tv Money Moves With Deirdre Bolton Bloomberg December 26, 2013 2:00pm-3:01pm EST
walked away broken i would say the director should the released. everything they have earned the previous five years or so. >> in all looking like a great year for the oracle of omaha, 12.2 billion dollars this year, about $38.2 million, to date alone. back in 30 minutes with more. ♪ >> welcome to "money moves," where we focus on alternative assets. the show focuses on the unusual things investors and entrepreneurs are doing, as well as what is going on in alternative assets. today, we take a look at some of the biggest tech trends for the capitalists,ture
and we bring you highlights of my conversation with square mckelvey,jim cofounder with jack dorsey. how is he attracting business in his hometown of st. louis, missouri? free tells of anchor us the best way for consumers to protect themselves from digital theft. first, we eat it, farmers make $64 million from it, and washington may kill it. we are talking about corn. the epa will decide how much ethanol the usa will use next year. as a ruling, farm and corn producers will be watching it closely. tell us what is at stake here, alix steel? everything from oil, food, gas prices. in november, the epa issued a draft rule lowering the amount of ethanol and gasoline refine
rs would have to add by 2014. this comes after a lot of lobbying from big oil, the american petroleum institute spent about $2 million lobbying. this is a big deal for the likes of exxon and chevron. >> what was the issue with the renewable fuel standard? is rising production and gasoline production is falling, and that divergence is where the problem lies. demand for fuel is expected to be down 13% next year. each gallon of fuel needs to be blended with 10% ethanol, so you might think the easy solution would be to blend more ethanol, but the problem is, cars were not designed to run on gasoline with these high levels of ethanol. 2001ically, all cars in are used -- approved for use in
higher ethanol gasoline, but many companies do not warranty their cars. the impact from a lower ethanol mandate would be what? losses at some of the producers, archer daniels midland, bolero. technically, ethanol producers can make whatever they want. they do not have a maximum. cash margins are still around four dollars which is pretty juicy. they do have an impetus to keep working. >> how will corn production be impacted? >> i was speaking to an agricultural economist who says there were two main pillars that grow corn to those record highs. emerging market demand and ethanol demand. that shifts the story. now you need to find new demand.
no longer our farmers looking at explosive growth. they are looking to keep what they have. of course, you have the price of corn going down significantly after the epa announced their potential ruling. maybe ourews for us, food is worth less. it will be good for chicken, livestock, etc., but it will have a ripple effect all over the farm economy, fertilizers, equipment makers. be watching closely. thank you, alix steel. obama'st barack decision to nominate max baucus to be the ambassador to china will trigger a chain reaction in washington. nomination opens up new opportunities for fellow democrats and alters the midterm election outlook. peter cook is here to explain. he was already retiring, so why
is this not such a big deal? >> it is all about the timing. he says he will leave the congress by the end of the term. people knew that already, but that meant he would be around and would have time to deal with his big issue, tax reform. he has been the point man in the senate and there were ideas that he would have the opportunity to nail that down as a legacy issue, but now he is off to china. the next question is who will take over the issue of taxes in the senate. the man to replace ammonia ron wyden. chairman of the energy committee. it is a seismic sit in washington and nobody believes the wyden will have opportunity to cut the sort of tax deal that max baucus could have. now it means that all of the lobbyists will need to be not max baucus.
you could call the musical committee chairs. more is moving to the powerful finance committee, giving up his seat to energy committee. that means mary landrieu is in lace to take over for ron wyden. that boosts her presence as she is running for reelection in louisiana. a tight race, tenderly considered one of the most vulnerable democrats. automatically, this makes the voters, i amiana in a more powerful position and you need to vote me back into congress. baucus' seat max in montana? >> montana was considered one of the best republican chances for a pickup in 2014, but now the democratic governor gets to name a temporary replacement.
