investigation in germany. we get you caught up on all the headlines. ,> bank of america shareholders a report from south carolina. >> and other momentous meeting as xi jinping arrives for visit. one hot topics will be on the table? how will they resolve their differences? scarlet: good morning, i am scarlet fu. betty: i'm betty liu. 90 minutes away into the trading day. let's begin with a look at how markets are this moment. stocks are on the decline, the dow is very near the bottom of the session, off by 266 points. driving down the indexes somewhat. the automakers, scarlet, there's a ripple effect from the

volkswagen debacle. that's exactly the right word. motors, volkswagen shares down 17%. a question about having a problem this is. cars,e future of these which is -- these diesel cars, which is just begun to be adopted widely. and what this means for other automakers on diesel sales. scarlet: it's a pretty broad retreat. if you look at the stock exchange, 11 stocks lower for everyone higher on the big boards. you are seeing declines across the board. and across longtime adjuster groups as well. auto is front and center. betty: let's get a look at the top headlines. a sign of the housing market still has momentum, home prices up more than expected in july. following an employment creates a bigger pool of buyers, and they have been buying -- finding

fewer homes. gains were highest in the mountain region, new england was the slowest growing. ceo saysgoldman sachs he has lymphoma, a type of cancer. in a letter to shareholders, he writes his form of lymphoma is highly curable. he says he will keep working, though he will cut back on travel. he has been goldman ceo since 2006. scarlet: major job cuts on the way a groupon. they plan to eliminate 1100 jobs in a reorganization of its international operation. that's about 10% of the workforce. the coming will take pretax charges of up to $35 million. groupon's revenue is expected to be flat in 2015, the stock has fallen in half this year. betty: ashland, the chemical company plans to split in two. the other company will be called valvoline and focus on maintenance. thou believe has more than 1200 oil change locations, and service centers. scarlet: the world's biggest

cruise operator hosting better-than-expected earnings. carnival gives credit to higher ticket prices and occupancy rates. he had been battling back from a weak economy in europe. isther problem for carnival too much capacity and the caribbean. it's one of the perks of rising to the top tier of republican candidates. "the fiorina appeared on tonight show." she showed a very nonpolitical side. fiorina: please come take a walk with me, i'd rather stay right here alone in bed, i want to lie back down in my nice warm bed. ♪ that delivers high ratings. some serious moments as well. carly fiorina told jimmy fallon

that ben carson is wrong saying muslims should not be president. betty: six months ago, you would not have seen her invited onto the stage because she was nowhere as a candidate. she -- ii wouldn't wouldn't say she is in the poll position, but she's ready to take on the challenger. up, xi jinping kicks off his visit to the u.s. today. we have the details on that trip. office: microsoft introducing new features. we preview that software. get of america shareholders their say on how many hats brian moynihan gets to wear. those stories and more coming up on the "bloomberg market day." let's return to the story of the day, autos. it involves volkswagen, and it's a situation against more complex by the hour. scarlet: more complex and worse for automakers. we saw a moment ago, vw shares have plummeted for a second day in a row.

betty: you are at volkswagens american depository, the volume was 21 times the daily average. a gym or newspaper -- german newspaper is reporting the --pany will replace the ceo you cannot have a german word in the script without matt miller chiming in. matt: there are two separate news media sources. spiegel,to site target it's a different company. scarlet: matt miller, accuracy. betty: the german government says it will send an investigative team to vw headquarters this week to speak with officials and examine documents. matt is here with us, hans nichols is in berlin to tell us more with the latest of elements. -- venture corn released a statement. - to fightsays he plans

for his job, he's asking for trust. he said he doesn't have all the answers to the technical questions, but this is clearly a ceo that is girding for a battle. onthe next 48 hours, wednesday we have a supervisory committee of the executive board. this is a normally six person board, they're are down to five people right now. they meet on wednesday night. they present things to the full board, which is equally divided and laborvestors representatives as well as representatives from the states where volkswagen is .eadquartered we see what happens of the full board on friday. it looks like dr. venture corn is going to fight for his position. autos effected is

11 million. the company produced about 10 millions units. why is it only a five person premium instead of a six person premium? hans: the man who was the chairman of the board -- matt: who wanted to oust winterkorn previously? and who controls 51% of the company? hans: the family. matt: he kind of full the --ings behind the string mine the scenes. he's going to have a lot of say in this. hans: when you look at the five-member board, three of them are sort of on the labor side of things if you count the representative for labor. just because the advisory board recommends that mr. winterkorn

leave his position, it doesn't mean the full committee will. the most important comments are from the premier of lower saxony. we should just do this entire segment in german to make sure they stay asleep. in some ways is the premier of he had some, saying exciting to do. the control some of those votes. if they vote together it's game over for martin winterkorn. scarlet: this is affecting not only the german -- you have seen german stocks. largee german economy at in the sense that what is consumer confidence. but also the carmakers in the u.s. -- angela merkel coming out with a comment. another play them for viewers are now. havea merkel: we need to

full transparency from the company. the entire situation needs to be clarified. the minister of traffic is in close contact with volkswagen and i hope that the facts will be put on the table as quickly as possible. germany isnow that now watching its own investigation. the french and called for a broader investigation, italy is requesting information. does the eu itself have a role to play here in enforcing emission limits? or is it all individual national issues? hans: never underestimate creates ability to problems. we've seen antitrust investigations from brussels stunning with microsoft and was currently with google, taking a pretty strong -- i don't say antibusiness. they want to make sure the business is playing by european rules. but we had of the european union yesterday, the eu commission, was that they would look at the matter, but they hadn't formally announced an investigation. in some ways, that somewhat academic.

if 16 of the 19 states that use the euro have announced investigations, in some ways, volkswagen might actually prefer to centralize it and go through the eu and set of litigating this country by country. centralization of power was one of the reasons that volkswagen is in the mess that it's in. when winterkorn spoke, it was in a video statement. he was delivering a one-sided argument. matt: i think some people right now are asking the question -- does volkswagen think he can do whatever it wants? does it make the rules? it helps that it's basically almost a government organization. stake inony owns a 20% the federal government owns a big stake. and the unions also occupy seats on the supervisory board. everyone in power is running this thing and they feel like they can do whatever they want. that is not the view, what wasn't expressed by the north

american ceo of volkswagen. present theevent to new façade. -- passat. said to hise and credit, the first thing he did was apologize for this and make what so far is until last night the only public statement from an executive. listen to a piece of that. dependshorn: our future on turning this into an opportunity to learn, to improve, and we had been permitted to do so. i'm confident and personally committed that this company will do what it needs to be done to make things right. to make things right. he says they will pay what they need to pay also, which could be a high bill. scarlet: it's like $30,000 per vehicle. matt: that's the fine. we were throwing around $18 million.

they have set aside $7.3 million already. imagine if you bought a volkswagen with clean diesel, you brought a product to do one thing, you would take it back and say here is your product come i want the money back. if there are 11 billion of those, that's going to be a pretty hefty bill as well. scarlet: brendan greeley also owns some of that. the bloomberg team is very familiar with him. it's a personal story right now. matt: hans? hans: if i had a clean diesel that had a lot more torque and was legally allowed, i might hold on to that car. maybe i should be more environment only conscious. matt: don't you care about the environment, hans? hans: i want a prediction from that, does winterkorn stay? matt: he's gone. betty: we have to get going. hans, thank you. matt, we will be back with you and more car talk later in the

hour. nissan'su spoke with ceo about what's going on with volkswagen. scarlet: much more coming up on the "bloomberg market day." stay with us. ♪

scarlet: welcome back to the "bloomberg market day." i'm scarlet fu. betty: i'm betty liu. chinese president xi jinping and u.s. president obama will meet in washington this week. officialsp foreign think cyber security is not just a u.s. problem. >> china believes that china and united states and other countries should really try to

work together and work out the rules for cyber security. equality and of mutual benefits. and mutual respect. scarlet: for a closer look at u.s. now is former u.s. defense secretary william cohen. xi jinping has suffered numerous , thecks, mismanagement stock market selloff, the slowdown of the economy. what does that mean in terms of his willingness to find common ground with the president? bill: first of all, this is an important meeting. there are some would call for the cancellation of the state dinner, whoever is advocating that should take the car keys away and certainly those to the oval office. , in risingortant tensions. when the economy of china

slowing, with all the implications for the global economy that's embedded in that. with china building more military capability in the south china sea. with the fact that there is a cyber threat that comes from china. we need to talk about these issues. the man who just spoke, it's important that we carry on this conversation about how we establish rules of the road that govern cyber technology. i was talking to the chinese about this two years ago. if you don't have some kind of agreement, some agreement terms of how we proceed with this, you can have a very quick escalation of cyber attacks, which could be very crippling to each other's economy, and to the world economy. it's an important time. there are some tensions in the area with respect to china, but all the more reason we should be talking to each other. of said thatides publicly. they know they had their differences, but cooperation between the two is much more important and vital for peace in this world. really describe

the relationship between the u.s. and china? bill: one of the most important in the world. the chinese people in the american people have to find a way of living together on this planet in ways that are peaceful and cooperative. -- theyill, is it good haven't talked that much over the last several years. is it good, better, or worse than before? bill: i think it is more tense today than it was five years ago. there's greater apprehension on the part of the business committee and united states. five years ago, roughly 58% of the business executives were about china'sc economy. today, it's about 27%. there has been a real drop in optimism, in terms of what's going on with the chinese economy, and whether china is going to make the kind of structural changes that will open its market to international competition.

