and anyone in brazil. there was no journalist or academic or activist who could have predicted anything like that. and i think it had to do with the fact that we were going into the confederation that received the world cup by a year and so there was a sense among the population as the momentum built and started to become bigger and bigger there was the sense that the world was watching it is time to say something. the frustration came from an interesting thing happening in brazil. all of this talk of the growing middle class into the country is up and coming and was doing better economically. so many who had lived month-to-month now have a little bit of spending money. and they were being called middle class. and i feel like they started to be needed. being middle class is more than just being able to get a smartphone. it comes with a host of other expectations. expectations for basic services, expectations about how your tax money will be spent. even civil rights and expectations we were talking the litt

i guess that's brazil, right? >> yeah, it's brazil.re, but not in the whole city. >> how different is salvador from rio and sao paolo? >> man, salvador is the mother. you know? the music here, the attitude, this area is amazing. >> it is. >> amazing. eat, drink, history, memory, anything. >> pelourinho, pelo for short, was salvador during the portuguese colonial period. it's almost always a party, a series of parties, actually, but tonight is special. ♪ >> look at this smell, man. >> smells good. >> yes. >> oh, that's good. >> isn't that good? >> where to next? >> go to this area. >> yeah. >> i like to bring you today because coming here, people everywhere, this is a free party. you can dance, you can drink your beer everywhere. it's good to see the show inside. it's amazing. ♪ >> you'll try that. >> what is it? >> it's carameo, clover and a mix of honey and limon. >> alcohol? >> yes. >> alcohol of unknown origin dispensed from atop the head of a stranger? >> it's good. >> that's good? >> mama always said that was a good idea. ♪ i don'

>> i think it is representative as whole of brazil unfortunately. we'll has elements that make its vitamins particularly based out of rio including the fact since the early '80s drug-dealing gangs have come to dominate a great swath of the landscape. but part of the specific brand of violence one the police is just another faction. and then the police itself for the last five years sifting hundred people killed this isn't just the ngo to call attention to but at the same time it is an improvement and in 2007 there to thousand 330 people killed by a police didn't rio de janeiro just 2007. >> i thought it was a symbol to the attitude that is the special forces of the police. and that is what they're wearing the patches of their uniform. >> there is an understanding that is how they want to be police. and to have the daily life that live there. >> because structure and unlike the u.s. of cents that we're all kind of middle-class and brazil and it's a very strong social hierarchy that is not only felt the part the way the government looks at society. so

brazil cut not once but twice.-y managed to downgrade first of all it surplus moving to a deficit. they think it deficit will be north of 5% of gdp come to the 16. 2016. that engulfs even the president herself. this is what is happened to gdp in brazil, look at that slumped over the past couple of quarters. 30% versus thewn dollar, and how the markets reacted to these cuts in the debt rating. we are continuing to see borrowing costs in brazil rallying to a six-year high. , theredit default swaps protection against a brazilian debt, that insurance is continuing to get more costly. what can be done? where can we go? what needs to be fixed to end this downward pressure? the finance minister has been under so much pressure, he's a technocrat. it really hit home when it came to austerity. popularity negative of the president, he is not able to get through to carry the government. we're seeing congress rebelling against austerity plan. no tax hikes, no cuts to spending. we just had opposition rebelling tripper potion --

for some reason outside of brazil there is this travel agency poster image of rio end of brazil as if it were a flat place, as if it were a single dimension. sometimes it would surprise people to mention some of these complexities. >> i mean, i was recently, talking about some of the other aspects of it. i was reading recently there is an amnesty international part this is police have killed so we people in the last five years. as the weather goes back, backwards and forwards between the kind of bandits you described and the security forces, among themselves. why do you think rio is such a bother place? do you think that is representative of brazil as a whole? >> i think unfortunately it is representative of brazil as a whole. real have very particular elements that make his violence a particularly rio vista violence, including the fact since the early '80s drug dealing gangs have come to dominate great swaths of the landscape that were virtually abandoned by the state. police couldn't go in, and these gangs control those spaces. but part of a specific brand of violence and something

mexico and brazil were the best targets last week. not to say brazil is in a great place.res quite a lot of the problems. currencies have come down a lot here. em earnings have also come down. that's why has done so well in brazil. alix: in some capacity or zeal china. exposed to 35% of their exports go to china . what is the china factor here? >> most of brazil's exports go but it's reasonably small in relative terms. the story on the currency is quite interesting. if you looking at how does brazil rebalance its economy? the currency arguably got to strong at one point. not only brazil but you see it across a lot of emerging markets. earnings have been crushed over the last years. wage growth is rising more strongly than gdp growth. biggest what's the misconception that exist with emerging markets, whether it's brazil or others? that's lumping a lot of things into two words, emerging markets. ways, mexico is the opposite of brazil, any which way you want to look at it. is biggest misconception when we lump them all together. alix: look at the the valuation of developed an

