tv Money Moves With Deirdre Bolton Bloomberg January 6, 2014 2:00pm-3:01pm EST
name and good design. i'll be asleep will be for the lawyers to decide. even if they said that they were still people that love their iphone and needed something with the keyboard to handle their messages, with so many people on wall street, still you see they have both. >> hugo miller, thank you so miller will be talking to the ceo of blackberry. interviewing you that tomorrow. we will be back on the markets in 30 minutes. "money moves" is next. >> welcome to "money moves," where we focus on alternative assets. i'm deirdre bolton. we show you what is going on in private equity, real estate, and more. today, sprint main merge --
still a possibility with t- mobile. if that happens, we will tell you what that means for verizon and at&t. carlisle has hired the former sec chairman to do tech and media deals. we will show you what he could contribute to carlyle's bottom line. greylockd manager from here.ether -- capital is first though, t-mobile is buying airways from verizon. cristina alesci is with us. we know that t-mobile paying close to $2.5 billion in cash. morethis make t-mobile a attractive takeover target? >> absolutely, and it makes t- mobile a better company, right?
they have been talking about the need to go out and acquire what they call low band spectrum. this is spectrum that can travel far, even through thick office walls, making it the more reliable network at the end of the day. they raised $4 billion last year in an effort to go ahead and buy up more spectrum to become a the strong player against likes of at&t and verizon. which essentially only markets for wireless right now. they have about 70% of the market. t-mobile making inroads here. yes, it does make it an attractive buyout partner, especially for the likes of backed bych is japanese giant softbank. it has a lot of cash. again, they could leverage resources to take on two major competitors there. but let's not forget -- from t- mobile's standpoint it has
become a true competitor. at&t is feeling the heat. comelast week we had at&t out and say anyone who switches from t-mobile to at&t gets a $450 credit. that is in part because t-mobile is making such an aggressive push. it is marketing itself as the coal carrier, the one that does not lock you up for a long time. deirdre, this is another page in the ongoing storyline of who is going to win and wireless. >> thank you very much, cristina alesci. liberty global offering to buy the remaining shares of sirius xm. the move good strength in john malone's push to bid for time warner cable. alex stone with me. them finances help
the time warner cable purchase? >> in two ways. liberty is a positive cash flow company, meaning that it makes money. toy will have more money potentially shift toward a bid for time warner cable. the second thing is -- i spoke with liberty's ceo on friday thatnoon, and he told me he would potentially increase the leverage ratio, the target .everage ratio of sirius xm what does that mean? liberty could borrow more money assets for time warner cable acquisition. but related, the dutch broadband providers. how does this fit in? may by thisedia
company. it has primarily european assets. but the overarching thing is john malone push into cable. he likes the cable industry. he particularly likes the broadband growth there. in europe and the united states, giving themidating, more leverage against programmers who have been raising prices by 10% or more every single year and that increased leverage will cut costs and make companies more profitable. >> to your point, alex, we know that liberty global last year mobile and that was meant to compete with b-sky- b. how does that look right now? >> europe is still very fragmented on the cable side. way to go. is a long the united states is more consolidated in the sense that there is only a few cable companies that have real skill. time warner cable is the only
cable company that is not family-owned. what does that mean? it is the expression john malone can go after in conjunction with charter communications to bring that case -- that company up to scale and compete with comcast on a total number of customers bases. >> thank you. you, alex sherman. focusing on commodities -- the weather makes us do it. the coldest weather in decades. putting natural gas back in the spotlight. a pretty volatile start. sticking with me now -- su keenan with me now. what does this volatility mean for the big layers out there? we have agricultural commodities, volatile, and natural gas is already surged, all on the cold weather. we also have the coldest start to the u.s. heating season and 13 years.
much of the country just shoveled out from a blizzard. we are seeing wind chills below zero. the chicago forecasters say below zero all day. these are dangerous conditions for people. challenging conditions for traders. offral gas has been selling as we head into the close. in the meanwhile, we have electricity topping 5000 megawatt hours. that is a record. the consumers will feel this in their heating bills. from natural gas to crop futures, what else are you keeping your eye on? >> another wildcard. one agricultural meteorologist forecasting 50% of the winter wheat crop could be damaged. -10 in kansas, colorado. the heart of the breadbasket.
