u.s. air strikes against the islamic state proving effective. turkey will not engage in battle against the islamic state. mark zuckerberg like jeff bezos and satya nadella makes a pilgrimage to india. good morning, this is bloomberg "surveillance." live from new york. thursday, october 9. i'm tom keene. joining me, olivia sterns and adam johnson. top stories. to paylays has agreed $29 to settle a u.s. lawsuit over breaking benchmark interest rates. libor.e to rate also agreed to swap rate traders between other banks-- barclays has agreed to cooperate with traders between other banks. the imf warning the ebola could lead to $30

billion of losses in west africa next year. sierra leone is likely to be the hardest hit nation. in the u.s. comedy family of an dallas,ctim died in questioning the care he got. the family once to know why it emergency room released him. at&t will pay the price for bogus claims on mobile bills. million for unauthorized charges to customers. among them, subscription services for horoscopes, ringtones, and love tips. most of the money will go to customer refunds, tony $5 million will go to fines. device media cofounder shane smith helped kick off sandy media cofounder shane smith helped kick off the vanity fair senate. >> the holy grail for every media company is mobile.

mobile is the wild west. it is where everyone's scale is coming from. it is difficult to monetize and difficult to get our heads around. we are trying a lot of experiments. experiments with providers. mobile.e first of the summit continues with stephanie ruhle and emily chang. they will be live from san francisco later on this afternoon. . has rattled investors. shares down as much as 9% in extended trading. gap said it would replace ceo glen murphy. he will be replaced by president of gap's innovation and digital unit. >> i'm not surprised. the store is appalling. boring, boring, boring. >> i don't have bowties.

>> it is back to basics. >> those are the top headlines. >> olivia sterns has not been a gap. a >> back to basics. >> back to blue. >> boring. currencies,nds, commodities after yesterday. adam got whiplash. futures up 5. yields are stunning. from 2.43 to 2.29. euro stronger, hydrocarbons churn. from 17 to, vix 15.11. jaw-dropping.s 0.50+ towl to the brim, carnage.tunning

ready to makeyear record lows. let's go to the bloomberg terminal. the red line is japan, back 20 years. below yields, life is terrible. here is the animal spirit of europe to sending. this is where we are, the japan verification -- this is where we are, the japanification of europe. >> of all the stories, dow, blow -- the bond yields my mind. 88 basisn germany is points. in switzerland, 43 basis points. >> 0.45? 0.5?ss than

>> there is no place to hide from. it is your money safe. >> dr. faber, bring in gina, please. >> help us. 8% earnings growth good enough to keep people in the insane markets? >> in the short run, it is going to be tricky. the shifting central-bank policy macroape combined with weakness outside the u.s. is striking fear in the hearts of equity investors. in the short run it will be rough. out 12 months, we feel pretty good about the u.s. outlook. >> why? >> it looks ok. >> the necklace you are wearing a spectacular. could you provide comfort -- >> the gap. tocould you provide comfort

people that hear christine lagarde say the new mediocrity at the imf, the real economy is terrible. yet companies are minting money. how does that happen? >> when you think about what u.s. companies are exposed to, 70% of sales are in the u.s. the fact that we have added 200,000 jobs per month every month for the last year. the fact that we have unemployment below the 20 year average. we have consumers that are still slower than long-term pace, but still spending. a housing market is in recovery. these factors support u.s.-specific growth. absent anything that happens overseas. that is helping u.s.-centric -- >> what is your call on earnings going forward? >> in the third quarter it could be week at 5.5% because of the currency volatility and the commodity price volatility in the short run. every 12 months, 7% or 8%. weeks,8.5% move over 8

corporations could not hedge effectively and it happened quickly. >> september alone, the dollar moved 4%. incrementally all summer but in september it was volatile. oil from $100 to $90. >> many of the fashion industry visited with the first lady in washington. testifying.was >> no, i was in a meeting with one of the gse's. >> gina martin adams can talk about financial earnings. what is the stated our banking economy? two cities. anticipation of rates going up thegiving the interest opportunity to widen. we have a problem in terms of

what washington is doing to the industry. and the perception weighs heavily. >> one of the key things as we look at jamie dimon or brian normaln, is this a banking environment given what janet yellen is doing? >> no way. >> when you see what the two yielded yesterday. >> the industry being able to try to generate loan demand. at the same time, better customers are axis in market time, bettere same customers are axis in the markets directly. they are getting -- >> there's an irony, thanks are trying to stimulate loan growth. last week, ben bernanke could not get a mortgage. alan krueger told us he could not get a mortgage even though he had cash. a number of pieces to the bernanke piece not getting a mortgage.

he transitions out of a job. he has not the same stable income. you're saying that ben bernanke was unable to get a mortgage because he is temporarily unemployed. >> if you move to traditional underwriting standards, that is the person -- >> i think his creditworthy. >> josh rosner sense us the thickest powerpoint of anyone. ridiculous.s is >> you feel that the complexities of dodd-frank are going to end up concentrating power in the big banks. >> i don't see how it ends any other way. when you create an environment where you have does cut resolution regimes -- when you create an environment where you have to resolution regimes, you are creating a tale of two cities. cost of funding advantages to the larger players are real. the pastseen that for decade in mortgage finance. that is continuing.

