tv Lunch Money Bloomberg January 14, 2014 12:00pm-1:01pm EST
>> welcome to "lunch money." i am adam johnson. we take a look at the menu today. here's what we have got. the sports car is back. one of the many new models they have in detroit. we will show them to you. sharing the secrets of his success. separate ways to j.p. morgan and wells fargo. we will talk about that. we will hear from the biggest names in fashion and retail all under one roof. and south korea's latest export. we will kick it off with a story
everyone is talking about. handful of companies are making deals. fromiggest one came outside the arena. >> democrats and republicans came to an agreement last night, unveiling a 1.1 trillion dollar package. >> a rare moment again of bipartisanship in washington. the continuation of the budget .eal we saw last month patty murray and paul ryan said spending levels for washington missed billr a agreed to last night from top leaders, effectively doles out the numbers specifically and that is why this represents a compromise. neither side got everything they wanted. the houseuld pass tomorrow and the senate later this week. >> congress feeling the vibe from a big start to dealmaking on wall street. charter communications finally made its highly anticipated takeover offer. $51 billion. the largest unsolicited it for a company since 2008.
time warner cable says it is too low. qwest what was interesting about what happened yesterday is charter came forward and said time warner cable had rejected the latest dead, so we are going straight to shareholders and then time warner cable came out and said that they had rejected the bid. charter had already said that. their purpose was to go to shareholders. it was almost a double rejection that time warner cable came out and said this is way too low. sharentered with 160 per and charter said that was way too high. been set here.ve the question is, can aid he'll get done somewhere in the middle of the two numbers? in another deal, the japanese abouty maker is offering 20 times cash flow. two very different values for
different types of entertainment. of feeling cost comfy? it is $3 billion, how much poop -- google is paying the maker of wireless thermostats and smoke alarms. what does google want with a company that makes thermostats and smoke alarms? they aree ceo said excited to bring great experiences to more homes and more hunt -- more countries and fulfill their dreams. homes. that is the keyword. this deal is showing google is branching out. it sounds like apple. the ceo and cofounder came from apple. designed the ipod. here he is in his own words. >> you start with a problem. for me, frustration. what isto figure out the best technology to solve that problem. ♪ on a thermostat
prompted it was frustrating. no goods illusions to save energy. this was born out of that frustration. for me was born out of the frustration that i was a dj and had to lug around 1000 ed's. cd's. my spirits came together with the love of music. i look at all the various pieces around the house. a lot of things we could apply the same hardware and software services to them. will it be your toaster? maybe or maybe not. i still burn toast. i look atmaybe one day the toasl get a lot smarter so i do not burn that toast. >> there is one deal out there. going up in smoke. directv blackout on the weather channel as of midnight last night. the sides are fighting over the amount of money directv pays the weather channel to carry its
programming. directv wants to pay less. the weather channel wants it to pay more. let the finger-pointing to begin . >> all have long-term contracts that believe in this value. this was an arbitrary move. not based on the value to subscribers. it was just trying to squeeze a small andof independent channel because they thought they could. bullying tactics will not work. our fans will not stand for it. >> directv's response, they said in a statement that consumers understand there are a variety of other ways to get weather coverage free of reality show cover. the weather channel does not have an exclusive on the coverage. the weather belongs to everyone. the ceo of the weather company says -- people love our reality shows when we run them. the channel is completely committed to weather.
