tv Bloomberg West Bloomberg February 28, 2014 11:00pm-12:01am EST
>> welcome to the late edition of "bloomberg west" where we cover the movie conveys that shape our world. we are focused on the future of business. apple had an annual shareholder meeting tuesday. investors reelected the board of investors. tim cook promised new gadgets but did not reveal anything new. apple face down carl icahn he wanted an increase in buybacks. the company is sitting on nearly $160 billion in cash.
cory johnson is with me as well. rudy standard fare. one thing that did check me was when asked if you could see into our engineering labs you would not be worried about anything. >> i will say that for all of the bluster that comes out the company in public events with apple is known for bluster, when a ceo says to a shareholder new things are coming, then he has to do it. you can talk to the press all you want and make themes up to your customers. you have a fiscal responsibility to shareholders. >> did he really say something?
>> he talked about the success apple has had in their business, saying they have more money in the last year than any other companies than those who draw oil. they are the most viable company in the world. i would argue that it is not. >> there was also a shareholder that asked about apple's more aggressive policies. he says i care more about climate change that about all of you making money. you should get out of our stock if you do not like that. >> this is why i hate covering these events. there's always some crackpot who has a chance to go to the the microphone, not the climate change believers are crackpots, but i think what happens at these meetings is apple meetings are filled with a lot of ex-employees.
very small positions and hold their stock forever and might to get the chance to see the ceo. it is not necessarily representative of the shareholders at large. >> moving onto microsoft. new chairman john thompson said done with bloomberg television in london, speaking exclusively about the future of the company. he was the guy that spearheaded the search for a new ceo. he was very much behind the movement. tell me more about john thompson. >> a longtime ibm guy. he took semantic and ran one of
many companies in the new emerging world of internet security and became the leader in that business. he made a lot of money for himself in the process. his role as a war member has been just as important. his central role in turning the heat up on steve ballmer is really interesting and one of the untold stories of microsoft. you have seen steve ballmer retired from the company. how much was his own doing? how much was the board asking tougher questions? >> the issue quite frankly for us is about focus. one of the reasons why we chose satya nadella has a strong background. we are excited to watch the next few months unfold as he builds his strategy to reject the company. >> absolutely.
so much will focus on the cloud. the types the company that find the cloud attractive want fast service providers, quick service providers, flexible. how is microsoft going to be more nimble to cater to this consumer? >> microsoft has certainly demonstrated inability to provide how based web form on which others can build applications. on top of that, 365 is a very successful cloud-based application. the combination provides a foundation on which microsoft can clearly grow its cloud-based business. it is focusing on how we we can become more relevant to consumers. it has a strategy launched about a year ago now. it is very much a part of that. it'll be interesting to see how sfatya augments that. >> what lessons will you bring to microsoft as a new chairman? >> i do not know if they are
struggled. we grew from 600 million to 600 billion. if we did have a flat revenue performance. if anything, 43 years in this industry has led me to believe that nothing is more important than focus. >> what do you make of what he had to say? it is obscure this whole moving to the cloud space. what does that actually mean? >> that is the third of four time i have heard the interview. focus on focus. let's think about that. satya nadella is running the cloud business. microsoft is in a lot of businesses and lacks a certain degree of focus. i think that might mean a closer
focus on the cloud. perhaps the shares does not sound like they're off the table. spinning off xboxes, consumers. they can contractually keep a lot of the things they like about that. but spin it off somehow. >> what about the fact that nadella is an insider. >> that is the question. did they categorically decide a year ago to not get rid of the stuff? or is he going to say let's have windows office, xbox and the cloud in mobile and when we separate them? contractually agree to use each other's work. >> we will be watching. thank you. up next, we are joined right here in the studio. he is often called the $700 billion man. the architect of art will be here. ♪
>> welcome back to "bloomberg west." jerry brown just made it official, announcing he is seeking a record for the term. he will be running against neel kashkari. he's also called the $700 billion man. now again republican candidate for governor. you are very hit to the new technology. i know you're big on twitter and instagram. you take a lots of reverse selfies, showing your perspective of the crowd. you're also an engineer. you used to work at nasa. >> my first job in california was for a nasa contractor. >> it is curious how it may have helped you as a politician.