joe: brazil's debt hangover. brazil announcing an austerity plan. scarlet: we begin with u.s. markets. stocks falling ahead of the fed decision. about 25% over the 20 day average. nine out of 10 industry groups are down. that goes back to the idea that it has shifted when the fed would shift rates. joe: this is a quiet day. the market was lower. not very dramatic. people have been talking about the pre-fed wall in the action and there was nothing you could point to that was particularly exciting. august: it felt like in trading day. >> it felt like the days when we are on vacation. is the pe of did cap's. -- of big caps. thater or not you believe was too high, they have all started tumbling down. stocks have recovered a little bit but that is not a very nice line. let's get rid of that line and show you what happens if we max it out. stocks are not cheap by historical standards but the debate is still is the secular bull market for stocks still in place? stocks still appeared to be expensive by historical standards but they have come closer to a people think might be there fai

the troubles in china and brazil -- are they linked? you also see it taking place with australia and one other country, canada, which is in recession. commodity exposing countries. tom: did i learned yesterday that mario draghi is affected by the commodity producing nations? ai-kumar: he indicated as press conference that the chinese economic slowdown was a major reason why the numbers were not looking good in terms of inflation and growth in the eurozone. he did. are affected because germany is a big exporting nation, and china is a big importer. ofyou have the benefit chinese economic growth coming to all these countries, and at the same time the slowdown is affecting germany, canada, brazil, and australia. brendan: when we talk about a commodities super cycle, has this been a china super cycle? sri-kumar: the commodities super cycle was propelled in a big way by chinese growth. if you look at when the commodity price boom began, it was 2002, 2003 and coincided brazil inresident in the 2002 election. the expectation was that the real

joe: brazil's debt hangover.he government announcing an austerity plan admit a cell up of assets, and all eyes are now on if it spreads. scarlet: we begin with u.s. markets. u.s. stocks falling ahead of the fed decision. light trading overall about 25% , over the 20 day average. nine out of 10 industry groups are down. the exception there were utilities, which, again goes , back to the idea that it has shifted when the fed would shift rates. joe: overall, this was a really quiet day. the market was lower. just not very dramatic. people have been talking about the pre-fed lull in the action and there was nothing you could point to that was particularly exciting. scarlet: it felt like in august trading day. joe: it felt like the days when we are on vacation. scarlet: this is the pe of did -- of big caps. whether or not you believe that high,rward p/e's were too they have started tumbling down. stocks have recovered a little bit but that is not a very nice line. let's get rid of that line and show you what happens i

brazil, turkey, you know. feel like if this happened a few weeks ago and we got this big downgrade, we would not have seen this come back. you sort of have to wonder are we maybe seeing some sort of fatigue selling of emerging markets. i think it's interesting that the brazilian stock market had some life to it. alix: and we have seen certain commodities hold up today, despite news that would tell you otherwise. the supplies have not been cleared for oil and copper. joe: speaking of copper, i want to look at this one-year chart of copper and focus on something that has not got a ton of attention. copper is in a fairly nice uptrend in recent days. you start to look at these signs , brazil not getting slammed, carper -- copper starting to rise, maybe there is a respite in the brutal selling of everything that we have seen for most of the year. alix: i will take the other side of that, though, and talk about it is all the shorts, man. i'm looking at the short interest in the copper price -- it is around record le

brazil. tom: it is highly symbolic and really folds over into the political debate within brazil.ally front and center this morning. manus: ok. tom keene, the head of "surveillance" in just 25ur7bd minutes. stay tuned for that. we were talking about drunk. -- junk. standard and poor's put brazil back to double b plus. francine: it highlights the economic challenges mays facing the country. here more on the rate change is caroline hyde. what is the latest? caroline: seven years in the investment grade sun. that has stopped shining. e're now back to junk. the outlook is not bright. meanwhile, this is seven years. notably, the other libor rating companies, moody's, fitch, they still have brazil on investment grade and the question is how long? what do standard and poor's push forward? the deepest recession in 25 years. the trajectory is downhill for g.d.p. the growing budget deficit is rearing its ugly head because not once, but twice has the deficit -- well, the fiscal budget been changed and reor yen tated by the government. in august it went down to a deficit. half a percentage po

brazil has been cut to junk. latin america's largest economy lost the investment-grade it enjoyed for seven years, after standard & poor's cut its rating. it highlights the economic challenges facing the country. and the trouble plaguing many of the emerging markets. here with more on the rate change, caroline hyde. good morning, how are the bricks come rolling? caroline: russia previously cut by standard & poor's. and the other one in focus, brazil -- the leader of the brakes in terms of which one comes at the beginning of bric. cut by just one rating, sending it into junk. and also worrying, a negative outlook. ment, moody's and fitch still at it investment-grade. anna: the challenges the country faces, s&p worried about the fiscal challenges in particular the government faces? caroline: the list is quite phenomenal. but we are in the midst of a recession, the deepest in a quarter of a century. but the growing budget deficit, you are right, this is something that standard & poor's really signals out. effectiven

