tv Lunch Money Bloomberg January 28, 2014 12:00pm-1:01pm EST
>> welcome to "lunch money" where we tied together the biggest stories in news and business. i am adam johnson. watchesfare and rolex is a bloomberg exclusive. wait until you hear it. there is one company that knocked the cover off the ball for investors and then ran for the exits. we will tell you which it is. in media, we have the triple charter, time
warner cable. we are kicking it off with the thing everybody is talking about , president obama going in front of the senate chamber tonight for his fifth state of the union address. >> the president tonight will announce that for federal contractors he is going to sign an executive order mandating the increase of a minimum wage up to $10.10. >> $10.10, the federal minimum wage right now is seven dollars 20 five cents. that is $14,500 a year for a full-time worker. these federal contractors -- how many are there? this is the start of the first bush as he tries to pressure -- first push as he for ato pressure congress federal minimum wage increase. >> how many are there? >> a few hundred thousand, but
-- leadying to increase by example. wants to provide for cost-of- living increases periodically. >> a couple hundred thousand. that is .06% of the u.s. population. it's a start. some republicans are not buying the minimum wage mission. >> we are going to see a lot of the same themes in this years state of the union as last years state of the union. to resortent has to the small measures to circumvent the congress. theo the issue is not that president wants to raise the minimum wage but how he wants to do it. the president is unwilling to do is wait for congress to act to work with them.
withll continue to work them, but he is also going to take action on his own. he is going to sign executive orders. he is also going to bring people into washington who want to make progress, create jobs, grow our economy for hard-working americans who just want to succeed. >> knows a prize, republicans are not too supportive of this -- no surprise, republicans are not too supportive of this style. >> welcome to the real world. it is hard to build consensus. that is what he needs to do. >> this president, it seems to me, after the 2010 election when the american public issued a restraining order, the president has hung out on the left and tried to get what he wants through bureaucracy as opposed to moving to the political center. we are anxious to help him
create jobs, but we are not going to go over and endorse more spending, more debt, more taxes and more regulation. >> republicans are not buying it. they want more face time. >> he has reached out to republicans time and time again. he has solicited their ideas. there is barely a speech he gives where he does not say if you have suggestions for legislation and ways to move the country forward, i want to hear them. he does not just want to hear what they are against. he wants to hear what they're for. that arm has been outraged. wo. it takes t is not what republicans say. >> i am not talked to the president or democrat leaders about this issue because i have laid out what needs to happen and they have yet to come forward with any plan. it should not stop reasonable democrats from working with us.
the president and democrats changes toiscuss those programs unless it taxes.s raising dealing with the white house is like dealing with a bowl of jell-o. >> but surely republicans would not do what the president is doing and go around the usual channels. >> if the president will not deal with the dead, we will take you directly to the american people. harry truman was sick of having economic advisers say on the one hand, on the other hand. this is going to be that. he is going to say the state of the union is getting better but it has to get a lot better. he is going to allude to executive action, but that is small ball. he cannot do much there. he is going to lay down markers
on income inequality, but also seeks him a, nation. i don't think it is going to be a defining speech, but it is nevertheless an important speech. >> how? >> this is one of the rare times there is a semi-shared experience in america. to address 3 gets million americans on television and many more are on line and on social media. very few events attract as they as big ance -- audience. >> we asked this question every time there is a state of the union. our that many people really paying attention? are that many people turning into -- tuning into social media, twitter, whatever it may because they care about what the president has to say on this one night of the year? >> they are interested, but not
passionately concerned. he will have half the audience bill clinton did? >> why? >> don't forget. you didn't have some of these cable outlets 20 years ago. the you also didn't have , twitter, all of that. president'sk the approval rating is going to change all that much. the country is polarized. i don't think you can change people with one speech, but you can play a role in setting the agenda for discussion for the next couple of months. so, what can we expect tonight? the president mentioned 41 proposals in his last eight of the union. two were passed. we will have full coverage of the state of the union tonight at 9:00 p.m. on bloomberg television. we discuss recent comments
is perkins, your timing impeccable. yesterday was international holocaust remembrance day. countries around the world memory to the $6 million -- countries around the world commemorated the 6 million jews who died in the holocaust. letter.ined this >> the use of the word was a terrible misjudgment. message.egret the any time the majority starts to demonize a minority, no matter what it is, it's wrong and dangerous. and no good ever comes from it. >> but why even mention kristallnacht? >> during the occupy of san francisco by the occupy wall
street crowd, they broke the windows in the wells fargo bank, they marched up to our automobile strip on venice avenue and broke all the windows on all the luxury car dealerships. i saw that. i remembered that the police just stood by, frozen, and i thought well, this is how kristallnacht began. so that word was in my mind. quakes more than 90 jews were killed in kristallnacht, 30 thousand people put in concentration camps. what were you going for with this analogy? >> the jews were only one percent of the german population. most germans had never met a jew. , hitler was able to .emonize the jews --stallnacht was on of the
one of the earlier manifestations. there had been others. and then we know about the evil of the holocaust. my point is that when you begin againstgainst him at -- a minority, it can get out of control. theet's just remove holocaust analogy and talk about income inequality. the president will address this tonight in his state of the union address. classs says stop with the warfare. >> let the rich do what the rich do, which is get richer, but along the way, they bring everybody else with them when the system is working. he mentioned his point that class warfare had gotten out of hand. >> they got into the discussion of the idiocy of rolex watches and why does any man need a rolex watch?
