Skip to main content

tv   Market Makers  Bloomberg  February 10, 2014 10:00am-12:01pm EST

10:00 am
>> live from bloomberg headquarters in new york, this is "market makers," with erik schatzker and stephanie ruhle. >> carl icahn him back down. he has a shareholder proposal to buy back $50 billion in stock this year. big pharma, big expectations. investors want to see even more growth from drugmakers. we will speak with a ceo. right step.he it cory johnson trains like an astronaut in zero gravity. we will tell you how you can take your own giant step. how cool is that? makers."o "market i am joined by tom keene.
10:01 am
it really needed a fashion enthusiast. >> i am shifting from radio to tv. i woke up this morning i said where the blue bowtie. you will be gorgeousity. we're going to ask a guy who knows best -- this is a story that broke before we set out. carl icahn is declaring victory against our old. he has been pushing tim cook to buy back $50 billion worth of stock this year. no reasonhat we see to persist with our nonbinding proposal. the company is so close to fulfilling our requested target repurchase. it might also have to do within influential advisor recommending that they vote against this proposal. let's ring in tom giles. break it down for us. not often see carl
10:02 am
icahn back down from anything. he saw the writing on the wall. said thatme out and we see no reason for them to be hamstrung in this way. we do not want them micromanaged. we do not want someone coming in and telling apple to do something beyond what it already does. they have already returned a great deal of their cash to shareholders. you also have to keep in mind how much of that money is held off of sure, as opposed to in the u.s. it is one thing to return cash that is already here. >> who quieted carl icahn? who is iss? >> this is a shareholder advisory firm. they give advice to shareholders on various proposals that are before the shareholding bodies. >> if i am running the rule fund, the rule value fund -- i have 147 holdings.
10:03 am
i need them, don't i? >> they look to these firms for advice. there are a lot of proposals every year before every company. you are a fund manager and you want someone you can trust grid there's a belief that they are looking out for the little guy. >> is this a move that pushes back against activist investing? there has been criticism saying activist investors are not there for the betterment of long-term shareholders. they are there to get out. i pointed him over and yahoo!. marissa mayer -- where is dan now? what does this say about activist investing? >> there is a backlash now. they are out for themselves and the quick buck. carl icahn has upped his safety. he is really putting his money where his mouth is. >> that is why people love him. he is never all talk. >> $3.6 billion the last time i checked. >> it is his own money.
10:04 am
with get our head around this. he is not managing anybody's money but his own. $3.6 billion. chew on that. day chart to show the on apple trading. lower on this announcement. it comes right back. i look at them as 400 to 527. >> it puts the onus back on apple. there's this big question about the rash of products they put out. it is nearing the end of it's cycle. everybody wants apple to do the next big thing. -- younot going to bring will not do a lot in buyback. they cannot make a big acquisition. they have a lot of cash that they have to pour into new products. >> they can do another transaction. that worked out. >> their timing was impeccable. >> thank you for giving us the
10:05 am
latest. >> blue tie, blue bowtie. i got the stephanie ruhle memo. >> i wish the whole company got or downs at mcdonald's for a third straight month. boeing 3.3% in january, which was worse than forecast. julie hyman is here. >> i did not get the memo. mcdonald's continues to struggle as it has been. another disappointment with that. 3.3% sales decline domestically. they have been struggling to get the right mix. it has been expanding and experimenting with its menu. particularly with the value side of the equation. like you are saying with walmart, you are seeing the lowest end of the spectrum struggle. that is affecting places like walmart and mcdonald's. on the flipside, if you look at the overall comparable sales normal for last month, you saw a gain of 1.2%. that was better than estimated. the growth is coming from
10:06 am
international. >> they are up 16% for the last 10 years. the new research, are they a damaged wood chip? or is this a tweak in the road? >> if you look at the timeline, it looks like a tweak in the road. particularly if they're going to get that growth from abroad. this weekend, they open their first store in southeast asia. in vietnam. the ceo, don thompson, says they want to expand africa. that is where the growth will come from. by the same token, one third of sales come from the united states. >> we do surveillance research. let's see how many times stephanie ruhle eight at mcdonald's. >> i cannot say. my children's have been there. they love it. do you know why people eat their? it is tasty. it is what it is. myi go with the idea --
10:07 am
number two value meal, i like. mcdonald's, you have to be hooked into the greater economy. not just about mcdonald's. >> that goes back to what i talked about with walmart. you are seeing these various businesses that rely in particular on americans who are making the least. those seem to be the businesses. they are suffering the most. i cannot remember the last time i got anything mcdonald's. >> she is so tiny and healthy. you have to give it to julie hyman. >> the last time it with a lunch, it was not mcdonald's. it was the four seasons. >> nobody loves that like this girl. when we come back, one of the biggest drugmakers is setting its sights. is it too low? we will talk to the ceo of fo
10:08 am
sonifi. and mark andreessen shots off on shareholders. he doesn't on twitter. he even tweeted me. this is "market makers." you are watching bloomberg tv. we are streaming live on your phone, tablet, and ♪
10:09 am
10:10 am
10:11 am
>> good morning everyone. stephanie ruhle and tom keene. the market is down negatively. in washington, forget about the debt ceiling for now. the obama administration is excited to release its newest cyber security strategy. lb this week. u.s. companies are getting hammered. you know about target and others. they will watch that release closely. , our to phil mattingly white house correspondent. he is looking at this.