the person likely at the top of the list is attended governor john walsh. he has already announced that he will place baucas, and now he has the chance to get into that seed earlier, giving him an advantage over any republican challenger, raises his profile. much harder to replace a sitting senator. generally, as i hear from republicans, a master stroke by the white house, improving their chances to win two senate races and holding on to control of the senate. >> thank you. let's get to this not so great christmas story. ups angering thousands of customers after missing thousands of christmas day deliveries. give us the scale of what happened and how it happened. hewe spoke to an analyst and
said everyone is upset with amazon or ups, but he says, blame yourselves, parents. even though amazon guaranteed delivery by christmas. maybe there is some blame to go around, not managing expectations as well as they could have. ups says there was a surge in demand even higher than what was anticipated. amazon said it signed up one million new prime customers in the week leading up to christmas, so a lot of people taking advantage of free shipping, putting their orders in at the last minute, and ups could not handle it. that is compounded by the fact that we had some bad weather days. of thepany says most packages that were delayed should be delivered by today, but in the meantime, ups and amazon are going back and forth. >> i imagine it could affect their relationship. out with aame
statement that said we are examining our relationship with all carriers. delays,perienced some not to the magnitude that we saw, but amazon really relies on these carriers to do their business. you have two national carriers, that is about it. it amazon would build out its own network, that would be costly, take a lot of time. maybe you have some wiggle room on the part of amazon, but i spoke to one analyst who said when they are planning for the holiday season, it is a collaborative process. they are trying to work together, and that is not likely to change. >> thank you, julie hyman. could st. louis be the next high-tech hotbed? to jim mckelvey, cofounder of the mobile payment system square. ♪
>> welcome back to "money moves ." could get any bigger, social media exploded in 2013, from the twitter ipo, to the huge growth of photo-based platforms like snapchat. people like jack dorsey became household names. one person that knows him well is the cofounder of the mobile payment system square, jim mckelvey. he found much success from glassblowing to starting a company in his hometown of st. louis. i spoke to him this morning. >> the fundamental changes we are now carrying around these devices all the time. that is so new, you are still seeing evolution. one of the great and we have in this business is this ignorance
of the future. nobody knows where it is going, so we can make bets on these new directions. it is super exciting because it changes so quickly. >> it is very exciting to watch and be a part of. i know you are limited on what you can say about square, but how can you benefit from this? >> there is a tremendous amount. it is really about fairness or merchants. we are trying to make it accessible to conduct commerce anywhere, easily, to essentially disappeared. the best thing to happen to sawre would be if people that we were not there. >> what does that mean exactly? >> we made a square device, but eventually that device will go away. things will morph. we are trying to get out of the way of the transaction.
ae valley exchange between merchant and customer is so fundamental, the more you can step out of the way and let the communication happen naturally, the better you will do. in pursuing that, one of the things we have to do is help bring the technology so that we can better the communication. in general, increase the level of trust so that commerce can occur more freely. >> you have several projects. one of them is bringing tech startups to state lewis, st. louis, your hometown. from st.ack is also louis. we are trying to encourage a couple of different programs, like taking promising companies from anywhere in the world and giving them grants. grants.them arch we bring them from all over the world to st. louis and give them $50,000 right at the beginning.
that is crucial, because it turns on when you get the money is almost as important as what you get. this very early money that is non-diluted -- we do not take anything in return for it -- has a real boost for some companies. was jim mckelvey, cofounder of square. returns, wemoves," will take a look at the tech trends that venture capitalists are watching. ♪
looking for an established firm, but he already has extensive experience at three of the hottest tech companies, including square, google, and slide. he spoke about the shift in consumer psychology that is driving our on demand economy. differentre three areas that i see as consumers focus on their behaviors changing, things they are demanding from new businesses and innovation. the first is about real-time. consumers want information faster than they ever have before. if you look at this self- service, it used to be something that was a discounted experience when you wanted the full-service offering. he would call a restaurant and wait for a reservation. now consumers want to be able to do things themselves. we need to give them the tools that enable them to have this information, and that is about empowering them to make decisions. >> you believe there will be three key trends in tech next