it is a symbol of terrible values, etc.. well, i think that is a little silly. this isn't a rolex. i could buy a sixpack of rolexes for this, but so what? >> that comment caused a small explosion on twitter. here is some advice perkins has for the 99%. >> i think the 99% across america should pay attention to politics, follow where it is going, do read the newspaper, don't try to get everything over twitter and facebook. it's not bear. and worry about the future, , i thinkight now america faces a very, very troubled future. >> quite a jump to assume the 99% doesn't read newspapers. in the end, he says being an object of scorn is just part of
life. >> i am an old man. i look back on my career with great happiness. it i think i have accomplished a lot. if i had to do it again i don't think i would change. and i am at ease with myself. the fact that everybody now hates me is just part of the game and i am sorry about that, but that isn't what i meant to do. >> you can watch more of emily's interview with tom perkins on bloomberg.com/tv and on our free mobile app, bloomberg tv plus. when great is not good enough. there is only one company that knocks the cover off the ball and then investors run for the exits. that is coming up next. we are talking the super bowl in fight club. and folk singer pete seeger just died. he is best known for his rendition of we shall overcome.
>> intech, when great is not good enough. we are talking about apple, the maker of the ipad, which sold a record 51 million iphones in the final quarter of last year. profit and revenue beat estimates. and yet the stock fell. what is going on? iphone unit sales were 51 million, only about six percent or seven percent over the previous year. and growth of six percent is not a spectacularly growing business. the margins were a little better. increase in the
number of ipads sold. the ipad air is very thin. quakes it does not take an analyst to figure out there is a disconnect between wall street and apple. the surveillance team tried to figure it out. >> apple is heading into a model.- kind of the bmw they are going to be a smaller percentage of the marketplace, but they are going to maintain their brand and the reputation for excellence. that is why they are doing a cheaper phone which has decreasedrevenue but profitability. they are growing at a smaller rate but maintaining their higher margins. , theat the wrong choice
right choice? hard to say. >> i have this phone, and it is a miracle. quakes tim cook said the challenge is to focus on the very few things that deserve author strategy. is that the right approach? very narrow focus strategy. we're only going to build a few products and only a few models of them. that has had great advantages. one thing people don't talk becauseite as much is they have a very narrow product line, it is very easy to design apps for it. quakes i just don't share the gloom. i think the new york times did a more balanced approach than others. i know they missed it, but if you took the name apple out and called its turns, everybody would say it was pretty good. >> if you look at increased revenue per quarter. profitability, right?
>> it is not a great sign. that combined with the other struggles since tim cook took over. there is a lot of pessimism. >> you look great on instagram. >> imagine what you can do with it when it becomes your wallet. quakes here is the other question. you can pull up another phone. they can do that now. a couple of years ago they could not. >> from high-tech phones to high-tech cars. industry loves showing off. how made of these things actually make it to the streets? we will tell you. and time warner/comcast. we will break down this potential blockbuster deal. ♪
quakes it is 26 minutes after the hour which means bloomberg tv is on the markets. i'm mark crumpton. interesting day, a turnabout from yesterday. the dow jones invest -- dow jones industrial average up .41%. the s&p is at 1780 eight. nasdaq is trending lower. a couple of movers we are keeping our eyes on. first, herbalife. shares are dropping after the new york post reported that canadian regulators are investigating the company over complaints that it has a pyramid structure. herbalife is already facing scrutiny in the u.s. and china over similar charges. we are also watching apple. shares of the tech giant are falling after iphone sales in the holiday season fell short of estimates. activist investor carl icahn to good vantage of the falling
quakes this is "lunch money" on bloomberg television. i'm adam johnson. in today's moving pictures, where the video is the story, the prime minister of the ukraine has stepped down. he hopes his resignation will diffuse the country's political crisis and put an end to two months of violent protest antigovernment activists and police. about 50 workers marched into a wholesale market in hong kong with a mission to keep local
cases of bird flu from spreading. after authorities in eastern china announced a ban on live poultry sales. finally, a centuries old treasure has been returned to italy. after authorities inafter 25 years, it is going to be repatriated to the italian government. it is a single page taken from a prayer book, scripted in latin. reporting record annual profit in north america. the number two u.s. automaker also reaffirms its profit outlook for 2014. here is bob shanks with the market makers team. >> what we got into is profits of $7 billion-$8 billion this year. >> $7 billion versus 8.6 is almost 20%. is it really that expensive to
roll out new models that it would cut your pretax profit by 1/5? >> yes, because we have so many different products we are launching and tripling rollouts in america, including the all- new f series. we announced today that we will have 13 changeover down weeks, if you will as we prepare for that launch in the fourth quarter this year. jamie butters of bloomberg news explains what the record profit means to forward. --we saw a pretax private profit in north america. the important thing about that is that is also the number the uaw is using. that is the number that sets off profit sharing. in this final big moneymaking year on the old f series design,
the uaw workers are going to get $8,000 on average for their share of that, and that is part of the new model that is made detroit more profitable, lower base rate and higher profit sharing for the workers. >> ford has introduced a number of new models recently. where did all of these ideas come from? concept cars. we checked out the detroit auto show. most concept cars will never see production. so why build them? to gauge customer reaction and create that all-important buzz. here are five concert -- concept cars. what you see behind me is an example of both what is amazing about concept cars and the problem with concept cars. this is the toyota st one.