commodities are hurting brazil.nk about the weak demand from major export markets like china. tom: richard, i saw you on the front row of the world cup. you guys go down there -- how do you consult the government or private business to modernize in richard: november, brazil has some pretty good winners, too. think about anheuser-busch, one of the best run beer companies in the world. brazilians now -- tom: how do they extend that into best practices? these few companies are doing really well. how do you roll that out? david: there are real problems with economic management under president rousseff. it will be interesting weather the downturn numbers really heits their hand, whether will have the flex ability do what he wanted to do. richard: the commodities problem -- everything, the slowdown in china, will be picked commodities. out the finance ministers of the chicago school, are different been what you knew. does austerity in brazil work the same way with the austerity with mixed results that we saw in europe? th

brazil i guess always the first leader to. he at this event. we also expect to hear from many important leaders today, the next leader up to be president barack obama and we'll bring that to you as soon as it happens on aljazeera america. do keep it here. >> welcome back. you're watching the president of brazil address the unite united nations general assembly. she's the first speaker. pup when she's done president barack obama will address the unga. and in the meantime, we'll bring you other news. >>> shell is suspendings its quest drilling oil in the arctic.

describe brazil.s: we are talking about the fundamentals of the countries in terms of stability, it in terms of governance stability. we are concerned about latin america. a realeager to see economic policy that will give stability for operators like ourselves to do our jobs. hans: we will bring it down to the u.s. where we have a federal reserve decision coming, a potential rate hike on thursday. what will that do for auto sales? stage, we ares not selling cars in north america, but we are selling cars around the world, in china, latin america, and russia. whatever the decision that is taken, it should not affect the rest of the world economy. it is reasonable to recognize that the health of the u.s. aonomy has now reached threshold, and from there, things should happen, but at the same time we should expect that in north america would not affect the rest of the world. the consequences may be even -- hans: behind us we have the 308, the gti version. describe for me where peugeot is now quickly. ago,

brazil is the world's top coffee producer. but up till now there was little demand for the highest quality beans at home. these were mainly set aside for export. but things are changing along with people's tastes. this is the head of a subsidiary of a major japanese trading house that has been selling brazilian coffee beans in brazil. but three years ago he began marketing higher quality beans to domestic consumers. his greatest challenge is procure enough high quality beans. recently, he visited a plantation growing coffee beans for export to japan. he wants to plantations to increase its acreage so he can provide more of the high-end beans for sale inside brazil. >> translator: quality and safety checks are likely to become tighter in brazil. i want to find a partner whose beans i can trace to their plantation of origin. >> reporter: the growing popularity of high-end coffee in brazil is lead iing exporters t secure high-quality beans. demand is so strong in the u.s. that a coffee chain there bought in coffee plantation. the

dollarioned brazil reality 3.78.ureau of a much weaker brazilian rialto come this morning. this is the house republicans going back-and-forth with a lack of information that they need to come to a decision. democrats saying they got plenty to keep a presidential veto through and to pass and move on. with that deal, apple, i love the coverage of apple. cory johnson out in san francisco. i love the idea of the underestimation of how the .phone will do with apple maybe the iphone will do better than good. we say good morning bloomberg 1200. the patriots take on the steelers tonight. i believe mr. brady will be allowed to play the game and that is exciting. what are you observing this morning? you've got that long dining room table, you spread all your newspapers out, what is the one story you're looking at? brazil. mainly because the s&p downgrade to the country's debt. this is a return to that cycle. we'll be talking about big cycles later on today and the cycle in brazil, everyone thought it was broken and they would

the fed is almost the least of brazil's concerns. most of brazil's problems are home grown. the fed in china serves as a head wind but most of the problems come from brazil. >> very worried about when the rate hike comes. >> yes but despite the fact that we had lower for longer we had a 325 basis point rate tightening cycle in brazil. that's because of the inflationary pressures existing in the economy. >> why do you think they'll still be hiking in september? most economists, they don't think september is on the table as much as what it was in the past. of course we had fisher talking still leaving the door open but when you look at the volatility for one taking place, why necessarily risk it? >> no we think the risks have definitely diminished that they'll hike in september. the base case is that they hike this year but it suggests that september because of exactly what you said, because of the additional uncertainty factors and what's happening in china and emerging markets they may delay lift off. >> so does that globally create a big opportunity for credit investors? >>

