tv Taking Stock With Pimm Fox Bloomberg December 16, 2013 5:00pm-6:01pm EST
>> this is "taking stock" for monday, december 16, 2013. i'm pimm fox. i will focus on instant gratification. did you notice that sometimes it takes patience? take the big shop that is tempting you to indulge this holiday season. looks at thecutive baking industry. him andoking at investing. and it is monday, so my producers will once again try to stump me with the mystery guest.
but first, let's get headlines from carol massar. >> boeing is now looking at a $10 billion stock buyback, in addition to the $800 million plan. it is also boosting its dividend by 50%. they now has a quarterly dividend of $.73 per share. herbalife is saying price noerhouse coopers has said changes in its riata dating back to 2010. to 2010.it dating back herbalife shares serving -- soaring in the afterlife -- after hours trading. a stock deal valuing kkr at $2.6 billion. >> thanks very much. facebook, walmart, apple, and lockheed martin -- what do they all have in common? they are all exploring the
potential use for facial recognition technology. in the future, your face print, not your fingerprint, could be a good tool for marketers. megan hughes joins us with more. this mean for people's privacy, other than waking -- making them wear a mask? >> that is something the obama administration has just started looking at. that does not seem very realistic for the day to day life. the calmest -- commerce department is bringing together industry groups like the national retail federation, which represents walmart, and also civil liberties groups like the aclu. they are meeting in february and the goal is to have a code of conduct agreement by june. the technology they will be talking about at these meetings -- remember the movie minority report in 2002? it portrayed this futuristic world where cameras in public places could read people's faces and target ad specifically to them. not there yet, but the technology is absolutely there.
cameras can take better pictures in public places. can matchet giant photos to individuals, like with facebook's tagging system. we talked to one of the pioneers of this industry who calls it a disruptive technology. he said it is looking at a perfect storm. click the tag technology that facebook has launched is -- >> the tagging technology that facebook has launched is a game changer to some extent. more and more people are putting images of their life on facebook and automatically creating a .atabase it allows you to search and retrieve and create links. business.uld be big one research firm estimates the global market for facial recognition products could reach $6.5 billion by 2018. but privacy is a concern. once regulations get involved, that could impact the bottom line.
>> any tension in these meetings? this is a contentious issue. >> absolutely, and as i mentioned, you will have these privacy advocates sitting next to the retailers. from the privacy groups standpoint, their big question -- can you still be anonymous in public anymore? there are people that will be asked to opt in before the facial recognition technology is used. thisr as the retail concern, they are concerned that if there is too much regulation it will cramp too much innovation as this is getting off the ground. >> thank you very much, megan hughes. facial recognition, it is something that the advertising community is certainly interested in. they are also passionate about a recent tax proposal on capitol hill. one that will change how the cost of advertising might he detected. the industry sees it as a threat to jobs and the economy. here to make the case against
the proposal is dan chaffee, the head of the association of national advertisers government relations office in washington, d.c. good to have you with us. just explain for those who may not be following this issue. what is being debated in washington? you know, advertising is one of the major engines of the economy in our society and throughout the whole of the history of the tax codes since the federal tax code when into effect in 1913. advertising has always been allowed to be deducted in the year where there have been expenditures. the dollars you spend this year will be deducted in that year as well. now there are proposals to change that to say that you can did that 50% and that the rest will either be amortized over five years -- and there has even you will have to pay over 10 years. this would have hundreds of
billions of dollars of impact on the advertising community, which would certainly slow the advertising effort in this country. which could bring down -- jobs are driven down by advertising. 21 million u.s. jobs are directly related to advertising. it would cut down on the whole economic activity in this area as we are trying to climb back out of the recession. this is a very serious issue for the advertising community. >> just to be clear, this is a change in the tax code that would be affecting those companies who spend money advertising. currently, they are allowed to deduct that advertising spend completely in the year in which it is booked. >> exactly. what is significant is that this proposal does not affect just one segment of the economy, or one group within the economy. almost every group in our society that is in business uses advertising to generate sales. , andve studies that show
economic model created by a nobel laureate in economics shows that in every state of this country this would have profound impacts of bringing down the number of jobs and the amount of economic activity so far growing forward. >> have social network companies , such as twitter and facebook, have they expressed any of their thoughts about this issue gekko -- this issue? these seem to be businesses based on advertising almost exclusively. >> the whole media community is -- is deeply concerned. get 92% of all their money or from advertising. newspapers, magazines, the internet as you mentioned, twitter -- all of the new forms of advertising, everyone of them would be severely hurt. and if you are a new form trying