i would say there is greater attention to date has been in the past. part of it is due to china's rise as a military regional power. being aaps a goal of much bigger player on the world stage militarily. they're bound to be a number of tensions, and that's the reason we have to talk to each other rather than trying to break out relations and say we are not going to host these state dinner meetings. scarlet: we thought there would be more communication because the president had launched this pivot to asia, which many people argue never really happened because it was sidetracked by so many other breaking news issues. what is chinese leadership think of the president's pivot to asia? are they threatened by it? threatened.re not you're starting to see china throw its weight around. is going to be a bigger player in the asia-pacific region, and perhaps globally. that's to be expected. they have 1.3 billion people, they have a brilliant people in

terms of their capabilities. they are going to continue to grow. what has to be done is -- yes, we have a pivot, but i don't like that phrase because we have been there since world war ii. but we are going to build up our relationships with our friends in australia, and singapore, throughout the region, vietnam, thailand, and elsewhere, and japan and korea. we are to strengthen all of our relationships with the democratic countries in that region to send a signal to the chinese that no one power should dominate the asian-pacific region. no one can lay claim to the entire region as some of the chinese government are doing. all the more reason why we need to talk about these, and not just talk, but have results come out of the meetings. betty: that would be my republican candidates say obama easy on the chinese, and we should be harder, including putting in economic sanctions for that cyber warfare. the first thing that

congress should do is pass a budget. if you are asking how the chinese look at us, they look at us as a power that can't have a theet that can fact project defense capability, project our defense capability to the asian-pacific region. those who are critical of what the president is doing have to measure up and say what have you a budget so the military can operate on a protectable basis of what the funds are going to be for the systems that we need? and to reassure allies so that the -- throughout the asia-pacific region that we are a serious country. we can't be seen as a serious country as long as we can't pass a budget or we are threatening to shut down our government over planned parenthood. that is not a serious country as far as other nations look at us. there is plenty to go to capitol hill as well. scarlet: plenty of criticism everywhere. thank you to former u.s. defense secretary william cowan joining us from washington.

betty: coming up on the "bloomberg market day," the tuesday selloff, the dow off by 252 points. julie hyman with an update on the markets. ♪

scarlet: you are watching "bloomberg market day." i'm scarlet fu. liu.: i'm betty we get to julie hyman with a look at what's happening. we are looking at the 19th triple digit down move in the past 24 sessions. it's another way of illustrating the incredible volatility we have and the return to volatility. we are seeing losses continue to be steve on the major averages today. there are a lot of different reasons why we are seeing declines today. i also want to look at the recent pattern that we've seen. this is according to be spoken investment group as quoted by the "wall street journal." you have the sp y, the spider etf trust, over the past 16

session. see the gap down 1% or more at the open, the stocks continue that downward trend throughout the session. theeptember 1, when we saw stocks continuing down, we sought again on september 4. and then again on september 18, the gap lower at the open and then continuations in declines. what we see is what we have declines at the open, those the kleins only accelerate through the closing bell. we will see if that happens this time. let's take a look at the drugmakers. we saw them falling yesterday after hillary clinton tweeted that she would try and clamp down on prescription drug prices . she will be introducing the plan later today. we are continuing to see drugmakers pull back in advance of that. we have seen outperformance of until now from the is. that is worth mentioning. take a look at staples and office depot. their deal may be in trouble, according to the "new york post." a top ftc official may object to

that deal. one stock that is bucking the downtrend is weatherford international, with shares plunged 17% yesterday after weatherford said it was raising $1 billion in a sale of shares. and then it cancel them just hours later after the close yesterday, saying it couldn't get the price it wanted in the market. the shares rebounding by 10.5%. scarlet: julie hyman, thank you. jeffrey saying the canceled offering is the company is backing away from making big purchases as well. betty: repercussions thereafter but we've heard so far. scarlet, good to see you. much more ahead on the "bloomberg market day." ♪

penny: welcome back.

i'm betty liu. will visit a boeing factory here china will announce a big order for boeing airplanes. there is a new twist in the government investigation into whether airlines colluded on pricing. an antitrust official wants to know about airline executives communications with large shareholders. consumers pay more when the same large investor holds shares in the biggest airlines. the cost of renting a home rose again last month but at a slower pace. zillow says rent was up almost 4% from a year ago. it says rent hikes may be slowing down because more apartments are being built. apple is still tried to build a car but the question is which way will it go? decide whether to buy a self driving car, electric, or

a combination of the two. apple has hundreds of people working on the project. those are your top stories as of the hour. in europe. closing volkswagen dominated the headlines. mark: what a day. the fed, when will they raise interest rates? that is the big question. the biggest decline, volatility rose 18% on the stocks index. that is the biggest rise since august the 24th when the euro stoxx 50 had its biggest fall and seven years. bank cut development its forecast for chinese growth for the second time in three months. it fell 17% monday, 19% on tuesday. a two-day slide, biggest in 17 years. 23 billion euros valued wiped away.

a profit warning. interesting note from bernstein. says the stocks look overdone. the shares offered deep value and it also said management change is inevitable. the french carmaker, 8.7 percent lower come the biggest drop in a year-and-a-half. france passes finance minister called for european persiagation looking for and glencore. 11% lower today, the lowest since the ipo in may 2011. by 80%, all onk concerns of slowing growth in china. until suisse says emerging-market currencies find a flaw, it will remain challenging to put the absolute flaw on commodity prices. what does that mean for the lights -- likes of glencore? back to you. betty: much more ahead here.

a very exciting news. matt miller spoke with the company's ceo pure the full interview is straight ahead. global growth in paper consumption dropped 80% in seven years. we are going electronic. factories embarking on new, interesting endeavors outside of paper. those stories and more coming up. bank of america shareholders finally get their say on whether the ceo should keep the chairman title as well. it has been a contentious issue. investors have a special vote. yes, in fact brian moynihan will and ceo.s chairman erik schatzker there with more on the outcome. it looks like he stays on as chairman and ceo but at what

cost? . -- erik: that is a good question. brian moynihan gets to remain chairman. the resolution concerning the board of his freedom to appoint a non-independent chairmen to run the board. previously in 2009, bank of america was forced to name an independent chairman and after let years, chad were tiled -- retired last year. the way that they handled it, that he, gets to the crux of your question. ask for forgiveness, do not ask for permission kind of scenario. today, they changed the company bylaws but only 63% supported versus 30%, not exactly an overwhelming majority.

betty: indeed. according to the bloomberg sources, it would have been much better if brian moynihan got 7% or more. the higher the number, the better it is. given that it was only 63% so far. need tothe story they put out to shareholders? it remains to be seen whether the board will see fit on a 6% approval. in that briefing i just came out of with brian moynihan, the lead notpendent director, i was able to get a clear sign p are on the one hand, there is a dismissal of 37%. some of the senior managers in the room will go unnamed, talking about glass lewis, advisory firms that recommended

voting against the resolution as ideologues. the same goes for the two giant california pension funds that came up publicly against the resolution. they're being dismissed as ideologues. on the other hand, you have people like brian moynihan lot througharned a this process. jack is saying he was very surprised by the shareholder reaction and a commitment by both to spend much more time over the next few months because is not a long 37% way away from 50% and if any of that board getn more than 51%, they know the annual meeting next man, they are kicked off the board. that is what the board needs to focus on now. rebuilding its trust. it was clearly lost today. betty: clearly it was under fire. the next step for bank of

america, another step we are watching, they are resubmitting the capital plan, the federal reserve. what do we expect? they hope the capital plan is approved. is september 30. brian moynihan told us that bank of america will resubmit on time. i believe the fed then has 75 its to decide whether or not meets regulatory approval. it will clearly be nothing short of a disaster for bank of america and shareholders if the capital plan is not approved by the fed. the vet -- the bank very badly wants to give capital back to shareholders and the shareholders want it. loom much larger than the vote here today if that happens and it will raise questions as to whether the board to the right ring by giving brian moynihan the 's job like he did and

not giving them more to say in a timely manner. brian moynihan is now the fifth of the five largest thanks ceo's is to also be chairman. i will not call him a hold out because it is certainly not his choice. the only outlier now is the ceo of citigroup, but not the chairman. this will raise pressure on citigroup and the chairman asked whether he will give up the seat and allow mike to give up the same status all the other big bank ceo's is on wall street have. betty: a great point. thank you so much for that reporting. erik schatzker will be back in mayo'st hour to get mike view on the meeting. more ahead.

on the volkswagen scandal and the release of the new 2016 nissan altima, one of the most popular cars by nissan here in the u.s.. we will be back. ♪

betty: welcome back. it has been a tumultuous day. was a fortunate thing matt miller got to talk with the ceo, carlos this morning. they were there to unveil the new 2016 nissan altima. wanted to talk about his company but matt, you had to ask him about volkswagen. matt: every time, we have to

taught him about it because there is some scandal that does the an important role in auto community. he is president of the manufacturers association. reluctant today to answer questions about the big picture because he is in charge of it. he was here to talk about the new model, so i started with that. >> it is the most sold car for nissan in the united states. this segment used to be the largest segment in the u.s.. it is now the second largest in the u.s. contact are taking the lead, but still, it is an important segment. the second most sold car and growing. matt: you do not sell diesel in this country. is this technology to difficult to make perform and still pass epa emissions testing?

