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tv   In the Loop With Betty Liu  Bloomberg  May 15, 2014 8:00am-10:01am EDT

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in the loop today. first, here's a look at our top headlines this point. shares of walmart falling in premarket trade. the world's largest retailer posted profits that missed estimates. the euro area economy still in low gear. crew .2% in the first order. a proposed takeover the health care industry. kindred healthcare has offered -- genteelealth port iva health. the disappointing outlook on walmart. if you have been digging into what's going on here. with allhat went on the retailers. it was the weather affect, which took three cents per share off the earnings-per-share
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number. fell. we know what went on there. there were some other headwinds that are going to persist into the second quarter. to -- everybody is thinking, ok, the first corner was bad. aren't things looking up? a couple of different things going on. the company is still seeing a lot of currency headwinds because it has a big international business. health care costs have been going up. not just health care inflation, but also enrollment of berries and ploys and health care plans have been higher than anticipated. there is the continuing effect the food stamps program. all of these things are still happening. in the second quarter, they will
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take a toll. >> is anything going to change? like it.s not sound unless you look at the comparable sales numbers. ,ou will find the u.s. business those trends are starting to improve. it will be interesting to see the disconnect in the second quarter when the number ends up coming out between that sales number. are they seeing more traffic or more people in the store is spending more money? , if you are number getting the bytes from these other effects we are talking about like health care costs. >> what about walmart online? >> their continuing on pretty well. when a seven percent increase in online sales in the first quarter. after a 30% increase last year. the company has been very inquisitive in technology. it has been buying up companies like a recipe technology company and the company that manages website performance
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optimization. it has made a lot of acquisitions there. there are 2000 folks employed on the west coast working for walmart. when of the executives at y arert.com says ther building a technology within the world's largest retailer. you don't think of walmart as an -- they are expecting to do $13 billion in online sales this year. >> thank you so much. julie hyman. the biggest internet company in the world is squaring off against the country's biggest service providers over the issue of net neutrality. it's all coming to a head today as the fcc is expected to release its proposed rules about the future of the open internet. ,o better understand this issue bloomberg west editor-at-large cory johnson helps break it down for us. >> al gore did not invent the
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internet. but he did invent the information superhighway. what better metaphor to help explain this idea of the controversial notion of net neutrality? let's take a drive. guzzling -- agas metaphor for a video. we hit the interstate amid the backbone of the internet at full speed. as fast as 100 gigabits a second. backbone is owned by a handful of companies like at&t and centurylink. all of our fellow travelers are going the same fast speed. that last mile is owned by a number of internet service providers. they have different rules for the road.
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we may have gotten off th information superhighway and we are now hitting traffic. the netflix 18 wheeler monster truck him as long as they are able to pay for their own fast lane. that is the deal that netflix comcast.th is that fair? then neutrality would make an even playing field for all the drivers on a road in that last mile. tocast and time warner cable like this. they want to have their own rules for the road. drivers like us, we want to enjoy the freedom of the open road. reckoning inf .ashington is happening grad facing a tough proposal, tough strategy. peter cook has the latest. people have camped out at the fcc to get into this meeting?