davies, matto grosso do sul, brazil.een elizabeth is about to become the longest reigning monarch in british history to reach you seen a dozen prime ministers come and go during her 63 years on the throne. i present to you, queen elizabeth. be queen, not born to but her reign is the longest in british history. her coronation set her apart to a light of service. that service spanned seven decades. from the 1950's when she was young and her 20's, bringing up a family, to the years that followed. she has been there for moments of triumph and moments of tragedy. she is traveled the world, no head of state in history is traveled so widely. she is witnessed huge change. and has met every contemporary leader of note. in britain she has been served by 12 prime ministers, from churchill to cameron. john major. >> many people will be pretty concerned, the voters, and perhaps frightened about the sheer pace of change. throughout the last 60 or so years, the queen has been an absolute constant. as prime ministers and celebrities hav

brazilian -- brazil continued to weaken because it is fundamentally made in brazil.appreciating dramatically and it is giving that back. it is relevant because emerging markets are dangerous and inause a wholesale selloff emerging markets is still not impossible. brazil's markets are sufficiently homemade at this point in time. i am not sure that anyone can do anything else other than them reforming. tom: kit juckes, thank you. that brings us to our twitter question. we mentioned it yesterday as well. now we need to hear from you. should janet yellen be central bank or to the world jacket we got ron paul -- be central banker to the world? opinionon paul's yesterday. stay with us. ♪ tom: good morning, everyone. "bloomberg surveillance." we have been showing you this shot all week. it is gorgeous in september in london. st. paul's cathedral. our new headquarters in london opening in 2018 is off to the left on top of a roman ruin. cathedral, bright and shiny this morning. spectacular photo. thank you to our london team for that shot. right now we need a single best char

this is the lowest of any precedent in brazil's recent history. however, having said this, we spoke to several an analysts who think that the measures are much needed and that they are the last resource that brazil has to try and save its economy. >>> we are going to talk about pop art from the 1960s. it's more than andy warhal and his soup cans. >> the faceless figure in a western half highlighted the increasing americanization of japanese society in 1966. the japanese artist used highway billboard paint to create his pop art. the world goes pop, looks at how artists have interpreted pop art. the 1960s culture movement made famous by andy worhall. some curators have unearthed the art. >> we discovered so much we didn't know about that has been left out of history, that you can't even find if you google. and to us that was the most exciting thing. >> reporter: the show is divided by themes instead of geography. the artists reflected their own troubling times, the cold war, the war in vietnam, racism, women's rights. many of the works are intense,

brazil is junk again.aded the largest economy credit rating director whos the spoke moments ago about why the cut is happening now. the outlookevised to negative, which really reflected our increased perception of increased risk for execution, for the government economic plan beyond the fiscal side in particular, risks stemming from the political environment, the economic environment, that had been impacted importantly by the corruption investigation. go to julia. thank you for spending a few minutes with us. havinghas obviously been well reported economic issues, horrible corruption issues, a scandal involving people at the highest levels of politics. was it inevitable? expected.ngrade was the outlook was downgraded in late july. wasmost surprising thing the timing of the change and the negative outlook that we were not expecting at all. is there anyway to see it differently? if you needed to, could you frame the outlook for brazil's economy in a positive way? >> you could take this as a wake-up call. you

. >>> brazil's president dilma rousseff is talking about how to salvage brazil's economy. the currency has plummeted against dollar, while investment confidence is as low as it's pen been in years. >> i'm in the economic heart of brazil but all 800 kilometers to the northwest to the capital brasilia, to see what president dilma rousseff will do next, will she impose the necessary measures to get brazil back on track? can she? the brazilian currency the reale is the lowest level against the dollar since it was introduced in 1994. investor confidence is at an all time low. >> the government needs to let investors know that there is a political environment of understanding and debate and all the measures they're discussing will in the end be approved. >> the president wants to make macive cuts to public spending closing ten of her 39 ministries but by doing that she risks alienating, those who elected her less than a year ago. these ordinary people, bread and basic items skyrocketing have the most to lose. >> buoyant optimism of just a few years ago when brazil was the econom

tom: brazil is -- brazil is not mexico.rendan: there -- how do you overcome the cost of brazil here go robert: brazil is not necessarily like that. there are some very well-established companies. one of the copies we work with, they went public -- one of the companies we work with, he went public. they have 350 stores in brazil. they see the opportunity and they have the production capabilities, and they see the possibility of doing exports. brendan: does the movement in are other companies looking at manufacturing in brazil, or is it too soon to tell? katia: i think it is too soon to tell. we have to see how it plays out. tom: on your desk this week, what are you going to look at? depreciation,real -- the 4.25%d bond. to look at the fed. tie janetre going to yellen to latin america? katia: it could really push the rally even briefly. brendan: is the central bank chief there the last adult left in brazil? katia: that is harsh. unfortunately, he just had everything going against him and was brought in too late. tom: katia po

