scarlet: good afternoon. here is what we are watching this hour. resume a selloff after china unexpectedly weakens its currency. we look at the fragility of u.s. markets ahead of the jobs report on friday. north korea says it detonated a hydrogen bomb. what this means for pyongyang's relationship of gauging -- with beijing. we've got a conversation with the qualcomm ceo. first went ahead of her to the markets desk for julie has a chance of today's market activities. julie: so much for the bounceback in for the reassurances about it's not a big deal the first day of the year being down. it's just three days and we are setting up for the worst week in quite some time for the major averages. they all declined in the neighborhood of 1%. nasdaq has been doing the best of the three.

it's an energy led selloff. energy stocks are down the most by far. in the neighborhood of 3%. materials also declining. again.ties-lead all the groups are lower. pc a slice of consumer discretionary. that is the media groups. look at oil prices specifically. they are pushing below $35 per barrel again. for brent is the lowest price 11 years. for nymex crude is the lowest in six years. we have inventories today. although we saw a drawdown in crude oil inventories there was a -- the outlet is going forward. there might be an eventual building crude oil as well. china is still in the backdrop. it's guessing a pall over the markets. . julie: we had this north korean claim of a hydrogen bomb test. the market seems were concerned about this yuan devaluation

because of what it might signal about the authorities concerned over its economy. how concerned that they need to weaken it more than it had been. the dollar versus the chinese currency. it is going up. the chinese currency at his lowest since april 2011. we are seen people sell out of stocks to of whether they perceive as risky today. other things are perceived as safer are doing better. gold is trading higher by more than 1%. the miners are following right along with it in treasuries as well. we are seeing yields push lower. flowing intoy is treasury markets. scarlet: julie, think is a much. let's check in with mark on the headlines from the news desk. mark: we begin today with north korea. united nations secretary-general condemning pyongyang's

announcement of its latest nuclear test, calling it "profoundly destabilizing." he's but to reporters before the un security council met in an emergency session. some are questioning the claims. the last registered as an earthquake. even china is condemning the a test -- condemning the test. blamesabout -- germany greece's sea border. denmark's told -- denmark told refugees to go elsewhere in sweden says it is swamped. this threatens no passport travel in much of the eu. sweden and denmark have instituted border checks because of the crush of refugees. members of the armed group occupying a lot of effort region organ oregon say they were afraid of a federal raid. authorities say there is still -- they are working on a peaceful resolution. the group says it will leave the

refuge once or is a plan to turn over management of federal lands to locals. the man accused of buying rifles used in the san bernardino massacre has a scheduled court appearance today. he faces charges of conspiring to provide material support to terrorists. you get up to 50 years in prison if convicted. said little in previous court appearances and has yet to enter a plea. ♪ global news 24 hours a day powered by our 2400 journalists in more than 150 news bureaus around the world. scarlet: thanks so much. the consumer electronic show is in full swing in las vegas and cars are kicking at the height year. qualcomm is partnering with audi to make its 2017 model cars chocked full of infotainment. this is part of their latest move to expand the rest be on smartphones. cory johnson is live with the ceo of qualcomm. cory: you are right.

cars are a big focus this year. -- joining me is the ceo of qualcomm. >> if you look at audi we have had a long relationship with the car industry. over 10 years we have shipped over 340 million chips. different chips. it started off by getting the car connected. is accelerating not only through the higher speeds of more technology. the audi partnership is not just taking the modem, the part that connects the car, but the parts of the car processing information and the way it really interfaces with the consumer. cory: this is an additional socket? >> it is but it is more technology in the car. the cars you smartphone driving experience. a smartphone on wheels. now they are observing that

absorbing more technology. cory: do you see more market share for you in this arena? >> the automobile for us to be a growth factor. our blend of technologies we can provide in smartphone type factors is really going to be important to the car manufacturing. car manufacturers are becoming much like the cloud providers. they generate so much data. if i had information on your wireless which are intermittent window wiper and washer, there is so much data i can get off that information. that's what you see the companies in the cloud providers tying up. we connect all the cars. we invented technology that enables us to occur. that trend is good for our business. cory: i think it's what you see car coveney struggling if they want to allow android into the car or the apple cart products in the car.

they want to maintain their own map systems as a some german automaker bears -- automakers. they were to keep the data themselves. >> anytime you have innovation occurring at a fast rate you have a lot of different parties working on it. that is always a good trend for us. we try to make that easy for these companies to take advantage of that technology. cory: you look at qualcomm five or 10 years from now, what percentage of the business might be cars? ityou look at our business, will continue to be a strong business but it is slowing down. we can take the same technology and play that into new markets. when we look at the businesses it doubles the available market over the next five years. when you look at all the things on the showroom floor. cory: not just cars? >> you take cars, the home, what is happening in smart cities. automotive, health care.

all these things are happening on the showroom floor with those are new sockets for us, a new opportunity for us to employ qualcomm technology. that doubles our available market. cory: i think i've to hate the phrase "internet of things" says that -- so thank you for not using it. >> today we are a big player. we ship over 100 million chips into that area. what people forget is that it is very diverse. you have to enable a number of different partners, not just one like you might do in smartphones. what is happening is they are absorbing many different technologies. drones, even your thermostat now has a number of different technologies that take years ago or five is ago would've only been in the phone spaces. that accelerates the rate of innovation that occurs in the home and with all these different markets. i think you are seeing that on the show floor now. cory: you have had difficulty protecting your intellectual

property in china. you seem to have turned a corner. are you stronger than two years ago? >> we had to over the last two years really adapt to our business practices in china. we reach an agreement with the chinese government. investigation on our practices. we resolved that through a resolution we announced about a year ago. now we are in the process of rolling that out with our licensees and customers. that seems to be building momentum. we signed up four different licensees in december. we are pleased to see that moving in the right direction. cory: four in december is significant progress. business,ile chip there was a time when you are putting in chips that no one could equal. but there is a level of commoditization and mobile phones that was not around. are we getting close to the time when chips and phones are commoditized?