we run it all the time so people always know the weather locally. we also run live 11 -- live weather and not a loop and field reports really show people what it looks like all day long from 4:00 a.m. to 8:00 p.m. all day. whenever there is severe weather, we continue it as long as it takes. we are alive with the weather. >> i get it. directv is saying talks are ongoing for an agreement to return the network to our lineup at the right value for customers. we are off to the mall on "lunch money." the view from some of the biggest retailers in the country. plus, the hottest cars in detroit. we will show you five of them coming up next. here is worse power. a chinese racer set a guinness river by driving across a in -40 degrees fahrenheit. incredible. pushed therong wind
♪ >> bmw unveiled its new coupe. we were told all about it. >> this is very different. much lower and much wider and slightly longer. step forward. we moved it up to the fourth. you make a valid point that the m3 is still the icon of the brand. bring a sedan version as well to really keep a hold of it. >> i love the classic color
you have chosen. you see the carbon fiber roof. it be -- it has become a huge trend of the show this year. you have used it probably more than any other carmaker for longer. that in fuel efficiency? a couple years ago the use of carbon fire had a very good future ahead of it. cars, weight out of our electric vehicles, or into all of our sedans and products that come in the future, it is not something we wanted to really prove or pioneer, the production of carbon fire. see it it and you will in a lot more products as we go into the future. car this has a new year. we explain how this works. >> we have been working on this for some time. prototype after prototype for the last 20 years. to thell be available
general public in 2015. >> i knew it would be possible, but i thought for only hundreds of thousands of dollars. everyone has been saying the technology is too expensive. when you really compare what you will do to battery technology, it is like a discount. >> especially when you look at the ease of refueling this and the water vapor. it is the real deal. >> explain to our viewers what it is and how it works. >> basically, it is using off- hydrogen togen and produce electricity. to either drive the vehicle or recharge the battery and all the omissions are only water vapor. >> that is pretty awesome. you have really been the driving force in hybrids. with the prius and really across your vehicle range. how much of your sales are hybrid vehicles? of total volume is hybrid and that will only go up only -- over time.
when you look at fuel cells in hybrids, one of the reasons fuel cells work so well is because we are using hybrid synergy drive to power the vehicle. rather than have an internal combustion engine, it will work off ace -- a fuel stack. we did not have to reinvent the wheel. >> very cold. you have something extra special, which i did not expect to see. real surprises of the toyota.uper sporty is that the direction you are headed? >> it just tells you about the brand. since he has been in charge, he talks about his passion and that is what the car represents. it gives our cars -- designers a clean sheet of paper and we said, if you could design a car and forget landforms and engines and all the details, what with the car look like gecko that is
what they came up with. it is exhilarating. about,you might not know they only sell a few thousand of these but people love them. >> we are honored to be recognized for that. it is in our dna. as you can see, we are trying to throughhis thoroughly the introduction of our brand. a much sportier brand. >> absolutely. the difference with the other brands is not only do we bring to the market technology morermance, but a much affordable price than our competitors. they are legends. you see some movies on the cinema that utilize our cars. need to pay to place the products. toactually get -- they seem
like it. of those who are enthusiasts the mobile competition, it is a good option and a good brand. furious."nd >> absolutely. we will have a complete you may expect nissan much more engaged into competition activities here in the u.s. dairy >> volvo is back there that is what the ceo wants you to believe. after being acquired from ford, the company is innovating and are ready to resume selling here in the u.s.. >> a new management team. new products coming up. new engines. the drive any and -- engines. market.t more in the we have to tell customers we are here to grow.
we have to be much clearer on the mobile brand. why are we a premium car and what are we delivering that other premium cars do not deliver. that has to be much clearer. >> talk to me about the engine. over the last years, you were doing well. some of your engines in racing. , six-for the customers cylinder engines, we will answer for them between engine concepts , electrical engine, four wheel drive, and combined powers and 400 horsepower's. it is the way of the future. >> it is much more modern and a high-tech solution to the market segment. just to put that 400 horsepower engine into perspective, it is twice the -- twice the average car. a lot of power. you heard from people in the car
>> we are looking at how to ladder.e corporate what ceos say you need to know about getting ahead. we asked some of the biggest leaders in business what they think got them to the top. here is the pimco ceo on his secret to success. ♪ not realizing your strength could be a weakness. you have to bring together various people. areatters what other people doing. it matters what skill set they have. you cannot excel without also realizing the skill set and capability of other people on the team. dismissssist -- do not soft subjects. some people focus too much on the hard subject. i did not pursue enough languages. i wish i spoke a lot more.