what i think is interesting is you bring up brazil. brazil may be where china was in terms of the market's recognition of it about seven months ago. the mitigating factor there, though, is brazil has been in trouble for a good two years now. nobody has really been counting on it for growth the way they have been in china. >> just want to point out that the dow is now down 100 points. not a big percentage move. we're down 100 points. see more selling accelerated. what is really on your radar right now? >> well, i think there's been a psychological shift, and i think there's a lot of denial out there. we've had several dips and corrections over the last few weerz, but every one of them has been resolved with a v-shaped bottom. we just didn't get it this time. we traced the loss, and then you roll back over again. you know, people have short memory. they forget that that's an entirely possible thing to happen. the v-shape is actually abnormal, and so now people are kind of coming to terms with this. if you want to take a look at the u.s.,

i've been traveling to brazil for 35 years.nk given the weakness in the currency, given the severity of the recession, all of the political negatives in the price, brian, it is starting to look good to me. >> i don't know what is in your west coast water beside fluoride. you know scott is based in l.a. and kind of said the same thing last week. maybe he is poking around brazil or it looks attractive. 35 years you've been going there. what makes so you confident that maybe this really is a bottom for brazil? >> good question. brazil does not stay low for too long, unlike neighboring argentina. that's one. second, when you talk to brazil in government and in the private sector, they are very qualified, many of them are u.s. educated topnotch people who are doing that. and then you find that when the currency weakens a lot, the country gains competitiveness. i think a lot of the brazilian problems are because of the chinese weakness. that is your other question. and that, again, is clearly incorporated into what is happening. all

despite the enormous progress brazil has made over the past 20 years, one third of brazil's secondary school students do not graduate. >> ( translated ): in the future, i want to give my mother a house, to live with my siblings, to be a good person, and i hope to continue on this track. i plan to go to college one day. my future is not guaranteed. but the only way to guarantee my future is by going to school. >> this is pbs newshour weekend, sunday. >> sreenivasan: in other news, the spanish-language variety show "sabado gigante" held its final broadcast last night, after 53 years on the air with the same host. for its entire run on univision, the three-hour weekly program was hosted by don francisco, whose real name is mario kreutzberger. kreutzberger has been compared to johnny carson and oprah winfrey. the finale included video messages from president obama and the first lady, along with latin american stars including shakira and gloria estefan. >>>> so thank you, done franciso for all of the joy and the entertainment that you brought into our lives for some years. you will be miss

brazil, last night, cut to jump. junk.ign rating cut to let's have a look at some of today's top headlines. americans filed -- fewer americans filed for unemployment. the job -- they dropped and have been under 300,000 for under six months. that is billable economist associate with a healthy job market. 5.1% at the end employment rate, some people we are say at -- say we are at full of inflation. jpmorgan says prices will rise more, averages 4.4%. the bank says fewer distress sales keep home prices rising. ,ere second straight month american spot more cars than the chinese did. u.s. buyers are encouraged by a lower gas prices and the stock market collapse in china that potential buyers out of the market. it is time for the addition of five things to watch. julie hyman is with me. and peter chair is here, head of capital. number 1 -- the boe, lots to talk about that we will start england boe, bank of policymakers indicated they do not believe the market turmoil signs ofines -- and slowing economy will derail the briti

this follows a decision to slash brazil's credit rating to junk status. it referred to the growing debt and mounting turmoil, spillover effects of a corruption scandal. it seemed to be weighing on the president possibility to kickstart the slowing economy. reacting to the downgrade, the government says brazil will get back on its feet. >> we are putting in place the necessary measures for fiscal recovery and economic growth. a continental economy like brazil, the seventh economy, take some time to react to these measures. and in sao paulo, it is trading down. let's take a look at the other markets. shares in the united states in positive territory. although we have seen a little bit of a rally fizzle out sharest as we have seen coming down slightly. there is still a little bit of caution when the federer deserve will decide whether to hike interest rate for the first time in nine years. that is something investors will be looking at closely. oil prices are providing some support for american markets as helping 4% higher, energy shares. apple shares are al

it is interesting to have them on the show because after the -- after brazil was downgraded, brazil,o china. a lot of problems and it is all been a complete mess. it is interesting to see this, heels. >> it is really interesting timing wise. this week especially, we have seen a lot of deep negativity. the s&p downgrading brazil to junk. glencorehe news with on monday where they threw in a tower -- threw in the towel on dividend production and things like that. it is interesting. it feels like after a really big decline in commodities emerging markets overall, we have seen big negative calls and actions and you wonder if we are getting close to the bottom. alix: four charts right of the top of the show. do not miss it. we are super psyched about it. we will be back in just about 15 minutes. still ahead, how the oil route is fueling growth for tanker companies. we will hear from the ceo. ♪ alix: commodities have been holding up today, very surprising and relatively no news. >> -- let's take gold. here, he see the movement upwards as stocks have moved downwards in the premarket session,

joe: i also want to talk about brazil. we got the call from s&p that brazil is downgraded to junk. let's look at what happened on the main brazilian index -- a huge drop right off the bat. insaw brazilian etf's fall late trading, but it was quite a comeback. the brazilian stock market went green and only ended down .4%. this is interesting to me because you think about all of the negativity we have seen in emerging markets everywhere. i feel like if this happened a few weeks ago and we got this big downgrade, we would not have seen this come back. you have to wonder are we may be fatigueome sort of selling of emerging markets. i think it's interesting to brazilian stock market had some life to it. alix: and we have seen certain commodities hold up -- the supplies have not been cleared for oil and copper. joe: speaking of copper, i want to look at this one-year chart of copper and focus on something that has not got a ton of attention. copper is in a fairly nice uptrend in recent days. you start to look at these signs and maybe there is a respite in the brutal selling of everything