>> gina, i know you cannot speak specifically about individual banks. lookur securities analysts at big banks-small banks, is there a difference? >> we are overweight on the largest of the large banks. more of a market weight on the small and regional -- >> you are overweight on josh rosner's world. banking sector, those are the banks that show the most upside. part of it is the regulatory aspect. headlines have damaged the big banks most. violations are much lower than regional banks right now. part of it is a persistent loan-loss release that reinflate -- >> it hasn't been the driver. >> smaller banks have benefited from that. incrementally we like the bigger banks better. >> gina martin adams and josh rosner with us this hour.

tie that up, jp morgan trades at 9.8 times earnings, s&p traits at 16. facebook ceo mark zuckerberg making a trip to india looking for new friends. is trying tohe make money? i would say yes. you are watching bloomberg "surveillance" on bloomberg television. streaming on your phone, your tablet, and everywhere you are. we will be right back. ♪

>> good morning. bloomberg "surveillance," carl icahn at 3:00 p.m. on "street smart." look for that this afternoon.

this is bloomberg "surveillance," i'm tom keene. with me, olivia sterns and adam johnson. futures at five and data feature couple of 32 after yesterday afternoon. he has adam johnson. the cyberattacks spree on wall street is wider than thought. the hackers who hit j.p. morgan chase targeted a dozen other firms. at least one of those institutions had its data stolen. money might be flowing out of pimco, so far it is not filing bill gross. has taken andfund 66 milling dollars, a fraction of the $23 billion that has left pimco since his resignation. the metropolitan west total return has taken in $1.5 billion. nfl owners approved the sale of the buffalo bills. . $1.4 billion.a,

surpassing the 1.1 billion paid for the miami dolphins in 2009. those are the top headlines. >> studying. >> it is a lot less than what mr. what's his name from microsoft paid -- $2.2 for the clippers. >> the buffalo bills. >> $1.4 billion. >> wow. >> incredible. >> olivia sterns on the trip to india. the facebook cofounder is in india attending at two-day internet.org summit aiming to make internet access more affordable. he is likely to meet narendra modi. here are zuckerberg's comments on india's computer revolution. have embraced

science and research and education, the next generation here has the opportunity to define the future. and bring india to the world and the world to india. key to this next big opportunity is going to be a bracing the internet. >> here is the deal. india is already facebook's second-largest country. only 20% of the country is currently on the web. there this enormous opportunity. at 2.5 billion people could be on the web by 2018. zuckerberg and facebook hoping to tap into that. there's a sense that india is on the brink of becoming more tech savvy because you have a new prime minister, narendra modi, who famously campaigned by attending conferences via hologram. >> we heard some of this from columbia university yesterday. in technology is so much bigger than other nations. bezos, satya nadella, adam

johnson will go next week. >> i would love to go. professor made the point yesterday. the infrastructure does not exist. there is a dream of reaching people but a lot of them do not have access to electricity or internet service. , social katie says you have to advertise in india. it is stunning. >> there's the hologram. this is narendra modi campaigning via hologram. >> you mean like in "star wars pic." >> the key to india is mobile. a majority of users access via smartphone. >> our twitter question of the day. which wall street jargon drives you absolutely nuts? tweet us @bsurveillance. josh?

>> cash on the sidelines. >> i'm a jargon-y person. >> mine is cautiously optimistic. be cautious or optimistic, do not be both. we will be right back ♪

>> here's the image that of what the immediacy martha ravitz of abc said wit on "with all due respect." this is in syria. larger flames than what we saw yesterday.

u.s.very clear that the military is upset about the ineffectiveness of the airstrikes. martha raddatz' comments on planes returning to aircraft carriers without dropping bombs. that shows limitations. there's the image from south of syria. my morning must-read is from the wall street journal. daniel henninger is fed up. "u.s. bureaucracies have become a clear and present danger." josh rosner, in your world, the doj, late to the party. what has taken the doj so long to flush out libor scandals, mortgage scandals and now currency scandals? i think you need to be

somewhat slow in putting cases together. that part of it is sort of normal and appropriate. the other side, the situation has become politicized. are talking about enforcement agencies and financial regulators, it should not be political. the whole thing has become negotiated settlements with senior management in the room. at some point, who have a natural conflict between their own personal interests and the interests of shareholders in initiations. >> what is fascinating is the technology and its democracy we live in. here is albert camus. you can imagine the gentleman who just died in dallas writing to his loved ones. nothing has changed from camus plague," except we have facebook, government

authorities. it is a cheap shot against cdc. they are dealing with for allergy, not press moments. and not twitter. >> that is not my area to speak. there was a lot of warnings and a lot of academic papers about the risk of a conflagration of .bola in 2011 it seems like we are ill-prepared. >> the dallas hospital that admitted the gentleman. >> that's not the government's fault. do you know what adam's favorite nine words are "i'm from the government and i'm here to help." >> 9 most dangerous words. >> noah feldman had a great workersying amazon are today's coal miners. an analog to the coal mine.

is the distinction the length of line insecurity? we go through security everyday here. it takes 20 seconds. long are youhow required to the on the premises. how long did it take to go up and down the mine shaft. if you have to go through security to ensure you do not steal anything, shouldn't you be paid. the obama administration is siding with the amazon contractor. >> halon does it take you to go through security? >> i swiped in. >> that is not the case in litigation. >> some amazon workers contend they have to wait 25 minutes or 30 minutes to go through security. which is patching them down to make sure they didn't steal something.