10:12 am
what is the to do list for the administration as they go to this announcement this week? >> what you're going to see as they are to lay out standards. these are based on executive orders released last year. basically, this is what they have to do because they cannot get a legislative fix out of congress. they will lay out what companies provide critical services. you're talking energy, water, financial services. what they should do to guard against cyber attacks. rigorous put in a safeguards that force companies to do something -- but this one clue that. >> the government will give them a prescription. will they give aid or partnership in terms of funding? >> that is the big missing piece. that is the piece that congress needs to fill. they have not come to an agreement yet. they have been lobbying for this. boeing, ge, bank of america -- they have had private meetings. they need incentives to make this work. any tax incentives to build the infrastructure.
10:13 am
else the protection from lawsuits. they are saying that if we're going to share information with the government, we need to make sure we will not get sued for handing out that information. , i know the day is just starting in washington. with the crack of dawn, what is being done on the debt ceiling? i read a washington post article. it sounds like you accomplish nothing this weekend. you cannot expect lawmakers to work on weekends. definitely not the month of august either. this is all part of the process. you know how this will work or in >> the process or the problem? >> they align here. republicans need some kind of sweetener to get their members and some democrats to vote to move this forward. keep an eye on a clean debt ceiling increase in the house. no republican wants to do it.
10:14 am
they do not want to vote it back to their district. it might be the only option the john boehner has. >> one more switch gears. i know your encyclopedic. texas willistrict in greet janet yellen tomorrow morning on capitol hill. who is jeb hensarling and should janet yellen fear him? >> absolutely. he is the chairman of the house financial services committee. a strong conservative from texas. actually a staffer of phil gramm. chairman of the banking committee. anniversarytuted a investigation of the federal reserve grid on the 100th year in existence, the committee has pledged to spend the year digging into what the fed doesn't how they can change it. janet yellen needs to be on guard. he is a very smart lawmaker. he can try to back witnesses into about spot.
10:15 am
>> thank you so much. and sterling studied economics at texas a&m. >> what a surprise. >> i have no idea which way it will go. michael mckee thinks he will be gentle on chairman ellen. i am not sure. >> wall street is so excited. let's see if he will be a puppeteer. when we come back, a game changer in the nfl. we're talking about pro football getting its first openly gay player. we will talk about it when we come back. you're watching "market makers." you can watch all of our interviews on apple tv. it ran new experience featuring live, streaming, on-demand videos. we are on apple. ♪
10:16 am
10:17 am
10:18 am
>> good morning.
10:19 am
"market makers" this morning. the vix 15.52 -- sonofi is a giant pharmaceutical company. they have their first profit increase in four years. investors wanted to see more growth. some say they are lowering expectations. officerief executive spend most of dabo swinney stephanie ruhle. he joins us now on set. your here with a visit from your president hollande. what i find amazing -- we have not seen a french president and america in 18 years. this stems pay. >> this is the first state visit. there are various types of visits. this is the highest level. obviously, he has been here before, but not with all of the
10:20 am
treatment of a state visit. >> i think most americans are unaware of the size of french business in the united states. there is a substantial french investment in companies in the united states. >> there is. one of the things about being a european company is that you outgrow your domestic market much quicker. historically, european companies have always moved outside of their home countries. the united states has been a logical place. sanofi has been investing for years. a spent $20 billion to invest few years ago. we invested in my finances. >> i thought that was to give bruins tickets. [laughter] >> now you're in biotech. is that the wave of the future? access tot to have innovation and a wide range of resources. it is a risky business and you want to diversify your source of innovation. doing the deal that we did
10:21 am
recently, it is kind of a capital sparing way of having multiple harder ships. you could than $10 million to buy one thing or you could do 12 things for that. >> it seems like the right move. are you frustrated? you forecasted your first increase in four years and investors are not saying it is enough. do you feel like saying what gives? >> i have been in business a long time. investors are always looking for more. i despair. what we're trying to do is say it is not just about the guidance for 2014. we have constructed a company that grows. we have a strong pipeline. we have nine products to launch. 80% of them are in biologics. what i really want to see this company do is distinguish itself from the rest of the industry. on the basis of sustainability and innovation. move much higher. >> are investors unrealistic? the fact they could be
10:22 am
disappointed last week -- our shareholders just expecting too much? , they were disappointed on thursday and happy on friday. the stock is up again on monday. what is important is that you have to run a company for the future. you cannot follow the market trends. we are 120,000 people worldwide. if you look at our investors, a lot have been in the company for 20 years. >> they have been in the company for 20 years. the rap on u.s. investors -- they want to buy adrs in europe. there's a big tone about return. you have had good performance recently. 10% total return. do you see continental europe companies becoming more anglo? more american in focusing on use of cash and shareholder return? actually, we have doubled the
10:23 am
share price in the last three years. >> the last three years has been fined. >> it all depends when you bought and sold. i look at our investments, some of our top investors have been in for 20 years. they're not any different from a european. what you do have to do, if you are this size company, we have one third of our investors in the united states. you do have to make sure you have an investment pieces. i do not think that you have to change your corporate strategy. sounds like a fidelity, a pimco investor. as a corporate ceo, how do you feel about activist investors? are you hoping they do not figure out your phone number? along andivist comes tries to create shareholder value. >> are they? >> it keeps everybody honest. does not apple and it look like iss agrees with carl
10:24 am
icahn. it is not a bad thing that carl icahn put it on the table. what is important is that we are a long-term investment. it takes 10 years to create a product. i need to have a shareholder base that understands those long-term returns. we are necessarily competing for all of the investors. the market is -- you have to subsegment and figure out where to play. where we have been as a company, i have been happy. >> when you look at sanofi, there are a lot of acquisitions. what is your to do list for 2014? is there a geography or industry that is front and center? >> was very exciting here is that we have new products to launch. we have not had a lot of new products in the last 10 years. we have a pcs k-9 that will take your cholesterol -- >> you have flea and tick repellent, from line? >> we love our cats and dogs.
