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tv   Street Signs  CNBC  June 13, 2017 4:00am-5:01am EDT

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welcome to "street signs." i'm carolin roth these are your headlines the tech selloff stalls in europe as stocks shrug off the losses on wall street with nearly all the major equity markets moving higher. attention now turns to the fed, which is widely expected to raise rates tomorrow former board member randy krozsner tells this program that janet yellen and company are on a path to normalize despite recent weakness in economic indicators. >> now they have confidence that the economy is recovering and is
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on a good trajectory, so they can look past individual pieces of data to move forward. that's broadly a better approach than just responding to every bump and wiggle in the data. i got news this mess and i will get us out of it says uk prime minister theresa may as she prepares to meet dup leader arlene foster in a bid to secure her parliamentary majority good morning it is tuesday, let's have a look at the stoxx 600 this morning. we are broadly higher to the tune of half of a percent. merely shrugging off some of the renewed declines in tech stocks. all sectors in the green apart from telecoms. yesterday the stoxx 600 european equity market was down by 1% tech was the drag, pretty much mirroring what happened on the nasdaq most of the sectors are in the
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green. and you'll see that all of them are now in the green technology, banks and real estate leading tech stocks up by 1.2% yesterday we saw some apple suppliers falling and food and beverages telecoms, some of the relative underperformers the nasdaq has posted the worst two-day streak in 2017 as tech stocks continue to drag on the stock market in the u.s. apple and amazon pulled the sector to the first back-to-back daily loss in two months a 1800 global asset managers are gathering to discuss where the next opportunity is. gemma acton joins us from berlin i'm sure there was some talk over the decline in the tech sector many fund managers have been long that sector
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what ails that sector? >> it seems there's still a lot of enthusiasm for european equities even though they ramped up quite a lot in recent months. that hasn't dimmed the enthusiasm to many of the fund managers i've been talking to. i'm joined by jamie hammond, european ceo of alliance bernstein. thanks for joining us. >> you're well some. >> you had the opportunity to look across the whole of europe from your position talk about where you see the opportunities today. >> i think there are a number of opportunities. what we've been seeing over the last few years in a low return, low interest rate environment is clients more and more wanting advice of where to invest. you mentioned european equities. european equities are considered to be, compared to other markets, perhaps suffering better value but clients are shifting away from trying to buy a certain amount of european equities, u.s. equities, and putting
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together portfolios to looking to what people are calling solutions and products that offer an outcome that outcome is meeting income needs or risk tolerances that they have. so we're seeing around the region people increasingly going beyond home markets. so uk investors investing less into uk equities and more into global markets and a shift into different asset classes to create diversification and outcome. >> let's talk about the uk this is a country still reeling from the election result has the country been oversold as people get nervous about it? or is there opportunity there? what should uk investors be doing now? >> if you look at the immediate impact of the election result, you had a different impact on the currency versus the market the market felt it was a good opportunity for uk companies only time will tell if that plays out. uk equities for uk investors is still probably the dominant
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asset class. just what we're seeing now is a shift away if people want to buy that market towards more buying it as a passive component part of a portfolio so you have people who want to construct their own portfolios, perhaps using more passives. then people constructing the outcomes using a combination >> you bring up passives a lot of money has been flowing from active to passive or a lot of enthusiasm for passive. what is the future of active and passive in your view >> i think there's a role, and a very important role for both what happened over the years with the increased use of technology and digitalization, if it's easy for an asset manager to index a particular market or asset class and drive down the cost to the end investor, that's what's been happening. that's a good thing. it enables more choice that also creates confusion if you're trying to decide where to
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invest what you're seeing now is the use of passives. if you want that market exposure buy it more cheaply through a passive. and managers that cannot justify value in active and why people are paying more than that, they will struggle going forward. certainly a combination of passive and active to create an outcome is where the market is heading and will continue to head >> i will pick up on your point on solutions, investors looking for solutions rather than specific products. is this something that alliance bernstein is incorporating machines to help with? >> yes if i just step back a bit, the asset management industry relative to other injustries is still playing a bit of digital catch up there was a survey, over 450 asset managersman i managers, less than a third had
