody who has ever worked in that business knows it's virtually impossible to make a living doing it. i love making films and being part of the process, and then the restoration is really what we can come home to and remember what got us involved in this in the first place. >> you cannot make this up. ben bernanke says he is having a hard time refinancing his mortgage. he revealed this in chicago .esterday in a panel trish regan joins me now. you really can make this up. >> you know it's interesting about this. look.

the reality is, he is now self-employed. he is no longer an employee of the federal government. he is doing pretty well, makes about 250 thousand dollars every time he gives a speech. >> which begs the question, why doesn't he just pay the mortgage? >> that is a question probably for him and only him to answer. rates are interest low and everything. you might as well take out the loan, i guess. more of an having issue than say somebody who has a steady income just because his income is a little more lumpy. -- that may >> how much per speech? >> $250,000. >> i'll take it. >> just do one a year, right? is not exactly easy for your average american and ben bernanke is not your average american, for people to

get loans right now. we don't want anything like what we had a pre-2008, no income, no asset loans, but why is it that your average person is having a harder time getting a mortgage loan? i don't know if it's too tight though, mark. in all ofe good news this is we have gone back to a little bit more of the basics. in the old days, you had to save 20% before you actually bought a home. what is wrong with that? i mean, it is hard in today's there isnt, sure, but nothing wrong with saying fork over 20%. then you have some skin in the game. the years leading up to 2008, nobody had given in the ga game. ,> the unemployment report

5.9%. >> but the labor participation rate is the lowest since 1978. may simply that -- be that people say i am not going to bother looking for a job. the other thing going on, of course, is that you're not seeing any wage growth. so on the one hand, it may look good on the surface, that jobs report. on the other hand, there are some real problems there. this, of course, has the market very happy. it's one of the reasons we are seeing so much upside. a chief economist at ubs is going to be joining me and we are going to look at what he is calling the small cloud on the giant silver lining. >> we will see you at the top of the hour. coming up, what if you could send a driverless fire truck into situations too dangerous for humans? lockheed martin is developing a robot that can do just that. >> this is the first

instantiation of a vehicle that is killed toward first responders. in this case, particularly firefighters. it's like a large toy car were you take a game style controller and drive the vehicle remotely where you want to go but you don't actually have to be on the vehicle. we have a large water tank on the system. have a pump. we have the ability to dispense water while the vehicle is moving. this machine can be used to fight wildland fires. it can be used in situations where you have tricky wind. high also very useful for risk structured fire situations. you can use it in a situation where it is too risky to put the

firefighter in close proximity to the fire or another hazardous situation. it has not been nearly that expensive. we repurposed a vehicle we got back from afghanistan in one piece. because this is a prototype that is not really in production yet, there is a real challenge for to figure out how to build these vehicles at an affordable cost that first responders could buy. a time when these systems will save lives and help prevent injuries. if you can figure out how to do more with less and let the machines do some of the work of the firefighters, then you can help them. stay with us. another check of market movers is on the other side of the break.

autumn wind continues in just a moment. -- bottom line continues in just a moment. ♪

>> of that it does it for this edition of bottom line on bloomberg television. i am mark crumpton from new york. on the markets with matt miller is next. have a great weekend. past the hour which

means bloomberg television is on the markets. i am matt miller. at 200s number came in 48,000, better than economists had estimated. unemployment dipping below 6% for the first time since 2008. we had gains across the board. the dow back up over 17,000. more than 200 points gained in trading. it has been a week since bill gross announced he was leaving found 40he helped years ago. in that time, pimco lost $24 mutual in etf's and funds. where is all that money going? if it is flowing out somewhere, it is flowing in somewhere, right? >> i am going to look at the etf's. in the fixed income etf's in the

past week, we have seen $6 billion flow in. normally, fixed income etf's average about a billion a week. more than that is bill gross fallout money. a lot of money is coming in and doing something called manager transition, which is two-part cash for a while while you do due diligence on a potential manager or wait for bill gross to start of generous -- start at janus and go there. .he 1-3 year treasury bond etf >> you're not just looking at mutual funds and where they would go. you're looking at the etf universe. >> it's more of a tip of the spear as i call it. , this is a very conservative etf that's treasury notes. it yields about .4%, returns

.5%, more than the money market, but certainly a place to park cash. >> when you don't want to lose money or take risks. >> exactly. agg, thexample is agora bonde etf. this tracks corporate and government bonds like bill gross did. the only difference is this one is all u.s.. about 40% of his portfolio is international. him goingft out of you want to keep your bond exposure, very late go -- if you shift out of pimco and you want to keep your bond exposure very liquid, this is a good one. these two basically the biggest winners you can track? >> and the vanguard competitor to agg. tracks the steam

-- 16,000 bonds, the ishares product tracks 3000. i don't know if there is a difference between 13,000. they both yield returns about the same. the vanguard product certainly is popular with investors looking to replicate some of the exposure bill gross gave them. >> we will see what happens and janusch of that money takes when he fully sets up his office. thank you so much for joining us. street smart is up next.

>> welcome, everyone, to the most important hour of the session. 60 minutes until the close. u.s. stocks rallying. attorney general is said to be investigating s&p on how it rates commercial mortgage bonds and the center for disease control says it is now testing to vaccines for ebola. street smart starts now. went to get a quick check on the markets. stocks in rallying mode.