fed left the interest rate in place but how much should folks place on the decision? a key stopping port for migrants, we will speak to the ambassador of greece. mark: apple is taking aim at competitors like google. how some could change the world forever. betty: good afternoon. i am betty liu. matt: i am mark crumpton. we just talked about the fed, it is like the lebron james thing, the decision. betty: and then it came. matt: and then it went, and the market started selling off yesterday and the market still selling off.

julie hyman is in the newsroom with a check on the markets. julie: good afternoon. lebron james comparison although this one is a little more important i would say to the world at large. take a look at the major averages. we do indeed have that selloff going on. it is a pretty broad-based one. the financials are down, material stocks are down, industrials are down. this is very broad based but i want to talk about there is some fundamental news driving some of the selling we are seeing today. take a look at la quinta, the hotel chain. the ceo announced after the close that he was resigning. the stock is down 15%, the most on record as a result. it went public in 2014. the company also said it was cutting its forecast.

that commentary is having an effect on the other hotel stocks. hotel operators, we are seeing them decline. all of them are also selling off. betty: also, julie, tell us about the hotels. we know that some of the hotel stocks, as you were talking about, are declining, but the reits, those are gaining. when you're talking about hotels or other types of property, they are doing a bit better today. we are seeing yields fall today. particularly some of the health care reits are doing well. up bystate index higher, 3%. what is going on? a couple things. take a look at my bloomberg terminal for the relative

performance of these health care reits. this is a normalized chart. the white line is these health which you haves, seen decline. the health care reits have done particularly poorly. one thing was the out of -- the rising outlook. this is debt to ebitda over the past two years and it has been climbing as these guys are selling more debt. servicing that debt is going to remain relatively inexpensive, so those lower yield today, at least for today, are good news for these guys. mark: julie hyman, thank you, julie. betty: one more fed meeting down, one to go this year. markets are on an, even if many on wall street understand what the fed is thinking. >> financial conditions are the

key priority and the strong dollar that was wreaking havoc on emerging market economies, so i think they did the right thing. mark: right or not, years of low rates of what any asset classes inflated. steve, oakland to the broadcast. where are the savvy investors placing their money. steve: that is a good question, because right now there is not much value anywhere if you look across capital markets. the pervading theme is coming from financial markets. today, you are left with an environment where with the u.s. pivoting and looking to normalized some point, but the rest of the world is still

engaging in qe and mired in a low yield. today is not really about, or their chief asset, i think it is more about what is less overvalued. fixed some a look at income and say with the prospect that rates are not going to go anywhere, we have already seen yields come down so much, fixed income is not the place you want to be. fixed although i am a income person, i cannot disagree with that view. betty: it must be painful. upve: it is, and we are set for a different normalizing process. all factors are set up for fixed income broadly speaking to produce low returns over the next three to five years. how do you get the most out of fixed income and how do you manage the risk and pivot year portfolio? mark: if you are going to manage that risk that means you will have to reposition. how will you do that? steve: the vast majority of

warptors are in the ag core component of fixed income and that is where we see the least alley-oop. you do not a band -- the least value. you do not abandon fixed income altogether. this is not because we think rates are going to go up, but because we are going to be in this low return environment, you want to pivot to war you get spread returns and more of an alpha orientation when beta returns will be low. finally, you want to take a little bit more dynamic approach. historically, fixed income investors have taken a long-term strategic a six -- strategic places. you need to have a more active approach. betty: we had larry wrist area on who manages a global asset

team at goldman sachs. he was talking about liquid alts and how much more popular they have become, a place that people go to now, and emerging place because investors want to get rid of this volatility. i guess they need some peace of mind. do you worry that because traditionally people have gone into fixed income for that type of, i do not want to say peace of mind, but certainly safer than trading into stocks, that mightght want to -- you lose some investors who want to go into these alternative asset? steve: i think you have to be careful how creative you get in any market. i think one of the real challenges of fixed income, it has always been an offset in terms of risk position relative to the equity base of your portfolio. now, we areening starting to see correlation between fixed income and equities.