year. immediacy, flexibility, and less commitment, and exchange of information for premium service. let's begin with immediacy. >> consumers are expecting things to be faster than ever before, and they have more power in the all non-barehands with their phone. you see this in the airport, self-service kiosks have taken over. you cannot plan your entire trip largely by yourself. we invested in a company that takes apartment rentals and puts them online at your fingertips on a mobile device. in sooners want this type of information in all sorts of sectors to allow them to make decisions. and lesslexibility upfront commitment, you liken it to a consumers on-demand experience. have we become an on demand economy? >> absolutely. when i look at how decisions are
made on vacationing, my grandparents went to florida every summer before they purchased a condo. previously, we had introduced timeshares. today, we use services like aibnb or hotel tonight. this on demand economy, we have learned on television, from things like cable on demand or apple tv, and now we want that in more areas of our life. is the experience changing in the years that you have worked in startups? grown andcommerce adapted to consumer taste and concerns in that time? >> it is quite fascinating to watch. beyears ago, we used to afraid of putting a credit card number on the internet. make $260ommerce will billion this year. consumers have really shifted their behavior. this exchange of information
will allow for new types of experiences. personally, i use amazon prime, and i love the experience, but they have to have a great deal of information on me to enable that. any my contact information, shipping address, payment credentials, and can help me browse online by looking at what i have passed -- purchased in the past. are drivenr revenues from recommendations, so data is reading this premium experience online. >> what do companies need to do to establish a loyal consumer base? >> it is about building trust. you need to make sure customers feel comfortable and safe getting the information, and you need to give them something of value. consumers want to know they are getting something back for their information. ift.e uber and l put ina that i have to
my address seems clumsy to me. i expect a car to be on its way with one click. that is changing the way i feel about industries. even doctors and virtual visits. >> you are 29. you gained a ton of experience in a relatively brief window of time. what type of advantage does your youth give you? the have been humbled by experiences i have had, but it is great to be able to relate to your customer. i notice myself using my phone for an increasing number of activities. we see this across the company. , thatook at locality allows me to comparison shop for the first time off-line at local services. over 70% of traffic is on mobile. traffic is 40% mobile. i can relate to that because that is how i am purchasing.
being able to step into the ises of future customers, it very helpful as we make investments. the high-end art market gets a boost from the world's billionaires who brought the market to record highs this year. sales surged, totaling $752 million for the year. at the top of the list this year, francis bacon's 1969 three studies of lucian freud. that was followed by andy warhol's silk screen painting car crash, which sold for a record $105 million. and tying portentous plot is mark rothko's number 11 painting.
it is 26 minutes past the hour, which means bloomberg television is on the markets. olivia sterns has her eyes on the trading action. >> stocks are climbing. the s&p and dow extending their records to all-time new highs, pushing the nasdaq up as well to a 13-year high. we had better than expected unemployment data showing weekly jobless claims numbers fell more than forecast last week. also seeing some action on the treasury market on the back of that better-than-expected jobs data. the 10 year yield earlier today hitting three percent for the first time since september. also a widening between the 2-y ear and 10-year. now at its deepest level since july 2011. corn is also falling on concern that china may reject u.s. shipments amid estimates that the u.s. will have a record crop yield.
>> this is "money moves." i am betty liu, in for deirdre bolton. applyingr of americans for unemployment benefits dropped by 42,000 last week to a seasonally adjusted 330 8000, the biggest drop since november of last year. areomists say the figures worked by seasonal volatility around thanksgiving, christmas, and new year's holidays. shares of ups are bouncing back after it's network became overwhelmed in the days leading
up to christmas. thousands of packages were delayed. in the meantime, amazon says it is refunding shipping charges and giving customers a $20 credit towards huger purchases to compensate for those whose packages did not arrive in time. snow is falling in places where we can by storms turned out the lights from michigan to maine. southeast and interior main has been without electricity since sunday. the area is expected to get up to seven inches of snow by the time the latest system pushes off. utility companies are worried that the extra weight could cause setbacks in the around- the-clock efforts to restore power to millions of people. software commerce company conductive is trying to shake of the retail or. they say they need to take the best parts of the online world and fold them into the store experience.