>> policymaking is problem solving. when you're trying to unwrap it, that is what engineers do all day. >> you welcomed jerry brown on twitter and tweeted even though you do not want to acknowledge them, we're going to get the 24% living in poverty a voice. he has record approval ratings. what makes you think you can win now? >> people generally like him. only about a third of voters think he should be did. when he is patting himself on the act that he has fixed all the problems, for millions it rings hollow. their kids are graduated with low debt and no jobs. the education system california is ranked 46th in america and we are 41 and poverty. 21% live in poverty today. it is not even a knowledge them. >> you are best known for tarp.
you gave money to detroit. with basically no strings attached. you gave money to the 1%. how do you justify that to the people who could be voting for you? >> when we faced the worst economic crisis since the great depression, we got republicans and democrats to work together and we are tech did the taxpayer. we got every single dollar back. we made a $13 billion profit for the american people. there's a program that has ever done that. >> you have said the campaign is about jobs and education. it talked about tax incentives in regulation. what kind of tax incentives would you pursue? how much would that cost? >> there is a contest to compete to bring jobs to their states. we are not competing.
we are asleep. governor brown is not traveling insane bring your factory here. elon musk just yesterday announced his new battery factory. not looking to build in california. i do not fault elon musk for making a wild business decision. we need to improve california's economic climate so we are in the hunt. if you look up these windows, we have some natural advantages in california. nobody wants to move to texas. people love california. we do not need to be the cheapest place in the world but we need to be competitive and we are not. >> apple is building in arizona, apple in texas. how would you get them to do california instead. >> the regulatory litigation complex in sacramento is out of control. hundreds of regulations every year. it is like a giant ball of yarn because bigger and bigger.
we need to reign that and. when legislators want to build a new arena, they take it from the environmental review because they know it will cost so much more money. if it is good enough for their projects, why not enough for apple? why do they play by a harder set of rules on the politicians get a better set of rules? that is not there. >> what specifically about tax incentives? >> we do not cap to out texas texas because people want to come to california but we can create incentives to bring factories to count when you and me become up for ways for them to pay back the taxpayers. what we did in washington was the use taxpayer money. then we got the money back. error programs like that that we can look at to make it effective. >> like what? >> i was in alabama. i asked him how did you get this booming auto sector? they created long-term incentives to bring the first
few to alabama. then they developed a skilled labor force. then moore said be want to tap into the skilled workers. they started building more fact trees. i want to bring manufacturing back to california. it is how they design great technologies. if we do this, we can bring down 17%. 17% of california's need work. we can bring that down by putting people back to work. he wants it split into six dates. >> i like tim draper. i love california the way it is. i want to bring major economic and political change to california. if we do that, i think even tim draper will be happy.
>> what about minimum wage? a governor brown just raised minimum wage. wouldn't that help the poor? >> minimum wage increases are very low. it is devastating for those workers who are now out of work you were making eight dollars and are now out of a job. if we do that, everybody's wages will increase. >> i will talk to more about this after a quick break. neel kashkari here in california. we will have much more with him after this quick break. ♪
>> welcome back to "bloomberg west." we return now with our interview with neel kashkari. i want to talk to you a little bit about some of the tensions simmering around any quality in the bay area. the war on the 1%. tom perkins compared it to the persecution of jews in germany. he apologize for the metaphor
but he believes the 99% as demonizing the 1% when it comes to protesting against things like this. >> i think this is all about a lack of opportunity. we'll may have economic growth with a completely failed education system, inequality expands massively. we make a fairer society by making sure kids get a good education. i've visited some great schools that have taken the most disadvantaged kids and open their future through great education. if we put people back to work and we fix the schools, then we truly have an americatocrcy. i understand it. california schools are ranked 46 in america. if you travel around the bay area, this is such an amazing place. so much success and so much failure nearby. failing schools where kids are not getting a fair chance to participate.