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robo capability or used big data to help clients. at we are looking at how we can use digital means to create more cost efficient portfolios that are goal-based but those portfolios that the robo advice could turn out could consist of actives and passives. the other area we're look at is not just robo device but robo service, servicing intermediaries and end investors better >> it sounds like this will be expensive for the industry to i technology >> i think given the regulation and the cost of this, the bigger you are, the easier it is to put aside the resources necessary. i think if you don't do it,
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you're setting trouble for yourself going forward the industry talks a lot about the rise of munltillenniums at the moment people have ignored millennials and the under 35s. i have three children who could be classified as that. if you look at the forecast coming down the line, the next 15, 20 years, in the u.s. the millennials will inherit about $15 trillion of wealth if the industry doesn't wake up, get its digital act together in a way to engage with clients, it will suffer in a medium term basis. >> with regards to scale, we saw some consolidation with classes, but it's two similar businesses usually combining, will we see more vertical integration, do you think? >> i think you'll see asset managers considering how they can get closer to the client, to the end client
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and how -- they have to do that. if you look at the regulations coming in, identifying and stating the target markets for products, making sure you're distributors are engaging with end clients, not selling products to inappropriate markets, i think it's important that as a brand we have to resonate with the end investor like in other industries, you have to make your product available through the various ways that clients want to interact with you. that could be direct, online without human interaction or through an intermediary. you have to think about how your brand resonates with the end investor >> thanks for your thoughts today. that's it for us from the forum. let's turn to politics theresa may is due to meet with democratic unionist leader arlene foster in a bid to secure
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the dup support for her minority government the queen's speech may be need to be delayed if today's talks fail to result in a deal let's get back out to willem marx live from downing street. what are the key talking points? >> we understand it will be a vote by vote agreement, rather than a coalition deal between the dup and the conservatives. arlene foster coming here to meet with theresa may before theresa may meets with emanuel macron this afternoon. she will be asking for money, cash for education, four healthcare, bluntdi iblunting s conservative manifesto messages like care spending let's listen to her on-camera statement. >> we are going into these talks with the national interest at heart. the union, as i said before, is
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our guiding star we believe in the union. we believe in national, stable government, that's what is at the forefront of our mind going into the talks >> theresa may spoke to conservative backed benches last night and seems to have secured her position at least for now by promising them she would serve the party for as long as they wanted her to. however there are some very few choices left over to conservative mps if they were trying to force her out of leadership, if the talks were to break downdown, it may be jeremy corbyn's turn to try to get a run at government. if he would fail, that would mean potentially another general election not many british voters across the uk are keen on that now. >> we just had three elections in three years stick around for a moment. i wanted to talk about the committee meeting, the 1922 committee meeting that theresa
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may held yesterday according to british media, she was contrite, apologetic do you think that mea culpa worked in reuniting the party? >> conservative mps talked about her approach last night and seemed to be satisfied with her performance. she owned up to any failures during the election campaign she also provided funding for tories who lost their seats. apparently a lot of conservative mps gave her a round of applause, a standing ovation sticking with the topic, the shock outcome of the uk election cast doubt over the brexit timeline however the european union's chief brexit negotiator warned
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not to waste time before beginning talks. he said we must begin this negotiation. we are ready as soon as the uk itself is ready. speaking to cnbc earlier this morning, alexander radvan warned the eu is not prepared to go easy on the uk in the forthcoming brexit talks >> we discuss details about the program and how to negotiate, for germany and for the european union, this is important, that if the uk leaves the european union, this is not a blueprint for others the majority in the uk wants to leave the union, and most say we want to deepen the union today theresa may will go to macron, this is the topic of events i think the european union made a clear statement from the
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council and parliament we said how to negotiate we are just waiting for a proposal from the british side >> you say we don't want this to be a blueprint does this mean that the uk has to suffer in some way? it's been notable since theresa may's election result that michelle barnier, mr. juncker and others have hardly been courteous in language. they have been quick to say we need to carry on, get your house in order >> i think the wording is different. the wording from merkel is clear -- >> i didn't mention americaing merkel. i think she's been courteous >> we have to get to fix our problems now we want to continue on the european side, we have the