i am not as grounded as i would in my position as a global ceo. everybody owns a bit of your time. you can get bombarded by what is important. an urgent. you also get bombarded by what is urgent and not important. making time and understanding you need to regain control of your time is critical. are thosenspirational who focus on things that are important but not urgent. i do not get enough sleep. i'm lucky to get five or six hours. i wish i had gotten more sleep. >> more words of wisdom from the -- and founder of in 1998, he founded thor equities. a multibillion-dollar herbal real estate empire. >> i often say for a dollar, you
could buy a hardcopy of the newspaper were just go on the internet and all the information you the possibly want is out there for free. look for have got to opportunities either horizontal or vertical. what i mean by that is vertical, how to build a better mouse or technology to reinvent something done another way -- >> not to reinvent the wheel entirely but improve on it. >> or to take it horizontal. all the basic goods and services we take for granted in the developed world, people are starving for it in indonesia and the philippines and nigeria. it might be taking the shop -- opening a woman's closing -- clothing store. >> you recognize there were areas in retail not being well served. urge -- urban areas. hispanic and plus size women and you realize, they are not being well served and he started your retail chain. how do you recognize where those pockets are? >> just being aware
when you're walking down the street, looking at people and what they are wearing, what they are using, what they're doing, and when you see the opportunities, one thing is making the idea and the other is having the courage. jump in the pool but in the shower -- shallow part. not, you will never win the game. i would say that first and foremost. number two, i would say, building a great team of people and surrounding yourself with folks who will have the same forion you will have creating the better mousetrap. last and not least is relationship and honesty. being the kind of person that people want to see succeed. that people want to help. >> rocksolid advice. tomorrow, we will hear from martin zorro. -- week, we will have more from global leaders on how they get ahead in how they did it
erie jpmorgan and wells fargo out with earnings. derek -- very different results. and the hot business of hot sauce. that is coming up. ♪ >> is 26 minutes after the hour. we are on the markets. more markets are trading in stocks are climbing their way higher. nasdaq in the lead over one percent after a dismal day we saw yesterday where the nasdaq posted its worst decline in two month. bank earnings reports and retail sales. investors digesting the news and buying on the deck. -- dip. of daydifferent kind with the huge dip down at 1115 a.m. 15
>> this is "lunch money." also streaming live. i am adam johnson. today's moving pictures, where the video is the story. in thailand, antigovernment protesters dig in. they are blocking to bangkok and say they will stay there until the prime minister leaves office. they want her to quit before the february second election. the italian island of giglio, marketing and anniversary of the shipwreck. people were killed when the ship rocks near the
island. it will be towed away and dismantle in june. japan'20-year-olds get their own national holiday. the coming-of-age day. the day marks the age when young japanese can vote as well as i booze and cigarettes. japan had the smallest number of 20-year-olds this year, $1.3 million, down from a high back in 1970. in bank, we will start earnings with two of the biggest and different results. we will start first with jpmorgan. about 17%.ped jpmorgan paid out $2.6 billion in claims tied to a ponzi scheme. >> a lot of one-time items include the $2.6 million settlement tied to the ponzi scheme. also sale and visa shares and the sale of properties. analysts like to call it a noisy quarter. when you strip out one month -- some of the one-time items, jpmorgan had a profit beat of and $.40.