to break into the market place, this will hit you particularly hard. toause you need every dime try to be heard and keep your nose above the water. >> amortization, the idea that a certain portion of the ad spent would be amortized over future amortization usually used for the useful life of machinery? how could you quantify the future life of advertising? >> we don't think you can do that properly. and to other nobel laureates in economics looked at this issue. both of them said there was absolutely no economic or tax basis for having this extensive life for advertising. i don't think anybody believes that the ad they will see on your show in the next couple of minutes is still going to be selling products five years from now. heard making use talk about facial recognition and advertising is -- advertisers
trying to come up with some way to protect privacy. what is the stance of your group on using facial recognition technology? >> what we have been doing across the whole of the privacy framework is to try to set up systems to give more protection to more consumers. we have something called the digital advertising alliance that deals with this issue on the internet. it has now been extended to mobile. we look at all of these issues and we do not have a stance yet on visual recognition. as privacy concerns arise, we always try to find self- consumers means for to empower their interests, and at the same time allow these technologies to be used effectively where appropriate. thank you for joining us, then chaffee. coming up, when you think of anheuser-busch, what do you think of? products such as budweiser, michelob -- beer, right gekko but the family is -- beer,
>> the e cigarette business, it's got a new layer with a famous family background. jacob bush hails from the anheuser-busch dynasty. just a few weeks ago he became the chief executive of cigarex. comes on the show as -- along with jason carter. i want to welcome you on the show. why did you decide to get into the electronic cigarette world gekko >> we have been involved with a lot of consumer products. when we first found the raw version of the electronic cigarette, it was a game changer. the technology was too amazing.
it was too big. what it offered people was too exciting. e itat is the technology has to do with a lithium -- what is the technology? you have a lithium ion battery. battery because of the that this has been made possible, getting away from the combustible cigarette. that first came out, it changed the entire process for smokers, and the experience. smokers want or look for something else. it is not like chewing a piece of gum or wearing a patch. they like the experience. they like to see the vapor, the smoke. they like the oral fixation. an electroniching cigarette offers. >> jacob, how did you get involved in this gekko -- in this? jason, and my family has been in distribution
for hundreds of years. it goes hand-in-hand. wherever anheuser-busch products are sold, of course, you will find cigarettes and e-cigarettes now. it is a game changer. i'm trying to get distribution with the anheuser-busch part. wherever a bee products are sold, you will find -- whereverab products are sold, you will find cigarex. but it is a perfect partnership, is oftenour beer buyer the same customer. >> just to focus on the technology that goes into this, what does someone who uses a technology -- an electronic cigarette, what are they inhaling into their body e >> this is an important question -- what are they inhaling into their body? is an important question. we used three basic ingredients. distilled water, all-natural
vegetable glycerin -- this is what creates the smoke. and we also use liquid nicotine. we use a real liquid nicotine extract from the tobacco plant. that is what makes up the ingredients of what people are ingesting. >> the nicotine itself, is that regulated by the fda? just like cigarettes? >> it is great. the fdaent director of has just put some things onto the floor as to what will be the regulation. we are looking for regulation and we want regulation. the biggest problem we see in the market place are the people buying their own oils. they've got their own type of large pen type items where they are filling it, and who knows what they are filling it with? we want regulation. define wherealso it is sold, how it is sold, to whom it is sold? >> i hope. we don't want
children. we do not want anyone under 18 and we do not want previous smokers. it does have nicotine and it is a mild addiction similar to caffeine. >> you replace the combustible cigarette with electronic cigarette. >> exactly. >> but you are saying you do not want current smokers to switch to this? >> i want current smokers, just not people who have stopped before. because recommend it, you will just pick up a new addiction. right away. >> but it is a great way for people who are smoking to switch to electronic cigarettes and to wean off. -- rather than just to go cold turkey. >> yes, it's true. in the u.k. we have studies. we have about 40% cure rate to stop people from smoking. the patch and gum run about one percent to two percent. those statistics are amazing. i would like to see the fda move into a direction where they say, hey, you are helping people with
this product because you have removed all of those dangerous chemicals and the process that can cause all of the nasty health -- health issues. >> but there is a social issue with this, too. you have to be confronting the concept that there is a generation of people out there who have been taught and have learned that smoking cigarettes can kill you, can cause cancer. socially, is this becoming -- x> socially, i think cigire is 10 times better. there is no smell. it is better when you are with your family. >> socially, so -- smoke will kill you. this is just vapor. >> just to follow-up in the world of the social media, i know you have been featured in social media. how does that attention translate into success for something like cigirex?