>> what do tech companies want to the non-tech community to education? >> we all have a responsibility to each other. >> what should the googles of the world be doing? >> continuing to advocate for how is it that sergey brin and the leadership of google have had so much success? i got a great education. i know many tech founders and ceos are donating money to education. they know that education is the key to the future. governor brown says we're doing great yet our schools are ranked 46 and america. unless we get every kid in california and america a good education, we will not be a fair society. >> you oppose prop 30. without the tax increase, there would not be more spending on schools. >> that is the light. he sold it as though it was an
education for graham. the money is going to fund pensions. we spent $40 billion or more in k-12. only about half of the money is getting into the classroom. half is going into administration and bureaucracy and overhang. this is not about throwing more money into a leaky bucket. he does not want to do the hard work of fixing structural problems. he wants to for more water into the leaky bucket. >> you called the high-speed rail the crazy train. what is the alternative? >> we have a lot and need in our state. jobs. education. of all of our needs, who can argue spending $70 billion makes sense? i live in orange county. it makes the two hours to drive two hours. it takes two hours to drive to los angeles. >> what would you have done
differently what comes to the drought in california? >> there's limits to what the government can do right now. the truth is we should have been building more water storage for years. we should be building more storage right now so the next time we have a drought we are actually prepared. it is a lack of preparation. governor brown is on the budget here at the stock market went up last year. you and i know he had nothing to do with that. if it goes down this year, it will evaporate. >> the legislature is controlled by the democrats. you are a republican. how would you push your agenda? >> if i run a good campaign, i want to help other republicans get into the state senate and assembly so that the democrats no longer have a super majority. we need a vibrant two-party system in california. government works better will have a two-party system. in washington, we work with both
parties, republicans and the democrats. i worked for resident bush them president obama asked me to stay. >> your former bosses at pimco have been in the news. they reported disagreements. what was the relationship really like? >> it was very constructive. they worked very well together. i have a lot of respect for both of them. they have a deep bench. they will do great. >> why did you leave? >> to explore running for governor. i had a great experience there. >> according to reports, they disagreed over everything. trading, personnel. >> it is overblown. does anybody go back and say steve jobs was too demanding a boss? no. >> how much freedom did stock managers really have to make decisions that different? >> the manager would not go in and start buying greek stocks.
the equity managers have full discretion. i look go gross in the eye every day. >> you wrote a note of a tightening cutting entitlements. do you still believe that? >> i think we need to have an honest conversation. in california, we are on the hook for more than $500 billion of unfunded liabilities. governor brown has not acknowledged the magnitude. we need to have an honest conversation. >> one the question. if sheryl sandberg wanted to run for governor, what would you think? >> i would welcome the challenge. >> neel kashkari here in california. oscars are this weekend. it is not just movie stars being
>> you are watching "bloomberg west." apple is holding its annual shareholder meeting today where the full apple board was did. tim cook also said apple will have an up date on its cash policies within 60 days. carl icahn have been pushing apple to use its cash to buy back more stock but dropped to the plan to force a vote on the issue and apparently has turned his attention to ebay. the days of rapid growth that twitter may be over. one fit access twitter once a month. the growth rate is expected to
slow from 19% to 10% by 2015. by 2018 only 65 million will be logging in. the facebook audience is arty twice that size today. a british man charged with hacking into the federal reserve's computers aces up to 12 years in prison. he announced the charges in the indictment. he allegedly hacked the fed computers between october 2012 through february of last year and posted personal user information online. the crypto currency immunity is watching the drama unravel with mt. gox. there are now being sued by one of the customers for misappropriation of user
property. the class action case was found yesterday and seeks to represent all u.s. users who lost money. can this lawsuit hold any weight? cory johnson is back with us as well. are they ever going to get their money back? >> where do the coins go? was mt. gox participated? can it be proven? >> the money disappeared. there is no regulation. is there real recourse? >> imagine the owners of bitcoin he says hold the money for us and the guy holding the money said it just disappeared. that is the issue. one of the big issues will be what happens going forward with an covering this and any lawsuits. we are joined by mark williams. as a former regulator, in particular, i am wondering what