jpmorgan set in excess of $20 billion in legal settlements in 2013. when reporters asked jamie dimon on a conference of $20 billion in legal settlements in 2013. when reporters asked jamie dimon on a conference call later on whether jpmorgan will be done with the legal headaches this year, he declined to comment and said he would to take a rain check on that. no clarity from on the upcoming legal settlement. what we learned from the earnings report and a fourth quarter is credit trends continue to improve at jpmorgan, though trading revenue and equities did miss the mark in the fourth quarter. commodities trading revenue was higher than anticipated, even as it drop seven percent from the third quarter. investment banking fees were higher than anticipated thanks ipos andrease in dealmaking. compensation is a big area of concern for a lot of people because of expenses and the need to maintain expense control at the big ask. jpmorgan set aside $70 for pay and compensation. that is about 30% of revenue, the same as it was last year. in terms of headcount, the cfo
at jpmorgan says he sees a little way to go. >> the earnings call, jamie dimon addressed -- he said the bank had to replace 2 million payment cards after the breach of consumer data at all the retailers like target. is a bigbersecurity deal and will not go away. all of us have a common interest in being protected. might be a chance for retailers and banks to for once worked together as opposed to sue each other, like we have been doing the past decade. >> to wells fargo, the largest u.s. home lender. it writes about 30% of the mortgages in the u.s.. they posted a record fourth quarter. the net income advanced 10%. intoumbers were also dug at wells fargo. >> the biggest home lender, responsible for one in five u.s. mortgages, hurt by the higher
mortgage rates. we saw them drop about 30% from the third quarter down to $50 billion from $80 billion in the third quarter. trustas offset by rising in investment fees. a couple analyst notes i have been looking at say wells fargo was able to make its quarterly numbers and its profit and sales numbers. that is something to watch for. a drive to cut expenses continues at wells fargo. got an efficiency ratio, its cost as a percentage of revenue, back at the range it was targeting. wants to get that somewhere in the line of 55% to 59%. >> retail reality. we will hear from tommy hilfiger. about the changing face of the industry coming up. ands talk about barney superman. these guys made the trip to a festival in india. it takes place annually. the change of seasons and longer days. that is kind of cool. ♪
>> sales rose 2/10 of one percent. there are plenty of challenges facing retail right now like integrating stores with websites. atcaught up with chiefs tommy over your bloomingdale's and sex. goldman sachs. >> when we close our stores at 8:00 p.m., they are shopping around the clock. to all of us.t
>> an advantage at bloomingdale's, disability to engage. if i could engage with you and create relationships with you, is that not better than just going like that on the screen? >> the product has to, in this day and age, where it is a global business and the competition is not local anymore, the competition is global, you really have to nail it. to all of us. >> an advantage at if you do that with the product, everything else makes sense. >> retail today is about customs without patronizing them. you are understanding them and nurturing them but also giving them a choice. >> it is about the product and doing something that moved a needle him a that inspires people to buy. >> consumers are smart and they know what they want. have a definitive attitude. the role of the department store today is changing dramatically. >> notice the common theme. they are all talking about technology.
is technology essential to succeed today? >> you have to have technology in today's world. the growth of internet, you have to have this approach. you cannot survive without it. >> what do you do if you're one of these companies and amazon is beating yourzon is business and they do not care about making money. >> it has an unbelievably efficient business model. they have a very different fundamental cost structure. a multichannel retailer has to build to their strikes. do i i am macy's, how combat against amazon? >> have a great location. have great service within your stores. offer the customer a reason to go there and not just price. it cannot be price. it has to be so much more than that. >> no retailer out there can would notn? class i say that. they are beating amazon every
day consumer electronics is difficult. there is so much internet a big-tion, and it is ticket item. they can discount below where a storefront retailer can do it. it is very difficult. contrast that to a vertically integrated rant. control their own destiny. they have the brand. they control where they sell it. extremely powerfully today's world. control>> we have tommy hilfig. who is more important? your chief designer or your chief processor? >> you cannot live without both. you need great quality and pricing. if you are shipping something someone orders online and it does not fit, they send it back. we make sure our fits are really great. to be price competitive in this market.
we have to give incredible quality at an amazing price point. are youuch pressure under as a label to bring that sexy to the millenial? the miley cyrus's of the world influences them. hollywood and at there arelture world, the reese witherspoon's who have looks, or the kate bosworth's. i follow those trends, rather than the trends on the temporary side that come and go very quickly. i like something longer lasting and more trip -- more classic, with a twist. pressure to fall in with those who offer a much smaller price point, or is a happybosworth's. i follow those trends, rather than the trends shopper happy tr that? >> is a premium brand.
luxury brand is expensive. fast fashion, but not really well made. i want great quality, great premium positioning in the marketplace, and still attach a status to it. a tommyere one thing customer wants, what is it? >> everything. it is never enough. if we put red, green, yellow, purple, beige, they want brown and rust. we are doing is continually expanding assortments to make sure we really check every single box. are they slim? are they tight? are they full cut? are they soft? are they watched? are they colorful? are they affordable? check. and we continue growing the business. is obviously a big
concern for retailers these days. here he is on what he is trying to do to prevent another issue like we saw at target weeks ago. >> we feel we are doing keep theg possible to consumer safe. right nowry big issue and a prevalent issue. we spent all we can with security and technicians and i.t. specialists. we brought in external people and i think we're doing everything we can to make sure we keep a safe environment for our shoppers. shoppers need confidence and to partner with the brand. watch more of our coverage online or on our award- winning tablet app. all of this shopping is making me hungry. pretty crazy stuff. how about some spice? we have got that.