. >>> and as brazil's economy on the brink? from the young workers who fear the lack of jobs will only get worse. >> as the global refugee crisis intensifies... >> they have travelled for weeks, sometimes months. >> and the e.u. struggles to cope... >> we don't know, they stop us here. >> what's being done while lives hang in the balance? >> we need help now. ♪ >>> good to have you with us, i am he liz pebble puranam in doha. these are the top stories on al jazeera. dozens of refugees have arrived at the croatian border searching for a new route in to western europe. hungary introduced strict new border controls on tuesday forcing refugees strapped ed in serbia to find other routes in to the e.u. israel's prime minister is considering tougher penalties for people who throw stoned as security forces. coming after days of fighting between palestinians and israeli security forces armed the al action that mosque in occupied east gentleman ruse ledge. owners of a complain that collapse ed in mecca have been banned from taking on new

s&p cuts brazil's credit rating. also the case against a rate hike is at its most compelling. find out why he wants the fed to wait. we break the latest results later on. >>> something new today. >> new hair cut? >> it is a very warm welcome to london, susan. >> thank you. it's good to be here and great timing to be here. what's happening in asia and how it's effecting global markets. >> the last month or so has been the most crazy. as you say, the real spark for this correction is china. >> it has been about china and what they're going to do with the policy response. do they know what they're doing at this point. people thought what's happening in one corner of the world we don't really care. we don't just have china but the fed. they're saying please don't hike and then the emerging market chiefs, some of them saying i think the fed should hike. >> and japan, the biggest points gain since 1994 we saw yesterday. it's circling for all of us. >> burt then we tip back the gains in the overnight session. it's not a surprise. they simply evaporate but wondering how we're setting

stocks look extensive, but ks that looked cheaper, russia, brazil, hungary, turkey.e could never find guests that are bullish on these countries. these are hated markets. this is where you see pop russell --this is where you see possible upside? andt: we did a book subsequent fund that looks at strategies. ratio andhe cape found that it works great in all these countries, the same as in the u.s. even bigger examples of booms and busts. japan had a value of almost 100 in the 1980's. that was all the bad news. the good news is most of the rest of the world's reasonable valuation. the foreign emerging is down around a cape of 14, the developed is near 15, 16. then there is a subsection of countries that are really cheap, emerging europe, eastern europe, russia, brazil. one of the reasons they are cheap as they have gone down a lot. also, nobody wants to own them. that is one of the reasons it works. if you have a long enough time horizon, if you do not what to rebalance more than once per owns a lot of these countries, our global etf, that nobody wants to own, but that

you've been to brazil, studied their economy. they could be in their biggest economic contraction in 25 years. what is happening to the brazilian economy? >> everything that could go wrong has gone wrong. right? they're commodity dependent. you know what's happened to commodities. they've suffered dramatically, falling prices. they bet big on oil. guess what? oil prices have fallen dramatically and then there's this horrendous corruption scandal engulfing the state-controlled oil company which has led to complete and political gridlock and it could be that at some point the president could face impeachment. they can't get anything done. they should cut their budget because congress won't do what she wants them do. the finance minister nearly resigned in embarrassment because he kept promising that they were going to have budget surplus. guess what? new budget comes out and they're going to have deficits instead. i mean it's just a mess. everything that's gone wrong has and they don't have a political will to fix it. >> in your op

brazil has been hurt by a slow down in currency in china. virginia lopez is in rio de janeiro. >> in an effort to close the gaps next year. it will be affected by the huge project that had initially been aimed at stimulating the economy. also another sector seeing cuts is public sector employment, and close to 10 ministries were up to 10 elimination or slashing. the other sector looking to suffer greatly and comes at a controversial time is the - self of the social and welfare programs that dilma rousseff administration has been so keen on supporting. this is particularly controversial at the time because these programs are at the heart of the support base of the workers party, but dilma rousseff's government. and slashing them would have a huge impact on the popularity which is, at the moment, at a record low. her popularity is around 7%. having said this, we spoke to analysts today that think that these measures are much needed and are probably the last resource that brazil has to try to save its economy >>> the position of poet laureate h