>> if you are required to be on the premises, the argument is you should be paid. be paidif you had to for the amount of time it takes you to take makeup off. they found a pocket protector. >> in our next hour. the serious issue of ebola. us from berkeley. we will go to newark airport. shall the holiday has a thermometer in her mouth. we will be back on bloomberg "surveillance pickup ♪

morning, bloomberg "surveillance." olivia sterns showed up. let's do a data check. i got whiplash yesterday. what a market. 15.11.m 17 to yields. 0.878.10-year, stunning! >> government, take my money. >> your 401(k) is underperformed. stocks,ely because big blue-chip large caps have underperformed. that is changing.

excellenceap sustained? gina martin adams says watch the fed, it links directly. everybody has large caps. degree, folksr have fled to small cats at mid-caps because the returns have been faster. do not chase performance. what if that guy say at pimco, he left? >> gross. where are we in small caps to large caps? large capshifting to over small caps. large caps have outperformed as the small cap index has started breaking down. consistent with the middle of the economic cycle and the stage raising the fed starts tourist rates. >> i will rip up the script. icle,portant art

share buybacks do not work and we need more dividends. do we like large caps because of dividends? >> also because they are experiencing acceleration in revenue growth. which is pretty rare. ever last three years, we've seen no revenue growth. we are starting to seat revenues accelerate into the year ahead. it is a misnomer that everything that happens overseas impacts the large-cap index more than anything else. the small-cap index also has ever sees exposure. large caps tend to outperform when the dollar is rising. the correlation right now is positive. >> where is that revenue coming from for the blue-chip, from the capex?r or >> health care and technology. health care, a lot of that is biotech with revenue growth after lots of investment. some of it is technology, from

semiconductors to i.t. services. >> let's rip up the script again -- on!ang the security analyst -- can you own jp morgan as a blue chip? >> at the end of the day, you are owning the institution having a hard time generating topline growth without underpricing in certain lines and taking on more risk. we are not releasing the loan demand. as much as everyone wants to talk about credit demand, we have to worry about -- i'm sorry, creditability o availabi. you also have to worry about credit demand. >> it undermines the enthusiasm for stocks in general. if you do not have the banking sector, the second-largest weighting in the s&p 500.

underweight financials and we had a small return over 12 months. you can have an environment in which financials outperformed the broad index. if you go back 30 years' time, outperforman when the yield curve is flattening. it is the environment from 1995 to 1999. it is the environment from 2005 2007. time in whichf they outperform in the index still rises. is slowly coming to understand that even at the point when we finally see rates rise, the net interest margin growth is dependent upon demand. which is not there. you will have loans grilling off work repricing higher. if you look at the commercial

loan books at big banks, you have a lot of covenant light, year's50% of last issuance was credit light. the banks are doing the worst credit on their balance sheet, the best credits can access markets directly or do not need to borrow because they had great balance sheets. is, when mettion interest margins widened, are you going to start seeing a lot of credit impairments on the commercial books? even on the consumer books, borrowers who cannot get repriced and those who are therefore the demand side. >> gina, on the consumer. you said part of the revenue will come from the consumer for blue chips. discretionary is the only sector even expect earnings to shrink. why? >> consumer discretionary is an early cyclical sector. -- itically outperforms typically underperforms as the fed starts increasing. ,yclically positioned

consistent with where we are in the economic landscape. >> is that gap? >> retail is the single most ratetive to fed it increases. >> where did you get your necklace? >> we're underweight retail. >> just because of the rate cycle? with are seeing consistent the rate cycle deteriorating earnings. the consumer -- >> let me interrupt you. pepsi is crossing early. this was supposed to come out at 7:00. better than expected. one of your boring consumer stocks. $1.36 versus an estimate of $1.29. revenues better than expected. pepsico boosts

forecasts. those signposts. here's a big u.s. company making money. i'm not sure what portion of their revenue comes from the u.s.. on the bloomberg terminal, that will tell you. revenue growth is accelerating. for the first time. is that just for biotech and health care or the market as a whole? >> it is the market as a whole but it is faster for biotech and health care. suggest management will continue the overt pressure we have observed to make change and to make it more rapidly? just this immediacy. esay, paypal, or gap stor unloading their ceo. do you sense and urgency into autumn? >> it seems that way.