cold weather stretching from texas to florida. they're the biggest gainers as we had to the markets. onsu keenan there commodities for us. speaking of volatility, we will focus on distressed debt with our special guest for this hour. on the steering committee of the private creditor investor committee for greece, and is also the cochairman person for the global committee and argentine bondholders. great to see you. as part of your resume there. first of all, this year, distressed debt -- where are the best opportunities? >> obviously distressed debt in europe has performed extremely well. year for greekt debt. last year greek sovereign debt
performed extremely well, and we also had an opportunity in cyprus. there has been a lot of support that kept a lot of big european companies back from >>e cells -- fire sales. that is true. we are involved in the corporate side as well as the target side. the stocks that the europeans had, they really had a game plan for how to restructure companies. and you know, they were feeling their way out. that gave them entry points and are right.es. you we're not seeing quite the follow-through from the banks. on the other hand, that has given enough of a backstop as well. -- is this you're going to be different? maybe it is not a calendar year?
maybe it is more the two-year stretch, but in your opinion will there be more opportunities in the next two years? >> there may be. there is a tendency to consolidate the risk. in other words you will be forcing the banks to approach was taking in the same way. so, i think that regulators do not really understand that by imposing these kinds of requirements, you will get a very homogenous type risk. but i think that will take a little while to play out. relative to -- relative opportunities are just more in the corporate market than what we see in europe right now. >> so within the emerging market landscape, what you like best? >> there is nothing screaming right now, but i would say we saw about $10 billion in new corporate debt going into default last year. ojex,ally big names --
that inflows that have driven this market are starting to reverse. someou are going to see workouts happen. we have not seen the broad base buying opportunities. i think over the next 12 to 18 months we will certainly see it. i would not be surprised if over the next six months if we did not see good entry points for corporate sin emerging markets. >> we will continue this conversation after this quick break. we will also ask him about kkr and carlyle. a $1are in talks over billion deal in brazil. we will be back in two minutes with more on "money moves." ♪
>> we are focused now on private hiring formere fcc chairman julius genachowski. he spoke last week with joe lieberman, tim geithner -- in good company. jason kelly, speaking of good company, is here. "ins the author of cahoots." me. humes also here with -- he is the author of "the tycoons." genet joust her. can get going right out of the achowski can get going route out of the gate. >> yes. that is what we're talking about last week with lieberman joining this company at victory park
capital. clearly they will play off his name. achowski is joining the u.s. by a group of carlyle. they began a flagship fund for carlyle. he will be doing media and telecom deals. he will be a partner at carlyle. had to deal have with governments. this is getting a member of the hedge fund community -- it's usually not in the u.s. usually overseas. what you think of this trend of public officials going private? >> i guess my knee-jerk reaction is in six to 12 months we will see headlines of somebody get .nvolved in something but quite honestly we have seen this back-and-forth for years now. back when i started in the markets, you had people going from the banks to going to the government side. so, it it stands to reason, why
wouldn't you accrued a government official? they have the connections. >> and carlyle started that way. even in your book, our member reading -- hey, we were the only guys not in new york. stake in the ground. but they are buying brazilian medical devices company. so it seems like carlyle has its sights set further than the potomac. firm that did,he as you say, start in the backyard of washington and take advantage of the relationship they had their. in time though, they have become really the most global of all the firms. they have the most overseas offices. they have the most funds. they have gone to places for investors in investments that other people simply having gone. they really were in south america specifically long before anyone else.
it is interesting seeing them make this play this morning. >> speaking of south america, i picked up this from twitter -- "brazil is the new argentina." do you agree with that? >> i think that touches on something -- >> everything on twitter is true. >> i'm still trying to figure out how to use it. i0 characters -- anyway, think what that touches upon is cyclicality of all these countries. if you look back historically over 100, 100 50 years, those countries have gone boom-bust in this sort of cycle. the idea that result is fundamentally different than argentina suggests it has broken out of the problems it has had over this time, and if you look at zillow, there has been a real bubble of investment, that the structure had not taken place --
if you look at brazil, there has been a real bubble of investment , that the structured not taken place. argentina, on the other hand, it looks like the biggest problem there, which is been economic mismanagement of the political , thelishment currently administration, may change. you may see significant outperformance, argentina versus brazil. >> is brazil as strong as people think? jason, you were there for his news. people are saying you cannot buy end, you can't buy out. they have the olympics coming up and before that the world cup, which was huge for them. >> i am a bit as a mystic about brazil. i think it will offer up great opportunities because the sectors will over borrow and have to restructure. if they win hand, the world cup -- all of that will be great.