part of that is the fact that our equity price is being driven up by the liquidity in the fixed ifome market so therefore fixed income returns come down because rates are rising, it may equityend a favorable environment as it would have in past cases. mark: in the climate here in, how do you define a favorable equity environment? steve: i am not in equity person so it is hard for me to say. i think you always have to look and earnings growth. even though we are in this low earnings growth, we have earnings growth that has been buffeted from headwind from the rising dollar. it is really not a bad environment for corporate earnings and corporate fundamentals, simply that the level of growth is not materializing to the level we would want. one of the things that concerns me that spills over into the

fixed income market is now the earnings growth is slowing down, you see management taking much more financial steps of levering up their balance sheet to create earnings growth rather than driving revenue topline growth and organic growth. that creates leverage in the system and risk for business. betty: poor quality. didn't disappoint you, steve, when the fed said it did not does -- decide to raise rates? steve: it did. in some ways i was hoping that they would to get the process over with. i do not know if it is disappointment. part of the pivot that cap out of that -- that came out of that meeting was in two areas. they pointed to global factors and that is something they have not done in the past. is the fed becoming a global central banker? the second component which was

somewhat disappointing was they cited -- cited some of the market did -- volatility. you think the fed should be agnostic and the decision process should not be influenced by what is happening in the near term in the markets. mark: is it a u.s. central bank or a global central bank? are they not taking their cues from the ecb and bank of japan? steve: i do not know if they are necessarily taking the qs, but they are leading the path and they realize we no longer live in an isolated economy and isolated markets. that is partly why our view in the united states will stay lower, not because u.s. rates are low but it is hard for the u.s. to deviate separate from other sovereign rights, and what is happening overseas. i think the u.s. is acknowledging the fact that we do not live in a bubble and their implications taking place overseas in other markets that

while today may not have an immediate impact, it could spill over to financial impact over time. betty: steve, thank you so much. let's get a look at some of the top stories affecting the world today. u.s. and russian military officials will begin direct talks over russia's buildup in syria. it has sucked up -- russia has stepped up its support for syria-'s president bashar al-assad. president's throwing out the welcome mat for international journalists. according to the news agency, they encourage foreign media to cover chinese stories. she commented on the planned visit to the u.s.. she says, interests outweigh differences between the two companies -- countries. mark: johnson controls will cut as many as 3000 jobs in the next

two years, a little less than 3% of its workforce. the company hopes to save $250 million a year. exxon mobil is looking for shale bargains in texas, meeting with small oil producers about takeovers and oil -- joint ventures. many are forced to shut down rigs or partner with a company that has deep pockets. says the u.s.imon banking system is much safer now than it has been. he says banks have more capital and are more diversified than it used to be. he is concerned about what happens when the economy gets worse. >> what i worry about is what happens when you have a really bad environment. we do not have a bad environment. banks will be much more restricted in its ability to stand against the tide. a lot of that will be made up for with non-banks.

it all remains to be seen. betty: he said another of his concerns involves treasuries, saying some traders have never been in an direct -- in an environment where interest rates are rising. ultraluxury may be going out of style in manhattan. we will tell you why one homebuilder is going to focus on lower-priced units. betty: we will get more perspective on the federal reserve with michelle meyer's, the interview coming up at the bottom of the hour. ♪

♪ betty: welcome back to the bloomberg market day.