>> it depends in which price tier. for the entry-level phone, it is very competitive. it the men in high tier still tends to be a very technology driven business. product, we have over 80 different designs. it significant raises the bar for masters product. -- from last year's product. we have strong customer traction to prove it. cory: thank you very much. scarlet: thank you so much. cory johnson reporting live from the consumer electronics show in las vegas with the ceo qualcomm. we have a lot more coming up. kevin plank, the ceo of under armour, is coming up in the next hour. in the next 20 minutes, china's fight leaves expert divided on if it's heading for a hard or soft landing. two probably has more bad news

-- chipotle has more bad news. north korea claims to have tested its first hydrogen bomb. what that will mean with u.s. and china's relation with the hermit kingdom. ♪

♪ scarlet: welcome back. it is time for the bloomberg business flash. hsbc will run of the worst performers among european banks this year according to j.p. morgan chase which is downgrading the stock to underweight. analysts say that winning growth will more than double their bad loans in asia. berkshire hathaway stock has shares closer to where the -- book value like the kind of more

than $154,000 a share at the end of last year. that's according to an estimate. class a shares closed yesterday $197,000, 28% above the estimate. berkshire settable buyback stocks and premiums of no more than 20%. facebook is unveiling the price tag attached to the oculus rift virtual reality headset. it will cost $599. preorders begin today. the headsets are expected to ship in april. facebook bot oculus rift $2 billion in 2014. for $2 billion. julie has some check on individual company movers starting with winners. julie: we have winners today i wanted to mention. the media stocks are holding up pretty well today. there is not a specific catalyst. time warner is doing the best of these.

the stock is remaining one of its top picks in media for 2016. 20% three fox and cbs are also seeing a bit of a bump. if you look at my bloomberg terminal, time warner is approaching a technical level. this is a chart going back one year or two. it did go above it at one point today. we will see if it does close above that level. that can be an important level in terms of maybe breaking above it. we been watching internet services companies. they have been rallying today. not a specific big boost catalyst. angie's list, linkedin, match group all doing well. ebay has investment raised. air-lifted been interesting today. falling oil prices don't hurt. skywest was raised. we also have seen the airlines raising their fares. delta started the trend we have seen some others follow suit. though stocks are also gaining

on those increased prices. scarlet: thank you so much. we will check back in with julie on the selloff inequities later on in the hour. three trading days in and china's latest intervention and its stock is renewing the age-old debate over if the economy is heading for a hard or soft landing. marc faber says china has already seen a rapid downshift. here he is on the pulse. we had a hard landing in the stock market already and this -- a hard landing in commodities. we might have wanted the economy. we have a colossal credit bubble in china. scarlet: stephen roach speaking a couple hours later said not so fast. here's the former chandler -- chairman of morgan stanley asia. school: the hard landing

says china is growing worse and expected in there for on the cusp of rising unemployment and mounting social instability. that could bring the miracle to an end. nothing could be further from the truth. you can't look at topline gdp and conclude about where china hard or soft. the mix is former constructive than the china bears would have you believe. scarlet: mike regan is joining us. you recently had a call in on this on how remarkable it is that china's stock market has become's barometer for pricing rips across global markets when their stock market is 80% dominated by retail investors. mike: nobody trust the official statistics coming out of china.

the trend is to look at a stock right it as a leading indicator as a prospect for an economy. when you come in on the first trading session nec the shanghai composite down on the 7%, it's a knee-jerk reaction we saw. massive selloffs in the u.s. the question is if you can trust the chinese stock market anywhere they can trust any other data. there are a lot of technical things that cause a big dip at the beginning of the year. there was concerned that the ban on selling shareholders. there was a lot of selling ahead of that. there was the new circuit breaker instituted that shut the market down at 7%. that could sort of be a magnet. you think wow, this could shut the market down. i better sell off now. there is a lot causing gyrations in the market that makes it very much divorced from anything to do with the economy. scarlet: it's not help i chinese

official stances to say we will see how things -- m mike: the weakening of the currency was worse than people had really been expecting. a surprise. they surprised everyone by saying there were reports of buying of shares by state funds. elevator will be an extension of the ban on sales but major shareholders. if this sort of back and forth. the interesting thing is if you look last year, what an incredible rally ahead of the chinese stock market. the shanghai stock market was up almost 60%. it did not really seem to have much of a echo effect in the u.s. the u.s. market was flat ready much the whole time.

when it started to crack, when the chinese market started to crumble in the summer and china devalued their currency unexpected leak, you saw this real increasing correlations within the u.s. market in the chinese market. it's not quite as positively correlated as the european market, but it's much more correlated than it has been. scarlet: it's more correlated to europe in shanghai but we've seen an increase in the linkage. mike: the u.s. and chinese market are much more tightly dayelated over a 120 period than in the past. the size of the market has skyrocketed. marketnese stock capitalization was over $10 trillion at one point. that's bigger than the u.s. stock market was at the bottom of the bear market. cherry picking. just to give you an idea, that is how big it got.

currently about one third of the size of the u.s. stock market. it's become this massive beast that we have to pay attention to. yet it's pushing and pulling in either direction. it's so far divorced from the general economy. we are talking about soft or hard landings. some kind of landing last year. we saw this massive rally in stocks. he was a retail dominated market. traders, not necessarily investors that are in and out quickly. betty: stephen was talking about looking at the pieces. scarlet: we've got our chart tracking total credit and china. it's a pretty good indicator that the economy will grow or decline. it has rolled over pretty much. you can see the slide lower in the last two years. china is not hiding the fact its economy is slowing but he continues to confuse and confound investors. mike: there was a great quote from someone. it said, " if you don't trust

the official data, it tells you which way the wind is blowing in china." obviously credits come back. that was a big part of the stock market boom. they took a lot of leverage out of the stock market last year. it's the kind of thing would you can't really trust that market as a gauge of what the economy prospects are. scarlet: you can read my's commentary on the bloomberg terminal. mike regan, think you so much. chipotle not feeling so well after fourth quarter missed estimates. it has been grand jury subpoena and a federal criminal investigation. the latest on that next. ♪

♪ scarlet: welcome back. chipotle keeps getting served

bad news. their shares are lower. greg is here with us for more. the bad news on the fundamental side with the sales, we knew that was coming. but the subpoena came out of nowhere. g: it will be the first in the report negative sales as a public company. now we have the issue of a criminal investigation. people sort of confused or are uncertain as to what the crime would be. a subpoena involves one location in california with a headache virus outbreak the summer. more than 200 people got sick. we think it was an employee that was sick and not sent home. the ceo tells us it was a breach of protocol. it's unclear with the federal jurisdiction would be because we don't know state lines involved. it's unclear with a crime would be put the short answer is it's another bad headline and it raises the specter of a criminal investigation which is not good news. scarlet: what has been the response for management? craig: they declined to comment

on an ongoing investigation. the fda not saying much and the u.s. attorney's office not saying much about what they are looking for. they said we were asked to provide a bunch of documents. we don't know that much about what exactly the crime i have been here. scarlet: investors punishing the stock as a result. thanks to much for giving us this update. on "bloomberg markets," north korea claims and tested his first hydrogen bomb ever. we will see if the international community will call for more economic sanctions. ♪

scarlet: from bloomberg world headquarters in new york, welcome back to "bloomberg markets." i'm scarlet fu could let's look at the bloomberg first were news. ban ki-moon is condemning