>> so sports are so important to the cultural feeling -- arehe risk i think is they in group a. they will cross over and order finals to -- if they lose in the quarterfinals, you just short everything in brazil. the whole country will come apart. all the money they spent for the world cup. civil distress. >> if they win, everything will be fine. they are stretching. you ever real chance at the world cup is not going to go of negativeback headlines coming out of the corporate sector, and probably a lot of economic data that is not going particularly well either. we will see. we will get your excel spreadsheet of your world cup picks. , thank you. jason kelly staying with me. we will continue our conversation with both of our guests in just a few minutes. ♪
>> welcome back to "money moves ," for more on brazil, other emerging markets, distressed debt opportunities. we continue our conversation with hans humes and jason kelly. we were talking about this carlyle deal in brazil. you were saying, hans, it is priced to perfection. starting with you, jason, how does this look from a pe respective? >> right at equity, of course, is looking for a bargain. they want to buy low and sell high at the most the sick level. what we see in this fleury, this is a very poor performing stock
,fluery. is going after that -- a company that has missed its quarterly number for the last 12 quarters, hans. it raises the question, what is the broader sentiment around, not just brazil, but emerging markets. how does that play into the investment world? how the sentiment play in there? >> i would say i'm not really a private equity person and carlyle is an incredibly strong company. they can look very far down the road. this could be smart. the stock is down 30% from its high. i look more at it in a 12-month period. long-term they could do quite well. sentiment, the however, a lot of people when i start talking about the markets, they kind of laughed, but the reality is the most since it does drive these markets --
>> sure. >> what happens in the united states, when people lose confidence, you have to slow down the economy. it stands to reason. not only do you have sentiment on the ground, but you have the sentiment of international investors. emerging markets are getting more sophisticated. at some level, what drives our market is these big flows of real money, and from my vantage point -- i don't want to sound umble, but that money can be dumb money. you can get a pretty nasty feedback loop of people pulling sentimenty when the is triggered and i can be triggered by a loss. >> right. we have hans, jason, thanks very much. joining us there. we want to give you a quick check on the markets, because it
wheres is "money moves," we focus on innovative alternative investment. i'm deirdre bolton. here are your bloomberg top headlines at this hour. yousupreme court halting can't -- you talk same-sex weddings while the state makes an appeal. this of easley raises questions about the supreme court's readiness to -- this obviously raises questions about the supreme court's readiness to legalize same-sex weddings nationwide.
yellen poised to be confirmed by the senate. it is more than likely that she will continue ben bernanke from work. men's wearhouse firing the latest shot in the battle with jos a bank. last month jos a bank rejected a men's wearhouse takeover bid of $1.5 million. as you could hear earlier this week, a finalized agreement between jpmorgan chase and the justice department on a settlement related to the bernie made off ponzi scheme. su keenan with me now with the latest headlines from the newsroom. reported in early december. what is the push since then? >> the devil is in the details. it is likely the announcement is what to. jamie dimon put this behind the bank. this is one of the final agreements to be hammered out
after they agreed to pay her team billion dollars to settle -- $13 billion to settle lawsuits. ff arrested two years ago. therding to those close to matter, the u.s. attorney has been investigating how jpmorgan handled investments handled by made off, alleging that he -- that the company turned a blind eye. the $2 billion settlement would s victims. madoff' this is a situation where the government agrees not to prosecute for a time and possibly dismisses the charges if the firm is compliant. we are anticipating the announcement will be shortly. >> su, the trial taking place
for employees right now. what is the latest? >> we now know it will resume in the following week's. one of the things that we do know is that jpmorgan's jamie are starting to learn details about what happened inside the madoff headquarters that have not been revealed before. it is known that there is testimony from the computer workers. clearly some people in that organization new things were little unusual at madoff headquarters. >> su keenan joining us there with more on the expected settlement. reporterin our news dawn kopecki and also hans humes with me for this hour. you have been working on this since the story broke. where we stand now? >> jpmorgan is trying to put as
many litigation issues as it can behind itself. the first prosecution agreement is not a small thing at all. it is already under a different prosecution agreement from alabama, feeling that they settled in 2011. that has to do with raking in the muni bond market. this is something different. this could be significantly bigger, more serious. although the department of justice has very little follow through with banks actually, when they did not adhere to prosecutorial agreements. it's still a big deal. jamie dimon, the ceo of j.p. morgan chase, wants nothing more than to get this out of the headlines and not even have a less -- not even have us talking about it. >> they have so many other things to worry about. the bank will have at a minimum seven or eight department of justice investigations, many