10:25 am
>> fiercely. new products for rheumatoid arthritis. we will focus on new product launches. >> to me, the quiet ring about these companies is not the stuff that makes the headlines. the basic products -- >> what was turned down last year? will you appeal? >> i have never appealed. thatnk this is a product has been approved by 30 countries. we have seen people on phase two studies follow-up. they have been five years without a relapse. of patient lot groups and like to have access to that product. we will -- >> have you filed the appeal? >> you have to consult the fda and then progressively move up the agency. >> what is the best practices versus other drug companies?
10:26 am
what is the single distinction of your company? >> the biggest thing is that we have a business model that allows us to grow because we are in animal health. we're in emerging markets. ishave an r&d pipeline that one of the top five in industry. when you have a nicely growing business and you can bring some important new medicines, you have good leverage. we have a really strong business model. it is less risky, more diverse. >> how about keeping your teams engaged and happy? it seems like people do not want to business in france. how do you run a company and say this is the place to do it? >> life in france is still very good read there are over 1000 years of history. do not count france out. we are able to recruit the best in france. we're one of the biggest market caps in france. we can take the brightest and best out of france.
10:27 am
we can also develop internationally. >> thank you so much. >> thank you so, so much. we will have more when we come back. you are watching "market makers." we're talking with mark andreessen when we come back. ♪
10:28 am
10:29 am
10:30 am
>> live from bloomberg headquarters in new york, this is "market makers," with erik schatzker and stephanie ruhle. >> welcome back. i am stephanie ruhle, joined by tom keene. all we can long, i was fixated by mark andreessen's twitter. almost like an op ed. he writes about a lot of things, like tech investors. i thought this was super interesting. i want to redo one that stood out. at any given time, the shareholder base consists entirely of one -- growth investors, value investors, or no one. away, can these
10:31 am
companies run, or are they under too much scrutiny from shareholders? we analyze every day every single company and ceo. should we give them some space? >> i think it is a raging debate. at the bottom line is like argentina. they feel they have their own rulebook. the tech people in silicon valley people, really feel, that they get to play by a different rule book. >> some sense is missing. companies,tch tech whether ebay or aol, try to figure out their next move, investors do not want to wait. they want to invest in twitter or facebook that they have not seen turn a profit yet. >> that is true. we have seen a lot of shareholder return. amazon is archetype of this. a huge revenue growth, huge promises. very little profit. that is not much different from twitter, which arguably is different.
10:32 am
>> is that the new business model that we should follow? look at the amazon model. that is what we should evaluate. if you look at the fortune 500 companies, they are paralyzed. they are afraid of shareholders. the ceo is afraid of the board. >> i think is an interesting mix. one thing that everyone can agree on is that this is a very different idea. this is a much more mature industry. they are bringing out the new companies, linkedin and twitter and such. they bring up their ipos is very short -- slowly. >> should we give these companies more time to make acquisitions? as soon as you get in -- we have moaned and groaned about microsoft not announcing a ceo. the moment they do, the market response. maybe we should give them slack. >> that is a debate that is out there. mr. andreessen was very visible.
10:33 am
i missed most of these comments because i could not get to the fourth type of flappy birds. >> who better to do this than matt miller? isis an addictive game that soaring to the top of iphone and android app stores. it has disappeared. as tom mentioned, flappy birds -- worst name ever. announced that he cannot take it anymore. he pulled the game without allowing any other publishers to buy it. i cannot explain this phenomenon. there is no room for flappy bird in my dojo. matt miller understand that. explain. is from vietnam. he is an independent developer. this is an exciting story. had one loner programmer who makes a game
10:34 am
against a number one on the charts. this game has 50 million downloads. at one point, near the end, he made $50,000 per day. there you go. better than me. >> i have gotten 27. here's the deal. you can see, instantly from the game, if you have played a lot -- you will recognize the pipes. they are mario hypes. -- pipes. the bird likes like a bird from jet pack joyride. your kids probably now. he must have pulled this because of legal problems. he tweeted that it was not because of legal problems. he said he did not -- he said it ruined my simple life. >> baloney. >> he is not an upper east side hedge fund girl. he is a guy living in vietnam. he is probably all about them
10:35 am
and wants to have a simple life. >> if the copyright is appropriate, he is not dealing from nintendo or jet -- whatever you said. what is this worth? >> how many times revenue are you willing to pay? if it is $50,000 per day that he is making from advertising now -- >> he wants a simple life? have a simple life that of the amazing beach house. he said it is not for any legal reasons. that could be not true. he may have gotten a lot of pressure from developers. he may have gone pressure from nintendo, for example. saying there's a copyright issue. maybe he just did not admit it. there could be a scam to get more people excited about the game. there are a couple of -- you cannot get anymore. there are a couple of phones that have it downloaded on ebay. one was 65 bits, up to $90,000.
10:36 am
>> shut the front door. >> we probably have a full-screen. >> guys ridiculous. i will go with the second point. this is all a marketing campaign -- scam. i did not know what it was. ruined his simple life and he is taking it off and 22 hours. >> this is a marketing scam. >> countdown to get another copy. >> this is adam johnson playing flappy birds. >> he is so good. live on the upper east side. my kids do not know what it is. >> i do not know where you live. tribeca? that was my second guess. >> he lives in the suburbs -- what ever. that will be back with us later. we are talking about bit coin later. about thel talk
10:37 am
college all-american who may be the first openly gay player in the nfl. that is next on "market makers." ♪
10:38 am
10:39 am
10:40 am
>> welcome back. i am stephanie ruhle, joined by tom keene. the nfl may be getting its first openly gay player. the university of missouri all-american michael sam had an interview with yes the and. >> i'm not afraid to tell the world who i am. i am michael sam. i am a college graduate. african-american. and i am gay. sam was the southeastern conference defensive player of the year. he may tie his third for the nfl draft. about this or sam, here is our reporter on all ink, scott. this in no way is a publicity stunt. this is a great player who will get drafted either way.