i betty liu, here with mark crumpton. mark: tired of seeing all this adds when you use your iphone or ipad? you can block those after apple rolled out ios nine. betty: users are so excited that three of the five most downloaded apps are blocking apps. people are saying it is making their phone very witchy. hy.glitc apps are threeee of the top. it is not important only to the company that is selling it. this is about the ads that will appear inside an application when you are on your phone. from desktop to mobile, it is a huge deal because the notion of where revenues will come from in mobile is advertising. going to have an enormous

effect on the entire ecosystem applications, writing software. apple taking a very strong stand by allowing this technology to exist, even though it is going to hurt so many other companies that have developed applications to be used on the apple iphone. the success of the sales of the software is one thing. but when you think of the companies this might affect, the results could be huge. a terrific analyst out of ever research and published it. he tested out a bunch of companies who are sure to be ticked off when it comes to their inability to serve ads to the ios users. when you look at companies like linked in, twitter, these rely on significant, hundreds of millions of revenue from the ios users. when you look at companies like rocket fuel that depend on apple's other app writers and

serve ads today's app writers, those companies in danger of losing revenues over time because the ads will not show up on a phone if a lot of people deploy these blocking software apps. have any idea, because we said in the intro there have been complaints about itvhes because of this, as the company said anything about that? cory: we have heard nothing from apple about the problems of ios nine or the ad software. it is saying that apple did not write the software themselves. when they announced phones, the phones got a lot of attention, the announcement got a lot of attention itself. some of the new technology in the phone, i think this is largely missed. they made this decision largely to be part of this ios nine, but not a functional part.

what that really means is is open season on all of the companies that are trying to send ads to your phone. there are a bunch of new companies who are trying to keep those from io, and apple enabling that battle. betty: what about facebook? tell us about facebook. cory: it is interesting. the way that facebook embeds advertisements into the newsfeed makes it much harder to block those. the user will see those ads as part of their regular news face and facebook may be much less vulnerable to disruption, unlike other companies were the apps -- ads are slapped on top. mark: could this change the nature of what we are seeing now on the internet, the business model? cory: i think it is absolutely the case, there could be a big change in the way companies are

developing their business models. yes, that happens out here in san francisco when a company comes out with a good idea and will make money later. it could have a big effect on some of these companies that are getting the evaluations for an exciting idea when the revenue idea was only advertising. when you look across the desktop locking has been a feature of many desk top apps. chrome has grown quite a bit. when you look across the use of desktop advertising, 10.7% of all desktop users this summer have reported using ad blocking software. people are used to using ad blocking. it is an experience they want and they are demanding it on ios. mark: cory johnson joining us from san francisco. betty: i may have to download

one of those acts. the high-end luxury real estate market in new york may have hit its peak. mark: we will tell you how one of the world's largest builders is responding. ♪

♪ mark: welcome back to the bloomberg market day. i am mark crumpton here with that e-mail. betty: where have all the u.s. billionaires gone? on -- mark:ocusing that is a big discount for the new development listings. here to explain what a luxury condo glut means.

it is kind of interesting to say "glut" in the and same sentence. >> the first people out of the recession built very high and product -- height and products, and records were set. you had people buying condos for tens of millions of dollars and every developer piled in and said, let's build really high and stuff. apparently they knew there was just a lot of money on the sidelines, just waiting for the right time and opportunity. >> you had a lot of global investors looking for something to invest in, and this is a great opportunity. everybody piled in, and the resulting cost of land in manhattan skyrocketed. developers had no choice but to build that because that is the only way to make back your money.

what we have seen in the past few years, anything that has been built has been ultra luxury. the cost of new development has been steadily rising. basically making it completely out of reach for a normally well-to-do family. betty: even an upper middle-class family, it is way out of reach. what is toll brothers doing? >> toll brothers which built quite a few luxury units, they have a couple of sites they are planning. one west 17th street, as they were designing it they looked at the market and said, i think the demand for high and units have been satisfied. they really focused on two and one-bedroom units. these are still luxury units. but they are going to be slightly smaller and so overall, that lowers the overall price point of the unit. they are going to have a couple

of threes and fours with that is not going to be the majority of the building. mark: basically those days when mayor de blasio ran on affordable housing, happened to that? this is probably the beginning of maybe a shift. they bought the land at a certain price and still have to make the money for the risk they are taking, but they are going to be at a lower price point than what we are seeing. mark: thank you so much. betty: this is where i sign off. mark: to go by your luxury apartment. coming up, i will be talking to a top u.s. economist on what she thinks about the fed's decision. michelle meyer will join me next. ♪