the apparent testing of a nuclear weapon by north korea. he says the act is profoundly destabilizing for the region. the u.n. security council is holding an emergency session to discuss north korea's test. iraq is offering to act as a mediator to ease tensions between the two countries. the crisis began after the oftons -- kingdoms execution a shiite cleric and two attacks on a post in iran. the u.s. house of representatives will vote today to repeal obama care. unlike dozens of other attempts, this bill will reach the president's desk. the senate passed the measure and the backers made it filibuster proof. the bill will also define planned parenthood. president obama will veto it. the house has voted 61 times to repeal the affordable care act. british prime minister

david cameron meets again with german chancellor angela merkel. changesied to persuade to britain's eu membership terms . the trickiest one might be cameron's pledge to restrict welfare payments to non-eu british citizens. some of cameron's demands just global news could 24 hours a day powered by a 2400 journalists in more than 150 news bureaus around the world, i mark crumpton c. john yang says it successfully tested its first hydrogen bomb, confirming it will not give up nuclear development. this is reigniting tensions with china and the u.s. and also prompted combination on the un's secretary-general. >> this act is profoundly destabilizing for regional security and seriously international

cooperation efforts could i condemn it unequivocally. scarlet: jonas now from london with more is john. what exactly are the united nations options here other than condemning the action? say that there are three strands of attack that the united nations and the international community can take you could the first possibility -- can take it for the first possibility is to agree on a relatively muted range of sanctions. the second option of course would essentially given to north korea and to sit down with them and negotiate a longer-term settlement with the reclusive regime. the third one, a lot of ways the scariest one, they could really ratchet of sanctions as intensely as they possibly can

and effectively shut north korea out of the financial system, a bigis a lot of ways risk of the big risk is that north korea is so weak and you run the risk of turning it into a failed state and creating a massive refugee crisis. none of those options are fantastic. probably right now, the first step is likely to be a relatively simpl symbolic run of action. that north know korea has in the past exaggerated its nuclear capabilities. what indication do we have that this time is different? john: the short answer is that we do not know for sure. obviously, it's very difficult to know exactly what is going on inside north korea. talking to aing atomic experts and military experts. there is certainly a lot of skepticism about whether they went as far as detonating a

hydrogen bomb as they claim. the seismic activity that we saw coming from the test is much less and what you might've thought. in the past, north korea has deceived the west and exaggerated its capabilities. it's important not to rule out it possible that even though was a smaller detonation that it contained some of the components that you would need to conduct a full-scale hydrogen test. most people are saying that it -- unlikely that north korea has joined the club of nations that is capable of developing and detonating a hydrogen bomb. i would not necessarily ruled out completely in the medium to longer term that they would actually be able to do it. scarlet: either way a signal. , joining so much, john us from london. joining us now from washington with more analysis is victor.

he joins us now from washington. you are just hearing my areeague explained that we not clear whether this is actually a hydrogen bomb detonated or not. does it matter whether it was a more downgraded explosion? what is the risk of downplaying the claims here? victor: i think the risk is always that we tend to ignore what north korea does and sort of push it off into a corner and say it is just some crazy people experimenting with different things. if this is true, if it is a hydrogen device, that would be a massive new step in north korean capabilities and basically the second generation of nuclear and exponentially more powerful. we do not know. as john said, everybody is speculating based on the richter scale readings. we do not have any forensics yet in terms of the test. we just don't know. regardless of whether it is or

isn't a hydrogen bomb, they are advancing their capabilities. they are not just sitting still. you have gone from crude plutonium weapons to ukrainian-based weapons and now talking about this next stage in the fusion bomb. this program is not sitting still. it is growing and capacity into a modern survivable nuclear force. reaction,n terms of we heard from the un's secretary-general about condemnation. we are waiting for some response from china. inside the bloomberg terminal, we have a function showing north korea's free flows. china is north korea's biggest trading partner -- $6 billion worth of trade between the two countries. that is 30 times the amount of trade between the second-biggest partner, saudi arabia. my question to you then -- china has voiced its displeasure. china has been trying to make good with north korea's leadership. what is this about keeping north

korea and check? victor: the chinese have not been good in complying with international sections on north korea. they have clear concerns about destabilizing the regime. we are going to have to watch very carefully if there is a new un security council resolution and new sections coming forward from this test on how vigilant china is, not a week after, but three months and a year later. that is what really matters. your track record is very important because the volume of trade will be an important indicator of how serious china is in terms of using its economic leverage to shape north korean behavior. is aet: victor, there usual sequence of events that occurs when north korea does tend to propagate its neighbors in the world. south korea gathers its allies and sanctions are threatened. can we guess at what kim jong-un's and game is here? what does he want to happen? victor: you're right.

there has been a cycle in the past. there's always a cycle in terms of how south korea response. the biggest difference is that this is kim jong-un. this is not his father and grandfather. he seems to be much less predictable than his father or grandfather . the next step if we're supposed to play this out is another u.n. security council resolution calling for sanctions and other members will support. how north korea responds to this will be important hit in the past, they have responded with more tests and other sorts of things. with this new leader, we do not know what he will do. will be a provocation against the south? we just don't know. scarlet: do we know if he is acting from a position of strength or one of weakness? victor: that is a really good question, scarlet. my best guess is that he is operating right on the edge right now. best toing his consolidate power. that is why he is taking actions

like axing a lot of his high-level officials and pushing for these broader displays a strength internationally as they rev up for a big communist party meeting in the spring. it is a big seventh party congress where he hopes the cornet himself as the established leader. i think he is right on edge right now. scarlet: very quickly right now, what do you think is the next thing that will happen? what will you be watching out for? victor: two things basically. the u.s. secured council action which will be a resolution calling for sanctions. more sections based on the u.s. executive order after the sony hack last year and how north korea response to both of those. scarlet: thank you so much for your perspective. he is the korea chairman at the center for strategic and international studies in washington. coming up next, warren buffett has not bought back berkshire hathaway shares since 2012. will a stock swap influence him to buy back more?

amazon feeling pressure from star board, calling for significant changes that the company. is this a proxy fight in the making? on medicalver while leave. we will explain if this is good for investors. ♪

scarlet: you're watching bloomberg. this is your global business report. competition in virtual reality is heating up.