taking a step back and looking at the broad landscape, we are a point when valuations have reached their peak. violations have been jotting the market for the last two years. now we have got to see earnings growth. what i hear out of the banks is a thunderous silence. the opposite. we wish himis ill, the best. everyone else is quiet. why? >> not a lot of good news. the ideas.not have >> when you think about the fact that -- apple pay, you think about what apple is doing. the credit card looks exactly as it did 50 years ago. andakes someone to come in emulate. you are starting to see that happen. how much of the benefit will flow to the financial sector? chipssico -- lay's potato

-- olivia, you have boxes of those. >> milton peltz wants to keep them separate from the soft drink. thenacks is one third of business. that is why pepsi has been able to outperform coke. 1% growth is not good. >> can you tell the difference between coke and pepsi? >> i don't drink soda. >> i don't drink soda, either. much of it is stockpiling water for evil hydration -- for evil hydration -- ebola hydration. >> is a market crash coming. dentures.on's this is bloomberg "surveillance." ♪

>> good morning. looking at the ebitda. what wall street jargon drives you nuts? we will look at that trajectory. trajectory. >> let's create a venn diagram. gon.hat is not jar

out at @bsurveillance. our most popular question. a wonderful book to look at. jargon alert. what wall street jargon drives you nuts? a chaotic thursday after a crazy wednesday. single best chart will come soon and be therapeutic. >> if you want to predict where the economy is heading, look at your teeth. tight, dental care slips. this comes from our friend eric at "business week," patients are canceling required follow-up appointments are not showing up. indicator showing a lack of consumer confidence, below one point percent. 1.8%.ow that looks like what my pumpkins

look like when i try to put the last time i went to the dentist, it cost me $1500. >> what? been putting off my dental appointment could i don't have time. in my business, we've been so busy for the last two months. theipo calendar, i'm on road, i'm so busy. >> bring the chart up. fabulous. lows, josh lehman rosner. the cash flow goes down. wonders aboutece the statistical significance of on theseries that starts

eve of the crisis. >> a moment of silence for my kids' orthodontist. what a racket. olive, theyn on an had to put the tooth out, i got an implant, $6,000. insane. >> it's valid. this goes back to your caution on consumer discretionary. >> the consumer is probably more --ble than our more volatile the consumer has been spending at about a 2% pace for multiple quarters and probably will continue to do so. what they spend within the context of that 2% is important. less on discretionary and more

on staples. more on tech and less on other things. >> you are not getting your teeth done. iphone 6 plus. >> the hot waitress index. >> if i said that, it would be an hr violation. >> in tough times, the waitresses get better looking. can't find jobs elsewhere. "surveillance" expert joshua rosner. i live in half of that city. i had an index i used called the junkie indexed. nte number of junkies in fro of the bodega.

do -- >> now it is condominium million. lots for $3 >> you see the inequality greater in the streets of new york. >> record high. >> you are more of a new yorker. >> in some ways, the city runs better and has priced people at a manhattan. >> i agree. i grew up in manhattan. homelessness at record highs. one of the most startling things, how many people are sleeping on the streets. >> interesting. i got the braces off a month ago. >> we'll take a break. a new investigation, according

currencyj, manipulation. we will ask josh about it. ♪

>> this is bloomberg "surveillance p or cut adam johnson with tom keene and olivia sterns. some company news. arehe snapchat ceo says ads on their way around the company's product. they will be optional to view. that is what i got. raised money at around $10 billion. that is the evaluation without any revenue at all. has sentdate, apple invitations for an event october 16, it plans to unveil the latest ipad in time for the holiday season. apple will introduce new versions of its my .7 inch ipad and ipad mini. bond traders at j.p. morgan chase and citigroup face wall street facets shrinking bonus pool. j.p. morgan's revenue has fallen 14% this year.

>> josh rosner with us. i have got tuition to pay. it is not working. >> at the end of the day, it is working for management. >> it is working for regulators. >> it is not working at the business model. >> $22,000 for fourth grade at whatever school and you are delaying my bonus. >> forcing me to abandon most of it if i end up going elsewhere. >> thank you. i do not mean to interrupt. >> does the school consider taking a pledge of stock? >> i don't think so. >> they will not take the delay. banks beings us to

in the crosshairs. for currency manipulation. >> getting paid by the syllable. >> you wrote the book "reckless endangerment." relative tois this what we have seen, libor, mortgage abuses, is this worse or not as bad? currency manipulation. >> it is sort of the same. riskill see slaps on the and maybe even guilty's out of this one. thisg is more political at point. they should have pressed for guilty agreements in the past. does it matter if they are understood to be a government-sponsored enterprise and too big to fail? it probably does. it creates political overhang and headline risk. it does not really necessarily do anything to change behaviors.