>> i do not think so. it is a specific technology. nissan, as you mentioned, will not sell any diesel cars. we have electric cars and hybrids. most of it is a powered engine. this technology is much more widespread in europe. matt: you're the head of the automobile manufacturers association. with all the ceo's's and leaders of those companies, including volkswagen, is this an issue that you think is pervasive? are carmakers across the globe having to sheet in order to pass regulators testing? carlos: i do not think so. we are reminding everybody about how much improvements we have made for the last year's by all

the car industries in order to have better efficiency, etc. every single member of the association to make their own statements about what they are practicing and what kind of, you know, devices they have. this is much more in issue for every car manufacturer. we want to as much as possible re-of death reinforce what is existing between one side and the consumer from the other. matt: you put together nissan, 1999. you have been working around the globe, regulators from so many different regions. do you have a statement on your emissions testing or how you deal with regulators? carlos: every country has their own testing and emissions. we have to adapt in the most truthful and transparent way. we usually share the problems with regulators. technology is evolving a lot to

a lot of things to their possible which were not possible to years ago. what is important for the industry is to give some kind of visibility about what has to come. that is why what is going through this year at the end of the year is very important. everyone is saying, ok, we all need to reduce emissions but give us visibility about what kind we want to reach 16 years down the road so we can get prepared. matt: volkswagen is down 20% today. all car makers are getting crushed in europe. do they deserve it? is it a punishment the entire industry is waiting for? carlos: there is doubt existing today. i am sure you will see in the next hour statements made by carmakers, each one stating in his own company. i am not so worried about it. i can understand. matt: your next meeting, does your car have a too big to fail issue? will you tell he's leaders in order? carlos: i think most of the

company is in order. we tried to face the challenge in the most chance and truthful way possible. at the same time, it is a moving target because technology is evolving. betty: so he was responding a bit more to the volkswagen situation but is the situation at volkswagen, a problem that will hurt other automakers? matt: i am not an engineer but a question i have is how other carmakers who have a lot of vehicles in the u.s., how do they beat testing? carlos points out they do not have diesel vehicles here. german carmakers, all of the

other german carmakers do have a lot of these vehicles here. it could be that they use certain fluid to suck up the volkswagen does not use. there could be other engineering answers i am not privy to. but it seems like if volkswagen clean,make clean diesel how are other carmakers making normal diesel clean? i have a motorcycle collection problem. i happen to know motorcycle brands, which i will not name right now, from the 70's, 80's 90's, and today, i owned motorcycles build this year that have certain devices on them to fool certain regulators into thinking their bikes are wider, the exhaust pipes are quieter than they are. companies -- other

i have a motorcycle that has a butterfly valve in the exhaust manifold. that stays closed because they only test to 3500 rpm. i righted att, 8000 rpm. it is a lot louder. the same thing is true for a lot of carmakers and emissions testing. ofty: it raises a lot questions. thank you so much, matt miller. still ahead, surviving in the digital age we will tie you what paper companies are doing to stay relevant and not go extinct. we will be right back. ♪

betty: later today, "with all due respect" will be live in boston. john will be speaking to the red sox president and ceo larry hereino at 5:00 p.m. right on bloomberg television.

one consequence of the digital age is people are using far less paper. growth in paper consumption dropped 80% in seven years. tosee companies that used make paper turning out material for other products. more on joins me for that. it is now going to things like ketchup? >> it is food. you are going with a plant-based -- plant-based commodity. a variety of cardboard boxes and so on. also, we know this is a material.d for example, pine needles, typically found in the northern hemisphere such as finland. plant spindles, used to help cholesterol. a variety of uses, as you mentioned, trying to get into

ketchup and consumer products, because the idea that they will use more paper is not helping. what else are they expanding into? medical products. the coatings for various pills and various medications. also, you can use them for a variety of lubricants, industrial uses. and mill used sawdust houses for energy for a long time. this may spur that development even more. they need to pivot in order to survive. up.g from paper to catch thank you. i know you are staying with me through the next half hour. it is time for today's top inside. here is julie hyman with more. selloffet's look at the we are seeing in stocks, which only continues to deepen. 2%.nasdaq is down

what does the options market make of it? joining me is mark sebastian from out in chicago. as we continue to see the selloff today, it looks like it is a lot of little pieces adding up to the hole. -- whole. automakers are down, commodities down. do you see a macro reason for us to fall as well? markethave got a soft getting beaten a by little things because it is still weakened by the federal reserve. the federal reserve has undercut in the financial markets. out with a policy statement last thursday. they should have provided some clarity. we will not raise rates until we see x, y, and z p report we will rip the band-aid off. coming out and running around

like a bunch of headless really causing confusion, this is an organization that at least is supposed to provide marketability. they are the root cause of market instability right now. and need to do their jobs stop talking to her until they quite down and make a decision, we will continue to see the vix in the mid 20's range. we will see the market stop in no man's land in major, technical levels. these little things will be able to plunge around the market and that is the root cause of all of this. isn't part ofair, the job to talk and let the market know what the line of thinking is? also, what about data dependence, that the fed is watching economic data that comes out of the u.s., that thes out around the globe, argument seems to be they cannot make a firm decision until they get that information.

>> i know, but be clear in what the data is they are looking at and what exactly they're looking for. the unemployment rate at this level, we will raise rates. , not anymore. decisive and not cause confusion. can you imagine jamie dimon getting in there, the head of a bank, and saying, we do not really know. he would never do something like that. betty: i would argue running a central bank is a little bit different than running jpmorgan. we have got to leave it here for this discussion. tax,re looking at iowa which we know has been a beat up group over the past days because of hillary clinton coming out with a plan to cap prescription drug prices. >> they're getting slammed on hillary clinton's caps. president, becomes still likely to be a republican house. it will be impossible for her to

pass anything that competence of. i do not think it is a long-term play. i think it is bad news in a soft market. looking at october, 350 call spread for about two dollars that pays out for 21 on its cost, plays for a quick turnaround. percent in twoit days come it can rally 4% in a day or two so that is why i'm going for that play. betty: all right. thank you so much, talking about the market selloff, the fed, and biotech shares. stay with us. we will be back after the break. ♪ ♪

(ee-e-e-oh-mum-oh-weh) (hush my darling...) (don't fear my darling...) (the lion sleeps tonight.) (hush my darling...) man snoring (don't fear my darling...)

(the lion sleeps tonight.) woman snoring take the roar out of snore. yet another innovation only at a sleep number store. pimm: good afternoon 9:00 a.m. in san francisco, noon in new york. midnight in hong kong. betty: a decline in energy and mining stocks, leaving the

overall markets lower. commodities are falling on new concerns about china's slowing economy. pimm: the volkswagen chief executive says he is endlessly said 11d the company million of automobiles have emissions heating software. investors continue to sell stocks. do you dump your old iphone for a new one? three days before the new phone officially goes on sale. ♪ pimm: good afternoon. betty: let's check on how the markets are. we continue to hover at the lows of the session. we can see a selloff

happening today. news happening in different industries. been leadings declines today with a drop of 2%. let's take it industry by industry. we talk about drugmakers and biotech. .et's talk about mosaic fertilizers, cutting its output forecast. we see crop prices decline as other commodities have declined. that means waning demand for fertilizer. commodities, we have a drop of metal today. oft pushes down prices material related shares. the maker of aggregates, construction materials also falling in today's is session. those materials, the worst-performing group in the s&p 500 today. we have been watching all the headlines haven't to do with polls lag in.

what effect does it have on the market? >> the adrs that trade in the united states are trading sharply lower. what is interesting is there is a ripple effect among the other automakers. this right now is confined. there are jitters about what it means for the industry. we see other automakers sharply lower as well. we also see the suppliers lower today, considerably taking a hit today because these are some of the companies that supply vw with various components. looked to this function yesterday. i want to check on it again today. focus on thisto part of your screen. scroll down to find some of the companies in the u.s. gets 17% of sales from vw alone. it was one of the stocks you saw

falling. 11% of its sales. yesterday, the stocks held up relatively well. them, declines today are steeper than yesterday, so there is concern about the hit sales will take in the new supplier extension. a very cool start. pimm: being able to look at that supply chain. let's continue with. in. it has been doing dirty with the clean diesel automobiles. auto manys's largest pressure chief executive is set to resign. he said 11 million automobiles around the world are estimated to have this emission cheating software. as we saw a earlier today, the vw ceo asked the public for trust, saying he does not have the answers yet, but will do everything he can to

prepare the damage and make sure nothing like this ever happens again. with us now is matt, who actually spoke with nissan earlier today about this situation. he is also the president of the european auto manufacturing group. he is a spokesperson involved in this. matt: every time carlos has come in over the last year, i end up having to ask him about somebody else. a year ago, i was asking about mary barra and general motors. i asked months ago, about sergio marchionne he had a big push to merge fiat chrysler, which he runs. carlos said, listen, i talked to sergio, of course. run theecause i would automobile manufacturing association and i have talked to him at least once a month because we are both at the meetings very i asked him today what he thought about other

carmakers involved. do they need to change the way the diesel engines run? look at what he told me. putting -- reminding inrybody about what remains order to have better emissions, better fuel efficiency, etc.. every single member of the association to make their own statement about what they are and what kind of devices they have and what technology. it is much more in issue for every car manufacturer. ultimately, we want to as much as reinforce existing between one side and consumer on the other. and enginesl leg could not pass the test, why would bmw be able to?