>> in a social study, i think girex, it is great because there is no smell or anything because it is just vapor. people hate the smell of actual smoke. or they strongly dislike it, sorry. but if you have something like this, there is no problem. >> lookers are going to smoke, regardless. now they have an option to use something that is much safer for them overall. >> we will leave it there. fascinating. my thanks to jacob bush and to jason carter of cigirex. coming up, the antibacterial soaps that you rely upon to stay germ free, it may be giving you a false sense of security. find out why next. ♪
>> every morning, my german phobic reducer comes in and -- maphobic producer comes in and douses his hands in and i to real hand soap. -- antibacterial hand soap. experts, to antibacterial soap users are better changing up their routine. we are joined by an advocate who represent such committees as ,olgate-palmolive, s c johnson henkel, and l'oreal. he joins us from washington dc. meg.oining me here is
what is going on? there is a history of research into the use of antibacterial, specifically one ingredient called triclosan. >> that is right. it actually was introduced as a surgical scrub the monopoly got to be used by everyday consumers. over the years, it has been in traduced into more and more -- introduced into more and more consumer products. now the fda is saying, is this estate as we initially thought it was gekko and is it as effective as we -- we initially thought it was? and isn't as effective as we thought? an investigation prompted the us -- the fda to prompt the consumer products safety company to take a closer look. >> freckle fan is used in such soaps as -- freckle fan --
soaps and is used in and others.sh what is your stance on aid? onthe products that we focus focus on the antibacterial washes. they have been used effectively and safely in health-care four decades or more. it has been in the consumer space in the past decade and a half, millions of consumers using these products safely and effectively everyday. these products are already regulated by the fda. ist our industry will do provide the agency updated data that shows that antibacterial soaps are safe and effective. >> endocrinologists have been
studying this, because it has to inwith hormones and changes the in technology of an individual. have there -- has there been any non-us research that points to whether trackless and -- triclosan is good or bad for you? >> there have been many studies around the product saying that it might affect the thyroid gland, particularly in the development of kids. and it can affect harmonic function concerning fertility and purity. -- puberty. the worry is over use of antibacterial might lead to bacteria getting resistant to drugs. and that is a huge growing public health issue right now. you expect them to reach some kind of decision on this, brian? >> the timeline is over the next two years. there will be a lot of comment, a lot of data.
onthis is "taking stock" bloomberg. i'm pimm fox. let's go to mark crumpton. >> more strong numbers from u.s. manufacturing. factory production climbed 610 0.6% following a gain of 0.5% in october. motor vehicles increased 3.4% after falling over one percent in october. general motors ceo dan ackerson says the company is in a better position to consider paying a dividend last -- next year.
spent $1.3nts have billion to upgrade five including the one already announced this year. the detroit automaker has increased cash flow. one company has lost 70% of its value following in september ipo and has fired its ceo. coming up tonight on "bottom line" at 7 p.m. new york time, we will talk about the budget vote set for tomorrow with douglas holt he can -- douglas holt aiken. that is coming up on "bottom line" in about 90 minutes. created on our recipe by an 11-year-old you can find cookies, brownies, blondie in bake shops all over the u.s. and canada, even the caribbean. for more, i am joined by kate h
up chief executive. tate'sed by kate -- big shot ceo. how did you get to be the chief >>cutive of this shop gekko -- of this shop? >> i have been working with her for some time. you started out where? >> price waterhouse. i started a consulted -- consulting practice to help with running businesses. >> give us the scale of tate's big shot. how many cookies gekko >> about 2 million cookies per week. about 150 employees, mostly on the packing line.
we have 65 distributors around the country. most of the top line supermarket and independent gourmet stores. >> but it was not always like this. >> inserted off with an 11-year- old. >> ellis about the founder. >> kathleen king was the founder. she charted baking when she was 11 years old on her dad farm -- her dad's farm. she was tasked with buying her own school clothing and she made chocolate chip cookies and decided to sell them for one dollar. she opened up her first bake shop which was 19. in has her current bake shop northampton. we sorted selling cookies out of the back of the bake shop in a 2000 square foot building, and now it is a 40,000 square foot commissary. >> it brought in from just being chocolate chip cookies. what kind of new introductions gekko >> we have a great
of cookies. it is our new line of gluten- free with crystallized ginger cookies. this gluten-free thing so important gekko >> it is a trend -- so important? >> it is important because there are many concerns about digestive health, and it is also important for people with celiac disease. free category is now 29% of our business. >> almost one third of the business. a yes, and we just opened up 4000 square-foot gluten-free kitchen that is dedicated to gluten-free products. >> does it cost more? >> no, but we have to take really strict precautions in terms of how we bake and the allergens and what goes in and out of that facility. some of the ingredients can be a bit more expensive. we use almond flour as opposed to wheat flour. there is a little bit more cost. >> and different sourcing
requirements. >> yes. >> what would you like to see happen in the next six to 12 months? >> we have always stayed very focused and we would like to see our cookies go international. i'm working on great britain, abu dobby, japan, china. , japan,lso -- abu dhabi china. we are also working on a pili andake line -- pie line cake line. >> you often see on baked goods, the label that it is registered with the department of agriculture in pennsylvania. is there something special about what goes on in pennsylvania in terms of baked goods gekko >> i would guess those -- in terms of baked goods? >> i would guess those baked goods are made in pennsylvania. >> so it is a state-by-state regulation. >> yes. >> and distribution in the u.s., has that been a challenge? finding the shelf space?