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can see the protest signs behind me. there have been protesters camped out here so they can gain access to the meeting which began at 10:30. people have left to get in line. with what tomned wheeler is proposing here. they consider what they have put on paper as an abandonment of .et neutrality principles you have a lot of internet service providers worried that he could take this thing in a different. the fcccame outside yesterday to meet with the protesters. we have a picture of him holding up a sign saying "honk if you support an open internet." he's is under a lot of criticism from all sides. we will actually see the details hands outhen he the proposal to the public in that room. we will know if he has the
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support of his fellow commissioners on the fcc to move this proposal forward. one thing about this plan, a couple of things we do know -- fromll block isps preventing legal content. it will allow them to put some traffic in a faster lane under some circumstances. it will be a high hurdle to get there. it was a commercial reasonable deal -- he suggested a high legal bar. he is asking the fcc to consider r a more draconian alternative. reclassifying them and services as telecom services like a public utility. this would be a huge step up... he moves in that direction. you have internet companies like google and amazon and others worried that these provisions
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would cost some -- caused some discrimination out there. >> does he have the support? >> that is still an open question. the total is a mystery. you would think, would not bring it if you do not have the support of at least two other commissioners. it is still on the agenda. the duke commissioners to watch -- the two commissioners to watch closely -- you would think it would go up for public comment. some months down the road, this is just a proposal. this is an initial step. >> there is another big issue at today's meeting. a second issue here
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that is not getting nearly the attention. this is a more important issue because it's a final rule for broadcast spectrum options that will take place next year. these are the most valuable real estate in the airwaves. airwaves that belong to broadcasters that could be ideal for wireless committee case and. you will have rules set today muchwill establish how companies like at&t and verizon can bid on in this space. and set the rules for the broadcasters -- how much money they can get for voluntarily turning these airwaves over. does that ultimately reduce the amount of money that will be bid on this spectrum? this is another huge issue that is being overshadowed. >> peter, thank you so much. >> moving and shaking this hour, new york attorney general eric
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schneiderman is taking another shot at airbnb. he has issued a revised subpoena. his first subpoena was ruled as too broad. bnb -- he is worried that the hosts are breaking laws. best food workers in 30 countries try to hold another strike over their pay. -- fast food workers. elon musk wants a chunk of the military's satellite business. he might get help from an unlikely source. ♪
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you might want to prepare for
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a long wait at mcdonald's. it fast food workers at 150 u.s. cities and more than 30 countries are participating in what is expected to be the largest ever strike against the industry. yang yang looking into that issue. the ceo the restaurant chain, firehouse subs. he has been local about -- vocal about imposing and increase the minimum wage. the fast food wage fight has gone global now. >> it certainly has. hope thes international reach of the strike will help convince major chains to pay
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their workers better. it is the u.s. industry that is the target of the strike here. a 28 states, workers hope that thousands of faces on the cause, they can win an increase in the current hourly to $15 an hour. the target will be far off. >> what is their argument beyond getting thousands of people to strike around the world? using campaign is plenty of facts and figures to make the case here. one is the number 1200. the ceo to worker pay ratio in the fast food industry. the largest of any of the industries. many of those businesses say those races would mean decrease hiring and increases in many prices. says they offer competitive pay and benefits and this is an important discussion. it's a highly competitive industry.
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mcdonald's restaurants will remain open thanks to their dedicated employees. >> $15 is more than twice the current wage now. how are they justifying this doubling of wages? --it's definitely a big they're making the distinction that the $15 an hour figure is a living wage. meeting just high enough to afford basics like food, shelter, health care without the need for public assistance. when you take an average of the calculated living wages for the , the livingd d.c. wage to support just one adult $9.21 an hour. that jumps to $19 for one adult raising one child. it the lowest state living wage for one adult is $16 and three cents in south dakota and $26 and d.c.
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d.c. is not one of the cities participating in today's strike. >> thank you so much for that. let's turn to don fox, who has been listening in on this. he is the ceo firehouse subs. it's not a matter of a right or not. every employee, every person has the right to pursue a profession of their choice. to work as hard as they can on it and contribute and earn based on the merit of their performance and the type of job they have selected. -- it's veryd difficult to make any living, much less save money on the current minimum wage. why not hike that so people can have a better standard of living? >> the business model for small on that is not built
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premise. i will speak specifically about the restaurant industry. the restaurant industry, hourly positions are generally entry-level positions. at the first rung on the ladder. examplese myself as an -- i started at 16 years old 40 years ago as a dishwasher in a family-owned restaurant making below minimum wage off the books at the time. that? you pay taxes on >> yes, i did. i got the paperwork at the end of the year. >> go ahead. it's really a matter of the nature of the jobs in the industry. we have a diversity of people who work in the industry. more commonly, it's the young,
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entry-level position. if i look at the number of people who make minimum wage within the industry, it's a very small, single digit number. for those in the industry that would aspire to get towards wage levels that you mentioned, it is right in the sweet spot for a server in the history. someone who is working on tips in a casual dining restaurant will earn $16 an hour. i would say to any folks who are currently at minimum wage and are looking at the restaurant industry as a lifelong career, not as an entry-level job, theer and do better and do absolute best job you can and improve yourself and there are tons of opportunities out there within this business. not everyone can get to -- you are not just a special case,
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but there are some people who have gone to work and entry-level jobs and have risen up the ranks. that gets more and more narrow the higher you go. --t about people >> there are hundreds of thousands of opportunities. every restaurant has a general manager, manager and staff. all of those jobs are well above the median income levels. i will give you an example. we have a firehouse subs restaurant in texas. a very booming area. starting wage therefore a student part-time is nine dollars an hour. a full-time mix a minimum of $12 an hour. that is the driver. great point.ade a
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that is a student who is not likely going to stay at that level. and may have help from their parents or whoever. what about the people who are trying to survive on that wage and raise a family? a relatively small percentage of the workforce in the restaurant industry. 50% of americans have worked in the restaurant industry at one point or another in their lives. job in the restaurant industry as their first job. it's the very nature of it. the business model is built around that premise. the average restaurant in the pretax rockethas of five percent. pretax profit of five percent. if minimum wage goes to $15, that is a doubling. 20 goes to hourly labor improvement. you're talking 40% inflation. >> thank you so much.