they make a ton of vehicles in the market. mercedes makes a ton of cars that are all passing emissions test. and what isdo it the deal with the testing to begin with? is the testing build to be beaten and manipulated? is everybody doing it? anyone who has bought a vehicle and has seen the fuel economy numbers on the window, knows after you drive it for a few weeks, you are like, this is a totally different number on the window. there is no real world significance so maybe that has not changed. what is the real world performance of the diesel automobiles made by vw? a ton of torque. i used to own an audi 84 with a 2.5 liter turbo diesel engine. i bought it for great gas

mileage and tons of torque. i could zip up. it was legal. i did not have to spend it when i got to the gas station. it is far more expensive there than it is here. full slag and he's talking about the cars are yesterday, michael horn, i went to the thing in brooklyn. pimm: if they fix your car, what will be different between how the car operates now without it being fixed? >> it is probably a pleasure to drive. it goes. and, you get great miles per gallon. if they fix your car, you will lose the zip when you put your foot on the pedal. much more expensive because you're miles per gallon will go way down. he will have to stop at the gas station. but you will not be emitting too much of this into the atmosphere

anymore. that is the trade-off. i'm not sure what it does, but i believe it is toxic. these cars were emitting 40 times the legal limit. probably not good here in most diesels have the solution that you put into the engine that removes that. if you run out of that solution in a truck, the epa requires that truck manufacturers do not allow your card go faster than five miles per hour. it goes down to a crawl mode. that is how serious they feel it is. he talked about nissan. you guys are standing next to the 2016 altima? matt: ultima sells 350,000 of those a year here. it is more than all volkswagen brand cars here in the u.s. they make combined. i asked them, wide do they

invest in the midsized car segment when we as americans only want to buy trucks and suvs since gas is so cheap for us and we can use as much as we like. one -- the was only only midsize segment car actually showing growth. choosing.r they are pimm: if volkswagen shares -- far: the only one i know so , the only one who has reported venture corn will step down. they have cited unnamed sources on the supervisory board. take that with a grain of salt. it may happen or it may not. it is fun to speculate who should run it after. they said my german name shake and the chairman of the porsche group would be their candidate to run it.

other people suggested alan mullally. quite a few people suggested volkswagen go try to get him from ford out of retirement. he is a turnaround king and this is what he does best. sergio has been pushing for this merger. full's wagon, not huge fans of sergio marchionne, reportedly. the former chairman of the whole no longer serving in that role. maybe volkswagen should combine and get sergio to run the whole group. have 32 different auto brands. he would sell off all but one. the ferrari against the vw? matt: they have the bugatti's, the lamborghinis. it wouldevery spirit

be cats and dogs living together, a horrible mess. i get to talk about this all day long. listen to you because it is not a story that is going away. thanks. now let's look at top stories crossing bloomberg at this hour. brian moynihan comes out on top today in the power struggle at bank of america. dual role asain a chairman and chief executive. 6% of shareholders back cam. some said the board overstepped its powers when it made him chairman last year. backers say he has done a good job cutting costs. the goldman sachs chief executive lloyd blankfein says he has lymphoma, a type of cancer. he writes his form of lymphoma is highly curable. he will keep working.

he is 61 years old and has been goldman profits chief executive since 2006. we wish him a speedy recovery. betty: groupon plans to , about 10%100 jobs of the workforce. the company will take charges of up to 35 million dollars. the stock has fallen in half so far this year. whether airlines colluded on pricing. burton burden is report antitrust officials want to know about airline executives to medications with large shareholders. pay more when the same large investors hold shares for the same airline. starbucks nationwide today. lattes and anything else you crave from the coffee giant could be waiting for you by the

time you arrive. service will debut in some locations in the u k and canada next month. maybe no more waiting in those long lines for your latte. pimm: first world problems. that he: those are your stories at noon. much more ahead on the market day. we review the latest iphone spirit what is new, improved, and is it worth upgrading? pimm: a detail about the big victory for brian moynihan. why shareholders decided to mourn the death ignore the critics and have him remain as the chairman and chief executive area -- executive. ♪

pimm: this is the bloomberg market day. i am pimm fox. let's take a closer look at the

federal reserve decision. the really doing nothing to leave it unchanged for now. what this could mean for stock investors. betty: joining us now is the chief equity strategist, bob. you say actually the fed's non-decision or decision not to raise interest rate is a negative for equities. why is that? >> it increases uncertainty. the company the release had everything to do with things outside the u.s.. while not unimportant, to make that the whole story, not spending enough time talking about the improved employment situation, i think it through a bunch of investors off not knowing what are the goal posts the fed is looking at. it is uncertainty that it creates. pimm: if you could speak more specific the about asset classes, what categories do you like and which categories would

you like to get rid of? environment an where i think the uncertainty related to the correction in august and the healing process necessary in the market, the fed issue we just talked about, uncertainty about third quarter and beyond earnings, i think you balance in your portfolio. eventually, we think a free cash flow and value went out but i think you need growth in there. do not give up on consumer staples and utilities, but mr. you have consumer discretionary because of domestic earnings that come from that. and yes, then there is health care and parts of technology. i do not think being out on a limb in any direction makes a lot of sense at the moment. betty: speaking of not being out on a limb, jeffrey dunlop spoke with investors on monday and there is a 50-50 chance the fed is going to raise

interest rates in december. >> i will plead the fifth and side with janet yellen. it will depend on the data. the data will be sufficient for the fed to go. i will go a little further and say 6040, how is that? pimm: speak about the energy sector. we know stocks as well as the high yield of many companies has sold off because of the slump of oil prices. with this be a good time? >> i'm still patient on that. i would rather pay up knowing i have better fundamentals in my back, rather than trying to catch a falling knife pierced slow growth outside the u.s.. china has slowed and they are a big incremental demand or oil.

you have got saudi arabia, iraq pumping oil. but don't you want to get ahead of all of this? you want to buy what everyone else's going and so what everyone else is buying. only when the fundamentals are turning. if you tell me china is going to get strong tomorrow and some one will shut down supply, i will buy them big time. but i do not see that happening. have seen how bond investors and equity investors, traders, have had two different views on the economy. bond traders are much more pessimistic about the situation. knowing that the fed has held off on raising interest-rate, does it change the game and turns of who you pay attention to, who create trader traitor that is much more accurate going forward? are right toou

characterize it that way. the bond guys have had it more right than equity guys. i think a lot of it is the geography question we have been talking about here. how deep will russia and brazil's procession be? can japan restart and what will that look like? the u.s. is doing ok meanwhile. consumers are in pretty healthy shape. you have got to balance all of that out. it leads to a world where economic growth is ok, but no better than that. it is good for certain kinds of stocks. you have got to have a earnings for the stocks to do ok appear that means i think you have to have free cash flow area -- flow. pimm: what is your best and worst call? preceding 12 months. >> my view is value stocks in the equities market, we will do better than they have an interest rates will move up and bonds will have more difficulty.

they are my two worst calls, to answer your question. pimm: thank you very much. joining us from minneapolis. coming up, wall street banks may have found a new way to hit you up for even more money area was the end -- what is it really worth? you are about to find out. ♪

betty: this is the bloomberg market day p or dime betty liu. pimm: i am bed -- i am pimm fox. after years of essentially giving away the research free, they now want you to pay for it. , thanks for being here. outline for people who made up be following the different revenue streams that banks have and the relationship between those revenue streams and customers. >> sure. in the past, trading commissions, about 60% of those

went toward paying for research. wall street banks have never --rged directionally directly for research. they tended to give it out free and provided to clients here when it comes to the end of the year, they say, we gave you all the ports and smart analysis, you have got trade ideas for us ine at and more our way area europe, regulators are starting to think about doing away with the system. trade fromreventing paying research. they believe pension funds, people's money, is going to sort of over a wall street takes for research. the banks are trying to get ahead of that by moving in this direction by locking down their is not blasting it out free of charge, but realizing,

this costs a lot of money to produce. : also, to bring it to the dave h have all that information out there, you have got websites that are producing high research out your it is this a way to say, the demarcation, if you really want research, you have got to pay for it? >> that is right. it is people doing smart thinking on their own, but some of it is deutsche bank, and just putting it up. twitter is another good example. they are trying to get away from that. why pay for research if you can get on twitter? the size, shrink shrink strength like we saw going on? >> that is right. 8.2 billion in 2008 went toward

research analysts. compensation, travel, things around that. ands not technology distribution. that might fall to 3.4 billion in 2017. more than half. pimm: we have got to watch that. thank you for your story. i want to thank you. betty: this is where i say goodbye. hello to the chinese president arriving right now. take a look at a live shot. he is beginning his first official state visit to the united states. more details on his visit next. ♪

pimm: you are watching a live shot of the aircraft, the 747 that has landed in seattle bearing president xi jinping.