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russia and north africa what does that mean for defense and the fight against terrorism? the europeans want to go on with the structure. on the one side, great britain has to solve this problem, but we cannot wait until it is solved we have to continue. >> let us know what you think of these comments or anything else you're seeing on the show. e-mail the show, the address is streetsignseurope@cnbc.com you can also find us on twitter, streetsignseurope@cnbc and tweet me at @carolincnbc. as the tech stock selloff drags the nasdaq to the worst two-day loss of the year, are the f.a.n.g.s fading we'll talk tech after the short break. ♪
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the nasdaq posted its worst two-day streak of 2017 increased volume in some bigger names like apple and amazon pulled the sector to the first back-to-back daily loss in two months the nasdaq is still up nearly 19% since the u.s. presidential election in november driven higher by the f.a.n.g. stocks. apple led the declines on wall street and has lost over 6% in the last two trading days as some analysts have become concerned over its valuation goldman sachs warns the fairytale scenario behind the tech rally is unlikely to last, morgan stanley and ubs also cited overvaluation worries as reason for the pullback. neil joins us now to put this into perspective this is a healthy correction, isn't it >> we think so at the end of the day you have the five stocks that accounted for 40% of the s&p's performance
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this year. you have volatility which is very, very low we need to put other things in context. so let's look at the s&p 500 30% of the net income is generated by the tech industry if we look at apple's multiple, yes, it expanded but on 15 times forward earnings it was trading at 11 times this is a discount facebook's valuation has gone from 42 times to 28, but trading around 38 times. i think the drivers are still intact, but these are healthy pullbacks and gives opportunity for investors to partake in the companies with differentiation who they may have felt they missed out on. >> it's worth noting at the end of the trading session on the nasdaq yesterday we saw some marginal buyers come n because
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they thought the sell offwas overdone now we'll jump back in and buy some tech shares this is what we're seeing happening in europe. some apple suppliers, dialogue for example are trading to the upside do you think this selloff was limited to two days or do you think we could have more follow-through this week or next >> i think it's difficult to pinpoint a time on this. this time of year heading into june and july is seasonal slow period for technology. lack of news flow, lack of earnings we had the u.s. congress about to go on their six-week summer holidays it's difficult to say whether it's over or could continue longer the drivers we think are intact. so if we look at it with the year's view, the opportunity for the key things which are things such as video gaming growth, semiconductor growth, new smartphone cycles of big, high-end devices machine learning, artificial
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intelligence, those things are intact we think we have to look at this in terms of the context of the bigger picture and great opportunities to add to positions. >> the other issue is there's not simply that many other alternatives out there when it comes to sectors some reflation trade sectors, like infrastructure, cyclicals, energy that's lagged, too because there is not that trust in the reflation trade under trump anymore. is that the main reason why so many investors are just flocking in to tech >> i think that's partly the reason for it. to a degree. whether it's a safe haven or not, i think it's more you have clear, strong growth dynamics for the industry there are many ways playing to that theme it's not just those five stocks, but globally many companies are well positioned to enjoy that. offer good cash flow, good quality cash conversion metrics.
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so maybe there is less alternative elsewhere, but certainly within tech there are many opportunities to invest >> let's talk about some names you like in europe, ams, amd, facebook. give me some color on your top pick s >> ams in europe, they play into the new iphone cycle, and also artificial intelligence for autos. that stock fell 13% yesterday, but we see significant earnings power. stmicro could have multiple expansion going forward. facebook gaining against google. amd spent four years restructuring its business it has less than 1% market share
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so it could substantially increase share against intel >> we have to leave it here. we could could talk about this tech sector for hours. thank you very much for that you can head to cnbc.com to read what goldman sachs analysts think about the recent moves in tech that's on our website and app right now. let's get to some other corporate news altice usa is pricing its ipo at $27 to $31 a share the cable operator's dutch parent company says it plans to sell up to 7% of the u.s. subsidiary valuing the company up to $22 billion. the new york offering is seen as a move by altice's founder, patrick drahi to fuel further expansion in the u.s no date has been announced for the ipo. the uk's competition authority found that heineken's proposed purchase of punch taverns could be anticompetitive.