guilty from the corporate entity, not the individual. >> you will have deferred prosecution agreements. >> still no individual? i don'tevel or traders, think you will see it at the management level. i would not be surprised if we saw it at the commodities level. it partially that we are in the political season at midterm elections. it does seem like that is a legitimate question. >> another question. holder for the post. why would they announce now? is it lay groundwork for a successor? >> i don't know. about howquestions are they going to be confirmed

if they are from outside. i don't know. it has been going on for a long time. the announcement is dictated by eric holder's departure. >> to change the topic, it is very important, i believe that this. i read about the future of the gse's 4 years ago. 16, something or miraculous is supposed to happen. i do not see that. see -- legislative economy is anything -- legislatively, we are not going to see anything on gse until 2015. >> what is the risk? >> 2 enterprise is that i thought you are a good trader a

t fannie and freddie, why are you staying? a massive risk. seeing is some action steps. you have the ability to fix them through the conservator. not exercised authorities to recapitalize enterprises >> that would advocate. think theed if you regulations are creating consolidating power in the big banks. you said big banks are becoming government-sponsored. issponsored enterprises becoming government-sponsored enterprises. warnedople in 2007, as i thet fannie and freddie,

assailant had been either because there. now is the banks. 40.orex report, ruble near stay with us, bloomberg "surveillance." ♪

>> "bloomberg surveillance this

is -- this is "bloomberg surveillance." >> yields plunged. he was air strikes against the islamic state. should people not engage in the battle against the islamic state? good morning, everyone. this is "bloomberg surveillance ." it is thursday come october 9. let's get to the top stories. >> barclays has agreed to pay $20 million to settle a u.s. lawsuit over bringing benchmark interest rates. the settlement result claims by people and firms that traded in the eurodollar market. the british bank has paid a nearly half $1 billion in fines for submitting false rates. in italy, a victory for the prime minister. the senate approving a

controversial overhaul of labor laws. the contracts make it difficult for firms to fire. that's why many were reluctant to take on full-time employees. the imf is warning that the able epidemic will have more human cost. sierra leone is likely to be the nation that is hardest hit. here in the u.s., the family of the ebola victory who died analysis questioning the care he -- who died in dallas are questioning the care he got. mark zuckerberg is in india this morning. he is meeting with the prime minister during his visit to the continent. the challenges of introducing indians to the net.

>> the biggest barrier is actually that a lot of people who have never experienced the internet just don't know why they would want it. >> india is a huge potential market for facebook. there are 240 million internet , 100 million of which are on facebook. there are over one billion people who do not currently have access to the net. earnings out from pepsi this morning. the soda maker boosting its full-year growth forecast. stillo says the company faces challenges related to market volatility and sluggish consumer demand in the developing world. a shakeup at the gap has rattled investors. assures of the retailer down as much as 9% in extended trading after gap said it would replace the ceo. theill be replaced president of cap gaps innovation and digital unit.

france gets at the bragging rights this morning. always good for literature. i have not read his last three books, but there it is. the nobel prize in literature. let me do a quick data check. stunning moves in the market. the 10 year yield is all you have to look at. 2.29 or do let's have a moment of silence for gary shilling. that is jaw-dropping. >> the lowest yield we've seen on the tenure in about 14 months. in about 14 months. >> crude at 91.

knighted. on the list is a noneventd unless you think it's a big deal. let's move on. a german low yields. what are the ramifications of that for the european financial system? >> it is certainly a loosening of credit. the monetary policy side of things in the bond market -- it's what the bond market is telling us. it's telling us three things. inflation is going nowhere, growth is going nowhere and rates are going nowhere. two years ago come if you saw low rates in europe, they thought it was a good thing. it spells out a pretty bleak economic outlook in europe. >> mario draghi will speak later this morning. what would you expect to hear mr. draghi -- from mr. draghi? >> maybe he gets down on his

knees and says, oh, janet, help me. there was this united front against a strong u.s. dollar. i imagine he wants a strong dollar and a weak euro. it's a fight for inflation. the easiest way to do it come a weaker currency. dollar lifted gold up $25 this morning. >> quite a move. especially since it broke 1200 when we seeld negative to your rates in germany, switzerland and the netherlands, do you bring the money back and keep it in the u.s.? >> to a large extent. this is quite typical although rates are extremely low.

it's a typical thing to see as the fed shipping in advance -- >> we just have a headline. you nailed this a week ago. it germany's 10 year bond yield drops to record low. what does that mean for u.s. investors? isit does mean that there inflationary risk growing around the world. this is something we have contended with. time the fed it tries to get away from qe -- there it is. talking about qe six. is that what we are seeing now? a joint qe seven?