the first stop in a visit to the u.s.. president xi will be meeting with chief executives of companies such as microsoft and boeing as well as starbucks at a technology forum in seattle in order for companies to increase their business presence in china. we will have a live report from ramy inocencio as xi jinping arrives in seattle. this is the bloomberg "market day," i am pimm fox. some stories making headlines. chemical company ashland plans to split, the other company will be called valvoline. focus on automobile maintenance. valvoline has more than 1200 oil change locations and service centers around the u.s. new jersey governor chris christie knows a thing or two about weight has ordered the

leader of the state's national guard to slim down. governor christie has given air force brigadier general three months to shape up. the government was reportedly unaware that the general had been reprimanded by the pentagon about his weight and for dodging physical fitness tests. women have to work longer to afford the same iphones as men. bloomberg crunched the numbers and found that women customers on average must work 8 extra hours to purchase the same product. the gap is greatest among restaurant and coffee shop hostesses. omen in those jobs must work 28 more hours than male counterparts to afford the same iphone. that is a look at some of the top stories at this hour. we will stay with iphones for a moment. the new iphones go on sale officially friday. are they worth the upgrade? iphonebart reviews the plus.d this 6s

there's a lot different on the inside. sam: this is the new apple plus. 6s and 6s should you buy one? yes, probably. since it debuted, i still think the iphone is the best smartphone. android phones have made tremendous improvements and apple has had some missteps. the way apple's hardware and software together still makes for the best user experience. the new s models are typical of year product cycle, nothing looks different on the outside but a lot has changed inside. let's start with the display. apple added another dimension to multitouch and called it 3-d touch. if you press harder than normal you can pull up shortcuts for different apps. it is like right-click on your mouse.

a couple things, 3-d touch does take getting used to. push the wrong way and you wind up getting your apps to do the jiggling thing when you want to them. then there is a matter of what you can do, things are a little bit limited right now. it is better that i can preview a mail message or jump to a new note but other uses are questionable. exactly needs a shortcut to call a private browsing page? fortunately, apple is allowing third-party developers to use the technology so we may see more clever applications in the future. the other big changes have to do 's camera.s the rear camera has been upgraded to 12 megapels and can shoot high-resolution 4k megapixels. life photos, capturing the moment before and after the shutter has been released. one thing, they do take up more

room on your phone. in the apple store, walk past the 16 gigabyte model and get an iphone with more storage. the front facing camera can take better selfies thanks to a display that can act like a flash. you do not cannot looking like a zombie. iphones the best smartphones are the fundamentals , the new processor is ludicrously fast, as is the which now works instantly. there's a raft of improvements thanks to the 6s's operating system ios 9. mode,n activate low-power get directions on maps and find things faster thanks to an improved search and siri. siri: hello. sam: new features usually get the headlines but it is behind the scenes upgrades that matter. thanks to fast hardware and well designed software, the iphones begin to fade away and let you

focus on what you are doing. he best things about a new thene s and 6s plus are not things that grab your attention, it is the stuff in the background that you never notice. we always noticed sam grobart, thank you very much. so you got to try these. do they feel identical? sam: no difference whatsoever. pimm: talk about the camera. and the video quality. sam: the rear facing camera, i have it here, it has been upgraded. it used to be 8 megapixels and now is 12. play has been reluctant to the megapixel arms race but has figured out a way to put a 12 megapixel sensor and keep the megapixels apart so it is clear. that allows 4k, ultra-high-definition video. pimm: the ability to make movies, videos and create content just on the phone. sam: here's the most impressive

thing. you can actually edit 4k video in imovie on the iphone, 2 different 4k streams at the same time. pimm: 2 different streams? the kind of thing you used to have a major desktop. sam: it is in your pocket. pimm:. you upload that to your website sam: share it with friends and family. you can start to produce great, well shot and well edited video on the device. pimm: that is going to put pressure on the video industry. sam: we've seen what has happened to camcorders and point and shoot cameras. it begins to tighten the screws. pimm: they should not even call this a phone. you do not do that much telephoning. it is a personal computer. sam: it is a media device, 4 things in one. the phone is probably the fourth. pimm: tell me about the apps that come preinstalled. every time apple makes an

acquisition like beats, there's the beats app. 15 million people signed up for a trial of apple music. sam: we will see if they stick around. apple has added a new newsfeed. is an aggregator of york news sources so that you select the kind of news you like to read. pimm: when they do something like that, do they have to go out and strike financial deals with providers? sam: correct. the older app, newsstand, is no longer. what you find is that when you upgrade to ios 9, your old news are on the home screen again. you can go into a bloomberg at an wall street journal app. or you can see some of those stories and other sources in a

river of information in the apple news app. pimm: you get your choice. you get a choice in color. sam: there a new one, rose gold. i don't have it with me. at first and some photographs it looks awfully pink. in person i must tell you it is fabulous. it is great. it is almost like a coppery gold. pimm: purely a static reasons, you would see that and go, i want that. sam: it is special. pimm: how is it that apple seems to be the leader when it comes to introducing what we call small innovations, changing the color. chain is soupply well managed. they have inroads into every market supplier, technology and material. they are working on developing all these different types of things at the same time and they move the market so much that when they want to do something it all lines. pimm: thank you, sam grobart.

check out this, the president of china, xi jinping is coming down the gangway from his plane as he arrives in seattle. his aircraft touched down about 20 minutes ago. seattle is the first step in his first official state visit to the u.s. he will be meeting with the chief executive of microsoft, satya nadella. as well as howard schultz of starbucks. he will be meeting with the head of boeing. there will be a technology for in seattle. ramy inocencio will be reporting in a few moments. still ahead on bloomberg "market day." we find out if the world would be better off with modern-day robin hood. we find out about the rich and the poor around the world. next. ♪

pimm: this is bloomberg "market day," i am pimm fox. let's go to david gura. you will tell me in detail about what is going on. david: the story is commodities but let's start with the major indexes, a bit of a rout. 1.5%.0 down dow jones also down. nasdaq down. come to my bloomberg terminal and the function that breaks by sector, what is leading the losses as materials.

materials and specifically metlals, copper leading losses. platinum reached a six year low. the concern here is china. ,he biggest user of commodities the asian development bank downgrading its forecast for china. ing a decline.een and the developed till the the nd theaven of choice -- a safe haven of choice is the u.s. 10 year yield. to give you a sense of the anxiety let's go to the vix. it's past level of the - -- it's at 23.

pimm: platinum is less expensive per ounce than gold. at this moment let's take a look at how european markets are closing. mark barton in london. fed, whenever they going to raise interest rates? the question sending shares to their biggest decline in almost a month. volatility rising 18% on europe's fear index, the biggest rise since august 24. decline after the asian development bank cut its forecast for chinese growth for the second time in three months. have a look at the biggest % monday andll 17 19% tuesday. biggest iny slide, years. today, a prophet warning. bernstein said the stocks look

overdone. the shares are devalued. it said management change is inevitable. the worst-case scenario bernstein has priced in. 8.7% lower. france's finance minister called for a european investigation of the industry which would include carmakers like peugeot. glencore, 11% lower today. lowest since its ipo in may 2011. since that day, shares have sunk by 80% all on concern about slowing growth in china. credit suisse says until china demand and emerging-market currencies find a floor it will remain challenging to put a floor on commodity prices. what does that mean for the likes of glencore? pimm: thanks very much. mark barton from london. coming up in the next half hour of the market day, volkswagen

shares dragging down european stock indexes. there are a word that states including new york and california are starting their own investigation into the emission control issue. we are going to be speaking with a crisis management expert, coming up. darden restaurants better than estimated sales with new lunch items and increased take out at all and garden. -- at olive garden. new details on results per let's look at top stories. amazon is celebrating its emmy award win with a one-day discount for prime membership. friday, amazon will cut the 99 fee to $67.1$ 9 in the awards. it is a decision that could affect the energy industry, the obama administration says the creator sage grouse does not ne

ed to be listed as an endangered species in 11 western states. federal protection could have led to restrictions on oil and gas drillers. buffer zones will be established fore mail grouse gather breeding. it would be world be a better place if the richest person gave all of their money to the poorest person? that is a question our bloomberg robin hood index try to answer. the index looked at 42 countries and prepared the wealthiest individuals to the percentage of the populations that live in poverty. joining me now is my colleague mark crumpton. this is fascinating. mark: this is a fascinating list on bloomberg.com and on the bloomberg terminal. our colleague came up with this story. that the folks on the billionaires list, look at some

countries, cyprus, sweden, the u.s., chile, india and china. the net worth of bill gates would turn into a one-off payment of 1007 hundred 36 dollars if distributed to the neediest 15% of americans. todepends on population determine how much they would get. india's population, 19 .2 billion, that amounts to the smallest payout of any country analyzed. his net worth is 13.6 million times more -- pimm: that is the worst payout. best payout? mark: cyprus and sweden. pimm: cyprus, that is john fredrickson, who is an investor in shipping assets. i don't think he is from cyprus

but he probably makes his domicile or live there. mark: $45,987 in cyprus. in sweden. they have small populations and high living standards. pimm: the reason we call a robin hood is you have a cadre of and alleged -- you have a cadre of individuals at the poverty line or well below and a small number of people that make a list for the wealthiest. mark: it is interesting. part of this was taken from the billionaires index. nevertheless, it says the modern-day robin hood would do little to improve the lives of those in need.

that goes not just to the size but to the scale of poverty. pimm: we should not make a blanket judgment that taking it from here to here is going to change that. mark: not at all. pimm: see you in just a little bit. still ahead on the bloomberg "marketing," brian moynihan will remain bank of america's chairman. live coverage of the meeting coming up.