10:41 am
>> maybe. >> really? >> one scout already said that he might not get drafted at all or if >> now? back it up. i am trying to establish, was he a player who was a contender? >> he was projected as a third or fourth round pick. some gm's say he was overrated. if they are right, and he was a fifth round pick, is he now worth the trouble and the headache of the scrutiny and the attention? >> trouble, headache, scrutiny? i do not accept that. >> you're not in the locker room every sunday. this is about winning. the way ofat gets in winning, anything that takes away from the focus of playing, showing up on time, anything that gets in the way of those things -- coaches and gm's do not like. that any oft think
10:42 am
these players have tons of personal drama in their lives? they are going broke. they have this girl there. suddenly this is -- >> i will give you the mindset of tony richardson, fullback of the new york jets. accomplished player, hung around for 15 years. he is getting his mba. he did not tell a soul. did not tell the owner, did not tell the coach. did not tell his teammates. he did not want everybody knowing that he was thinking about something else in his spare time. this is a guy going for his mba. should be applauded. >> weigh in here, please. >> i think the debate is, what will the nfl dale? they will make their micro decisions. what will be the responsible leadership? >> roger goodell has had a big push on diversity. the head of human resources have a financial background. >> does federal legislation kick in here?
10:43 am
is it like baseball where they get a free ride? >> no. like any employer, no. they are pushing for diversity. the line has been, so what. it is a meritocracy. there is a reality inside locker rooms. what they say publicly and privately are different things. >> the only thing i am struggling with is, is it truly all about business in the locker room? think about layers at strip of throwing money in the air. making it rain. i have been at nightclubs into the wee hours. players parting until the break of dawn. >> they did it together. it brought them together. large groups of players would do it. >> if you go with your team, then you should be there. if you are a homosexual, it does not mix? >> you know that is the big concern. you know that is the culture. >> they need to get with it. >> have you read the text
10:44 am
messages between richie incognito? did you see the languages antlers? >> or the text messages from brett favre? get real. nobody is totally appropriate. >> this should be top down. you need a strong owner, a strong general manager, and a strong coach who is secure. >> you identified a strong owner. in celebration of the super bowl -- is there a jonathan tisch that you would suggest? >> robert kraft of the patriots. look at the indianapolis colts. you have strong organizations. san francisco 49ers is a possibility. >> didn't mike sam come out to his team last summer? >> everybody has known for a year. this is the most amazing part of the story to me. he told his teammates on a college campus a year ago and were never got out.
10:45 am
they must really like the guy. they must really admire and like the guy. >> or maybe it is all about being a team and winning. they told the team they were going to exercise. everybody tell me something that you do not know. he sure did. >> this is also a generational thing. the young kids today, you say this is a gay player -- this is not an issue anymore. >> all right. well, they wanted a push for diversity. they got one. sports reporter, scott such make. >> we have more coming up. cory johnson has been floating around. i have never done this. very cool. zero gravity. we will talk about that experience. cory johnson from "bloomberg west" is next. ♪
10:46 am
10:47 am
10:48 am
>> welcome back. i have stephanie ruhle. richard branson's virgin
10:49 am
galactic will make its maiden voyage sometime this year. those will purchase a 250,000 dollar ticket and may want to get acclimated to the feeling of weightlessness before hand. that is where the zero g corporation comes in. they are partnering with virgin galactic and offering to take anyone who has already purchased a ticket on a parabolic flight that simulates zero gravity. they also offer the experience to anyone willing to pay a price of five grand. cory johnson went down to cape canaveral for a look inside the business of weightlessness. check it out. >> i am cory johnson. right now, this is one of the most enjoyable moments of my life. wow. it was not always that way. a few minutes ago -- i looked like this. i am downing cape canaveral on my way to experience zero gravity with a company called zero g. i am the wrong person to be
10:50 am
doing this. g has recently partnered up with virgin lactic. for passengers who have already purchased tickets on a suborbital flight to get out related -- acclimated to weightlessness. they will also offer up to anyone who'll pony up five grand for the experience. here's how works. the plane climbs to 24,000 feet. it goes into a series of parabolic parts. it flies at extreme angles. it feels like 1.8 geez. pinning passengers to the four. at 34,000 feet, it begins to do dive at an aqueous extreme angle. passengers experience weightlessness. they do it again and again and again. this plane is known as the vomit comet. than four percent of our participants get sick.