reporter: let's go to brazil. it is a good time for us but not for those in brazil.ng,e falling for the most in four years. this is what people are saying about this. some are supporting, some are saying it is time to plan the rio trip. counting their pennies against the currency. others standing up and supporting it. wages are 40% above those in mexico and china. those with perhaps the critique. shery: my brother lives in brazil and he is making money and korean currency so he must be having fun. let's head to the philippines. the controversy ruling there. intellectual property office being accused of stealing intellectual property when it came to creating their logo. logosite has posted the from a person claiming the ipo logo resembles the one they pitched in 2011. they say they try to contact and talk to the office and did not get a reply. the office has released an official statement saying they have never transacted with the , that a of that website making those allegations. imagine, a lot of reaction on social media with people saying, how can the ipo enforce p

it is a source of joy, not worry. >> what about brazil? brazil is a source of worry.ket down 20%, by the end of the year where forecasting a 25% decrease. unfortunately, we're going to have a couple of years. reporter: 2017? more? theos: that will depend on decision made. in order to get brazil back on track. the potential of the country is still here. reporter: another decision we are looking for is what the federal reserve my do this week. are you concerned about what it might do? carlos: you know, that is a big question. i am not so worried, because i have the impression it is already anticipated by the market. now or threepens months time the road or six months down the road, there is so much from the world market at this point in time. the growth , if there isconomy any reaction, it is going to be mild. i am talking about the u.s. now. the united states might be much bigger than that, but in the u.s. i think it is strong. price. most of it is next year, for example, for 2016, we are seeing strong growth in the car market in the u.s. between 1%-2%. reporter: one f

brazil and australia we can."bloomberg surveillance" i am brendan greeley with tom keene and vonnie quinn. john kerry will give a speech to congress in favor of the deal from iran. john kuhn's signals he will support the deal. >> i will support it because it puts us on a known path of limiting the nuclear agreement. the alternative to me is a scenario of uncertainty and isolation. brendan: william cowan joins us from indianapolis. it looks likely that the president has enough votes to sustain his veto. what does john kerry need to accomplish when he speaks in philadelphia today? >> i think he has to give one final pitch to solidify the rest of the democrats who are outstanding. i think there are 10 or 11 democrats who are yet to commit and if he can get them to commit that would mean they could not run a filibuster so the republican effort to negate this negotiation would fail so that would be a double victory. i think he will talk up the need to get more on board to support the president if there should be a vet

and rotten roots and look at brazil's growing corruption problem. ♪ u.s.ary planes have hit taliban fighters on the outskirts of afghanistan's northern city of kunduz, and a nato spokesperson said the strike was to eliminate a threat to coalition troops and afghan forces. taliban fighters seized the city after an early morning raid on monday, afghan special forces are still advancing towards the city despite having been ambushed by the taliban, local hospitals have received 16 dead bodies and treated 172 injured and afghan soldiers are set to have retaken the city's main jail and the police headquarters. let's get an update from the story from bagland in afghanistan south of the city of kunduz and what is happening in the city of kunduz right now? >> the latest update we are getting is reenforcement security forces and special forces they were trying to advance kunduz city and turned back because simply they said there were too many ambushed on the road and suffered one dead and one injured and they turned back now it seems like it will be very difficult f

and also brazil. how much concern is there regarding brazil. you mentioned the fed. if it puts off that rate hike, that would mean a stronger europe. i will try not to talk over this. this is my summons telling me i'm going on too long. anna: someone is trying to tell you that you're missing your breakfast. perhaps that is what is going on in the background. against --ll fight car manufacturing is a major component of the german economy. have any of the automakers you up and talking to had anything to say about the refugee crisis and whether that will reshape the labor market germany or change it in any way? hans: it will. i think a lot of the car companies here see an opportunity with the refugee am again as potential workers or builders of the next generation of these cars. we are surrounded by remarkable vehicles of luxury at the mercedes ceo went out of the way to talk about the importance and the opportunity of welcoming into german -- society and what they can offer the workforce. >> there are many people who are having been in danger and in need of support. th

people in brazil still have a desire to own a mobile and not the packages.ile penetration is very local. also 85%tation is compared to the u.s. and other countries. there is room to grow, and we see it in pay-tv. we'll continue going forward. joe: what do brazilian policymakers need to do to restore confidence and turn everything around? >> we liked it, we were expecting to see more budget cuts. earlier, the more budgets were focused on suggesting tax hikes because we believe we impact investments. do highot even unemployment traits. we hope that it will be strong enough to pass in the next few weeks. but no doubt there are things cap hostage coming out it might be linked to leave them, but this is the right direction rate think we are closely covered. daisy that -- teasing the president should keep her job? >> i can tell you that we believe the government finally this coming up with the right packages. the investment in the investment community easter seal outflows ney.this not see any ipo and the brazilian market for more than a year. those is one aspect o