"bloomberg surveillance >> what i see from the other side of the pod is a federal reserve scared of its own shadow. that is not good news when the federal reserve comes out and says we are concerned about growth in the euro zone, equity markets rally off the back of it. 99% of the people on this planet won't care about low rates for longer. they will see a concern about growth and concern about inflation and that is not good news. bad news is bad news. , mariopean central bank draghi speaking in four hours. what will we hear from him? >> talked about the currency side of things. side, more and more pressure to do more and more.

the ecb is getting to the end of the road. german bond yields and spanish bond yields an italian bond yields and you tell me what qe is going to do with the euro. goes to the imf meetings -- we are having a 1930's conversation. >> as christine lagarde tells you, we are approaching the new mediocre. what did these mean for mark carney? he certainly has to worry about the growth dynamic in the eurozone. if the fed is worried about growth in europe, the bank of england is definitely worried about it. decision. come a >> these are extraordinary yields and an e

extraordinary global economy. >> it's really about liquidity and what the fed is doing to force the hand of the investor into assets that have a higher yield. can you be fully invested if janet yellen yanks the punch bowl? >> you have to be really careful. this is customary. every end of qe has created volatility for equities. volatility toct emerge as the fed shifts gears. there is a tremendous amount of uncertainty. thank you so much for being with us today. i'm looking for -- this is like february of 09. the german yield was just punched through to three digits. we have never seen this. >> it is shocking. the two yield is negative in three countries. you said earlier that you still

like health care and technology. is that where you put the money? >> i think so. they are relatively yield diagnostic. they are very insensitive to changing policy. they are trading based on growth prospects, which are still improving. >> i really question what lagarde says today. come back on a quieter day. >> sounds good. >> be sure not to miss tonight. all due respect. this is "bloomberg surveillance" on bloomberg television. good at thursday morning. we're just getting going. ♪

>> good morning, everyone. futures flat. the bond market on the move in spades. the 10 year yield a stunning 2.28% this morning. just what we need come another self-help book. talking and listening to people who are crazy. not shocked she showed up to talk to me. i can't say enough how i agree

that somebody has to say crazy. let me get to the money part of the book. this is really quite good on mentoring. the first myth i want to explode is the protector's chief job is to shield you from harm and make you feel good. mentors are bearers of truth. tough love is good, right? everyone today needs to be told when they are not thinking big enough. or if what you are doing is just not in the right direction. >> how do you mentor mark zuckerberg this morning? >> he has a lot to learn about entrepreneurship outside of the united states. the u.s. have to change our own image of who the entrepreneurs are. we imagine them as these boys and hoodies at tech companies.

the fastest-growing group starting business today is women . even if we are inside companies today, we all need to think about being entrepreneurs. of companies is going up. it's not just mark zuckerberg who was a entrepreneur. it's all of us. >> entrepreneurial's. apreneurs. >> i like the idea of the startup screen. >> many start businesses with at somend family, but it point somebody's skills don't match and you need a startup prenup.

to go big, you have to go all in. >> know is as important a word as yes. sometimes a mentor needs to say no. >> sometimes you have to fire your mentor. mentors toircle of point us in the right direction. >> our twitter question of the day. which wall street jargon drives you nuts? ♪

>> good morning. u.s.ly after the first patient died from ebola, the government has come out with new policies to combat the spread of the disease with new screening policies for travelers at some key airports. i have tom keene here who was

very nervous that a mercury thermometer is going to be stuck flies upmouth if he to boston. explain who is going to be impacted by these new procedures. >> for now, tom will be ok. i'm here at one of the five airports that will be enhancing screening procedures for possible travelers. the procedures will start at jfk on saturday and will be rolled out to new work, liberty, atlanta, washington dulles chicago o'hare next week. receive 95% of travelers coming from the west african that have experienced evil outbreak. .ierra leone, ginny and liberia liberia is where thomas eric duncan came from. fear is certainly heightened about a bull entering the united states. these screening procedures are another layer of security. those westoming from

african nations will be identified at these airports and they will be given a temperature check with a no contact temperature. will be asked targeted questions about their history and their potential contact with be asked toey will give their contact information to the cdc can monitor them. the government says this is another layer of protection. it relies heavily on the honor system. it really depends on whether or not travelers are going to be honest about their history, where they are coming from, who they have contact with. actually popped tylenol when they landed during the sars outbreak. these screening procedures could cost millions of dollars and may be yielded no results. >> that is a scary prospect. thank you so much.

i don't know if you've ever had this done. if you fly into mainland china, the guys come onto the airplanes and take thisit infrared thermometer and go right up to your four head with the gun to see if you have a fever. right up to your four head with a gun to see if you have a fever. we have seen a modest level of hysteria here in the last 24 hours. give us some calm. how should we approach the reality of these five airports receiving temperature checks? >> i don't think hysteria is called for. the world has a lot of experience doing fever checks and airports. done with sars and flu.

these are basically -- does not involve a thermometer going into her mouth. no reason to be concerned about having your temperature taken. when you see the cdc taking criticism right now, i want you to defend the institution. what is the cdc getting right? >> getting quite a few things right. that,ndamental problem is like every other part of the world, their plan catch up during a disastrous situation. what they are getting right, first of all, in terms of this put in one additional layer of protection. is it going to be foolproof? no. but what's in place at the moment certainly is not full proof, either.

clearly, the primary thing the cdc is doing right is the incredible work it's doing in the countries that are so badly affected by ebola. >> thank you so much and we greatly appreciate your time this busy morning. the council on foreign relations has done a great job of looking at this. it really speaks to how we need to get knowledgeable before opening her mouth's -- opening our mouths. are talking about india earlier in the mobile penetration of us going on and orther it's a health crisis entrepreneurship -- we need people on the ground. where is the body count the cde

scenario, effectively, the doubles every 20oubl years. >> we just got 400 in the last 5-8 days. last night, the new york times reporting that a gentleman who had arrived from africa recently in harlem was admitted to a hospital for symptoms that resembled -- not to be alarmists, but we need to be aware. we will have continuing coverage of this through the morning. >> we will be speaking to devise private equity fund and find out why they are investing in south africa.