10:51 am
it is very rare. i willof our guides -- need some handholding here. a it is becoming more of reality. companies are starting to talk about training. they are bringing customers on board to experience microgravity. it is a wide open market being created now with commercial space. >> that brings us to where we started. this is crazy. this experience comes at a price. a virgin galactic ticket cost 250 grand for six minutes of weightlessness. that is $694 for each second. zero g is causing -- charging five grand for 7.5 minutes of weightlessness. that is $11 per second. weightlessness on the cheap. on more have their eyes than space tourism and thrill seekers. there is big money coming from
10:52 am
nasa. several companies are vying for a lucrative contract on the increasingly outsourced >> space agency. the government space race is over. the capitalist space race on. all be private entities now. >> westoff. russianss paying the each time an astronaut hitches a ride to the space station. a private space station says it will charge $90,000 for local flights. they only have room for one passenger at a time. still ceo jeff bezos is pushing for space for his company blue origin. he wants to take three astronauts and their new shepherd cap so. the odds of that working -- we're back on the ground. paying $5,000 might seem like a lot of point. think of the extra perks. you get to keep the flight suit. there is a set of twitter pictures that will make you the envy of your friends. can you put a price on that? one small step for me, one giant
10:53 am
leap for bloomberg television. >> a small step for cory johnson, but a totally cool, amazing, exciting one. >> i thought it was fascinating. they never show you what happens. does everyone just go bam. >> for $5,000, i am sure that they can put it below under your head. >> i saw the beatles on ed sullivan -- >> did you watch last night? >> i did not. you look back 50 years at the space program. this is all great. all of this inter-orbital stuff. you wonder what we're doing about a mission to mars. i hear nobody talking about that. as cory mentioned, nasa is so outsourced now. we're just playing games. >> the games cori is playing, he sure likes. i have never seen him so happy. he has a problem at work, they
10:54 am
will send him the video. every time he is a complaint, check this out. >> we are 54 minutes after the hour. we have a number of our coming up. right now, we are on the markets. >> let's take a look at where stock stand. not a lot of decisiveness being expressed in today's session. -- theave stocks below s&p 500 is off by four points. the dow dropped about 54. the nasdaq changed less than one point. we are coming off of the best week for stocks this year. the best two-day rally for stocks since october. that is the backdrop for today. also, people are looking for tomorrow. we will hear from janet yellen. they want to know if the worst than estimated jobs report means that the fed will continue on the same track or change. in terms of individual stocks, of course apple is on the list. carl icahn said he was
10:55 am
abandoning his quest to have the technology company come out and increase its buyback. he says that the rate they are buying back stock, they have almost on what we would have requested. hasbro as well -- missing estimates with their numbers. however, shares are over the two day -- they are rising. they're looking to cut activities not related to the bottom line. internet company first quarter revenue -- missing estimates. those shares have been falling. also, sticking with technology, yahoo! -- they may be enlisting yelp for content in their searches. that is helping out those yelp shares today. and loews corporation -- the worst corporate -- performer after its numbers missed estimates in terms of earnings. >> thank you so much. we will be back in just a moment. to speak, we are going
10:56 am
with the ceo of a startup out of apple's app store. that and much more when we come back. you're watching "market makers." i am stephanie ruhle joined by tom keene. ♪
10:57 am
10:58 am
10:59 am
11:00 am
>> live from bloomberg headquarters in new york, this is "market makers." >>. who hopes to get some help from yelp. marissa mayer has a new plan for more search users. >> bitcoin fans have their best shot. removed a bitcoin app from its online store. the been aisasters, lot of dining options at the obama wright house. will they get it right for the president of france? welcome to market maker, i am stephanie ruhle with tom keene. >> it is eight years since we
11:01 am
stop state dinner for the president of france. is a big deal. >> in new york we can laugh at who he is going to sit next to. >> it is dead serious in washington. >> remember three years ago a somewherewife from snuck in? who do you sit next to janet yellen? >> i would be honored to sit next to chairman yellen. we could go down to mcdonald's and have a number to value meal. at 10:00 a.m. tomorrow, key testimony as jalan -- janet yellen makes her first statement as fed chairman. she will talk about what is going on with the economy. michael mckee is here.
11:02 am
her crystal ball is different from that of ben bernanke? >> i don't suspect it will be different. i think people's view of the way the starting the year is different of what they anticipated at the fed and its own forecast last december. it was suggested to her 14 would be a year of three percent growth. it does not appear to started off that way. people will say what about those jobs reports? where are all the jobs we should be seeing? why is housing cratering? why is the manufacturing number week? -- a lot oft questions for her. >> where is stanley fischer in all of this mix? when his name was announced, everyone i spoke to on wall street said great. he is in the mix, he knows how to handle volatile markets.
11:03 am
what is his real role in all this? >> he is going to be a counselee area. he still is in the process of getting from -- confirmed. he is filling out his paperwork of that is an enormous task. he has many steps to take forgets to the hearing room to be confirmed. do not expect to see him on the fed for six months or so. >> the other side of this is who greets her. grew up in college station, texas. he is without question the number one acolyte of phil gramm. he does not like bernanke? >> he had something against government intervention in the markets. that is the way they think about it down there. >> does he come out and ask about the group growing balance sheet? >> that may be too early because
11:04 am
it is just her first meeting. she will probably address that anyway. whenll probably ask her the fed starts to bring down its balance sheet. >> we will be -- she will be dancing around the promoter. see if her fed speak lessons of paying off. >> that is why you are here. >> one of the key questions is what they do about that unappointed threshold. that was their big forward guidance. they are trying to back off from this. they are saying things like it will be appropriate to maintain the target range for the federal funds raised pass the time the unemployed rate declines below six percent. that is a deadly phrase that means never mind. we are going to be clear and say we are not going to hold to that. >> i don't know i would've
11:05 am
deduced never mind out of that. >> michael mckee, thank you so much. he is our chief economic reporter. on bloomberg television. we will go beneath the testimony. be covering it live. be sure to tune in. we come back, we're talking about utah partnering with -- yahoo! partnering with yelp. that is from a source close to the situation. is -- has been working on this story. the name that comes to my mind is one of the cofounders of yelp. is that how this happened? it is interesting.
11:06 am
you're not the only one who had at that. yelp has other deals with microsoft and apple. this may not be a surprising thing. yelp has a lot of great content. got any supple search. it is a good partnership. >> ire member when it was total display for google could increase their search competition. they were 53%. there are now at 67%. what is holding them back? why can't they just gradually build out above 70%? does anyone doubt they can do that? >> there is a lot of moving parts there. that number is usually associated with desktop. i don't think there is any doubt or fear in mountain view, california. search is its core business.