which are criminal. it still has a whole host of issues and headaches hanging over the company, but investors keep shrugging it off as no big deal. as we saw over this last year, they are paying billions and billions of dollars to settle these missteps, and at what point do investors say, ok, enough is enough? they still seem to have confidence in jamie dimon. >> hans, i will ask the question there distressed debt opportunities anywhere around this? >> i would say no. tebow that was an answer. ok. so that is at least one take. as far as the wall street community, do you have an opinion, do you not have an opinion? >> i suppose my opinion -- i can certainly understand why jamie diamond would want to get these headlines behind him. what is interesting on the by settling i--
think you are raising the bar a little bit for people to monitor if there is evidence of any kind of wrongdoing. muni bonds or a client who looks like -- i think you are going to be pushing employees to be more proactive in going with it. shares hitting a high today. interesting. >> yeah, they keep going up. it may not be the madoff stuff, but the 15 million dollars from the mortgage case that they settled two weeks ago. there could be other alternative asset classes were you can invest in this type of thing. >> we will take a look. dawn kopecki, thank you very much. hans humes staying with me for the hour. we have a quick break. we will talk about a new app browselows people to last-minute ticket sales. we will tell you why it isn't
>> 15% of all iphones in the u.k. have the yplan at. it offers a highly selective list of last-minute immense. the ceo told me how and where he saw the market opportunity. at $50s a huge market, billion market. however every second see those unsold. there is a loss of inventory every single day. from the customer front perspective, yplan helps them discover and book cool events happening in town. >> when you speak about him pcs,
are the sporting events, musical concerts, theater? space in a restaurant, a club? what is the range? it is more in her tame it. concerts, things like art gallery openings. all kinds of things. all kinds of things you may not know exist in your city. >> the nice thing -- it is not iste sharing, but your point being efficient about what might otherwise be waste pulp. >> ok. how do you make money? >> we connect people who have extra capacity, our event partners, with people looking for cool things to do on the night. putting them by together. >> your offering and app. i know you're and 15% of iphones in the u.k..
you have an app, and you are proposing 15 events in a 24 to period.ur short list. >> it is a curated and personalized list. it's the best events happening in sound. and also we have developed out rhythms to pick and select the best events to your taste. >> so if you see someone is clicking a lot on sports events, obviously that person will get more sports offerings. >> correct. >> how is this different other than the number and the time limitation in something like livingsocial? >> livingsocial is focusing on discounts. at yplan, where not focus on discounts. it is very different in that respect. we are looking on a very entertainment niche.
you willen up yplan, not see a meal deal, car repair, and an event. it is only events. >> this is on 15% of all iphones in the u.k. are you on android as yet -- as well? >> yes. in october of last year. >> ok. i know you are in london. i know you are in new york. what is next? one yearebrated our anniversary. it looks like 2014 will be as busy as ever. we are planning to launch in san francisco and are likely to expand in a few more cities on the west and east coast. >> in total you have raised around $13 million or a part of that money will go to expansion. what else do you need it for? how are you finding talent? do you find it easy to recruit people to your cause?
>> it is probably one of the biggest challenges we are facing. recruitment. recruiting people. it is difficult, a long process. but that is what makes me happy every single day i wake up. i know i will work with those amazing people i have hired, and that is what makes every single day fund. you were with goldman sachs. how did that prepare you -- if at all -- for what you're doing now? >> goldman sachs is an amazing place with lots of smart people to read we wanted to make an impact on communities, with my cofounder michael. we thought we would open our own business and change the world for the better. cofounder and cto joining me there. with a quick right to take. when we come back, we focus on the largest province -- natural
>> it is the biggest robinson pakistan, -- province in pakistan. traveled extensively throughout the region. he has a new book, "at the crossroads." he joins me along with our guest for this hour, hans humes of greylock. these pictures are amazing, and amazing. you spent time in this region as a little guy. grew up there? >> right, grew up in karachi. your perceptions growing up there and how the region as it evolved? it is a vast, vast area. than wyoming --
it is incredible. incredible natural resources that are untapped. -- verythrough it little infrastructure. everywhere you go, there is very little mining going on in that's one of the things that struck me in my travels. the peace corps -- i know hanh spent a good portion of his youth there. he chinese are there, the rainy ends are there. sometimes we forget here in new york city there are a lot of countries fighting to get these materials out of the ground. >> absolutely. pakistan is a very good example of a place where china has worked very hard to go in and get the positions where they
feel it will be beneficial to them. and goldse mine copper in the northwest of the province. western companies have not been able to get a look in. >> i know you were in morocco, in nigeria? there, doings business there for years. it was really impressive. when i first started going back to africa and looking at investment opportunities, i built a hotel in liberia. french guy.was a maybe an american. the chinese were always there. it was interesting from an emerging market standpoint. your impression is so negative, but you are seeing chinese money will underpin quite a lot of development. their debt was paid off by the mf -- the imf.