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>> what wall street jargon drives you bananas? good morning. this is "bloomberg surveillance ."

western private equity firms including carlyle are plowing money into growth markets like africa and the middle east. acquisition in the middle east and north africa jumping $7 billion this year. joining us now is our catalyst for the hour. -- guest host for the hour. when you look at all the turmoil going on in the region, why are you so bullish? africa, that -- consumers. we continue to see amazing opportunity africa. >> the imf to have

>> ebola is really confined to three small countries in west africa. we are much more concerned with investing in south africa, kenya, nigeria and ghana where it's really not had a big effect. >> as a read about your business, 106 exits. businesses you06

invested in in africa. who are the buyers when you sell? are localers consolidators, strategic groups or international groups. people coming into africa wanting distribution for their products. a company like coke and pepsi. is this about western expertise management expertise going in and structuring something and effectively selling it at a profit to locals who then take it over? >> not necessarily. there are some highly profitable companies in places like africa with local entrepreneurs building businesses that build large-scale, $100 million businesses all alone. they need something to take them to the next level, where we come in with capital. >> we have worked with 1000 entrepreneurs in emerging and growth markets.

they generate $7 billion annually and have graded 400,000 jobs. groups have recognized the early potential of the growth market endorsing blackstone and others following. there is a lot of potential in the next decade for a ownership and job creation in these markets and people are going to make money. >> are those regions hospitable environments for a partnership? >> they are. once you have role models -- if you can do it, i can, too. they worship steve jobs just as much as the rest of us when they see local people making a big exit and those people paying it theard, that's what spurs ecosystem. >> when i look at your growth, a center at the united arab emirates. how is business for your group changed -- has business for your group changed?

>> we have 25 other offices around the world. for us, the middle east has become less than 20% of what we do. you have to look beyond the headlines. it's a diverse part of the world. the uae is a pro-business environment. >> is there a new call between abu dhabi and dubai? have they come together over the last number of weeks and months? >> people have misread that. the prime minister of the country is the ruler of dubai. people have made much of the differences. it's one country that has always been operating as one country. >> you also have jordanian not yours, lebanese entrepreneurs coming to dubai, setting up .ompanies

we work with 200 entrepreneurs. for made 100 million jobs kids in the middle east. looking at the data, 2.29% of the tenure gets my attention. -- tenure gets my attention. -- 10 year gets my attention. >> if there is a story that is at the top of my focus right now, it's the bond yields. negative bond yields on the two-year in four countries in europe. what do they call him? dr. doom? expressions, there are a few others for you. x -- phrases you have

heard right here. according to our next guest, a lot of people don't understand what they mean. that's why john lancaster wrote the book. how to speak money. >> page 121, fraud, a perennial fact in the world of finance and money. on the preceding page, for guidance -- forward guidance. how do you walk the length of between -- >> my priority is making it plain and simple. language is a tremendous obstacle. if you don't know what the word means, you can follow the story or the news. i was that person. >> it was just the inspiration you wanted the knowledge so you said you better figure out

yourself? >> it was my day job, writing fiction. i was trying to understand the -- the city of london, finance, economics is central to everything. i was nearly 50 before i knew what the difference between fiscal and monetary policy was. takenon me for not having the time to figure out what that meant. >> thank you for writing the book. the origin of the word dollar. word,d from a german shakespeare or a small town in the czech republic. which is correct? >> do you know? "c."will go with

they made a silver coin. it was the main currency in europe for nearly 500 years. everyone has referred to this rule -- >> the eddie murphy role? >> a super complicated thing about trading places. it's about the only film i've ever seen about this whole world of finance. that's really accurate heard >> really had of its time. -- really ahead of its time. >> love it. cftc?

are there too many acronyms for wall street? >> outsiders certainly think so. it's certainly an optical 20 standing at -- obstacle to understanding it. when mario draghi was talking abst the ecb announcing with detailed modalities to follow, it's not really clear that that is english. industrynancial intentionally does this because they profit from misunderstanding. >> it keeps coming up. this question of intent. the intent doesn't really matter because if somebody is talking -- if that person is deliberately trying to confuse a civilian or this language is

bamboozling, it doesn't matter. >> tweet us. what is your most upsetting wall street jargon? ♪

>> good morning, everyone. markets on the move. futures at negative four. is nothing story short of stunning to see record low yields in germany. . -- let me get to my morning must-read.

from a guest we had a few weeks ago. truly one of the economic greats. --ractical man who believed one of the great quotes of my reading over the decades. i would suggest your book is read differently in the united kingdom than america. britain.a humility in >> it is read differently. markets are more professionalized here.