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33 local areas where the proposed pubs would not face competition. the deal would see heineken take over 1,900 of the 3,000 pubs heineken responded saying it is confident it can offer the cma suitable undertakings to satisfy concerns embattled electronics giant toshiba faces another lawsuit. a group of foreign investors claims nearly 4$400 million in damages from the accounting scanda scandal. >> yes toshiba announced today in a statement it had received the legal complaint on monday. with the latest addition the firm faces 26 lawsuits regarding the accounting scandal and the total amount of damages sought is over 9$900 million toshiba already booked losses stemming from the lawsuits, but said it will increase the amount for the year ending in march
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toshiba will hold a stake holders meeting later this month, but it looks increasingly difficult to secure the accounting firm's approval for the report, which is highly unusual for a firm of its side bidding is ongoing for toshiba memory toshiba is hoping to raise $18 billion from the sale. western digital who is toshiba's partner has sought arbitration to block the sale saying entitled to a controlling stake. foxconn and broadcom as well as a number of investment funds are jostling for the prize in a new twist, media reports say bane capital may be planning to join forces with a u.s./japan coalition. discussions are ongoing but it looks unlikely a buyer will be selected soon. that's all from the nikkei back to you. >> we will go for a quick break.
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check out world markets live, our blog which returns throughout the european trading day. we'll be back in two [vo] when it comes to investing, looking from a fresh perspective can make all the difference. it can provide what we call an unlock: a realization that often reveals a better path forward. at wells fargo, it's our expertise in finding this kind of insight that has lead us to become one of the largest investment and wealth management firms in the country. discover how we can help find your unlock.
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welcome back you're still watching "street signs. i'm carolin roth these are your headlines the tech selloff stalls in europe as stocks shrug off the
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losses on wall street with nearly all the major equity markets moving higher. attention moves to the fed which is expected to raise rates tomorrow randy krozsner tells cnbc that janet yellen and company are on a path to normalize despite recent weakness in economic indicators >> now they have confidence that the economy is recovering and is on a good trajectory, so they can look past individual pieces of data to move forward. that's broadly a better approach than just responding to every bump and wiggle in the data. >> i got us into this mess and i will get us out of it says uk prime minister theresa may as she prepares to meet dup leader arlene foster in a bid to secure her parliamentary majority good morning if you're just tuning in, let's bring you uk inflation numbers for may. unexpectedly jumping to the
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highest level in four years of 2.9% for the annual print. have a look at the reaction in sterling/dollar, it's shooting higher to the tune of 0.3% on the day. 1.2694 a couple seconds ago i saw it above the 1.27 handle. so once again, we're seeing the biggest increase in inflation since june 2013, that's according to the office for national statistics. we were expecting a print of 2.7% this is obviously a number that the bue might be concerned about. though it might look through it given that much of the rise in inflation is coming from the weakness of the pound sterling that should be accentuated as we get into the june month and see that further fall based on the outcome of the hung eleelection. keep in mind that wages are stuck at 2.3%. so the consumer is squeezed when
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it comes to real income. that's one of the bigger concerns for the bue sterling/dollar up by a third of a percent. let's show you some other crosses. euro/dollar up by 0.1%. we're seeing the aussie dollar up by 0.1% and when it comes to european equity markets, we're seeing that we are brushing off some weakness that we saw in u.s. trade with the renewed sell o off in second. the xetra dax up by a half of a percent. when it comes to the u.s. markets, this is what we expect when it comes to the futures s&p 500 seen up by 1 point the nasdaq actually seen up by 21 points. this is after it still fell yesterday but only by 0.8% the nasdaq saw the biggest two-day drop since early december and closed at the
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lowest level since may 24th. the dow snapping a three-day winning streak so maybe a little bit of a reversal today the dow jones seen up by almost 50 points. assets under management among global public investors are up to $33 trillion, up 1.4%. that global central banks including the federal vef reserve upped gd reserves to 33.5 tons. gold holdings the highest level since 1999 what is this down to >> gold holdings by global public investors have been coming down up to around the financial crisis of 2008 since then they've been increasing this has been done to increasin global uncertainty, due to big