it was a bomb dropped on the detroit auto show. the car doesn't even have an engine. execs tell me there are no plans to build this beauty. is a honda concept. although they will make a fuel cell vehicle in 2015, for the a classic green house, so you cannot get in and out of it and you cannot drive it. expect the real car to be not nearly as cool. sometimes the showcase is designed to show a future aspect of a car. gauges case, all of the will be displayed right in front of the driver to keep his eyes
on the road while he is operating the vehicle. this is the nissan sport sedan concept. it is a rolling concept which means there is powertrain inside. it does have a transparent glass .oof a lot of people find the design really striking. people are saying this could be the next nissan maxima, so it could actually see production. between concept cars that will never be made and those that are in production, this one falls at the lucky end for consumers. 500 feetnt more than of torque, the mercedes f troop
quakes this is "lunch money" on bloomberg television, streaming live on bloomberg.com, your tablet and smartphone. we have a connection with some of the biggest names in the business working on a deal. first, the headline. a 27% profitting increase in the fourth quarter and adding 43,000 subscribers.
it will raise its annual dividend by $.90 and plans to up its stock buyback by about $7.5 billion. muscle intoringing its cable deal and that is starting to take shape. here is how it will work. comcast will form a deal with time warner cable if charter can buy the rest of time warner cable. >> this is a hostile bid. a bearhug letter sent a couple weeks ago. charter saying we are going to speak to shareholders directly. i also learned from people familiar with the situation that a tender offer and a proxy fight a just be a few weeks away. initially charter put in a bid of 100 32 dollars. time warner thinks it is too low and that has not gone away. >> obviously a lot of moving parts, and the latest development is?
>> what we learned yesterday is that comcast has made a deal on the side with charter saying look, if shareholders except deal at whatever price, we will offer to buy certain assets and give you cash, which charter needs. they are raising about $20 billion in debt. they could add more cash to that offeror and maybe convince shareholders to do the deal. >> is that what is going to happen, ultimately? >> that is what shareholders want at this point. but this development, by doing a deal with comcast, probably takes the number down a little bit because comcast had been sitting out there as a potential competitor to charter. they could make their own bid for all of time warner cable and that might bring the price down a little bit. >> so again, who are the key players here? >> comcast has been the largest
cable companies since john malone got out of the game back in the late 1990s. now malone has bought back in to charter and a deal between charter/john malone and brian malone is really john saying to brian look, in order for us to do a deal, we need your help, and we realize that. johnis not a story of malone riding back into the cable industry and conquering. he is saying look, if we are going to get something done here, we need you, so he is kind of the kingpin in all of this. >> what dates do we need to mark on the calendar. >> in the next couple of weeks, we should get a sense of if time warner is going to bump up that bid. we will see, will time warner cable come down in their asking price or are they sturdy at 150? if they are, the process will continue. charter will nominate a slate of
directors and we will see what happens. >> do we have a timetable for all of this. >> from what i hear, charter will name its slate of directors a few days before february 15, so that is the general ballpark. >> duly noted. the first publisher of rolling stone magazine says there is one detail people are forgetting? >> this case goes between -- goes before the supreme court in april. if they win, and the consensus , thereing like they will goes $5 billion of new transmission fees that the cable companies are getting right now. that is going to have an impact on the earnings and the value of time warner cable. >> to the positive side, because they will no longer have to pay. >> remember what happened with
money. the actor and musician kicks off a new show in las vegas next month. he stopped by bloomberg studios and told us how he got started in the first place. >> i went over to jeff hunter and jeff hunter sent me down to the public theater. he said if you are going to do anything in new york, you need to meet joe papp. room, andnto the sitting in the room was jim steinman who we had done bad out of hell with, bat out of hell to. things from three. for him called i would like to be as heavy as jesus and jimmy stopped and got up and started walking out of the room and he stopped me and looked as me and said by the way, you are as heavy as three jesus is, and he laughed. and he brought back joe papp and this army of people. i started singing again, and joe stop me and said i want you to
go to this other room, learned this song and come back. i learned it and came back. i had gotten about three lines, and joe said ok, and he handed me a script. it was the first time i had ever been handed a script. he said i want you to go home and read this. he wrote on the outside cover and he said there are the .oldiers pick out which soldier you best relate to. i read the script and i had no idea what was a good script and what was a bad script, and i called a friend of mine who was a director and i said i am in a do this script and he said from said from the .ublic theater and joe papp he said is a real? i said yes.