the ceo of conductive spoke to mark crumpton. >> we are focused on building mobile apps. with ated in seattle bunch of experts in the space who are used to building mobile solutions. we focused on a classic problem in retail on the sales side for both ends of the cycle, the supply chain. in-store and on the brand side. the plumbing you are talking about is the connection in between and how our apps interact between a retailer and supplier. >> we know that brands and retailers are connected digitally. how do you help manage that real-time information and keep everyone on the same page? >> because we are a mobile application, not a web portal, on the supplier side, we are modernizing a specific piece of that business. we are taking the digitization
of the catalog which happens today, which many are addressing, and connecting them into ordering and a swordsman and landing functions for pre- seasonal sales, which is that once a year cycle. that has controlled the inventory cycle for all retailers. we are focused on providing fieldassociates in the with real-time data, getting that information back to the factory for the inventory to be built and shipped in time. >> how do you differentiate yourself from competitors like square, lightspeed, etc.? >> we are on both sides of the supply chain. others focus on transactions and payments, but we are moving upmarket with our mobile sales application. we do not refer to it as a pos,
even though it has that functionality, so we are moving upmarket where we install equipment in stores which connects to current systems, and can be done in a matter of days. we augment the current pos with mobile capability. enhanceat real-time and it by doing additional connections back into the e- commerce extension, which brings brick-and-mortar back into the store. >> your company is projected to grow 100% through 2016. what data is supporting these projections, and how does a company position itself or growth in an economy that is still sluggish? >> first of all, we are still just starting. only one of our products is in the market, the companion mobile sales application. the brand catalog is just entering the market now in the fourth quarter. we have been successful with vna
wranglers so far. there are a lot or retailers and suppliers out there suffering with that fast paced technology movement, and what the client's expectations are coming in. >> how much funding are you receiving, where does it come from? >> all of our funding has come from the founders and one traditional vc. we have these two products now entering the market. believes thaty retailers and suppliers can improve their sales margins and the in-store experience through collaboration. how does that impact competition, and who is embracing the concept? mobile saleson the side, in-store, hickory farms, mountain high outfitters, beats.
those are all current clients. we have managed to get wireless mobile capability into ford's h ands. now they are going to trade shows and wirelessly selling their goods. >> so you are telling people that if we work together, we can do good things. >> that was marked crumpton speaking with jeff saunders. if you missed any of these interviews, you can watch them on bloomberg for apple tv. --n we return, this dart up the startup anchor free ceo. how you can remove yourself from unwanted tracking.
on bloomberg television. you can also watch us streaming on your tablet, phone, and on bloomberg.com. investing in precious stones usually means diamonds, rubies, but in many parts of asia, jade is an equally high demand. jade does not actually sparkle but it sure commands prices to match up to its glitzy arrivals. cy, color, and cut differentiate different pieces of jade. it may not be as popular elsewhere in the world, but jade has had a special place in asia or for hundreds of years, particularly the chinese. jade is the second most sought- after gemstone to diamonds. today's growing wealthy
consumers are snapping up items and driving up rises. after all, with local bank offering low returns, why not invest in jewelry? >> there is no index or clear market price for jade. the best items are made of jadeite, found almost exclusively in myanmar. the u.s. has and imports of it from them southeast nation because of concerns over over labor and human rights. >> market demand has always been high, but in the past five years , there has been a significant increase in prices for jadeite. stone is up for auction next month and could go for a bargain price. four hundredis thousand dollars, but as of late, pieces have been selling for several times its estimate. take a look at this ring.
for $2.5 million, five times its estimated value, to an asian buyer. but jade is not the kind of commodity invest in for a quick buck. it has a relatively small niche market in china and asia. of course, to get top dollar, it helps to have specialized knowledge, so you do not end up with any old lump of rock. the massive security breach of credit and debit card data at target is evidence of the increasing threat consumers face in securing personal information. anchorfree is one started trying to protect you. app protectsshield you from identity theft and unwanted tracking. david gorodyansky is the founder and ceo of anchorfree. >> anchorfree, fundamentally,
protects each user's identity on the internet. been downloaded by 2 million consumers around the world. they want to control their personal information on the internet, everything having to online, onlineng shopping, e-mails, mobile messaging, sharing pictures, videos, all of that is detected through the anchorfree application. ,> was this a need that you saw was there anyone out here doing this before you? the typical security companies, and they are good at protecting a user's device. while they protect your computer or phone, we protect you online. we see security as having two forms, people using security to
their device, and another to protect their identity. we are adding 650,000 new users every day. we have recently surpassed as far as active users. we are the 33rd largest internet service in the world today. >> what is the goal? >> to be in the top 10, $1 billion. >> when will you reach that? >> we are hopeful, within the next 18 months. >> what about the hotspot shield user base. it is pretty diverse. you have professionals to folks who are using the internet at home. >> absolutely, very diverse. everyone from business travelers traveling abroad looking to access their home information. our goal is to provide secure
access to information. people use us specifically when they travel. homee one way to connect when you are abroad. maybe you want to watch her favorite television show. >> is that one of the reasons mucht has so many -- so interest among expatriates? >> exactly. if you are at the airport and you can add the wi-fi network, you are inherently unsecured. shield, everything that you do on monday comes private. wireless security is a big reason. finally, we have all of these are the sea violations. -- privacy violations.