you make of the role of a trading operation like mt. gox in bitcoin? >> it is not even trading operation. no controls. it is a mess. clearly what this represents to the market is that there are other exchanges out there in the bitcoin world which are run this way. the standards were really low. customers lost lots of money. >> i wonder what kinds of specific legal requirements banks have that are different than what these kinds of exchanges have that might have served as a model for such exchanges like mt. gox. >> the banks themselves have a control system. they have internal policies and procedures. they have external auditors that come in. we also have regulators that
come in and find them if they are not complying with these high standards. compare that to what we have in bitcoin world. in the bitcoin world, we have exchanges. many of them with different level of standards. we also see specifically that there is no control environment in place. we had cyber hackers come in now up to two years to stool these coins. not only do they steal customer points but they stole 100,000 coins from the owner specifically. >> what do you think is the likelihood that these people will ever get their money back? there is no regulation? there are no laws? why should they? >> that is the fed dory. assumes there's no consumer protection whatsoever and without the consumer protection, these investors could lose
everything. most probably they have lost everything. bitcoin itself is untraceable. once these transactions are done, they are irreversible. it is anonymous. it is hard to track down the criminals. it is hard to get the money back. >> it also seems to me, i'm not a lawyer by any means, establishing standing, the most basic legal principle that any suit has to go through, is virtually impossible because of the way bitcoin is designed it so there is no location and place. >> that is correct. there's no legal structure over the top of it as well as any sort of regulation over it. the chance of getting money back is quite low. what is very interesting about this whole story is the fact that this is really bitcoin being tested in the real world. although the protocol has
claimed to be very strong, the infrastructure around the protocol, those industries that support the structure appear to be weak. that changes only as strong as its weakest link. that is what we see with mt. gox. >> i didn't really care about the guy that lost the money. i am a mean person. i just care about people. i do care about the structure. the risk with bitcoin is how it is different than other things because of its anonymity. that is what makes it attractive but it creates an inherent risk within the product. can it ever get away from the inherent risk? >> three things have to happen. it has to be regulated. there has to be a high standard set during this currency is nation-less so it has to be a mobile high standard. we have to get away from the anonymous coins. if not, look at what has happened here. criminals were very efficient and fast that transferring the value. without the customers even knowing. now the customers have zero
full disclosure. tolls are treated on the fly. they're always thinking of way they have to jim of new things. this generally works within a film's budget. here are some of the back story. if you solve the "transformers, dark of the moon" you might recall a sea of exploding cars. this is not cgi. you have real cars and there. even school buses. the device that makes it happen is a pneumatic car flipper. john fraser helped dream it up when he was shooting armageddon. >> this is michael bay's favorite toy. >> a car is placed on top of the car flipper. it looks like a floor jack it is loaded with high-pressure nitrogen that pushes it into a piston which throws the car sparse 25 feet.
>> you want to get the air and asked fast and as much as you can. that is what makes it work. 3, 2, 1. that's how you flip a car. >> before car flippers, the choice was mechanics. now they have a couple hundred bucks a day. >> this is the most economical way to flip a static car. this is going to cost you 2500 bucks. if you times that by 25 or 30 cars, it is expensive. >> if you really want to get fancy -- >> we will get back 200 feet. you pull on that high-speed accelerator. it will just pulled the car. >> once you put the car in rough shape, what do you do? >> they will all go to a wrecker and in four more years or something they may look like a
bobsled. >> when i was standing a few feet away and they were going to flip, i was getting a little wimpy. i thought like they needed some safety goggles. there's pretty good precision. >> nobody is dying as a result of this. right? >> absolutely not. one of the reasons it came about was the filming of the movie "armageddon" a lot of people were living in this area were concerned about not having control over the process. this revised a little bit of science behind the filmmaking process and makes it a little bit easier. >> i understand some other players behind the scenes, visual effects workers are planning to protest on sunday. what can you tell us about that? >> the big deal in the city, there is concerned that studios have cut costs.
a lot of jobs on the production side have gone to other cities or countries. that has resulted in some bankruptcies and some companies having fewer production shots. there's no bigger stage than the author's. they want to get the word out about that. >> all right. i want to bring in michael gold come made the executive director of this forecast that predict it rectally five out of the six winners. what do you use to predict the oscars? >> it is great to be here. thanks for having me back. there are five things we look at any we're making a prediction. one, social media. two, the vetting markets. we also look at the previous wins and nominations and the guild awards leading up to the academy as well as other awards like the critics choice and golden globes. >> best picture.