is there hope for stability and as you say much-needed infrastructure? year was a very good year for the stock market in pakistan. when the new government came in inmate, there is a sense of new investments opportunity. bail out, which will help people. those loans are a third of gdp over there. without that being addressed, investors will be quite wary dealing with this government come in not knowing where things are going. that is looking more promising than it did a year ago. thisw would something like stack up with other positions you have taken, hans? >> the yield on the long and is close to about nine percent. i think it is actually pretty attractive. in large part because of the fixations.
when you look at pakistan and the general impression on the street is, oh, this is sort of and untradable area. as will mentioned, it was one of the best performing stock markets of the year. people put their money? brazil is the growth story. i think the opportunity is no place like pakistan. if you happen to have the contacts -- [laughter] >> it is such an opaque way to do business there. you rely on having personal investment with government and that is what marginalizes a lot of people who do not feel like they are getting the best out of what is available to them. >> congratulations. there.rx joining us and hans humes, who will be staying with me for just a few minutes. also we will have a markets
>> final thoughts now from my guest hans humes. greylock ceo of capital, a distressed debt hedge fund. we know you can do other things, too, on its. as you look at the new year, biggest opportunity is where? >> i think argentina might be the place in the world where you see some catalyst or resolution from litigation. the pressure on the debt -- there will be big returns. the backdrop is difficult. with rising interest rates, you might have continued pressure on the benchmark. we happen to see that in the u.s. equity market, because our markets have lagged, and we will
see if you get opportunities in other parts of the world. is the new argentina. argentina is the new in his whaler. venezuela is being new zimbabwe." that came from twitter, an informal way for people to express themselves. any truth?k there's >> you said we had a couple minutes left. if you want me to compare and contrast those countries, it will take a couple hours. symbolic weight -- you have seen seen -- zimbabwe, you have this. there's a lot of deterioration. >> all right, you will come back for another hour, i hope, to talk about it. thank you. capital.greylock -- it is passed
56 minutes past the hour. we are late for bloomberg's on the markets. >> we are seeing a mixed picture for most of the session. that said, we did have worth an estimated data in terms of the services and is read this morning. stocks.waiting on we're also looking at volatility in the markets. namely the lack thereof. volatility has really fallen to unprecedented levels. i want to bring in nikolai, who has been tracking this. are youferent measures looking at? i know it is that historically low levels. assets and bet 29 applied volatility, i.e. the expectations for pricing, and average was a 12-year lows. it is amazing the low volatility we are in right now. >> what is the risk associated
with that? you talk to people concerned not only about low volatility now, but expect tatian that volatility will remain low -- expectation that volatility will remain low. >> absolutely. markets are driven by fed policy, central-bank policies and europe and japan. come to think it can adventurous him on what to buy. onwe could see an uptick volatility, certainly. what are things that investors are looking for that could push it up again? >> definitely we have political deadlines coming up in the u.s.. we have unknown knowns in the world. .e have europe >> and of course there is the fed as well. >> and the tapering, which is the main thing. would beactly how that
executed. ok, thank you so much nikolaj. ♪ >> good afternoon live from bloomberg world headquarters in new york, i'm cory johnson. >> i'm alix steel. people getting back to work, myself included, getting down to business and back in the saddle. >> down to business is a great area --or short sellers for short sellers. >> that's the worst pun all day. see if you can top that in the next hour. >> congress back in session today. >> in theory. they are there actually quote unquote working. >> they have