how is sony using one of its top-selling products to get in the game. we will hear from the ceo. monsanto posting a smaller than expected loss. we will dig into those numbers. in the u k, one department store reporting cheery holiday sales. how on land sales helped save christmas at john lewis. first, let us start with comments from sony's ceo speaking to bloomberg at the consumer electronics show in las vegas. he given how look on how the virtual reality experience. vr is theation th virtual reality expense we will bring to consumers this year. it will ship later this year. the most important content is the game content. just to give you some context, we have more than 200 developers that have signed up for and 400 titles are in active development at this time. scarlet: monsanto posting a

smaller than expected loss in its fiscal fourth order. , but they arerose facing the first drop in any warranties in six years. the company hasn't hurt overseas by the strong dollar. in addition, lower crop prices keep farmers from buying more genetically modified seas. atrich clay ss, investors can see both risks and opportunities. >> the lesson was it is tricky to find the bottom. my gut is that 2016 is going to be a year when that is going to pay off. oil at these levels and several other markets indicate to me, including some emerging economies, it has been beaten down to very low levels. my sense is that there will be choppiness this year, but there will be opportunity as well. scarlet: one of volkswagen's top executives has made a direct apology to the market people. the vwg in las vegas,

ceo says the issue with diesel engines is nothing to be proud of and he is truly sorry. bw has admitted faking admissions tests and engines and the company could face millions of dollars in fines. online sales soaring over christmas at british department store chain john lewis. sales rising 21% in the six week that ended last edited that more than made up for john lewis's decline in store-based revenue. this has been your global business report. for more stories, visit toomberg.com let us go now abigail doolittle, live at the nasdaq coming keeping an eye on facebook. it shares of facebook higher as the oculus rift is open for preorders. it is expected to ship in april and it may just usher in a new era in virtual reality computing. even so, it seems it may not mean too much for the stock over

the long run. one analyst says it is a "rounding error.: " another cause it "a nonevent in 2016." the stock has been on a great run on strong mobile advertising growth. giant, to another tech apple, shares are trading down on a report yesterday that says production for the iphone in the march quarter could be down by 30%. these are the sorts of concerns that cause the struct to drop by more than 10% since early november as analysts have cutting estimates on supply chain concerns. i did speak to john butler yesterday and he made an interesting point. he said the apple supply chain community is huge. even though there may be a few or even several reports of weakness among certain suppliers, and may not equal overall production. in the past, some analysts have got this sort of call wrong. all eyes will be on the upcoming quarterly report on january 26.

scarlet: thank you very much, abigail doolittle. another stock we are keeping a close eye on his berkshire hathaway. shares have struggled and they are almost at levels that warren buffett says are a steal p could this mean that a buyback is on the horizon? joins us nowoah with more. why would a buyback be significant for berkshire hathaway? it has not done this in a while. noah: that is one of the main reasons. buybacks are exceedingly rare at berkshire hathaway. other companies have regular by that programs. berkshire and buffett do not do them that often. it is something that buffett has recently opened the door too. he did a big one back in 2012. he bought more than a billion dollars in stock from the estate of a longtime shareholder. it is seen by a lot of investors as one of the ways that berkshire can deploy lots and

lots of capital in the years ahead. we are to the point where berkshire is so big that it is harder for buffett to find good places to invest all the cash of the company generates. terms of the last time berkshire bought back its stock, i know he says it's a good use of cash, but warren buffett's approach to extra cash is interesting. he does not believe in paying dividends. he says that is not the productive use of cash. that does seem to be a little bit of a contradiction. noah: he would not see it that way. he talks about this extensively. it in histten about annual letters. he has basically encourage shareholders to, if they want to generate income from berkshire holdings, to sell some of their appreciated stock. a couplehrough the map years ago and showed how shareholders would end up quite a bit ahead if they did that versus the company paying a

dividend. there's also a taxation issue with dividends. scarlet: got it. in terms of the company itself, we talked about how the stock really struggled in 2015. it also faces some fundamental considerations here with the s&p reviewing berkshires credit rating as well. that is mostly an issue of cash and how much of it that buffett wants to have on hand. mention, s&p has been reviewing the company's credit grade. they are doing a big acquisition announced last year that is going to go through probably this quarter. buffett wants to use a substantial amount of cash to buy the company. there's an outstanding question of what the cash level should be a berkshire. they have more than $60 billion on hand right now. the acquisition might take that down by $20 billion or so. scarlet: thank you for the perspective. noah in seattle joining us for bloomberg news. it has been a rough time for

valeant recently did the companies ceos taking a medical leave of absence. will the newly interim ceo be a good or bad change for the company shareholders? we will discuss. ♪

scarlet: welcome back to "bloomberg markets." i'm scarlet fu. valeant just announced an interim ceo as the current chief takes a medical leave of absence. this comes as a string of hardships along the way has been a drag on the share price. what is next for valeant? we bring interim armstrong. -- injure armstrong. tell us more about howard schiller. is the new ceo. he is a former cfo, but he left

the company for a while. drew: howard schiller was with valeant for a long time an executive role. fromrved as cfo 2011-sometime last her. he has been around. he has helped michael pearson with the company strategy. they also refer to him kind of as the explainer in chief of who is and the guy always good at giving investors comfort with what a lot of people describe as a tremendous and latercomplexity serious complication with the drugmaker. it is good news for the company and investors have been responding to it as such. shares were way down and trading late last night when they said they were going to appoint some sort of interim ceo. sent them backr up and they recovered a little bit earlier this morning. he is kind of an old hand. he's been around and has been on the board and knows the company. it has been a comfort to investor so far. scarlet: what does this mean for

michael pearson? this is a good or bad sign about his possibility of returning to the company? drew: the first priority for pearson and a company is getting hel healthy. he is in the hospital with severe pneumonia. it can take young people and knocked him down for several weeks. he is most likely getting very good care. as a ceo of a company, they have access to the best. it will be sometime in all likelihood before he returns. there a giant jpmorgan press conference that is the industry showcase that starts the. pearson is not going to be there. someone like howard schiller will have to be there in his place. it may suggest that there's going to be a good little while before michael pearson's backup. up in dealing with the demands of being a ceo. scarlet: does that mean strategy is intact going forward and we should expect more acquisitions from valiant? drew: i do not think so.

the amount of debt that they have been carrying in the comments that might pearson is made in the past is that they want to get away from that and they are interested in using some of their cash flow to pay down debt. one idea that has been brought up is that if mike peterson oversaw all these problems, scandals with the distribution channel and questions about boosting prices, doesn't howard schiller have those exactly same issues. ? ? wanted michael pearson the stay in there. howard schiller is viewed in the same way as someone with whatever association he has with valeant's problems in the past and he is someone that investors are comfortable with. scarlet: he had left the company for a while. this is not some wicked guy who wants to be in the job long-term. drew: i think that is not something clear and howard schiller is the only person who can answer. yes, he did let the company. -- leave the company. we do not know why he left the company and retreated back to

the board. left the company had a good time at peak stock. he is inevitably advising the pearson and investors from the positions he holds on the board. scarlet: the next item on the agenda for valeant is the health care conference at which the company may or may not be presented. they will be presenting, but it's a question of who will be there. can they get these scandals behind them and fix the distribution and get sales going back up? scarlet: thank you so much, drew armstrong. coming up in the next hour, new year, new you. we will take you to the floor of the ces show in las vegas. ♪

scarlet: it is 1:00 p.m. in new york and 6:00 p.m. in london and 2:00 a.m. in hong kong. welcome to "bloomberg markets." ♪

scarlet: from bloomberg world headquarters in new york, good afternoon. i'm scarlet fu. here's what we are watching at this hour. and about an hours time, we get minutes from the fed historic meeting last month. we will tell you three things investors need to watch for in finding the path to future rate hikes. yahoo! facing pressure from starport. the latest on that. under armour unveils new wearable technology. details ahead from ceo kevin plank. to head toh, we want the markets desk where julie hyman has been tracking the selloff taking place in global equities and, of course to blame, china. julie: at least partially to blame. yuandevaluation of the which has persisted in all three major averages have been lower.