>> we have worked with mostly small to regional distributors. and we have gone state-by-state, city by city. we are now going with some of the larger distributors, u.n. fi , getting into safeway and some of the larger chains. we did a lot of work on the ground to build our distribution network. >> do you have a favorite cookie? >> yes, the chocolate chip and the ginger zinger. both of those are my two favorites. >> well done. he chief executive of tate's bakeshop. coming up, test your trading with a board game that bears the same name. also, time for mr. guest clue number two. my mystery guest can judge a man by its cover.
>> first, a look at what is on wall street agenda for tomorrow. let's go to carol massar for our bloomberg reef support -- report. >> amc entertainment plans to raise as much as 380 6 -- $386 million in its initial public offering. that will be wednesday on the new york stock exchange. increased by 0.1% after inflation rates have remained the same. earnings out tomorrow for jefferies group. we will have those numbers. back to you. >> my next guest is a day trader who created a board train -- a board game by the same name.
the goal was to make money. the winner, the first one to retire. great to have you with us. described for those who are not current with the world of day trading how you got into this. >> i was checking my stocks one day,nd i was having a good a lot of green arrows. and i thought to myself, someone should make a game out of this, this whole concept of investing. that is where it all started. >> why did you decide to go and create an actual boardgame? there are various sites online where you can plug in your fictional trades. why a boardgame? >> when i got the idea, i intended it to be a mobile app for phones and such. a friend of mine who does little strategy and planning and development for some game companies advised me to take a step back and put it in a format that i could test easily, which
is the boardgame format. when i did, i bugged my wife and her sister as i was play testing it as a boardgame and it played really well. i continued down that road. it slowly but surely turn into a great to my engaging game. >> how did it turn into a business idea? you used kick starter. tooke testing process about two years. but when he got to the point where it was turning into a really fun game, i turned my attention to design aspect. i partnered up with a company called italics studio. they made it beautiful. enthusiasm if the saw in the people i was testing it with, i knew it was ready for kick starter. when i put it on kick starter with the new design, it took off. i was not sure it would fly, but eight -- based on the backers i
knew we had something. i was fortunate enough to be funded and moved to the next level. >> what is the next level? give us the details of the game itself. >> the next level, we are manufacturing these games. we made a first run. the game is out there and being sold. people seem to be loving it. the game is great. the goal is to retire. there are companies that you can you at around the board and save some cash and invest in the companies that you work for. the more players at a company, though -- the higher the stock price at the company. and when you have enough to million, ifh is $3 you can do that before the volatile market sets you back, you win. >> what about the toy industry? there is a lot of competition.
how did you get heard? >> there is tons of competition. it is a fun industry, though. and there's a lot of support. everybody i've met so far has been very helpful. we've been fortunate enough to get a lot of exposure on blogs and certain media outlets. we have been covered in a lot of different ways. i think that has helped us get our name out there and raise awareness about the new product, which has been extremely helpful. >> are you still a day trader? are you still using your real money to trade stocks? >> all my money is tied up into this game right now. not so much anymore. when i see something i like, i go for it, no doubt. but i like to keep my nest egg for that rainy day. >> what does it cost to date trade using your game? how much does it run for? >> $34.99 on our site.
playdaytrader.com. onere enjoying being the that carries this game exclusively, for the most part. >> thank you very much. congratulations. the creator of the boardgame daytrader joining us from los angeles. it is mr. guest day, but luckily, my producers have given us clues. my mr. guest can empower patients through medical -- through medicine. my mr. guest can judge a medicine by its cover. my mystery guest is looking to save around 700,000 lives each year. let's bring out the mystery guest. inky for being here. are you in the pharmaceutical industry? >> i was trained as an engineer, but i found myself working in the pharmaceutical industry. >> and engineer in the pharmaceutical industry. 700,000 lives -- are you a chemist? >> i'm an electrical engineer.