into a restaurant and order marijuana and get it served. it is hard to say, is this the beginning of the end of prohibition for marijuana, the same way it was for alcohol. it is hard to say what things will look like in five or 10 years down the road. >> there are a lot of ways to get pleasure from food. even watching people eat. it is a trend among south koreans. crazy stuff. rachel crane explains. cannot turn onu the tv without being bombarded by photos of soup. some call this food porn. korea isnon in south taking this appetite to a whole new level of indulgence. koreans are
documented gorging on food. we are talking a lot of food. >> unbelievable. >> the feast's are streamed live and people are actually hing. thousand lawye -- people tune in every night. is making manyt celebrities out of these eaters. watched jockey rakes in over one hundred 80 million views. he broadcasts nightly for five thesestraight very at jockeys are not just gluttons for fame. they're getting paid to eat. this is how it works. after cut cb uses a unique online current see and each about $.10.s 100, viewers get their favorite jockeys based on the eating performance.
at least 10,000 balloons per broadcast are made. he can make up to 40,000 broadcasts per month. he is spending $3000 per month on food. month.s around $7,000 a e does africa tv make money money? even korean celebrities are getting in, performing it on mainstream outlets. will this trend hit the u.s. and will we see the likes of angelina jolie stuffing her face? for now, you're stuck with me. >> if you did not lose your appetite, you might lose it over this. it is our mystery meat today. [applause] ♪
up about 1.5%, the s&p yesterday suffered its worst drop since november. we are seeing a big downs back betterpurred in part by than estimated retail sales this morning. individual movers. neutral ton buy from goldman sachs. the analyst forecasts better than estimated growth in 2015 and the on. gamestop is going the opposite direction. the shares are falling the most since 2002. it cut its fourth-quarter profits forecasts following lower-than-expected and reduced sales ofrgin for waystation and xbox consoles. we are also watching pharmaceuticals. shares have fallen over 35% in the last two days. that comes after the stock more than tripled last week. olivia sterns follows it for us and joins me now with what is going on. you have smaller companies that tend to be volatile. this is volatile even by those
standards. >> even with the recent slide, the company has a margin capital of $5 billion. last week,ed was they created a last week, they created a frenzy, saying they have got antics their mental new drug that works so well that they simply stopped the trial. that triggered initial excitement. the stock went up 280% and then we thought we would see a little reckoning friday. again, up 60%. stunning moves there. what happened yesterday, the ceo and five -- the ceo finally said, we might need a bigger partner to bring the drug to the market. since now everybody's cooling- off on the stocks a little bit. >> this company are to has drugs in the marketplace? >> it does not. is not unusual for the biotech sector. nothing on the market but a market cap of many billions of dollars because of these expectations of what the drugs could sell. we are seeing a little bit of
reckoning in the stock because what the disease is that it actually treats. it is not that easy to diagnose. some analysts are saying 9 million americans could potentially have this liver disease. since it is not easy to diagnose, it will be years before we ever see millions of people taking drugs here it >> this would be -- drugs. >> this is for a specific thing and is expensive. -- torefers to the diseases where there is a small patient population. 9 million is very big. analysts very bullous -- bullish. everybody got excited. bank of america up the price to $872.om $81 incredible. the last time i checked, the stock was $275. >> what happens now?
it will analysts saying continue to be volatile until there is more clarity on what happens? to go with u.s. regulators and do bigger tests. is only a mid-stage testing. there are a lot of questions about the future of the drug. the ceo himself said it is far too soon to guess. is only aa lot of big names ing billionaire investors we like to talk about a lot here on bloomberg tv. steve:, sec had a five percent stake. as of november 7. with last week's run-up, if they held onto it, they made a couple hundred million dollars, we do not know, but that is the position for him. >> steve cohen is still making money out there. thank you so much. we will be on the markets again in 30 minutes. "bloomberg west" is next. ♪