Were talking washington, dull will you explain, atlanta and chicago ohair. The editor who led the Washington Post through watergate passed away. Ben bradley s was 3. He was turning the postpone into a nationally respected paper when the postpone watergate stories earned a put letser prize and led to the resignation of president nixon. Posting thirdquarter sales that beatest mats and in a Conference CallMarissa Mayer said she is focused on maximizing value and will take a look acquisitions. We will continue to seek opportunities here and we will be smart about it. Marissa mayer seemed to to be sending a mess taj star board capital. It called for a breakup of yahoo and asked that the company quit making acquisitions. And daniel lobe is now targeting amgen. Therr calling for a breakup and lobe wants amgen split into one company with older drugs and one with new prospects. And carl icahn has nice things to say about a corporate sparring partner and pushing tim cook to boost a Share Buyback of up to 100 million. He spoke to bloombergs stephanie rule. I think he is a great c. E. O. One of the best ive met and ive met a lot of them. Why . Because he listens to you . I dont think tim listens to anybody. He listens to himself. I met him once or twice and watched him and he is what Silicon Valley should have. I kahn is bullish. He said that apple shares are trading at half their real value. And in baseball kansas citys magic ran out for game one of the world series. Hunter pence hit two home runs as the giants beat the royals 71, kansas city was dominated by giants pitcher Madison Bumgarner allowing just one run in three hits and the royals won eight straight postseason games. Game two tonight in kansas city. Chose to are our top stories of the morning. Looking at equities bonds. What a deprimps seven days ago. Futures back. Not in the 2,000 watch but not bad. Interest rates not part of the story this morning. That in and of itself is a big deal. Nymex churns at on to the next and the vicks showing the new complacency from 25 down to the much lower vicks feared in the market and from 17,000 the dow, a twoyear lower yield after central bank jaw boning dollar rule back to 41. 01. Heres the snapshot from within the quiet of whats going on in china. China 7. 1 g. D. P. Heres the currency back fixed rate of it. Dollar yuan . I say yen you say yuan. Thats a chinese thing. Its a proper pronunciation thing. And im going to get a lecture from scarlet when were on break. Here we are rolling on the new yuan strength. It is a big deal but you wonder if the u. S. Dollar strengthens. Its up over the past months but what happens to the chineses willingness to let the yaw juan appreciate . And its not as dependable as the data we get from other countries. China was actually considering giving us an unemployment measure. I think the chivene basebook people look at use of electricity in china because they cant trust g. D. P. Which is one idea. In the equity markets the vicks again a stunning 6. 08. The bankers said all the right things. When the red sox were in the orld series, but can a great bull market and portfolio rely on until the chief Investment Officer del Tech International group gives us some optimism this morning what did you actually dot dhue in the market . Did you change things or go to lunch . As it is were already out defensively really going back to july. Because at that point weak Global Growth momentum was upon us. Because of those two fons we could tell there were unstable markets coming up for the fourth quarter. Conditions that still exist. The slowing of liquidity is something that is going to continue. What is a slowing liquidity factory besides my wallet . It may have beenly means theres less u. S. Dollars that are being pumped into u. S. Dollars and that has a including oil . It includes emerging markets. Were starting to see the volatility which was creeping in over the past months and expect the volatility to increase but more importantly when market rates start to up in advance of that. I was looking at the 10year yield. We have not recovered to the levels similarly the way the stock market has recovered. What does that tell you . Well looking at the 10year yield is important but it really doesnt give us a signal of whats happening in the markets because as we said theres a what were really focused on is that twoto 7year part of the rates curve. Now, we saw a 33 increase in the twoyear yield. Thats whats starting to creep into the market volatility. The twoyear yield . Thats exactly it. Atul, im reading in the report from monday from del tech. You write that you expect growth to come soon from increased business investment. I feel like we have been asking this question for two years without an answer. Why are you confident businesss are going to start spending their cash . Thats the area we are much more bull in. Its the got to come from the business increases. Where are you seeing that . Cocacola, i. B. M. And mcdonalds are not talking about increased business. Yes. That sort of level which has only been reached about five times in the last 30 years. The what . The Philadelphia Fed cap exintention survey. This is an Economic Indicator that tom has not heard of. If you look at the philly fed brought up my indicator. If you look at the keands components of it thats a great ninemonth leading indicator into ninemonth investments. Its at a level we have not seen in some time which tells us we are going see the business prove over the next year and something we have been watching over the past two years and investment and brilliant sometimes cluster together. This is our twitter question of the day. Here will the next big innovations happen . Tule do you have a thought . We still believe the u. S. Is the place to be. It was the place that was first into the crisis and first thanks to some fantastic monetary and fiscal decisions. But thats where we are really starting to see the innovations come