they have been very steady as we see today in the declines. if you take a look at my bloomberg terminal, you see the groups on the move. yesterday we noticed that there was this sort of defensive groups that were doing better and more cyclical groups doing worse. it is largely the same kind of thing today. staples, utilities, health care of the top three were performing groups. telecom joins them today. consumer staples is interesting in that it is not doing as poorly. i want to point out a couple of movers. , the tobaccoican company, starting a new innovations unit to develop new products related to vapor and other kinds of tobacco products. walmart is higher as well. lamar has been catching a little bit of a bit because of higher gun sales. it is one of the larger gun sellers in the united states . those two stocks talking the downtrend today. scarlet: if you look at oil fores below the $35 handle

wti, that is a drag on the overall market yet again. weeklywe have the wik inventories as well. it would normally be bullish, but we saw to find products -- refined products being billed in inventory. and tosee that back up crude oil as well. nymex crude as well as brent trading lower. if you look at the worst-performing stocks and s&p 500 today, most of them indeed are energy-related. southwestern energy and particular down 13.5%. , you getergy, apache the idea. most of the worst-performing individual stocks are related to oil. quick check on netflix as well. just something we noticed in the past few moments. stock announced that it is now available in 130 countries, including india. india was anticipated by some. you see that the stock is now up by about 5% here. scarlet: thank you so much,

julie hyman. it's checking with bloomberg first word news right now. mark richt and has those. is another reason why the stock market is feeling some jitters. mark: absolutely. the un security council holding an emergency session to discuss claims by north korea that it conducted its first hydrogen bomb test. before the meeting, secretary-general on key moonlit international condemnations of pyongyang. >> these tests once again violate numerous counselee council resolutions of the international community to cease such activities. a great condemnation of the international norm against nuclear testing. , north korea is strong as ally, was not informed in advance of the test. the spokeswoman for china's foreign ministry is steadfast

that the korean peninsula should be nuclea d nuclear rise. two wounded soldiers in the body of a third have been evacuated from the battlefield in southern afghanistan could this comes after fighting broke out in ja. city of mar the evacuation was delayed when a helicopter caught fire. in venezuela, opposition lawmakers have taken power in the national assembly for the first time in 16 years. one lawmaker said the first priority will be to get political prisoners freed and to pull venezuela out of a recession. the head of the national assembly says he would work to have president nicolas maduro removed from office in the next six months. -- welcomeain news news for a state suffering severe droughts. el niño is excited to bring heavy rain to the state over the

next few days. still, officials say even the wettest the winters will not replenish water tables left drive-by a lack of rain the last four years. global news 24 hours a day howard by our 2400 journalists and more than 150 news bureaus around the world. i am mark crumpton. back to. isrlet: the federal reserve scheduled to release its minutes from the december meeting and the hour. first is to watch for the use of the word gradual. second is the inflation outlook. third, fed chair janet yellen's influence and the unanimous decision. joining us now is the head of macroeconomic policy at merrill lynch. marketnce served as monitoring at the new york fed herself. questions --ng cohesion among fed officials seems to be an obsession with investors. why is that when we have a unanimous decision and pretty

much everyone has agreed to the fact that liftoff should happen? karen: that is a great question. we went to this meeting in december knowing that there was discord between members in the committee. on one hand, there was questioning on whether we thought and flesh and was scheduled to go up as many were forecasting could on the other hand, janet yellen was doubling down on her argument that we expect inflation to beehive. we went into the meeting with different speeds and different outlooks on where inflation might go and where those risks are. what is interesting is that we got a full consensus at the meeting. what that really tells us is that shery ahn found a way to ring everyone on board. the minutes will show us how she managed to do that. was a possibly the language that she used? did it provide a lot of leeway for her so that she can guarantee to the market that she will be moving ahead by saying it is gradual but at the same time data dependent?

it lets people know that she will policy here and there throughout the year. scarlet: let us go inside the fedmberg terminal here for funds futures and what traders are pricing and in terms of another rate increase for this year. right now for march, the consensus is for 46% on a rate increase. let me make this chart bigger. this is the chart that shows the odd for a rate increase in march. it crested really in late december and has since eased a little bit. it is now down below 50%. when we look at the consensus and the unanimous of the rate chairn december, will yellen keep that up for the next rate hike after that? is that important to investors? karin: it's important to have a clear communication, but it's not a consensus that she will have it all the way through. it will be a new committee coming on board starting at the end of the month. new members four roll on and for roll off from the regional fed. that is going to change a little bit of the debate. there will be new voting

members. the second thing is that we are data dependent. depending on how the data shows up, we may find that differing for one, we altered will have employment data this week that will tell us a little bit more about wage growth. is that accelerating? do we still think the job market is strong and starting to ring out the flak in the market? those kinds of issues will help us understand how much flack is remaining, how close we are really to a neutral rate. so i think that janet yellen will have to really expect that there may be sent going forward. scarlet: in terms of the labor market, everyone is agreement that we are doing ok there could in terms of inflation, what are you looking at to look at signs that prices are ready to pick up? karin: i do a scribe to the camp as earnings are up more, people will be shopping up more. i cannot control what is going on abroad.

there are a lot of this inflationary forces coming abroad, partially from the dollar and import prices. it continues to befuddle all of us. i think what we are going to have to do is look to the measures that capture the domestic picture of this inflationary forces are going to continue. i will be looking at the core measures and at which growth. scarlet: thank you so much karen kimbrough. next 20p in the minutes, north korea says it successfully tested its first hydrogen bomb. what does it mean for the future of the global economy? yahoo! feeling the pressure from star board. we will tell you if a proxy fight is on the horizon. under unveiling a closet full of new devices. we will hear from the ceo kevin plank. ♪

scarlet: "bloomberg markets." this is -- this is "bloomberg markets." we need to head to the market where julie hyman has individual movers. julie: apple is where we will start. yesterday, apple declined after a report nikkei after the company reported it was cutting iphone production. rosenblatt securities downgrading the stock and siding some of the same concerns with weak holiday demand for the iphone. it's also signing -- citing concerns about growth in china. apple shares falling down 2.4%. just as we saw yesterday, it is rippling out the suppliers for apple products as well. sky works declining yesterday and broadcom also on the list falling along with apple and this concern about slowing

demand. there's freeport mac mine copper and gold. we have been watching the stock as one of the worst performance in the past year. it is down under 7% today after moody said it would put on review for a possible credit rating downgrade. a similar review at standard & poor's because of similar copper in oil prices. i've been looking at its credit risk profile as well. take a look at the bluebird terminal here. this is drs kp and looks at the the defaultt risk here. you can see the default swaps on this company having during fire risk affecting the company's credit. scarlet: you could put any kind of commodity company there and get a similar chart. julie hyman, thank you so much for that function. north korea says it has successfully tested its first hydrogen bomb, confirming and will not give up nuclear development could thi.