♪ ♪

>> welcome back to the "bloomberg market day." now, the latest on greece, where once again politics is dominating the discussion. you are looking at a live sicture of alexis tsipra speaking at a rally in athens, fighting for his political life as groups compared to go to the polls on sunday. joining is his former u.s. ambassador degrees, thomas miller. -- two greece, thomas miller. mr. ambassador, thank you for your time. what is at stake? ambassador miller: this is an important election, mark. the two major parties running neck and are both committed to carry out austerity plans. i don't think there's a question of whether or not that will happen. but the big question is whether you will have an outcome that is clear. it's hard to do the math to see

how to put together a government without a lot of coalition partners, or government at all. run: giving mr. tsipras'ss as prime minister before he called snap elections, what is the sense, not just for greeks, but from the international community, about how he handled the financial crisis in greece? >> the sense of the international community is that it was an abysmal mess. calling for a referendum to vote the package, then reversing himself totally. eu,ink the troika, the f, feel they, and im can probably deal with him now. bear in mind, he has lost a good segment of his party. there's a part of his party that has bolted, and formed a new party ,an and hastert group.

mark: the way things seem, from our reporting and other sources, it seems not a party is projected to win a majority. if they don't, than what? no one in miller: greek elections ever wins a majority. can they get over 35%? under the greek electoral system, usually if you get over 35% you can form a government, because the leading party gets an additional 50 seats in the whliament, in addition to it getsat -- what it disproportionately. neck,re running neck and and it's really hard to envision either of those two parties, syriza or new democracy, will be able to put together a new government without a number of coalition partners, and then is all kinds of permutations that don't work.

mark: former u.s. investor degrees, thomas miller, is joining us from washington. refugees from syria have been arriving on greek islands. is this degrees, and illiterate -- how big of a problem is this, and will it have an impact on elections? is asador miller: it massive problem. imagine 3 million people coming to florida. that is the equivalent of what is coming to the greek islands. greek does not have the funds or the wherewithal to deal with these people. most of them want to go onward, many to germany. elections?act the it could very much, because the party that is anti-immigration, anti-austerity, a very dangerous party, it is called golden don. -- golden dawn. think the two leading

parties would want to have them, golden dawn come in the coalition. they are a neo-nazi party. they could collect a lot of support as a backlash to this immigration prices -- crisis. mark: one of the things driving the crisis is the violence we are seeing in syria. there have been recent moves to support the assad regime. how should the united states responded? said innk what he london was the appropriate response. and that is that the russians suggested sitting down for military to military talks. that we andake sure get intoans don't yet a situation that could be dangerous. we have the final differences.

the russians are a much supporting aside, and we have said consistently he has to go. i believe we gain a lot by dialogue. the former u.s. ambassador degrees, thomas miller. from washington it's always a privilege to have you on the broadcast. thank you for your time. coming up in the next half hour the bloomberg market day, as alibaba mark since the ipo anniversary on saturday, shares have crumbled. can the e-commerce giant recover? that story and more, we return.

mark: it's jude law a.m. in hong kong, -- 2:00 a.m. in hong kong.

matt: markets are red across the board. looming government shutdown. will congressional readers like mitch mcconnell and john boehner demand that funding this trip -- be stripped for planned parenthood. another $3rs wants billion in extra taxes from the go: company. -- coca-cola company. mark: that is a lot of coca-cola. i am mark crumpton, with matt miller. matt: let's get a look at the markets. they are red across the board. the s&p 500 down 1.5%. 19.59 the number. nearly 300ing points. mark: it gives one pause, because