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political events, brexit, the election of donald trump, a lot of banks uncertain about the euro so holding on to gold is a safe haven asset. >> it's a safe haven asset, it's not a play on yield, not a play on equity investment is it also a currency hedge when it comes to the weakening of the dollar despite all expectations that the dollar would rise >> certainly, but over 2016 we saw the dollar strengthening, so this has been the data that we look at as 2016 for the whole. >> let's look at some of the other big trends we're seeing public pension funds make up a big, big part of some of the institutions that you're looking at. where are public pension funds investing? are they riding the equity rally? >> from 750 institutions that we track, 493 are public pension funds. most of those are in the u.s. and are increasing holdings in
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equities this is a big reason why they increase their assets a lot over 2016 as you mentioned, overall the assets rose by 1.4%. pension funds rose by 3.2% they did substantially better than sovereign funds they have the flexibility to invest in the type of assets that other public investors might be constrained to invest in >> how fickle are public pension funds when it comes to reallocating between different asset classes. last year they were heavy when it came to investments into u.s. equities we saw that rally stall somewhat i don't know if you have data for 2017 is there a sense that outflows from u.s. equities based on public pension fund data has slowed has it reversed? are there long-term investors? >> we can talk about global trends there is an overall shift to equities fixed income is yielding low returns. negative in some cases to give you an example of japanese pension funds, the
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gpif, one of the biggest public investors that we track. in april of 2015 it was allowed to shift allegation because of a constraint to invest more in japanese government bonds it shifted a lot of that to equities we expect that to continue >> what happens to some sovereign wealth funds in the gcc or in russia, in norway? those funds which have been so heavily reliant on what the oil prices are doing in 2016 we saw a rise after the opec announcement. but then this year a whole lot of volatility and some pretty big price declines how are they dealing with that impact >> they've been significantly challenged a lot of those economies have been drawing down on funds sovereign funds, their whole purpose was to save in the good times, use them in the rainy times. that's what a lot of economies in the gulf have been doing. they've been moving assets between central banks and s
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sovereign funds. in saudi arabia, they have been moving to the sovereign fund so there's a lot of adjusting from within countries to use those funds from the sovereign funds. this week, we have a fed decision, a uk bank decision, the s&p decision i'll be talking to the s&p once again. we know the s&p is quite a successful equity investor they usually do well they also have massive gold holdings where does the snb rank when it comes to other banks, this is a listed central bank. so we may not have all the details from other central banks. where does the snb stand >> we've been very big impact for monetary policy decisions in central banks, where they're moving with the snb, it was one of the biggest movements in the global
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public investor ranking this year because of its decision to -- reaction to the appreciating pressures on the currency, it increased reserves quite a lot. that's one reason why european assets as a whole increased more than any other region to 6.4 trillion >> what are some of the political risks that some of these public pension funds and government state funds are facing is it still brexit and trump anything else they're worried about? >> in addition to the ranking of the 750 global investors, our publication ran a survey of what the political investors think, they highlight the key risks as trump, brexit, worries about europe though these have abated now >> still pretty much the same things as usual, trump and brexit thank you very much for that
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let's talk about trump a close confidante of president trump says he is thinking about firing robert mueller, the man looking into possible collusion between russia and the trump campaign, this from christopher ruddy. speaking on pbs, ruddy said trump is considering terminating the special counsel. the white house said with respect to the subject, only the president or his attorneys are authorized to comment. i don't know whether that says much u.s. attorney general jeff sessions testifies before the senate intelligence committee today, following the explosive testimony of james comey comey told the senate panel that the fbi had information in february that would have made it "problematic for sessions to continue leading the investigation into russian election interference. a justice department spokesperson said sessions requested his hearing be open to the public because he "believes it is important for the american people to hear the truth