this move risks uniting tension with china. earlier today, he stop by to give his perspective. >> this is the fourth nuclear test that north korea has conducted over the last nine years. it is not clear whether it was a hydrogen bomb or not. worrisome, it is simply because they continue testing in the face of international pressure to desist and it shows that they continue to improve their capabilities. it is not happening in isolation. this, they are improving their missile capabilities. the combination of a north korea that is getting better at the weapon side and getting better at the missile side ought to give anybody pause. david: one of the things that i i read on when about this is china. north korea is an isolated country and live by their own rules. we also thought china had q when things turn bad, we could turn to china.

it seems like north korea is distancing from china. china has condemned it and they do not seem like they can stop it. richard: china does have influence, but for the most part, chooses not to use it. two thirds of north korea's trade goes in and out of china. if china wants to turn the screws on north korea, it could. it is worried about instability. it is worried about what north korea might do. it is worried that the country could even implode. there's the idea that you can have a unified peninsula eoul, so chinasw criticizes north korea that it doesn't utilize the leverage it has. the goal should be to bring about a sea change in chinese thinking. if you were to tolerate a nuclear north korea, it would be to put on pressure to a nuclear north korea. >> every time there's a nuclear test in north korea, the performance and south korea has been ok. it does not have a lasting

impact it i spoke to people in south korea overnight and they said it is business as usual. is it business as usual or is this an escalation to? you? richard: it might be escalation as it is the fourth nuclear test and not the same as an artillery strike. need for anot be a military response, but we have other considerations. let me give you another scenario. sometime during the next unitedncy, the states will wake up one day in north korea will put nuclear warheads on missiles that could reach the west coast of the united states. the only concerned about north korea cannot be the direct military threat they pose to south korea. we've got to worry that they can sell this hardware to somebody in the middle east. we have got to worry that they can put it in the united states with it directly. we have a broader set of concerns than the people in south korea. that is actually a source of tension for the u.s.-south korean relationship. >> i want to emphasize that you presidency, sot

as soon in the next four years, it is plausible that north korea, and your judgment, have intercontinental listed missile. - and intercontinental ballistic missile. richard: almost conceivably by the end of the first turn, yes. my time sure, but from in government, north korea is on the short list of the most difficult intelligence targets facing united states. it is not called the hermit kingdom lightly. it is a very closed, difficult to track society. scarlet: that was richard haas, president on the council of foreign relations speaking earlier today. coming up, yahoo! feels star boardfter urging the board to make significant changes to its labor should -- leadership. does a proxy fight loom? we will explore. ♪

scarlet: welcome back to "bloomberg markets."

i'm scarlet fu. is it time for yahoo! and music? mayer to face the star or value once again urging the company to make changes, specifically in its leadership in and a letter, starwood rights , " investors have lost all confidence in management and the board." joining us now is the adjunct professor x on the university and scott, the marketing the schoolt business. erik schatzker, let me start with you. what kind of response are you getting? erik: none could star board wants the letter to speak for itself. if you're going to send a shot like this one, you want to wait and see what kind of response you get from yahoos board before you decide to go nuclear and announce a proxy fight. scarlet: in terms of what is next, what can you tell us about star board? what is their usual mo in approaching a company?

>> they are focused on management changes. a track recorde of the largest dividend. they do not have a track record -- they want to see structural changes at the firm. it is important to note that they only hold a .75, less than 1% of outstanding shares. they need people to come aboard. the reality is in terms of what is next, the entire board comes up for reelection this summer. this is the first shot on its way towards a proxy fight. scarlet: justice be to your point, if you come inside the bloomberg terminal, this is the function that shows the security ownership of the company. for yahoo!, star board does not have a huge stake. they are number 26 on the list. erik: that doesn't always matter. scarlet: if you look at how many shares may have added recently, you can see that star board has added 3.5 million shares as of the filing in late september.

my question to you, if they get what they want and new leadership, how does that even begin to address some of the more fun than that of problems the company faces, including its treatment of texas? axes? scott: new leadership is a proxy. i hate to agree with anyone from .olumbia [laughter] only here, but i think something is about to happen here. the narrative is about to switch from complaining about marissa mayer. they're pretty much piling on. now it is a narrative about the board. erik: i just want to adjust the point that faulty a made about skin in the game. it is important. the larger stake you have, the greater voice you have in the proceedings, but it's not required. it helps if you are chiral icon and have a 13.5% position. are dan loeb or bill ackman, all of whom like to take large stakes in companies

because they know they will get hurt. carl icahn had less than 1% of ebay when he started his proxy fight there. jana had less than 2% of qualcomm when it initiated a strategic review last summer. 3% less of dupont, but ultimately resulted in ellen leaving the company. fabio: i hear you and there is the big stick. could there is the other reality that mason capital is the largest hedge fund that holds them. they have lost about 40% of their assets. substantialen a rotation out of activist. mason was down double digits earlier and had another rough you. they are down substantially. frankly, star board has also seen acid withdrawals as well. there's more of an element to whose army?us

the market cap for this company is $31 billion. you take these three things together, their ownership of alibaba is 29 billion. the third component of that is that silicon valley is about attracting town to people to work for you. does is in aone relevancy to the stock price of yahoo!. no one on the business card makes any difference to the value of the stock. scarlet: it is all rooted in alibaba. "days of ours lives." the soap opera has gone on way too long. i've run activist campaigns before and this is what is going on right now. star board is not talking erik schatzker but they are talking to other shareholders larger than them. they are saying, we are frustrated, are you? when they get over 5%, they will file and think about a proxy fight. if everyone is smart, they will get around the table. the quickest way to silence an

activist is to put him or her on the board. the fear for shareholders here turns intooo! board the defense of old white guy no one tells me what to do posture and says we are not doing anything that anyone tries to tell us. erik: the one thing that everyone seems to agree with, and i'm pretty sure you are in is that camp, scott, result might has to go. they want a change in leadership and a change on the board. like ericstors jackson thinks there has to be a change in leadership and the board. that is the demand that star board -- excuse me, yahoo! probably has the answer. scarlet: a leadership accommodating to these activist investors. erik: not all though. these guys think the core business can be fixed. star board face it has to be jettisoned. scott: is be on leadership at this point. i think this is over.