through. Where are you based in . The bahamas. But which island . Down next to John Templetons old place . Great value investors. Youre telling us the United States excellence will not be affected by the challenges in france or china . They will be impacted. Globally we many see an impact. The significant proportion is coming out of europe. So we will site on a cooperate level. Ok. I want to thank you for the invite in february the entire surveils team. Atu le e with us for the entire hour. Im already packing. Coming up in the next hour of bloomberg surveils, celebrated author and byeographer and wrote steve jobs talents c. E. O. Of aspen institute. He will be joining us as our guest host in the 7 00 hour. Walter isaacson. Aspen institute c. E. O. Good morning, everyone. Bloomberg surveillance. Nike partner and c. E. O. All coming up at 10 00 a. M. Mark parker. Looking forward the huge five dynamics in thing wes put on our feat. Looking forward that. And at 10 00 a. M. This morning on market makers. Yahoo remember that . Its a goofy company. Im sorry. Does it exist . I mean heres what i feel about yahoo. We cannot get out of the about of talking about yahoo as if it matters. I feel like its not news. Its [speaking in german] most came from a onetime sale and 6 decline in display ads and grew less than the industry average so atule is this a company or just a Holding Company for ally ba ba stock . Well, stat moment what were sneeg yahoos searnings similar to what we are seeing across the landscape. Were seeing tax eversion plays nd buybacks. This is Financial Engineering to the point of a Holding Company versus actually doing something in tech in a logical progress. I think its interesting all the analysts were focused on was the tax treatment of the windfall from the alibaba sale. That is notal exactly stuff to get excited about. Its what do they do with all that cash they got and also does core business recover . And right now the answer was not much. If they handle japan and alibaba then what men . I mean explain what yahoo does in one sentence. Its supposed to be a media business. But i feel bad for this. Some of my best friends work out yahoo. Can a leader like Marissa Mayer make a difference or is this a sinking ship either way . Whether it comes to yahoo or apple. And going back to toms point you need a leader who can innovate and look at what they can get a business through the cycle not just what they can do with Financial Engineering. Heart of the matter is everyone agrees ms. Marissa mayer is extremely confident and has the ability to manage or nogse where is that in yahoo but in any company like yahoo . In terms of whether the innovation is coming in yahoo from another country or the u. S. , because if we dont get that nogse can you get it from i. B. Snment i would argue thats more serviceoriented. But if we dont get innovation coming out of the u. S. , productivity wont grow. Then weve got a real problem. The yahoo chart. Its what it was and then its cyclical churn and then like you said. Be speaking german] she said they are going to ave cash and she wants to make acquisitions which feels like its desperately grasping for ideas. Are there any acking decisions that to you work not just things that look like they are grabbing to make money in the future . We are heavily focused on the tech hardware and equipment baze thats the area thats going to grow. The pay is quite high right now and its really an error that can be quite cyclical. When we look at tech hardware thats snag has an underlying growth to it and its hard to spend and they are going to be spending on hardware more than that we are going to be seeing spending on services. And what youre seeing comes straight out of your report monday which is you offer p. E. Compression which is like a spring. If the p. E. Ratio is stretched and becomes worse then you know in the future its going to snap back and the biggest come in whared and equipment. Is that something youve looked at . Yes. The reason we have push malicioused that on monday is because were saying if the market is going to bounce, were seeing vol tile markets but if they are going to bounce typically is the the stocks that have the largest come fleags are going to bounce back the hardest but they are not the ones we are necessarily going want to invest in. Do we want to invest in commodities . Absolutely not. So we want to look at experiences in peer compression and number two, are going to benefit when we start to see the growth cycle improv next year. Thats when we look at going back to yahoo for the moment. Does fact that star board investors are so involved that they make you want to invest . Yahoo less or more . For us it doesnt really november needle, because thats looking ultra short term and at a series or catalysts. As macroinvestors what we would rather l be focused son because thats well, weve got keep one when they say come look at the terminal folks. This is one of the greatest advantages i have. Have the Oxford English dictionary load sod back to 1852 and they mention Queen Victoria. It came from Queen Victoria who married a german. Theres a window into how we do things so gstaad engine damage in german and freuda is pleasure. Stop it. So damage pleasure . We will speak england accomplish with one of the great journalists of america. Walter isaacson and his recent rave review on Henry Kissingers new book. Look for that in our next hour of television and radio on bloomberg surveillance. Good morning. Good morning, everyone. On bloomberg surveillance im tom keene with scarlet fu. Now lets get to this. He is 58 years old and made his Second Public appearance last evening. Jamie dimon healthy and recovering from throat cancer. Resilience was the topic of his speech. Its terrifying. To hear tough disease. Jamie dimon ee mr. Out, healthy. I had a little problem with the base deference that every senator paid him when he went nto the london whales hearing. And writing