the interesting thing, most of our --spot shield's used people, butvernment our main goal is to convince people this is not just for the government. it is for everyone. >> that was david gorodyansky, ceo and founder of anchorfree. and a reminder to get the bloomberg tv app free. show streaminghe live and get quick access to related company pages and topics. weing up after the break, look at the pending approval for the keystone pipeline and its potential impact on jobs, oil prices, and the railroad business. ♪
>> the state department's final assessment of the keystone .ipeline is coming soon so what happens if the pipeline is approved or rejected? megan hughes takes a closer look at the impact on jobs, oil prices, and the railroads. >> the keystone xl pipeline is a 2000 mile final that would pump was a from the canadian tar sands to the u.s. gold coast. if the 5.3 billion-dollar pipeline is approved, what does that mean for jobs? it would create 42,000 direct and indirect jobs nationwide during the two year building phase.
almost 4000 our construction jobs, but the pipeline is only expected to create 35 permanent jobs. profits, a razor thin profit for oil companies. ae recent shale boom created glut of oil in the united states, driving down prices. but it oil from the tar sands can make it to the coast, it competes against the mexican crude benchmark. that is projected $889 a barrel in 2015. if it stayed in canada, the projected amount is $69. but that $20 premium does not necessarily mean big profits. canada's heavy crude is some of the most expensive to produce. it needs to fetch $65 a barrel just to break even. add in transport costs, including lubricants to get it through the pipeline, and a profit margin dropped to just $5.50 a barrel in the mexican market in 2015.
if the pipeline is not approved, who are the winners and losers? transcanada stands to lose a lot. the company has sunk 2.3 billion dollars into the keystone project, and companies like and conocogy - phillips could have their prices hurt getting the product to market. third is railroads. are movedof barrels by train from canada. but rail is much pricier than the pipelines, and that means investors like warren buffett could win big. the longer the pipeline is pushed back, the higher the demand for rail. >> coming up next, an update on the markets. ♪
are rallying. the dow and s&p extending their records into all-time highs. the s&p now up almost 30% year to date. toividual stocks we want highlight for you, the first is amazon. a $20 giftfering cards and refunds on shipping charges after some orders did not reach their destination on time. also watching urban outfitters. they are the best performer on the s&p 500 today. retailers are the focus of today's sector report. joining me now for a look at the sect or is the managing director at puget resource group. basically everyone dropped all the money they would drop. probably returning things i did not like today. how was it this year? >> it looks to be up 1.4%. the forecast from the industry
was 3.5%. versus thepointment higher forecast, but to be positive, when you have a top, me, people having their hours cut, higher taxes, uncertainty about health care, it will be a good season regardless. >> the national retail federation numbers, why did they get it so wrong, what happened that holiday sales came in so short? >> they did not miss it, it was the winter weather. affecting uptorms to 35% of the u.s.. people could not get to the stores, so they were ordering online. they could not get everything delivered, and now there are record crowd shopping in stores today and through the new year. >> also with that comes a record year of returns. that returns were increasingly becoming a bigger problem for retailers. what does this mean for margins?
>> returns put a lot of pressure on profit margins. it is a lot of extra labor, a -- backend and and and front end costs. retail product seems to be an increasing problem for the sector. you believe big-box retailers are hitting a wall. what do you mean by that? >> too many stores. chasing where footage too few sharper dollars. >> at some of the big-box retailers, those are the consumers we are seeing restraining their spending more. as we return to the luxury
>> the dow jones industrial average is at a record high and closing in on it straight day of gains. welcome to the most important hour of the session. christmas?e a good an awesome christmas. i got to hang out with the family, went for a hike, got some presents, gave some presence. >> good. >> let's take a look at our three charts. the dow industrial average. the dow jones is up 116 points. record.ke i'm a broken every day is another new high, but i am not going to fight it. most people would rather behind and short.