11:07 am
that is why companies like yahoo! are struggling. google can spend and innovate very far ahead. >> was the ability of microsoft to move being forward? will they jettisoned being it? bing? >> they do like it. nice movesade some and others. we do not know what is going to happen. microsoft has spent a lot of investment on its search engine. >> what does this yelp and yahoo! partnership mean? how will it work? >> that is a great question. we are not a the moving parts will come together. if you look at bing, they have a partnership with yelp.
11:08 am
if you do a search on a restaurant in long island, there will be a bunch of reviews on the right side of the screen. they provided by yelp. -- likeook some something like that. decidet the user which one they want? >> that is a great question. yahoo! is going to do what he can to get users like you back. that is the problem, not just of the desktop but smartphones. linehas a lot of a direct with users. it may have more users everyday. day, yelp is the making a lot of inroads. i know how to type www. i
11:09 am
thank you so much for joining us. back, bitcoin fans are devoid -- destroying iphones. there is an app that has been banned by apple. iphone, that is like shooting yourself in the foot. ♪
11:10 am
11:11 am
11:12 am
>> oil is back above $100 a barrel. we have top picks. --re we one less tell television talent show. fox dropping the x factor. simon ratings for the x factor were less than half of those of nbc's the voice. dreamworks animation is getting
11:13 am
into the publishing business. they will stop -- publish children's books. disney has been in the book business since time began. you did not see frozen. it was an extraordinary film. madagascar and come through panda are amazing. fan, but i x factor am a huge simon cowell fan. it is devastating that he is not on a show right now. was stressed about bitcoin. customers can take out cash is normal. bitcoin prices fell last friday.
11:14 am
there were technical issues. customers can exchange bitcoins for cash. the exchange says withdraws will resume once the problems are fixed. i have not turned the corner on bitcoins. not the enthusiast that matt miller is. i am a buyer of this disruptive innovation. i want to talk about another bitcoin contours you. apple is removing a popular bitcoin app from the app store. tech enthusiasts are not happy. take a look at how a few of these winners are responding. >> my name is brett. i'm here to destroy my iphone 5. ♪
11:15 am
>> what bitcoin it needs is a branding person. with anot need brent cigarette hanging out of his mouth smashing and iphone 5 with his golf called -- club. called block chain. he is in london today. matt miller is here with us. what do you think of these videos? >> thank you so much for having me today. i think if support to recognize that the reaction from the community is buried. there are people who are upset with apple and they have demonstrated their frustration i destroying their phones. there are also people who are seriously questioning their motives.
11:16 am
an adultint they had that asked people to think of who the innovators and the misfits were. long time ago people question their ability to succeed in the world. they had adversity. they are using their power and control to potentially rent serious innovation. that is the real question. >> is evil. -- it is evil. shootingpeople are not iphones but switching to other devices. hass interesting that apple without any comment blocked this technology out. for some reason, they are bitcoin. i wonder if you know why it is. what you think the top three reasons are? >> that is a really good
11:17 am
question. we are all eager to understand that as well. crazy that they would surrender the battlefield of digital currency to google. i would bet on google going forward. we are seeing a large amount of people switch. have seen an uptick and downloads the less couple of days. this should not be a big surprise. going forward, they may be telegraphing the intention of building a payment system. it will not be innovative at all. all the fees will still be in place. there will still be issues of fraud and credit card for payment. bitcoin changes all of that. we're watching intently. we would love -- > >> i find this an out of body experience. florida is a state within the some format is become
11:18 am
of prosecution against two individuals for money laundering. i don't know the exact details. every x number of days or weeks, there is some form of criminal or civil threat against a well-intentioned bitcoin industry. how is bitcoin going to respond to that? >> at another specifics. it sounds like you had some individuals that were trading large volumes of assets very and it was as if they were trading or amounts of gold dollars. that is get exaggerated in those french cases. waves. seem to make >> county times or crimes perpetrated with dollars?'. is it a thousand times? is it million times?
11:19 am
is it 100 million times? not blame it on the currency. we blame it on the crime. are you talking to other bitcoin developers who have had a similar experience? >> the general consensus is they are disappointed. everyone hopes that apple will come around. we would love to go operate with apple and build safe, secure apps for everybody. bitcoin is not illegal. it is a rejection of these products that people are spending their livelihood building. it seems strange. >> we you come to an agreement with apple? is thesuming block chain most popular bitcoin app in the world. i use it on my iphone a. i still have it so i can use it. we've come to an agreement? --if anybody has artie app downloaded the app, they can still use it. we are willing to work with them
11:20 am
and would love to find a way to make it cooperative on both sides. think about the issue? ity are still in -- allowing . they say it is an issue with the source code. what do you think we will see as far -- they do half of all the exchange volume. are watching a situation unfold their the demonstrates it is an internal issue. this not a bitcoin problem. they need to resolve this and the more sincere about it. in reality, they are not playing as important a role in the digital currency world. you can go to that stamp. the price will recuperate quickly. hopefully they will get it resolved. every window serves -- everyone deserves to have them being
11:21 am
straightforward. out?w did they cut you what was the comedic asian? .> we get an e-mail there was an unresolved issue. this was strange because we had not heard any other communication in a year and a half. we're not have any complaints about its functionality. it was strange. we are open to working with them and hoping to get it resubmitted for everybody. there is so much innovation happening. .> you get this e-mail you do not know them and issue existing. was there someone you could communicate with? >> the hell you get -- the e-mail you get comes from a do not reply at they have a resolution center were you consummate something. it is an impersonal experience. we hope to break through that is because him and cooperate. >> why don't you call tim cook? >> carl icahn may have his
11:22 am
number. the user much rejoining us. tweet him. that's what you should do. take it a social media, brother. figure for joining us. ceremonyhington, the is a state dinner. what could possibly go wrong for the french president? we look at that next on "market makers." ♪
11:23 am
11:24 am
11:25 am
>> good morning. it is bloomberg on the markets. but as with the dow. it is at -28. i am watching crude. it is over 100. that get your attention.