in the review with that agree wud which lavin noted was a shift. It was a rev rent deference that was there. They didnt hold his feet to the fire. Reading matt lavins piece. Ill put it out on twitter in a minute but goes to the immediacy of a c. E. O. And you compare mr. Dimons recover the atul ifference in the the moscow fter airplane crash. You have to be aware. Ive made mistakes on this as an investor. Yes. Weve got to be aware of how in control a c. E. O. Is and how much influence they have over a company, because it can really be a huge game changer. Youve seen some Companies Manage some of the greatest c. E. O. s leaving. Apple is a great camp example of that. Im haunted, scarlet of the scene in home alone where they are racing through the airport a c. E. O. Of a Major Company had a mass i have coronary there one time and i made a mistake. Didnt sell the stock and the company was never the same. Its one of those things that you dont plan for but theres got to be a deep bench in place. In the financials jamie dimon and j. P. Morgan are synonymous but overall youre less than optimistic about the group. Yes. Weve got an environment of slowing and there will be less u. S. Dollars being pumped into the world and Financial System and that just isnt a positive for the backdrop for financials. I know where the money is getting pumped in, its in politics. Senator ted cruz is focused in texas. An important conversation tonight with all due respect 5 00 p. M. On bloomberg television. I have to admit a weakness for ted cruz, because he makes all these other senators disturbed. He certainly riled it up and of course he is looking at a power to republicans starting. Was the one who read green egg and ham . Yes. That was a ridiculous stunt. Up n important conversation next. It is 2014 of discontent. For asia, so much of that focus is on hong kong. Near part of hong kong we know and travel. Its across the harbor in calhoun, this is, scarlet, essentially behind the peninsula hotel. North of it and a denselypopulated commercial district. Stand scene of a lot of scuffling. The barricades in the front. A data check news item october 22nd, hong kong stocks are beating every other developed market in the world this month. We will keep you apprised of whats going on. They are trying to get the world to ramp up the rhetoric. In north korea policing one foul e detainees, obtains freedom after he allegedly left a bible in the hotel room he was in. Heinekens thirdquarter results missing analysts. Reporting sluggish sales rowth. Last month heineken spurred an overture from miller. And ray of hope in the battle against ebola. Johnson johnson expects to doses of samples to treat ebola. Where is the number in april . Its not 10,000. Its a bigger number. The last estimate which was a month ago from the c. D. Was a million cases by the end of january. But stim, ebola was an fanned dug forever. Now you see a lot of existence see commercial potential in it and where Johnson Johnson doesnt see the potential in africa but here for stock piling. Thats where the money goes. The news we had this morning, they are evaluating a patient out of newark, new jersey. They took the patient from newark to a hospital in one of the three designated hospitals n the state and are looking to contact passengers on the flight from brussels. Lets get back to the markets. Lets take i. B. M. , cocacola. They switch from strategy toik triage thinking the bestlaid plans of selective blue chips crumble. Aatul lele has seen this before. You and i have seen this for years. Something happen engines october. What is it . In october its typically headed into the earnings phases. At the moment its a more difficult earnings environment such as for cocacola and mcdonalds. The u. S. Consumer isnt in a strong position right now. They are obviously exposed to that. The one headline we saw. Scarlet, i saw yesterday across the bloomberg terminal, cocacola hinging incentive to revenue and speaks to what you see every day which is the search for phenomenal g. D. P. And sales growth. Whatever the company, thats the battle right now. It is. Its very difficult for companies to achieve huge rates of sales growth which is why they are looking for other things whether its acquisitions, the sales growth is the real answer sthand typical to find. Given all that you made the comments of how cocacola and mcdonalds are more exposed. We are seeing new orders roll over. So growth momentum is slowing. But were still mid cycle. Typically these cycles last fee three or four or five years. So its Industrial Production and two, its cap exand business investment, which i spoke about earlier. Its still just lackluster. I am going to dry with the atul lele take of the international. U talking about cyclical problems, Consumer Confidence in the u. S. Weakness in europe. But i would argue the problem is people dont want to buy what some of these companies are selling. This is my morning mustread. It comes from Consumer Reports. You read Consumer Reports . He is the father of four children. Where else would you read if you want to buy something . Have you bought a crib recently . Dont answer that one. You [laughter] you can also read Consumer Reports if you want to buy a hamburger. Best and worst fast food restaurants in america. Mcdonalds own customers ranked its burgers worse than those of 20 competitors including white castle and carls junior. Would argue its not about cyclical macroeconomic friends. People are moving towards kraft beer, thats heinekens problems. People hate mcdonalds hamburgers. Thats mcdonalds problems. If you look across the consumer landscape where every mcdonalds where you say its a product problem off walmart where its what you say is a consumer problem. So which is a bigger blowup . The greatest value in a consumer stapletype areas of the market when were looking typically at consumption. Were starting to see wages up and gas price fall. The Broader Consumer lands