you are saying "12 years a slave." what about "gravity." >> it is a tossup. this year they really split down the middle the key awards. they tied for the pgas. it is the most important predictor of who is going to win. it is anyone's guess at this point. >> what do people in hollywood think about a company using big data to predict the most coveted award in your territory? >> it is pretty incredible technology. it is true. it is tough to say this year. the studios though generally bet on newspaper ads. they spend millions of dollars on that because at the end of the day, it is not with the crowd thinks.
it is what a few thousand people who vote think. it is a very subjective process. this is an objective way of measuring a very subjective game. >> let's run through them. the structure. -- best director. >> alfonso cuaron for "gravity." sandra bullock throughout the movie talked about how space or queasy all the time. i did a little motion sick just pushing my kid that the big run on the swing. i felt great throw the whole movie. that is a technical feat. >> i thought it was spectacular. >> best actor, you are say matthew mcconaughey. what about leo?
he is the crowd favorite. >> that is absolutely true. he's blowing up social media. no doubt he is the crowd favorites. the numbers are not behind him. the key awards leading up to the oscars really reflect how the small group of voters are going to react. >> matthew mcconaughey's performance was almost shocking. what are they saying in hollywood about matthew versus leo? >> i think he is in a great spots. i think he is in a great spot. i was going to bet, i would bet on matthew mcconaughey. there are certain studios that can be in a position to benefit from smaller films. he benefits as is the studio. >> best actress, you guys are going for cate blanchett. "blue jasmine."
>> it is a packed race with meryl streep, amy adams, dame judi dench. cate blanchett deftly has the edge. >> best supporting actor, jared leto. >> the critics love him. i think he has this one wrapped up. >> his speech at the golden globes was very moving. we will be watching to see if you can get six out of six right this year. thank you so much for joining us today. we will be back with more of the show after a quick break. ♪
start to be added. hardware as well as software adaption's. the latest effort. >> we have a guest with us right now to talk about it. in mechanical engineering professor who joins us now from m.i.t. tell me about what we are seeing that is so very different right now. >> great to talk to you. they are taking a technology that has been around a wild, localization and mapping developed primarily for robots and sticking it on a smart phone. what is exciting is bringing 3-d perception of our environment onto a phone. opportunities like indoor gps
and the ability to build 3-d maps and localize people and add information about the world. it is a really exciting space to bring search into the everyday environments. >> i want to break this into two things. let's start with the technology. what is the technological innovation that is very different as opposed to the evolutionary difference? >> a key difference is just bringing it together, the level of integration. some of the things have existed that laptops or more computing. in terms of packing it in such a small device, that is the key innovation. as you move a device through the world, it accrues uncertainty. your position grows. if you had a map, you can localize or sell. we do not have a map. the key thing is to concurrently map the environment and localize the device. >> give that to me again. simultaneous localization and mapping. it is a problem i have dedicated
this to. sebastian led the project. he was one of the key contributors. what exciting is a lot of this is getting into real physical devices that can be to point out there. >> it is a different thing. it's a little more basketball. this seems to be a common thread. >> right. the opportunity to capture so much data and to register it and remove the insurgency and stitch it all together, it does open pretty amazing possibilities. imagine going to a big office environment and being able to determine the physical locations
of objects and registered together. you really get at the equivalent of being able to locate objects. you can combine it with the clouds and next oyster. where are my car keys? it could be a search before the real physical world. thank you very much. >> now it is time for the "bwest byte." what do you got? >> big news. number three. do you know this? today is our third anniversary of the show. >> it is. >> this is so unfair. is there one where he did not have the goatee? >> there was no tie. there was no broken hand. happy anniversary. three years of this. what do you think?
lovely. you're always innovating. it is always an iteration. you will not know unless you try. you have to take the big risks. >> it has been incredible. we need a facial hair montage. >> i would say that your appearance has changed the lease. whitney say? -- what would you say? can always count on john. it is always been a wonderful three years. >> it is adjusting to watch the stories we thought would be the big themes. mobile and the cloud has been adopted. >> what is my hair going to look like in three more years? >> that is the big question. >> i hope you will watch for three more years. ♪