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directly from him. peter alexander has the latest >> reporter: president trump face-to-face with jeff sessions. >> great to be here. >> reporter: the attorney general preparing to break his silence on russia testifying in public before congressional investigators tomorrow just days after james comey addressed potential conflicts about session' role in the controversy. >> we also were aware of facts i can't discuss in an open setting that would make his continued engagement in a russia-related investigation problematic. >> reporter: will the white house invoke executive privilege? >> it depends on the scope of questions to get into a hypothetical at this point would be premature. >> reporter: sessions is likely to face bruising questions about his failure to discuss questions and two meetings with a russian ambassador and the possibility of a third that aides vigorously deny >> when sessions failed to disclose these meetings with the russians, was it an honest mistake or part of a coverup >> reporter: unfazed at his first cabinet meeting, the
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president touting this claim. >> we've been as active as you can possibly be at a record-setting pace. >> reporter: then an unusual scene. all the president's men and women showering the commander in chief with praise. >> i can't thank you enough for the privileges you've given me. >> i want to thank you for getting this country moving. >> we thank you for the opportunity and the blessing that you've given us to serve your agenda and the american people. >> reporter: the senate's top democrat on twitter mocking the moment. >> lucy, how did we do on the sunday show yesterday? >> your tone was perfect. >> michelle, how was my hair coming out of the gym this morning? >> you have great hair >> reporter: still hanging over the white house, the president's suggestion he has secret tapes of his conversations with comey who he accused of lying under oath but tonight, despite calls he'd come clean, no timetable for an answer. >> u.s. media keeps on asking where are these tapes? i guess we'll know shortly
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according to donald trump. u.s. senators agreed on legislation imposing new sanctions on russia that includes wording to prevent the white house from easing the sanctions without congressional approval industries tabbed for sanctions include russian mining, metal, shipping and railways. the agreement will be added as an amendment to another bill and is expected to pass the senate with bipartisan support. russian police detained hundreds of protesters across the country as the opposition leader was arrested and sentenced to his second prison term this year navalny was taken into custody before the protests began. richard engel was there. >> reporter: they showed up just a few hundred yards from the kremlin and in cities nationwide with one message, to show dissatisfaction with russia's president. this is what happens when you try to demonstrate against vladimir putin in today's
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russia these demonstrators have come out and denouncing putin calling him a criminal and now the riot police are pushing them back they are making it very, very clear that this demonstration is not going to be tolerated. the flash mobs answered a call on social media from opposition leader alexie navalny. but he never made it, arrested outside his home sentenced to 30 days in jail navalny's rallying cry i anti-corruption. he has a hugely popular youtube show designed to show the fabulous wealth of kremlin insiders but navalny has been banned from running for president because of corruption charges against him, which says are trumped up. in many ways, navalny the last prominent critic standing.
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alex one shot dead near the kremlin anna shot down in an elevator and vladimir poisoned twice but survived tonight on russian tv, the top story was putin showing students his office no mention of the unrest nor of navalny richard engel, nbc news, moscow. coming up, we will speak to a former rogue trader but now author and a lecturer in academ academia ayun f tt.st tedorha
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it's what busch is known for. what are you known for? i'm cool under pressure. what is that? a fish hook? (chuckling) golly! [sfx: buschhhhh]
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welcome back to the show the attorneys general of maryland and district of columbia filed a lawsuit claiming government payments to donald trump's businesses violate the constitution
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the white house rejected the claims saying the lawsuit was motivated by partisan politics >> reporter: adding new legal firepower to challenge president trump's worldwide business holdings, maryland and the district of columbia say he' violating the constitution's ban on public officials, receiving presents or payments from foreign sources. those provisions are walls, their suit says, against presidential corruption. >> and the one thing we know about president trump is he understands the value of walls this is one he can't climb over and he can't dig underneath. >> reporter: the lawsuit filed by two democratic attorneys general says mr. trump markets his property as president and benefits from payments by foreign countries for space in trump tower and holding events in trump tower, and staying at his washington hotel. too much of a conflict they say when he makes decisions about u.s. foreign policy and they say