it is time to sell or spend. if we need new leadership, the new board finds it. fabio: they will in fact spin off. by spinning off the internet all that's left is alibaba. that is important because there could be more people getting more seriously involved. scarlet: we have a lot more to watch out for when it comes to yahoo!. think you so much, gentlemen. bio, andatzker, fai scott galloway. much more coming up on "bloomberg markets." under armour flexing its muscles. its ceo kevin plank will be joining us live from ces in las vegas. ♪

this is "bloomberg markets pepco i am scarlet fu. if you come by the bloomberg terminal we have an intraday chart of the s&p 500, dow, is

that for you. there you see it, posting losses of 236 points on the dow industrial, pretty much of the session lows at the moment. if you look at how we have performed your today, it's only been a few days but so far the s&p 500 has been down to an half percent and the nasdaq losing 3.4% and in fact across the globe it is a screen of red for equities. that is the set up as we head into the fomc minutes. now it is time for some bloomberg business headlines. for chipotle it is all about the latest fallout for those outbreaks of foodborne illness. andth-quarter sales plunged it was subpoenaed by a federal grand jury investigating sickness. several hundred people have gotten sick from illnesses linked to chipotle. monsanto posting a smaller than expected loss in its fiscal

first quarter. soybean sales rose but they are facing their first annual drop in earnings in six years. the company has been hurt overseas by the strong dollar. lower crop prices keep them from buying genetically modified seeds. sales reachedt $1.1 billion in the two weeks leading up to christmas and that they sold $144 million worth on new year's day. by the way, that is a company record. facebook revealing the price tag attached to its new virtual reality headsets. they will cost $599. preorders began today and they are expected to shift by april. inebook purchased oculus 2015. that is your business/update. heading over to cory johnson, he's there with the ceo of under armour.

>> welcome to our bloomberg radio office -- under armour, you don't think about sneakers when you think about 11 national electronic show. you do, why? >> the world has changed. the convergence between what people do and destin one thing we know is that the more people exercising workout, the more they will have to buy. our first acquisition was two years ago. summer of 2013. 20 million registered users. more than 160 million registered users today. hadhe four that we have, we 142,000 downloads monday alone. scale is extraordinary here. giving back to that consumer is a goal that we have with the launch of our new under armour box.

cory johnson: is there anything in the box? >> there is a wearable device. and a strap. >> if you like a paratrooper. >> the idea is -- you know more about your car than you do about your own health and fitness. how much gas in my car, how much oil, much tire pressure. how many days were you sick last year? u.s. me, i get sick every time it goes from summer to fall , winter to spring. if you asked me with empirical data, that's something we want to be able to capture with this unique feature. wearable devices have been around for a long time. it doesn't give me a call to action to actually do anything about it. that is where our four component quadrants, because of the community we have assembled that measures sleep and fitness and activity levels and finally, nutrition, which is -- how much do i put in my body?

last year alone we had 2 billion workouts logged into the community with a billion foods. picture,he greatest the largest database of food assembled in the history of mankind. if we take that information and give it back to consumers. these are typically low gross margin businesses, although that's not been the case with others. but this place is chock-full of knockoffs. that leaves two questions for you. number one, can you run this on the zero margin? number two, do you have data that is unique the makes your product work better than others? >> we are getting things because we are going to win. the life is what we see with health boxes, arming consumers with information to help them win. think about how little you know about your own health and

fitness. i can tell you my bank balance in my stock price but ask about my health and it's a ridiculous answer. we have a new app that we launched yesterday or on monday and the record platform gives you something like a snapshot, a daily dashboard of effectively saying -- how do you feel on a scale from one to 10. myself a nineated or 10 three times. what's the activity that led to that? you ate no more than 2000 calories that day. -- for met was below it's below 210 pounds. those are the things i look at. if i could start dialing and on digestible.hat make how does this put you ahead of companies that do fitness trackers? >> these are license relationships that we have.

incredibly simple, off-the-shelf , and we've got this product in our new headphone sets. i think that what makes it unique is the three-pronged approach. it's truly giving me a picture of what i can do that actionable to make myself feel better. there is an entire insight engine with three components to it. how do i compete or compare myself to last week or last month? versus my friend community? plus we have this feature called just like me. it basically gives you the capability to say -- of the 160 million people in the universe there are 4.6 million of the set that i fall into. of those, how much did we sleep last night? i know the average run for consumers, 40 to 45-year-olds, is 4.5 miles. more or less? i go back to my high school reunion and people don't look the way that i would like to

look at my current age. how am i going to gain an edge on them? how can i use their health or fitness? that allows you to leverage a much bigger idea about informing my own health and illness. break this down, headphones alone, what specifically makes us better than the other stuff on the market? >> it allows you to run untethered with the product that you have. there are no long strings or cords going into your phones. the bluetooth capability is pretty extraordinary. two years developing this with jbl, and amazing partnership. we would not put the brand on it unless it was ready. we've done a lot of time and testing on it. cory: i always think that every company is technology oriented. but yours is more so. is a special thing

and our job is to make sure that any partners we bring on, anybody with the brand onto, the consumer just wants to say it's the best. partnering here, it's the best. cory: thanks for talking to us. you so much, cory johnson, who is on-site there. next hourly will be back on the floor with the ceo of the ford motor company. in the meantime we want to get to the headlines this afternoon. mark crumpton has those from the news desk. mark: the secretary-general is condemning the latest north korean announcement of a nuclear test, calling it profoundly destabilizing. theki-moon spoke to security council that met in the emergency counsel and some are questioning the claims. the overnight last registered as an earthquake. even china, their closest ally,

is condemning the test. germany made it official, taking in a record number of refugees last year. angela merkel's government said that 1.5 million asylum-seekers entered in 2015 and no one else in europe took in as many. more than one third were fleeing the civil war in syria. members of the armed group occupying a wildlife refuge in say that they were afraid of a federal rate. authorities would only say that they're are working on a peaceful resolution. the group says that they will leave once there is a plan to turn over the management of federal land to local authorities. the man that brought the guns used in the san bernardino attack is pled not guilty to federal charges. marquez junior agreed -- appeared briefly in california to answer to a five count indictment alleging that he conspired to provide material support to terrorists. a jury trial was set for february 23.