brazil, everyone talking about brazil. the emerging market like many has problems whether it's the commodity route or the fact the currency is down 35% this year alone so let's take a look at the dollar versus bra brazilian real. a ten-year chart. when you also consider they have 9.6% inflation rate, things start to make sense. when you think of interest rates, of course, figures into this. let's look at their ten-year. it's well over 16%. i went back to '07 on this chart because the only other comp to this was when it was close to 18% during the depths of the crisis. also s&p this month downgraded it to junk. tyler, back to you. >> all right. mr. santelli, the major averages are down today taking a big hit over the past one week. down about 2.5%. what is leading the declines? the mega cap names dragging down the market. we'll talk about them plus move over governor christie there's another big bridge scandal. but this is the other kind of bridge. it's one that involves playing cards. you won't believe who has gotten wrapp

a better brazil. now they are camped in the heart of the capital.omeless, disillusioned and angry. their future looking bleak. things here in congress are moving very fast as the president negotiates with and cajoles both the opposition and her own politicians to support controversial measures that include cuts in state expenditure, including 10 of her 39 ministries. >> so we are in a very difficult deficit situation. the only way out that have is to increase taxes or reduce spending or both. and she's trying to increase taxes, but is very hesitant about cutting a lot of expenditures. >> reporter: meanwhile, more heads roll in a massive corruption scandal involving politicians, construction companies and the state oil company. the accusations point right to the top. the only certainty is that brazil faces much more uncertainty in the days, weekses, and months ahead. daniel, al jazeera, brasilia. >>> riot police have confronted protesting students in mexico. injuries were reported in guerrero state as rocks were thrown, tear gas fired and a truck set

mexico, brazil, russia, canada and the u.s..boutay we won't drop by 500,000 barrels a day next year. and that that will balance the market. goldman sachs that we have to fall yet another 585,000 barrels in the u.s. alone and another 220 thousand barrels for countries like brazil, canada, and the gulf of mexico. to shutre oil is needed in supply according to goldman sachs than what the iea said. this is why no one can figure out what is happening in the joe: oil market. joe: goldman's call sounds familiar. citigroup already made this call a wild back. alix: they are now in the 30's. but the reason why goldman says it could be 20 is because as we keep up production is going to go into storage. storage isnt going to fill, and they may hit $20 to be tight enough to balance the market area why they going to stop production when it is that 40 five dollars a barrel? you can get a little dicey. it was an awesome morning. coming up, you will not believe the reason larry summers is given for why the fed should not raise rates. that is aft

born and raised in brazil, he left a top job as the facebook android to take xiaomi global. joining me, xiaomi vice president of global operations, hugo barra. so great to have you here. hugo: my pleasure. emily: how is your chinese? hugo: coming along slowly. maybe next time, we can do it. emily: i will hold you to that. i understand they call you tiger brother. how did you get that name? hugo: our ceo, a social media rockstar, superstar did a simple post and said hey guys, hugo barra is joining us from google, we have to give him a name. people went crazy. everybody started suggesting names. i had no say in it. you are tiger brother. emily: when are you going to start selling phones in the united states? hugo: i would tell you if i knew. but i don't. we don't have a set date yet. selling phones is a big step up. it is a huge marketing undertaking. you know, building a smartphone brand. operationally it is complicated. you have to have after sales set up, customer support set up, customer support said up. it takes a huge amount of work plus localizing the hardware. we are g

joe: and it is all about brazil, with the global markets turmoil. one of the top ceos is your best. alix: we have to begin with the markets. it was quite a ral. at one point the dow was up well over 230 points. all u.s. stocks are of about 1%. it was a risk on dave. -- a risk on day. caterpillar was back in the dow. joe: one thing that we saw was dollar strength. it does not like the market was rallying because they thought the fed would be on hold. everybody was up, it looks like a true risk on day. alix: right around 2:00, it dipped extremely. president obama's spokesman said that president obama was not for the house ban to lift oil experts. -- to lift oil exports. joe: this will be a while until that happens. alix: we do want to take a deep dive into the bloomberg terminal looking at the 25 year charge up i guess and manufacturing group looking at the previous rate high cycle you have 1990 4, 1999 and 2000. what is interesting about this is it comes from goldman sachs and all of the are between 52 and say hi 60's -- the low 60's i should say. we are below that right now, we are

brazil's economy is facing its worst recession in 18 years. mark thompson has more. mark: desperate times, desperate measures. placing a 7 billion-euro shortfall and taking popularity ratings, the brazilian government announces a new plan to kickstart the struggling economy. >> it is a budget that requires everyone to make a big effort. in particular, it requires a significant effort on behalf of the government. mark: those measures include 6 billion euros worth of spending cuts and about 9.9 billion euros worth of tax increases. among the areas affected, government salaries, infrastructure investments, and agricultural subsidies. almost a quarter of the country's ministries dissolved, and an unpopular tax on financial transactions revive. standard & poor's unexpectedly downgraded the country better rating to junk status last week. that is largely due to the knock on effect from the slowing chinese economy, a major customer for brazil's once booming commodities exports. >> it has become obvious to all that the need for such an effort , and in the coming months i thin