you are further ahead in understanding. >> there is a rigor to it. they don't have the math and statistics background to really bring the rigor into their language. there is a lot of mushy stuff. >> synergy. >> my least favorite word. madmen in authority who hear voices in the air. >> where are we on the synergy watch? term is toofavorite big to fail because i think it has an arrogance. the bitcoin entrepreneurs don't think the big banks are two big to fail. take smart risks. >> i have to bring this and. -- bring this in.

a lack of history and we have no clue. and consensual school of economics, history does not play a role. they don't think history matters . it's in defiance of history and common sense. there is a permanent human truth about how markets work. >> how to speak money. futures at negative five. good morning. ♪

>> good morning. what a great time to speak to vincent reinhart of morgan stanley on the punch bowl filled to the brim. i thought mark crumpton today phenomenon will job -- did a phenomenal job. this time is different. company news right now. here's olivia sterns. >> ads are on the way. they will be placed around the companies products and they will be optional to view.

the u.s. government has only itself to blame for silicon valley's enhanced efforts to protect user data. the google executive chairman made a comment at a roundtable of tech executives when he was asked about the technology that encrypts smartphone data. apple sent out invitations for october 15. that is your company news. >> thank you. we're watching the markets. february of 2009. stunning. >> the lowest rate we have seen in 14 months. in europe on the two-year, negative yields. >> give germany money.

michael lewis is one of the great explainers of the financial crisis. first acquire skill in math, statistics and engineering, dynamics. no, describe our collective surge for financial literacy. jargon.float in mba crazy is a compliment. and "how to speak money." two wonderful worlds here colliding on jargon. where's the synergy between the two worlds? everyonenergy is that needs to think and act like an entrepreneur today. of risk is really what

i think is wrong. we think of entrepreneurs as these risk maximizers. they are risk minimizer's. -- risk minimizers. >> a type to construct. -- type two construct. to the point of what she said about risk aversion, nobody agrees with that in the financial media. >> risk is an interesting word. it can be used in a totally different sense. it means the things we understand this uncertainty, chaos, the things that happen in life. in financial sense, it's a thing you can put an accurate number on. like is full of things you can't accurately monetize.

what john is saying here is starting my own thoughts. says what makes great companies great is the b hag. how do we balance a big hairy ambitious goal with the math or the expertise that tom is getting at? -- notave to focus on everybody is going to have the next zuckerberg idea. you mentioned india. amazing pride for the best failed idea. we need to encourage our employees to fail, take some risks or else no one is going to

try anything. >> i bumped into tom keene two read ago and he said "against the gods." andbout risk, uncertainty ambiguity. explain how my world talks about these terms different from the rest of the world. >> it's one of the books that started me writing about this. he describes risk as a humanist project. gamble --eligious to a religious to gamble. -- mathematics denies asian cization.ca's eye gray,the majesty of john

we have lost our humility in our modern certainties. certaintypriate occurs in lots of areas of modern life. >> you mentioned india. you often hear about people talking about the ingredients it takes to fuel entrepreneurship. a lot of it has to do with the bankruptcy laws in the u.s. they have precipitated this cultural acceptance of failure. >> i thought the biggest -- there are psychological. people don't give themselves permission to take chances. we need to not only its to failure, but we press stability in this country.

companies know that chaos is their friend. disrupt theto status quo, make chaos your friend. >> dare to dream. keep it simple. >> guess why tom likes the name of your book. he has never been called crazy. >> these are two wonderful books. >> the twitter question. everybody responding to our question. what wall street jargon drives you nuts? to basisone refers points. bailout. hate that word so much.

>> from the twitter handle "youwild." >> thought leader. >> please, linda, i'm thought leader. it's the dumbest thing i've ever heard. >> be your only to her. don't model yourself on someone else. -- be your own a leader. -- be your own leader. >> what do you think about elon musk? thought leader? >> a great entrepreneur. but not the only type of entrepreneur. >> he is way underestimated on his engineering chops. fantastic. are which brings me to my agenda.

elon musk tweeted out today he's going to unveil something he calls the tesla d. what is it? we are not sure. it could have a longer range years. d is the iv 500 -- the roman numeral for 500 years. on my agenda today, going over to europe. we have three people speaking , the imac president president -- imf president and the ecb president.

john, thank you. linda, thank you. great to have you both here. loop" on next, "in the bloomberg television. ♪

>> good morning. we are life from bloomberg world headquarters. you are "in the loop."

here's what we have in store for you this morning. airports gear up for screenings as ebola fears and spread. how will this affect the travel business, ticket prices and your safety? jones. with terry we have a reporter stationed at an airport. the container store has tanked more than 25%. " witho is "in the loop his holiday outlook. the st. louis cardinals are on top. heading to the national championship series for the fourth year in a row. david eckstein will join us later on in the program. first off, here is a look at our top headlines this morning. features indicate stocks will be lower at the open. after a big rally. the s&p coming off a huge rally.