he said is it too offensive? i says there are parts of it better offensive, but not so offensive that i wouldn't do it. he said you should do it. and i got started. in dallas, they had multiple study halls, and i just wanted to get out of them. >> what year was this? >> i don't know, like 1742 or something. i said i need to get out of study hall. is there an elective i can take? she said drama class. i said put me in there. i went in not expecting to be doing anything. i sat in the back of the room like the old hoods, like fozzie would have on happy days. and i got really into it. and that lit the fuse. >> fight club. >> david fincher directed. a remarkable experience. we took -- we played a lot of poker in the downtime and i took
a lot of money off brad pitt. it was not a lot of money for brad, but for me it was. fincher was amazing to work for. i would work for him for nothing. if they called me up and said we in a movie and we are not going to pay you, i would say fine. i would do it for david. he brought out more from me as an actor. because you have to continually be creative. >> you also told me that instead of watching the grammys -- >> i went on the internet and they showed you, i would say fine. i would do it for david. he brought people coming to the grammys and i didn't know any of them. i said ok, well, i'm out of it, so i am not even going to watch. i didn't know any of the first 60, so i said oh boy. i am out of touch. i am like my mother now.
meatloaf will be in planet hollywood in las vegas from february to april. it is supposed to be a 90 minute show. however -- >> i don't know how to do 90 minutes. until -- wenton until 9:26. it's improv. my indian name is never shuts up, as you can tell. i am not concise. i tend to ramble. >> today's mystery meat? meatloaf. ♪
earnings from higher and stronger quarters. on the flipside, the hard drive maker experienced a 13% drop, worse than analyst estimates. thes get you caught up on broader markets. stocks rising today after a three-day decline in the s&p 500. this shows rising consumer confidence and higher than estimated corporate earnings. both the s&p and dow jones industrials are up. for more, we bring in the chief investment officer for commonwealth financial. he says caution is appropriate that panic is not. ofhave seen a lot volatility. what's going on? so callarkets have been him for so long that what is normal follett -- so call him for so long that what is normal follett 30 is scarier than it should be. >> do you think -- normal
volatility is scarier than it should be. >> do you think we can go lower? >> i think we can. if you look at the time it has been since we have had any kind of meaningful correction, we are due for a pullback. it has been two years since we have seen anything of significance. at this point a pullback would be healthy. >> we are seeing that the fundamentals are still strong. the technicals are still strong. is that enough to cushion any further downturn we might still see? fundamentals are that the economy continues to expand and earnings continue to grow. if wek the adjustment, see one, will be on how much earnings continue to grow. if we are talking about growth instead of shrinking, that gives a cushion.
the technicals also give us a measure of comfort. >> we are seeing that business is increasing. will that translate to more jobs? >> i think it will. we a cushion. have seen the economy continue to grow. we have seen employment continued to grow, although not as much as we would like. investment growth means they have hit the limits of what they can do with existing capacity. now they have to both start investing and hiring. that is going to be a contributing factor. >> talk to me about the balancing act we are seeing right now between investing and hiring. fed tapering and an improving economy. can both of these coexist at the same time? >> they can, and in fact one more or less causes the other. the economy is improving, and that is going to help in norm asleep. at the same time, rising interest rates are going to start to pull back on people spending ability, people's
ability to buy houses. it is a back-and-forth trade, and on the whole, at this point, i think the economy is winning. >> you still think meanies are attractive at this point. tax advantages are only going to be more important in the next couple of years. >> brett mcmillan joining us from boston this afternoon. thank you for your time. we appreciate it. we are on the markets again in 30 minutes. bloomberg west is next.
>> live from san francisco, welcome to the early edition of "bloomberg west." i am emily chang. our focus is on innovation, technology, and the future of this miss. the pressure is going on apple the nextook to unveil generation of hit projects as it faces its roughest patch since the iphone. shares are down seven percent today. iphone sales missed estimates in a key holiday quarter. this amid more competition