11:26 am
gas is elevated over the cold that we have had. there is a stronger yen over the last three or four hours. it is not dynamic. there are challenges in japan in the coming months. janet yellen delivers her first report. we will have that tomorrow at 10:00 a.m. , he says heurprises sees sense. he likes and he saw there as well. apple is down on the announcement. 529 on see there from apple. they plummeted a few weeks ago. that picks up much of their domestic cash.
11:27 am
gillianll have a 14 get shares. coming up, we will look at shell oil. good morning. ♪
11:28 am
11:29 am
11:30 am
>> live from bloomberg headquarters in new york, this is "market makers." >> good morning. december 12, 1874. grant gave the first formal state dinner at the white house. it was for the king of hawaii. that was a few years ago. and think of the controversies for the president of france. tabloid headlines we pushed aside. there are important protocol decisions to be made.
11:31 am
in food will not be as good paris. this is a major sweat factor for the white house. what is going on right now question mark >> all kinds of plans going on ind the scenes. one big question is their able to sit being next to the president. who will the senate -- french have sit next to the president. >> can i get cynical here? there are 17 days left in the month. we are facing the debt ceiling and nothing is happening, it upsets me that the white house is spending so much effort on who is going to sit next to the resident at a dinner party. that. have to separate
11:32 am
a lot of that is being done by the first lady's office. times for these kinds of state dinners. they are a distraction or a more impressing issue. there are important issues for them to be discussing. syria, iran, counterterrorism thomas the nsa spying revelations. >> why hasn't not been a state dinner in two years? >> this will be his seventh state dinner. it is controversial to be holding state winners. -- dinners. the economic times are tough. there was a bust we won last year for the brazilian president and she canceled. >> is this a tough ticket? tell me about the social ballet
11:33 am
of washington. is this where they owe chips to people in the democratic party? is it difficult to get through the white house door? hottest one of the tickets in town. it is an opportunity for the white house to say thank you for big supporters. members of congress, members of the business community -- >> are they serving pizza? >> i think the other question is are they going to serve champagne? they usually highlight american wind. .-wine will the use champagne from france or a sparkling wine from california? >> i might have to bust out some champagne in my apartment just in honor of it.
11:34 am
what will people wear? to -- what dong people wear? >> it is black tie. there will be many long dresses. the first white house and then i covered was when bush welcomed the queen of england. that was a white tie and tails affair. tomorrow night will just be black tie. there are some lovely french designers. >> thank you for that update on french article. comeback, what the shell oil boom means to the rest of the economy and the gas pump. you're watching "market makers."
11:35 am
11:36 am
11:37 am
11:38 am
>> with the mac. -- welcome back. do that -- that the chief investment offer. i know you are moaning about the cold weather. the cold weather impacting the natural gas market? enjoying a mild 60 degree day here today. has createdther opportunities in the natural gas market. the rice is are higher as they should be. gas prices for the winter months have gone up tremendously and for the summer months not as much. are trying to exploit some
11:39 am
those opportunities. essentially, you buy the summer months which have not gone up as much as they should. fourink prices should be dollars. now we think it should be at least $.50 higher. the winter months are reflecting that but the summer months are not. monthssome of the summer for our clients and sell the winter. the difference between the natural gas market and the oil market. >> the natural gas market is spot driven. prices in the united states are very isolated. the revolution has made a lot of difference. to twocome down from $12 dollars. now it is trading for about $4.50. it was not for shale oil
11:40 am
production, the price would be higher globally. rise can cut both ways. it hurts people using that gas. but he can spur production. is are any long-term effect or we will see more gas production? does this validate the long-term --ory on the independent energy independence of america? andou see higher prices some more production. you have to be able to store all that production. gas,plenty of natural maybe not for a winter that is a one in 50 years of that. gold, how doook at you evaluate it? >> gold is funny. we can have a conversation for three hours and we can agree to disagree. for when things
11:41 am
go haywire. gold is a safe haven asset. the abilities cost something. what are you paying? it does not pay you yields or dividends. steady,ngs are pretty up, it goesrates go up and gold prices should go down. -- it has the additional property that if the global economy goes haywire, it does well. as an option when things go haywire. i think that is a fair price. you look at the emerging markets, there is high demand out of china and india.
11:42 am
when you see emerging market turmoil and you look at that geography of marginal demand for gold, what does that tell you one year or two years out? can the demand come out and press the price higher? >> the emerging market demand will come back. it is there. the chinese have been buying a lot of gold. indians bought a little less gold because he got very expensive for them as their currency when down by 20%. in theand for jewelry emerging markets is there. that is not done away. what has changed is the u.s. market. >> are there less opportunities in gold or oil? >> in gold. it is not just what the economy is doing. it is also geopolitics, it is supply and demand.