>> you do not actually create drugs. >> no, we don't. >> do you create a technology that tracks drug? >> yes, we do. do you create -- >> do you create technology that is used in hospitals? >> to some extent, yes. >> is it also used outside the hospital? >> yes, more outside the hospital. >> is it used in a pharmacy? >> yes. >> is it an electronic device of some kind? >> there are electronic components combined with a label. >> do you have software that is connected to, let's say, a mobile phone? >> yes. >> are you available in the united states? >> we are headquartered in the united states, but we do most of our work overseas. >> are you in, let's say, a shell? >> we have an indian office. >> are you big in africa gekko >> -- are you big in africa? >> yes. >> do you print labels, medical
labels? >> we provide labels that go onto pharmaceutical products. >> and you are traceable. it is to prevent counterfeiting. the foxhole company, right? >> yes. i read it but -- >> i read about you in the news. very interesting. our mr. guest is a mystery no longer. we will talk about how the medicine that people take israel -- how they make sure that the medicine people take is real. ♪
how does what you do connect with pharmaceuticals? >> there is a very big problem pills.king fake >> and telling them to patients. >> and in some cases it is killing the patient. each label has a number that is unique to what the customer would buy. it works like a lottery ticket. you scratch the label and you see a 12 or 13 digit number. genuine orin and get fake right at the point of purchase. >> what if it comes back and tells you, this is a fake. you should not take this? ? write enormous -- you write a tip to the authorities and they do conduct raids. then legal action can be taken.
>> do you get a replacement? is there some reward for it in that you actually get the real medicine? >> yes, and you avoid taking counterfeit, which is really appreciate it. >> where is this most popularly used? >> the target markets are the emerging world. we have i, a couple of african countries -- india, a couple of african countries. we are expanding into new .arkets as we see success those are targeted markets. how do you make sure the message that is sent is encrypted? if you've got a code, can't that code in some way be broken? someone could just write down all the correct codes and sell those, too. >> is a good question and leasing counterfeiters try to do that and they typically fail. when they fail, we are able to effectively discover where they are operating from and the authorities swoop in. we use a service that is highly
encrypted. our text align is like a 911 for fake drug service, which is heavily advertised by the government. everybody knows where to send the codes and get the response. to date, we've had no breaches. >> what goes into a fake drug? >> is terrifying. it could be anything from brick dust -- brick dust -- >> brick dust? >> yes. counterfeiters use a variety of ingredients. >> rack pose in -- rat poison, paint, bone, chock. >> you name it. using yourult of service, have there been raids on any of these counterfeit drug manufacturing facilities? >> yes, a number of raids and the number of seizures. one thing i found very interesting as we did not go out to the market to sell an antitheft service. had a codeour client
that was stolen. we instantly change the message from genuine drug to stolen drug it was in three days pharmacies selling stolen merchandise and up the supply chain. we had a stern message for the supplier. with bills that work clinton? what does he have to do with this? help made a solution to save a couple million lives. i received an outstanding commitment award from the clinton global initiative when i was in college at dartmouth to bring this technology to life. the foundation has given great support to our work and we have continued to live up to the commitments that we have made in 2009 and 2010. toyou said you are going
work on expansion. >> yes. interestingly enough, there are counterfeiting needs in several industries. >> you told me underwear, counterfeit underwear. >> i don't know what the south -- the side effects of counterfeit underwear are, but clearly there is a problem. and because it is not a pharmaceutical product, they are able to overlay loyalty services to that. every third person who verifies gets free airtime on their cell phone bill. we're getting to loyalty management and analytics based on the large amount of data we are able to capture from verifications. >> almost encouraging people to not use and/or by counterfeit goods of any kind. >> right. this?t is the cost to use is it expensive gekko >> it is really cheap. if you know anything about india, their prices are quite affordable. the packaging in the emerging
markets, it costs cents. >> we know the clients are individuals, but the big pharmaceutical companies, are they your basic customers? >> yes, we work with enterprises and distributors. distributors control the large portion of the supply chain. this kind of technology be applied to all types of consumer products, for example, cosmetics, health and beauty, things of that sort? have realized through our bearings that three things matter when it comes to protecting consumers. the consumer will not bias -- by counterfeit if they lose a lot of money. and they are affected by safety. and the third thing is social pride. >> the chief executive of s proxil, tonight mystery guest.
live from pier third in san francisco and new york city, welcome to "bloomberg west" will read covered become news that are reshaping our world. our focus is innovation and the future of this and this. let's get straight to the rundown. a federal judge caused a u.s. government selection of phone records almost orwellian. it is a lawsuit, saying the surveillance is probably unconstitutional.