pimm: i am pimm fox. bank of america shareholders have spoken. keep hisnihan will dual role as chairman and ceo after a special shareholder vote. erik schatzker is at the inreholder meeting charlotte, north carolina. he joins us with a key player in the debate. erik: thank you. the key player would be mike, an analyst who has been outspoken not just in his research concerning bank of america but a

number of banks. feels positive about some and not so positive about others. welcome. thank you. erik: you were urging shareholders to reject this resolution. you spoke in today's shareholders meeting. demanding that the board be upgraded. the poor is not up to the task. were cast in favor of the resolution. do you feel you lost. >> shareholders had a lost opportunity. vote is a strong statement by shareholders to the board saying bank of america board, you need to improve. erik: help people understand why 37% is important. event like look at this as effectively a thumbs-up or thumbs down. 50.1% you win.

it does not work that way. hard not to get voted on. bank of america almost did not vote on this. typically an election of a director, you have 3% no votes. a typical election it was more than 10 times the no vote. signal that shareholders are unhappy. round one was the meeting last may. there were 30% no votes for the 4 members of the governance committee. 7% no votes for the recombination. round three will be the anchor meeting next may. erik: what happens? >> either bank of america makes changes to its board, we would be shocked if banc of america does not make changes before next may. i think it is likely that

shareholders do not make changes and possibly take out some directors. >> which number is more important? 63 percent or 13 minutes, that is all it took for them to consider the issue at hand and get the meeting over. >> it felt like bank of america was doing shareholders a favor. independent director, the person shareholders are supposed to rely on, spoke 477 for 77 seconds. why wasn't he answering questions? why did they limit investors to speak for two minutes. the most insulting part is when you had a representative from lster,s and cas individuals who represent -- erik: quickly before we run out

of time, what does this mean for citigroup and michael corbett, the last ceo who is not also chairman? >> eventually performance rules out. we think citigroup is on the right path. a man accountable as opposed to banc of america which has no timeframe. their conversation is not linked to that. erik: thank you very much. back to you in new york city. it does not resolve unanswered questions for bank of america going forward. pimm: more on "bloomberg market day, next. ♪

pimm: in :00 p.m. your new york 1:00 a.m. in hong kong and mark: this is the bloomberg market day.

they had lost investigations, and here he has said he is sorry for cheating on admissions tests. arrivede's thinking has -- the chinese president she's .i has arrived helping students pay for loans. ♪ helping students pay for good afternoon, i am pimm fox. thank you for staying with us. let's go straight to our senior markets correspondent julie hyman with a look at wall street action right now. julie: good afternoon. we are seeing the selloff accelerate as the day goes on.

we have been watching the groups that are doing the worst, sharply the worst rate we have technology on that list. a lot of large-cap technology stocks are pulling back. session had had an 11 winning streak, and it is now lower today, breaking that when you streak, which is a record one for the company. despite some positive reviews that have been coming out on the iphone as well as an analyst initiation this morning from goldman sachs to a buy rating. google also completing our large-cap techiphone trifecta ty that is doing poorly. we've also been watching pharmaceutical shares fall once again today. yesterday it was a hillary ting them off.set she said she was going to do something about it, and she is pulling out details of her plan to caps on. the drugmakers and biotech companies are pulling back as a result of that. pimm: taking a look at

automakers, they are falling today after the news regarding volkswagen and the admission test. falling for a second consecutive day. julie: they are down more than 30% over two days, whether your looking at the german traded shares, or the shares and the united states are what is also interesting is the ripple effect among the other automakers. fiat chrysler taking a 6% hit on that. for the moment there does not seem to be any concrete evidence of those other automakers are guilty of the same behavior. and yet their shares are paying the price as well. there was an interesting piece on the bloomberg terminal today, to lookyou through how at the profitability of the various automakers. looking at the difference in revenue growth, and their operating margins. not many of these companies have been seeing positive operating margins at the same time as the

revenue growth has been on the rise. only five of the automakers have been seeing that rising revenue growth at the same time they are seeing operating margins expand. motors.daimler, honda most of them have been seeing negative in that column. you can go to where bloomberg terminal and it will walk you through how to look at that. mark: julie hyman joining us from the newsroom. thank you. the crisis that. i can is a top headline again today. germany and a number of u.s. states have opened an investigation into how the company knowingly put software and 11 million vehicles allowing them to cheat on u.s. emissions test. the ceo has issued a video statement saying vw is ruthlessly investigating how this happened. pimm: joining us now is professor daniel dear meyer. he is at chicago's school of

public policy. he is also the author of the book reputation rules, about building and protecting brands from just the kind of news stories that volkswagen is dealing with right now. thank you very much for being with us. what would you tell the directors right now? we have here is the biggest crisis the company has faced in its history. it has gone far beyond anything that can be fixed by a communications strategy. even though i think the statement by the ceo was right on the money, this goes right into the culture, the processes, and then there is a question of who knew what, when, and what is the ultimate responsibility that the ceo has to bear for these actions. reputation flag and over the years has been one of

trustworthiness and one of quality. given the scope, given the size of this scandal, and that reputation ever be one back with consumers and investors? >> i think what it would require a head to toee investigation, identifying with the root causes are. that typically goes beyond the individuals of some individuals -- some decisions of individuals, but goes to the culture of the company. with a crisis of this magnitude you have to go deep and have a reorganization of the entire company culture. one more thing on that, the whole issue about environmental performance, clean diesel and so forth have been something that full flag and had pushed over the last few months. strategy andof positioning its brand, it is a gamble in the united states. volkswagen has about $19

billion in cash. settle this issue, or do they have to clean house when it comes to management? >> the payments and fees will just be one part of that. in addition you to look at various legal actions to my potential class action lawsuit. political action, fallout hearings, investigation. this will be extremely ugly. on top of that, as we see this on the markets already, there is a tremendous loss in the reputation and the trust that customers and investors put in the brand. these are shockwaves that are being felt in the united states. tell us how the rebel effect is also traveling overseas to europe. >> the newspapers are full of that as you may imagine. german runs is dominated by the story. it is iconic brand in germany, for sure. they had been dominated by the refugee crisis, but now they're talking about something else. in addition to that you have a

very dramatic power struggle about the leadership atolls i can recently. this friday the board was supposed to rename his contract. there is a whole politics aspect. the state government has shares. is a very dramatic story playing out on the front pages of the leading newspapers. you can about the future of volkswagen and its potential for a takeover target. >> we have to see about how bad this is. at this point we do not quite know exactly how deep these issues wet. if they go all the way back to the ceo or to the board, there will be dramatic changes from that. we also have to see how dramatic the impact from the regulatory, legal, and political side will be. there is no mistake that volkswagen is in a deep crisis right now. mark: i have to ask, does he

survive this? it is really a 50-50 chance at this point. we already heard some negative comments from some members of the supervisory board. we have to keep in mind that he just survived a brutal power struggle within the company. it is not looking very good, but we will have to see how friday plays out. pimm: thank you very much. now let's take a look at some of the top stories crossing the bloomberg. more than 2 million muslims are beginning the first rights of largest religious pilgrimages that draws people to the holy city of mecca for rituals and prayers. it requires all able-bodied muslim to perform it once in their lives. and virgin wants to strengthen financial ties with china,

including a possible stock exchange link. the transfer of the exchequer announced deals at the stock exchange. >> i want the u.k. to be the natural western hub for rmb trading. we have announced a package of agreements that will firmly established london as china and range into western financial markets. george osborne has said that the united kingdom was vulnerable to the turmoil caused by their stock market collapse, but he said the u.k. should not run away from china. rose more than expected in july, according to the federal government. gains were highest in the mountain region, with cities such as phoenix, las vegas, and denver. new england was the slowest rosing housing market, falling unemployment and hiked inventory has increased the prices of houses. mark: lloyd blankfein says he

he says it is highly curable. he is 61 and has been goldman ceo since 2006. brian moynihan comes out on top in a power struggle at bank of america. will remain the chairman and ceo. some shareholders of the board overstepped its powers when they meet him chairman last year. that is able to the top stories we're following at this hour. president hasna's touched down in seattle, washington. he will meet with tech and business leaders. chinese cyber espionage and chinese trade barriers are two topic slightly too, -- likely to come out. pimm: darden restaurants have increased lunch items and takeout items we will give you details on their earnings report. mark: scott walker dropped his bid to become president. which republican candidates

stand to gain ground as he spends his deficit spends his campaign. ♪

pimm: this is the bloomberg market day, i am pimm fox. you for staying with us. chinese president has landed in seattle wash 10. it is the first stop on his three-day state visit. he is meeting with ceos and some of the biggest companies, including microsoft, boeing, apple, and starbucks. our reporter is live in seattle with the latest. good today. >> good morning.