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he never put his businesses in a blind trust. but in a filing last week in a related case, the justice department says the constitution only blocks the president from accepting a gift for personally performing some service for a foreign country. easily, the riches president in modern times, his business ties raise a legal question that hasn't come up before and the lawsuit faces long odds. but legal experts say even if today's lawsuit doesn't ultimately succeed, it could force the president to turnover revealing financial records. >> and request number one will be his tax returns, to see if there is any basis behind these allegations that they are made, that could be very significant. deutsche bank is settling an investor lawsuit claiming it rigged the yur isheuribor bench. deutsche bank has already paid 15 billion euros in legal bills since 2009. a pretrial hearing takes place in london today for 11 traders accused of manipulating
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the euribor. it's the latest case intothe rigging of benchmarks by banks in the city of london. joining us is alexis stentforth, author of "the barometer of fear." he was given a pro hib bhibitior banning him from trading for 15 years. thanks for joining us. you had nothing to do with the scandal. you circumstance was based on something else >> i overvalued my book in 2009, which is the reason i got the prohibition order. but i was trading libor and euribor derivatives. so my portfolio consisted mainly of libor so these guys on trial and
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former ones were my counterparties >> how did it come to this explosion when it comes to the libor rigging? explain the culture on the desks at that time everyone was essentially doing it no one thought there was anything wrong with it how did it get to the stage where it all erupted? >> i don't think it's that simple i didn't know it was that suicide spread, even though i traded libor derivatives every day. i had suspicions and i was irritated by libor but i didn't know it was manipulated to that extent i think the culture was much more widespread. we can see with the foreign exchange scandals as well, it's similar. the culture that went on in the dealing rooms has something to do with that and not necessarily the benchmark. >> talk about the inner workings of a trader.
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in your case it was the mismarking of books, in the case of libor, offering a higher value for the bank it's maximizing the bank's profit, but also making yourself look better. is there a sense of personal hubris that's going on >> yes, i think i talk about that a lot in the book i don't think mine had anything with doing as much money for myself >> what was it >> i still don't have the answer that's what the book is about, it wasn't that simple. i agree the culture that existed during the time was a lot about encouraging, pressuring making as much money as possible for the bank what many people should have done is stood up and say hang on, we're not prepared to do whatever it takes to make money for the bank that's the biggest mistake i
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made >> how much remorse do you feel years after? do you think about it still daily? >> every single day. i feel a lot of guilt towards the bank, my family, my friends. but you have to move on as well. i can keep on apologizing for year after year, but there comes a point where i have to leave it behind i'm not there yet. >> do you think it's wrong so many of the libor traders, only one of them was convicted, and i think that was a sitting former ubs trader, do you think it's okay that so many of them got off lightly? not just traders, but senior management of many banks pretty much everyone kept their job. >> it's tricky i was very angry at the time when i knew that so many of my counterparts were actively manipulating it. i was furious. i knew these guys.
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after a couple years i began to change my mind i don't think it's fair many of these people, these traders have been put on trial without the banks actually taking that much responsibility they pay a fine as we saw, but they still argue they haven't done anything wrong. i think that's strong. >> you think the buck stops with senior management not necessarily the trader >> it's difficult to say, where do you draw the line which level of senior management knew about this? how you can find proof that's very difficult. but still the bank as a whole should take more responsibility. it's not only about paying a fine to the regulators, it's about saying our culture was wrong, not that this was only about a few rotten apples. >> do you think the culture changed enough for this not to happen ever again? >> i think there's a lot more
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compliance, lawyers walking around, but i'm not sure whether the culture has changed. that has to come from the banks themselves that's not only up to the regulators >> you work in academia, you're an author, do you miss trading do you miss the action >> yes yes. once a dealer, always a dealer, i miss it quite a lot. i don't think i'll ever go back. >> even though you could >> i could apply to go back but i do love academia >> thank you very much for that. that's it for today's show i'm carolin roth "worldwide exchange" is up next. bye-bye. you know what's awesome?
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good morning the tech tumble. the nasdaq posts its worst two-day streak of the year the fed in focus the stall bacentral bank kicks s two-day policy meeting and congratulations to the golden state warriors who claim their second nba title in three years. "worldwide exchange" begins right now. ♪ good morning welcome to "worldwide exchange" on

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