11:43 am
there are a lot of opportunities for trading oil other than gold where it is just does the price go up or down. >> overall, optimist or pessimist when you look at the market? >> probably neutral. i think interest rates will be raised. oil prices will be raised. long-termis anchoring oil prices around $90. you could buy long-term oil at $90 an event happens, you have made 10%. we do not see big movements. there are a lot of opportunities if you analyze the markets closely. >> that is not boring to me. making money is usually a good thing. >> the churn that we have seen in the last number of weeks, there is a reaffirmation of what he said. boring work for the market
11:44 am
last year. volatility separates the men from the boys. figure for joining us. enjoy your sunny weather. bidene come back, joe puts the spotlight on a crumbling infrastructure right here in new york. you're watching bloomberg television. ♪
11:45 am
11:46 am
11:47 am
>> the vice president did not make any friends in new york. joe biden rip the condition of new york laguardia airport. here's what he said. >> if i blindfolded somebody and took them 2:00 in the morning to an airport in hong kong and said where do you think you are, they would say this must be america, it is a modern airport. if i took them to laguardia airport they think they were in
11:48 am
a third world country. >> maybe a little hyperbole. rebuildinging about america's infrastructure. she is a senior economist at bloomberg government. i am waiting for our infrastructure problems to get even marginal. >> we don't need to sit in traffic anymore. our airports are in terrible shape. this is not that much of an exaggeration. the american society of civil engineers has linked our -- ranked our infrastructure and gave it a d+. that was upgraded from last year. airports are bad in this country. congress hopefully is looking at to invest in our crumbling and the structure. >> people won't argue that the
11:49 am
roads are terrible and the bridges are a mess. they don't vote to fix them. motor to have real infrastructure, you need to make cuts and raise taxes. nobody votes for that. how are you going to make progress? >> you are right, stephanie. you get what you pay for. we pay for some lousy infrastructure. the current budget there is 3.3 5 billion for airport improvements. the airport industry would like and pass silly fees that cost to the passenger. darrell issa what to see that. they don't want anything to increase his ticket prices -- airlines do not want to see that. they don't want anything to increase ticket prices. maybe some private dollars to fix the roads. >> i look at this debate. it goes on on. we have had this debate five years ago. with you sitting at bloomberg
11:50 am
government, what would be the catalyst to actually getting something done? do you look to the democrats? the republicans? is it a white house issue or a state issue? > it is all of the above. the highway trust fund goes bust in 2015. the way that highways are funded is to raise gas prices. there is no incentive from either democrats or republicans to raise taxes. revolutionary things like user fees on mileage. that brings privacy issues in terms of tracking your miles traveled. what is it going to take? a huge pothole in the middle of either 495. we need -- >> doing a disaster to strike? >> i hope not.
11:51 am
ae debt ceiling debate is decision coming up. we are racing against the clock for that. hopefully there will be a rethink on how we fund our infrastructure. we're not have a good mechanism. we are bringing private dollars into something like the infrastructure. if the mechanism was a place, we could sidestep the congressional battles. >> where is the vector right now on this? who is winning the battle? the gas tax is not been raised since 1993. it is about $.18. with inflation it should be about $.30. they want better roads. a lot of politicians including chairman shuster of the denver structure committee and president obama cannot take it is the right time for it. >> figure so much.
11:52 am
>> we will be back with more "market makers." ♪ you're watching bloomberg television.
11:53 am
11:54 am
>> that is it for market
11:55 am
makers. >> janet yellen tomorrow. >> she testifies before a house committee. there will be a chorus in the background behind her. they will be singing let her go. >> wait till you see the lego movie. bloomberg tv is taking on the markets. julie hyman is not wearing blue. >> i and not singing either. i am not going to go there. i will leave that for the karaoke bar. it is nine -- time to look at derivatives. they're making use of the option markets. derivative a strategist. record 3.2n a
11:56 am
million options on the vick. people say volatility is going to go down. stocks are going to go up. what is going on? it is kind of an amazing that? that is the most actively traded volatility product. it is at an all-time high. it is clear that from a macro perspective, investors are looking for volatility to climb and stocks to go higher. they have nailed this pullback. the call ratio peaked before the s&p did. his continued to decline sharply. apparently, they were well hedged. on the backend, they are getting short volatility and ostensibly long stocks as well. that sets with our view.
11:57 am
our broad view is we entered a time of structurally low volatility in 2013. we have had eight of these events since then. when we think is likely going to dissipate more and be over and enable stocks is among the more intense. other volatility metrics peaked at through levels in the last 13 months. we are on board with that. the things we saw is an increase in correlation among individual stocks. everything was going down. it made it hard to make money in that environment. we are going up, will we see more differentiation? i know you have a strategy to take advantage of individual stocks that are benefiting from a rebound. >> when stocks come in broadly, they'll come in.
11:58 am
we run a screen of s&p 500 constituents. we isolate stocks that may have been oversold. we want names and reported fourth-quarter earnings. we want them to have beaten consensus estimates and are above their 200 day moving average. we look at how far below they are from their level. we use those two factors equally to create a list of potential targets. >> their business might be performing well, but they were punished along with everybody else more than they should have been. now you're getting into these stocks. let's talk about two of the picks in particular. engineering,cobs they are both industrial. the stock was up 16%.
11:59 am
we -- in the wheelhouse of what we are talking about, the stock was unfairly come in sharply. volatility remains pretty low. bywant to look at it and 135. >> thank you so much. we'll be back on the markets in 30 minutes. ♪
12:00 pm
>> welcome to "lunch money." we tied together the best stories from this news. i am adam johnson. we are going to kick it off with the menu. the ceo of aol gets caught with his foot in his mouth for the second time. vice president joe biden and a fan new york look wordy at airport, but there are other airports that could make the cut for worst airports. in the nation, a college football all-american comes out to all of the world. he could become the first openly gay player in the nfl. they coinedbe


info Stream Only

Uploaded by TV Archive on