we are awaiting the imminent arrival of china's president west inhind me to the seattle. increasing in commotion around the region. this is his first dictate is -- state visit as president of china. highlights will be a banquet in his honor that happens right here. expected to have his first and only policy speech of his whole entire weeklong trip. dignitaries asg well as local and regional business leaders. that does include henry kissinger, which many of us noted a lot of a lot of secret negotiations between beijing and washington in the 19th of it is, led to normalize ties between the two countries. tomorrow, his biggest event will be a roundtable discussion with

business leaders from both the u.s. and china that is hosted by the paulson institute. that is by the former treasury secretary hank paulson. it is a who's who is business leaders from the u.s. and china. that includes people like tim cook of apple, satya nadella from microsoft, howard schultz of starbucks, as well as dennis muilenburg of boeing. but also includes jack ma on alibaba, robin lee, as well as the bank of china, the industrial bank of china's head. capprevious bank by market -- biggest bank by market cap in the world. the president will be here on his trip and have a market cap of $1 trillion. we talk about business, they definitely do mean business. this how different is visit from his previous visit in 2013? it was back in 2013, and politically speaking, he was not

president of the time. he was vice president. but economically, china is a very different economic half and is definitely seeing better days. sawhe past summer or so we china's shanghai composite fall about 38% because of their slow down. china has been slowing down in the past year and saws slows pace of growth since 1990. yen has devalued into surprise moves. trying to engage with business leaders and tech leaders and saying china still a consumer driven society and we still want to buy. mark: how important is china to the city of seattle? >> good question. it turns out that washington dollarsports 29 billion of goods and services to china every single year.

if you look at the gdp of country around the world, that is roughly on par with about half of the world's gdp. it is huge. looking at what they actually exports, boeing is one of the biggest things. that accounts for about $21 billion or 22%. there is also agricultural exports, week, soybeans, and washington apples. pimm: i would also imagine coffee, since he is meeting with howard schultz at starbucks. thank you for reporting. now let's take a look at some of the top stories. carnival, the cruise line, is reporting again in third-quarter profit. the world's largest cruise operator is a higher ticket prices and higher occupancy to lift the results. sales fell slightly but exceeded

analyst estimates. carnival is trying to battle back from a weekend european economy and excess capacity in the caribbean. mark: espn is planning to reduce headcount, according to sports websites the big lead which says they will cut 200 to 300 jobs in the coming months. the network reducing cost to make up for a huge increase in rides it will pay to broadcast nba basketball. pimm: coming up on the bloomberg market day, star board value is squeezing more revenue out of olivef garden -- all o garden. will break down earnings with bloomberg radio when we return. ♪

mark: welcome back to the bloomberg market day. pimm: darden restaurants

increased their annual forecast after posting sales. gains at a number of stores included the longhorn steakhouse garden.oolive >> we welcome all of our viewers to themberg tv bloomberg advantage. we want to talk about darden restaurants because it is down about 1.4%. --y did come out with me with a new result. what about the specifics was in that quarterly release? >> darden actually be expectation when it came to say store sales -- same-store sales. when people were a little bit

has a tent about is that they are very assistant they're going their spinoffwith for real estate. that is causing a little bit of concern. cory: it is a business that was falling dramatically year-over-year. we saw 23% decline in sales last year. it's picked up this order, 6% increase. where was the strength and sales? >> it came from their specialty group, which is angst like capital grille, the higher end chains that they have. the positive in there is that olive garden which is the main part of their overall business is showing improvement. they have shown positive same-store sales for several quarters. >> that is a good thing. they went back to the basics, they are showing what is working at this point. >> exactly. they are making additions to their menu, making it more whoaling to people want to customize. they had positive traffic into

stores, and that is a very important achievement they were able to realize. cory: he was live bodies. they really do hate all economic sectors. the capital grille is much higher to get them cheaper restaurants. what is going on at the cheaper restaurants? , the largestgarden part of their chain, they are making progress. they also had good result that longhorn which has been that middle range. there's same-store sales were about 4.4%. they are seeing success across the full scale. that is reflecting the consumer and the organizational changes they have made since they had their investors take a larger role in the company. >> talk about star board value. they are the largest shareholder at this point. main board members had to go work in the restaurant to get a feel of what darden

does and what they are doing right and wrong. does it show that they were right in their activism for darden? >> in many aspects it does show that there were a lot of things fundamental to the business that needed to be improved. with attention to cost control and attention to organizational improvement they are seeing that on the top line as well. cory: we saw some discounting as well. quarters oftive growth, but there are questions about what was happening in terms of price and what they are doing. we look at this 1% issue where we see retailers that are selling to rich people doing well. we see capital grille doing well. i'm curious about what is happening on the lower end of the scale. >> what has been working in terms of the value and of all of garden is a have added an entire section to their menu that is there everyday value menu. that has done very well with customers. deepquarter they did less

discount promoting than they did last your, and they still posted sales gains. what that tells me is that the changes they are making to their menu, for example they did a create your own, which is one of the long-term best selling items. >> i have had it. [laughter] they had soup, bread sticks, it was all good. >> given the choice of items of reinforces that brand integrity that people associate with and gives them a sense of flexibility. those are the types of things that are appealing not only to the value of consumer, but people overall. costs goingge forward. we know the labor market has improved a lot, could this be troublesome for them going forward? >> it could be troublesome for any restaurant going forward if minimum wage continues to rise. >> what about the commodity cost? >> it has helped, especially in

jerry. >>? thank you so much. shares of darden just down 1.6%. maybe we should do a road trip to olive garden. cory: forget olive garden, we will go to italy. [laughter] pimm: our thanks to bloomberg intelligence. i will leave it all in your good hands, and check out olive garden. mark: you will. i am hungry. coming up in the next hour, that scott walker has dropped out of the presidential race, where does all of that donor money go? we will explore that, next. ♪ sure, tv has evolved over the years.

it's gotten squarer. brighter. bigger. it's gotten thinner. even curvier. but what's next?

for all binge watchers. movie geeks. sports freaks. x1 from xfinity will change the way you experience tv. mark: welcome back to the "bloomberg market day." let's get straight to your top headlines. david detritus says he sorry. he testified before congress today, apologizing for sharing

classified information with his biographer and mistress. betray us: four years ago i made a serious mistake -- petraus: four years ago i made a serious mistake. it was a breach of values. there is nothing i can do to undo what i did and i can only to how sorry i am in strive go forward with a greater sense of humility, purpose, ingratitude to those who stood with me during this difficult chapter in my life. also offered his thoughts on the american efforts in the middle east, calling efforts against the islamic state "inadequate." employers are putting a greater amount of medical costs on

health insurance, which is the average deductible for workers with single coverage now tops $1000. up from $303 in 2006. they say deductibles have climbed to seven times faster than wages since 2010. the aetna ceo says the company will raise the pay of low-wage you manna. they have reached a $35 billion deal to acquire arrival health insurer -- a -- the rival health insurer. the obama administration says it is getting harder to sign-up americans who are still not enrolled in the affordable care act. among the reasons, the most eager customers have already signed up, many young adults don't see the value in coverage, and many others are managing tight household budgets. 10 point 5 million people remain uninsured. open enrollment starts november 1. one of the perks of rising to

the top tier republican presidential candidates, carly appeared on "the tonight show," where she showed a very nonpolitical side. >> ♪ i'm slick, please don't take a walk with me i'd rather stay right here at home instead lie right down in my nice warm bed you're going to have to carry me ♪ [laughter] were some serious moments. she told fallon that ben carson is wrong for saying that a muslim should not be president of the united states. those are your top stories at this hour. wisconsin governor scott walker is out of the presidential race, but he says he is not the only republican who should be quitting the race. other: i encourage republican presidential candidates to consider doing the same, so that the voters can

focus on a limited number of candidates who can offer a positive conservative alternative to the current front runner. apparentt is an reference to donald trump, whom walker never mentioned by name. phil mattingly joins us from boston. before we get to walker and trump, what about carly fiorina on "the tonight show." phil: we need to start talking about the jimmy fallon bump. you have to understand that she bested ted cruz, who was on stephen colbert's show. i think that's the ticket. carly fiorina is hot on the campaign trail and has ratings as well. mark: talk to us about scott walker. he seemed to suggest that he was falling on his sword for the good of the republican party.

phil: the truth is he fell on his sword because he had no money left for the campaign. when he launched his campaign he was the prohibitive favorite in iowa and considered a top-tier favorite, now it has all fallen apart. i haven't talking to people inside his camp about what actually happened. there are a number of reasons this actually occurred. mismanagement with his finances, he hired too much staff. and he was not a good fundraiser. there was also scott walker the candidate. liket tripped up on things birthright citizenship and then revoking birthright citizenship. there are a lot of elements here, like time to coalesce around someone not named donald trump, his biggest problem was not donald trump, it was himself. governor walker made his bones, if you will, by taking on the unions in the state of

wisconsin. why did that never resonate and why did it seem like he didn't mention it? that goes back to the inconsistency of the message. what we heard from donors going into this in a purple state, his national donor network was very real and it included the coke others and a lot of people aligned with the coke others americans for prosperity network. those donors were just disappointed and did not feel that is a compliment in wisconsin were ever coming through. they were not coming through on the public stage or in donors meetings. the biggest concern i heard from donors, and there were a lot of wall street donors his fold, they never saw scott walker come out and make a public pitch for them. it stunned a lot of donors who early on got behind him and thought that he was the real deal. walker is out, rick

perry is out, who stands to benefit? who gets those potential delegates? phil: the voters will be the most interesting. went scott walker got out he was below 1% nationally. it's not like there were a huge number of voters migrating one way or the other, but it does go to the money. a bunch of donors last night had already pledged to scott walker. they mentioned a few names where they are likely to go. marco rubio, jeb --, carly fiorina -- who we just heard from, has had some stellar performances in debates. and then you have john kasich, who has a one state strategy, focused on new hampshire. those are the people his donors are looking towards right now. one thing they all made clear to me last night and this morning is that they are going to sit out a little bit. the reason why is this -- they don't know how to get their head around what is going on in the republican primary right now. with donald trump, ben carson, carly fiorina.