he is set to go behind bars of convicted. powered by our 2400 journalists with more than 150 news bureaus around the world, i'm mark ronson. the canadian dollar dropping to a 12 year low today. will the central bank governor be cutting interest rates in the near term? the federal reserve will release the minutes from its december meeting at the top of the next hour. will there be any hints about future increases? the forza ceo says that he is determined that the carmaker cell chidingder in vehicles. live, from the consumer electronics show. ♪

welcome back to "bloomberg markets." let's head over to the markets desk, where julie hyman hasn't even track of the declines in equities today. if you are looking at stocks, you have to look at oil. julie: the major averages are pushing towards the lows of the session, looking like it might have something to do with oil prices. bloomberg energy has been the lagging group, weighing down the s&p 500 the most today. taking a look at oil prices, they have fallen to the low of the session as well. potentially a closing, heading towards the lowest since .ecember of 2008, down 5.5% we got weekly inventory numbers today and while nationwide inventories dropped, in cushing, oklahoma, the big hub, they were

actually at a record. that is one of the things putting pressure on oil prices today. where do you go in this market? that's something that people are asking going into 2016. one of the answers to that question is something that dave wilson mentioned in his chart of the day column today. cites sean darby, the chief global equity strategist, saying the cash is not a bad place to be. not that you want to put everything there, but it is a good alternative. when you talk about cash we talking about short-term treasury bills, not actually going out and holding dollars. dave shared his chart of the day with me. he looked at 2015 and at the index year, this black line, an versusf treasury bills the russell 3000. the returns were similar, you only a 0.2% for cash, but the

returns on stocks and bonds were only slightly better. darby's argument was that you are not paying for it, you are may be getting paid a little bit. in othere pullbacks assets, you can go into those assets. we have been hearing from a lot of strategist this year. scarlet: absolutely, keep it simple, you could have entered .r exited whereas if you were just in cash? slow and steady for the whole year. i like what he said about being steady and valuations. the median valuation on mainland chinese exchanges was sick the five times reported earnings. contrast that with 18 times for ones listed on the index. >> definitely a big gap. and still you get the volatility. thank you so much for

the latest on the markets in that idea that you should just be holding cash. speaking of, traders see an increasing possibility that the bank of canada will drop interest rates back to record lows this year. the canadian dollar falling to a 12 year low. this is the dollar versus the loony. as it goes up that strengthens the weakness and at the same time we are seeing traders starting to price in a 50% chance of a rate cut by may. joining us now, our chief bloomberg tv canada anchor. the talk is picking up, pamela? tamala: that's right. you were talking about holding onto cash. what canadians are holding onto is just not buying what it used to on an international basis. we saw the dollar come down. one canadian dollar is line every once in's u.s. right now. the lowest since 2003. this is on the back of a very weak economy on the backs of

being linked to oil. that is what the story of 2015 was. and the precipitous fall of the loony. interest rates are at .5%. one year ago they were at 1%. a year ago at almost exactly the time. if canadians were not expecting a rate cut then, stephen pollack cut in january and cut again in july. essentially it is something that traders thing could happen over the course of the next several months. 52% expect to see a rate cut by half way through this year. exports are just not picking up the slack, even though the loony is low. apart from traders betting on some kind of rate cut in the near term, how else could the bank of canada deal with this? the other policy options in their toolkit -- they laid this out.

we spoke to the governor of the bank of canada. further rate cuts, negative rate cuts are on the table. these have not been used as a tactic. all of those come he said, are on the table. traders at the moments and to think that a rate cut is the most likely. it's bouncing around to where the -.25% interest rates could set over the course of the next year. that was bouncing up a lot last year. certainly some sort of cuts, it seems there are higher probabilities of that by this year. scarlet: pamela, thank you so much. coming up, the december fed eraing had a decade-long that ended. what will we learn from the minutes of the meeting? what will they tell us about the next fed rate increase?

scarlet: welcome back. i'm scarlet fu. it is time for the bloomberg business flash. berkshire hathaway's stock has moved shares closer to where warren buffett says they are us he'll. brook valley, a measure of assets minus liabilities climbed to $154,000 per share at the end of last year according to an estimate. shares closed yesterday at about $197,000 or 28% above the estimate. berkshire has said that they would buy back for a premium of no more than 20%. of the worstone performers among european banks this year according to j.p. morgan chase, which is downgrading the stock to underrate neutral.

analysts say that waning growth in emerging markets will more than double their bad loans in asia. speaking of jpmorgan, they will pay $4 million to settle a claim that they misled private bank customers about how they paid brokers. they say the bank stated on their website that compensation was based on high performance. the bank said that no commissions were paid to brokers. regulators say that misstatements were not corrected until 2012, even though employees pointed out those inaccuracies more than one year earlier. that is your business flash update. we are less than 10 minutes -- eight minutes exactly away from the fomc release of the minutes from its historic meeting where the chair, janet yellen, gleaning.the first michael mckee will be going through the release of the fine tune -- fine tooth comb. what words are you looking for? mike: we are not even looking

for specific words. we are looking more for the preponderance of views. can you make a grouping out of any particular lot about how the ad is going to approach its views on the economy going know that they are looking for actual and forecast improvement. particularly in inflation. what does that really mean? does it need to go up by a certain amount? do oil prices need to stabilize? is it going to be better? no one knows. another interesting question on the sames anyone page here? are there any dissents not expressed in the meeting that could push back on the idea of a second rate increase? it feels so last year. we've had so much going on in the last couple of days. renewed concerns about whether -- about what china is going to do with a soft landing or hard

landing. why are these two big structural changes changing place? changes causing so much angst in the markets? with people more focused on what the fed said three weeks ago? >> there is always a focus on what the fed said in its minutes that is overblown. we usually don't get that much actionable news out of the minutes, but there's nothing else to trade on. we are three months away from the first time anyone thinks they might do another rate move. with a strong jobs report you might see people change their views. the fed china and with rate increase, others are suggesting that maybe it is a delayed taper tantrum. when the fed raised interest rates everyone was heading off for the holidays and there

wasn't much volume, now we are getting reactions is reposition the portfolios. scarlet: delayed reaction. i want to replay for you the publisher of the gloom and doom report. here is what he said earlier today. >> they will go into the history books waiting to increase in 2010 or 2011, when they should have done it, when the economy had momentum. until right before a recession of 2015.s. in december i think that that will be the biggest joke and failure of monetary policies by the monetary authorities in that recent history. people are still questioning the wisdom of raising rates to begin with. are they still? a small group of

investors who think that is a possibility. roach said that he's wrong, the problem was that they did not raise early enough and that the basis cut would not make a difference. yellen and company said that they would easily reverse of they needed to. >> of course the fed minutes will be released in just four minutes time. before we had to break a quick check of the market right now. the doubt and jet -- dow jones near session lows resuming a selloff that began earlier in the week. losing 1.1 percent, this comes as oil comes off the lows, although it is still below 35. ♪ we live in a pick and choose world.

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>> good afternoon, i'm david gora and here is what we are watching at this hour. minutes away from important fed news. i go now to rendon greeley in washington. this fomc is willing to run the economy hot. what they have talked about in these minutes is keeping the rate of unemployment unnaturally low to get inflation up. on inflation, it's something they are very concerned about. several participants said that it was a close call, the decision to raise rates. here's a four letter word for you, credibility. they talked about the credibility of their at target. meaning that they are worried that market