they will keep their powder dry until the race shakes out a little bit more. expect this to happen so quickly and they are a little bit scared. is this about the rest of the candidates getting their message out or is this about stopping donald trump? night is message last the one i have been seeing behind the scenes over the last couple of months. club for growth has already started to launch ads against donald trump. you will see money from outside groups targeting donald trump with a lot of opposition research flooding out from media,ns into the attacking donald trump. i spoke to one campaign aide two days ago who said that when it comes to donald trump, you don't need one person doing opposition research, you need a battalion of people. the key up to this point is that nothing negative that has come out about donald trump has had any negative impact on his overall numbers. i think there are a lot of people right now scratching their head, hoping that the peak has been hit.

one really knows for sure. that raises a lot of concern. the luckiest person working at bloomberg today, you will be at fenway park. phil: i took the hardship rout today, taking this one for the team. new england, boston, top-tier people. we are going to hear all about is the most important thing in new england -- unless the red sox are playing. with all due respect, definitely do it -- definitely tune in at 5 p.m.. we will definitely look forward to that. coming up in the next half hour we will hear from the nissan chairman and ceo. we will get his take on the volkswagen scandal and whether cheating on regulatory tests is common in the auto industry. price waterhouse coopers has a new tool for attack -- a tracking top college grads.

tracking top -- a college grads -- attracting top college grads. ♪

the: welcome back to "bloomberg market day p let's get a check on the markets. julie hyman is standing by. julie: i want to talk about the huge declines we have been seeing in commodities, continuing to see commodities. let's talk about oil. progress in its efforts to lift sanctions, but you do not know when they will be bringing oil to market. this already in the market one analyst say that we are going to continue to cease low oil prices because of the surplus. goldman says that that is going to continue for the next 15 years, but now we are seeing a

decline of 15% in oil prices today. otherg across the commodities, metals under pressure. this is inc., which is trading at a five-year low. platinum is trading at a six low. the asian development bank is still forecast china, which has affect metals today. the production of copper in particular will exceed demand by 598,000 tons by 2017. double the surplus we are seeing this year. supply demand dynamics are continuing to not be strong for many of the commodities. not just limited to oil and metals, we are seeing it as grains as well. looks like growing virus edition -- growing drier conditions mean we could see pressure on crop prices ease soybeans trading lower. this all mean that this bear market for commodities is broadly continuing.

this is a look at the bloomberg commodities index. to 2011, it is down 50% since then through today. this enormous downturn the commodity eating back into a lot of different path classes. stocks among them. mosaic, the maker of elements going into fertilizer, cutting their potash outlooks this year. mosaic shares have been under pressure. miners have been under pressure as well with the likes of new orton mining and freeport mac moran on the line areas we are also seeing consol energy, one of the minute -- many energy stocks on the wane today. mark: now a look at the european market clothes with our colleagues in london. the fed, when will they raise interest rates? question out there.

volatility is rising 18% on the european fear index, the biggest rise since august of 24, when the euro stoxx 50 had its biggest fall in seven years. miners led the decline, tracking the fall from asia. cutting the forecast for chinese in as for the second time many months. on tuesday. what a two-day slide. biggest in seven years. value wiped away. today they issued a profit warning. note from bernstein, they said that the shares offered deep value to the brave. are you brave? it also said that management change is inevitable. the worst-case scenario has already been priced in. carmaker,e french eight .7% lower. the french finance minister

called for european investigation of the industry including carmakers like persia and glencore. what a slide, 11% lower today. may,t since the ipo of 2011. since then shares have sunk by 80% along concerns of slowing growth in china. ,redit siu's -- credit suisse by the way, says that until currency finds a floor it will remain challenging to put a absolute floor on commodity prices. what does that mean for the likes of glencore? back to you. mark: staying on the growing volkswagen,at europe -- new york and california are opening investigations, as is germany. the ceo opened a video this morning saying that he is deeply sorry that they put a cheating software into 11 million cars. , correspondent

who interviewed the president of nissan this morning. what did he say? matt: he was here to show us the new nissan altima. they have sold 350,000 of those per year, climbing every year. doing very well for a midsize car, a segment that suffered from low gas prices because most americans want trucks or suvs. interestingly, he is the head of the european automakers manufacturing organization and it is a legitimate group of ceos who meet every month and talk about things like this. i am sure it will be on their next meeting agenda. listen to me about what he planned. >> as the head of the association we are putting out a communique about how much improvement has been put out over the last couple of years to have better fuel efficiency and emissions.

we leave it to each member of the association to make their own statement about what they , what kind of technology they are developing. this is much more an issue for every carmine facture or. but the association obviously wants to as much as possible reinforce from one side, with the consumer on the other. matt: what about for you? in 1999,ogether working around the globe, regulators from so many different regions. do you have a statement on your emissions testing or how you deal with it? as you know,, every country and region has its own testing and carmakers have to adapt to this. we must adapt to this in the most truthful and transparent way. when we have problems we usually share them with regulators. at the same time, technology is moving a lot. a lot of things are possible that were not possible to years ago.

is tos very important give some kind of visibility about what has to come. everyone is looking, ok, give us visibility. what kind of emissions do we want to reach 15 years down the road? ghosnso, carlos interestingly showing me the missions last night. i went to the premiere for the passaat.ah -- the message seems to be overweight by the cheating scandal. up at 2:00,e coming and are you going to have on? matt: they try to get companies upe mgm casinos to come working with them to do that right now.

mark: still ahead, i will tell you how one of the world's biggest consulting firms is aiming to take a bite out of student loan debt. ♪

mark: welcome back. thanks for staying with us. price waterhouse coopers has a new tool, student loan assistance. they will receive help each year in paying off their student loan debt. a big appeal for candidates for shouldering billions in student loan debt. the vice chair of price waterhouse cooper joins me in studio. thank you for your time.

when you were being seated i said that the seems like a no-brainer. it is a win-win. >> i agree. when you have got 40 million americans with college loans, 71% of graduates have debt. this is a societal problem. mark: talk to us about the genesis of this. how did this come to pass? we realized that this is one of the biggest pain points for our youngest people. what better thing could we do that is consistent with both our purpose overall, building trust in society to solve important problems, as well as hitting up a point for our people mark:. mark:-- people. mark: this was something that i think maybe a lot of corporate types had thought about not implemented. design,this come from if you will, to implementation? mr. ghosn: it actually -- ms. sawdye: it actually came about

fairly rapidly. one of our client service partners convened a leadership team and our human resources people, we talked to some of our people and our youngest employees and we found that they really felt that if we could help with one of the things that is a burdening point for most of and, a real distraction problem for them to face, it was a no-brainer. mark: if you recall, a few years ago president obama said that he and his wife and then, i remember senator marco rubio were saying that they had not paid off their student loan debt until they're 40's. the burden is just crushing on them. is this something that you believe other firms will take a look at? saying that this is not a bad idea and we should do that too? i sure hope so. we should all join in and try to help with this problem with our people. i had student loans myself when

i was younger and i was able to over a long. of time pay them off. long period d -- of time pay that off, but you cannot do that these days. mark: how did you come up with the figure? ms. sawdye: we are obviously balancing a portfolio, we thought it was enough but not too much. mark: when you tell them that this is on the table, what is their reaction? ms. sawdye: i can only guess, we toy rolled it out yesterday focus groups and they were all universally thrilled. even those without student loan debts. this is such a big societal problem that we all need to lean in and help. you mentioned societal problem. is there any idea how crushing this is on the u.s. economy? you are talking about young people with a debt erred in who cannot buy a house, cannot buy a

car. in addition they cannot save for retirement because they are paying all debt and if they fall in arrears they have the penalties and interest building up, so they are drowning in this. they absolutely are. i'm sure it affects their whole outlook, their daily consumer buying habits as well. correct? look, i think that this has a real potential to have a real impact, especially if this catches on in other organizations. --k: any sense of or lawmakers in washington who might be paying attention to this? any advice for folks in washington on how they might alleviate this debt burden on american students? ms. sawdye: the best thing would be if this did not have to be taxed. mark: i hadn't thought about that. ms. sawdye: who knows. it would be great. it would have a significantly bigger benefit for the

individual involved. the benefit for price waterhouse coopers is you are going to start attracting talent . what do you think that will be like when word gets out through interviews like that -- come work with us, we will benefit because we have your intellectual capital and you will benefit as well. hopefully it will help to solve a societal problem and that would be great. that is a high-class problem. i think that's great. thank you so much for your time, appreciate it, carol. ms. sawdye: thanks, mark. mark: coming up, much more on the volkswagen scandal. several u.s. states begin investigation into the admission that they cheated on air pollution test. ♪

it is 11 a.m. in san francisco, 2 p.m. in new york. matt: this is "the bloomberg market day." mark: the wheels are coming off

at volkswagen. we will bring you the latest. matt: china's president arrives in the u.s. for a state visit, stopping first in seattle, where he will meet with technology and business leaders. we will discuss the hot topic on the table. mark: a big victory for brian moynihan. we will look at why most shareholders decided to ignore critics and let moynahan remain ceo. ♪ mark: good day from bloomberg world headquarters in new york. i'm mark crumpton, here with matt miller. matt: let's take a look quickly at the markets. just two hours to go until the close of trading. we are witnessing a selloff again