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loopu're watching "in the ." streaming on your phone and bloomberg.com. his look at our top headlines. walmart ready to -- blaming sphere winter weather for first order earnings that trailed wall street estimates. sales fell by 0.2%. they posted second-quarter earnings that were below estimates. what is going on? ge's bid may have hit a roadblock. itself the power to block foreign takeovers and what it considers strategic industry. a 2005 law that says that
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foreign investors can make improvements in areas that are critical to national security. jim announcing another recall. -- gm announcing the recall. recalling 140,000 of its chevy malibu is because the brakes could fail. -- ithicles were is 26 minutes past the hour. which means bloomberg television is on the markets. equity futures are slightly lower today. we will get a whole rack of economic numbers, including cpi we will get initial jobless claims as well. did we fall closer to the 300,000 level? we will find out in just a few minutes. as part of a $13 billion its mortgageer lending practices, jpmorgan paid the state.
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the problem is how to spend that money. the new york state attorney general and governor have agreed to split a small portion of this. it leaves $450 million up for grabs. i'm curious how wall street billionaire wilbur ross would put that money to good use. founder of a $9 billion investment bank. ray to see this point. how would you spend this money smartly? >> if i were the governor, i would legalize fracking. there is plenty of natural gas reserves of their and very few jobs upstate. it would not take any money. >> is a democratic-controlled state. that will never happen. >> pennsylvania is a democratic-controlled state and they have plenty of fracking. ohio and west virginia do. could be put into
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things down state to help the very severe housing shortage. studied this have a lot. now that we have this money, what could actually be used to help homeowners? >> there are several things. one of the problems that every home lender has because they have -- schools. theyovernor is saying that will do statewide pre-k. maybe something in early childhood education would be a good activity. or something to help jumpstart low cost housing. >> should any of this be given straight back to homeowners? these are all theoretical things and mostly technical problems that the banks did wrong. >> i think it would be hard to
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pinpoint the individual. >> there has never been a case i know of where someone who did not have a mortgage and was not in default. there are all of these claims that there was signings -- that is true. the real question is, was anyone actually just processed of their property incorrectly? >> is it surprising to you that the attorney general and the governor have to fight over this money? year.s an election >> true. it still does not answer the question. >> i think it does. everybody is running around trying to get more headlines. >> yes. and aig wants to use some of that money to boost their own political points. the fundamental question is, should they have a right to use
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any of this settlement money for their own purposes? --i think it's a question of i'm not enough of a legal expert to know if it's the right answer or not. >> if you just put it in one big pool, a gets lost and you do not get headlines. >> we are going to get breaking news on the economy. we're going to get inflation numbers, cpi coming in line with estimates. jobless claims, 297,000 claims. far less than what economists had estimated. also, some good news on the
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.anufacturing front 19 is where the index is. the survey calls for an index reading of six. mike mckee, what is going on? >> an awful lot to go through. the economy seems to be picking up as forecast, the jobless claims are lowest since may of 2007, well before the whole housing crisis and recession got underway. this is the week before the survey week for the april payrolls. you will have a lot of people looking for a big number come the first of june. looking at cpi, this is the one that people have been watching for. it comes in as expected when you look at the numbers down below. food prices are up. that is something everybody has been watching.
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not a huge job, but keep your eye on it. medical care, this was the wild card. a year ago, medical care prices plunged as the sequester hit medicare. now, we see them come back again. that is putting us back up to a 2% rate their. empire manufacturing is at 19. people will be concerned about that. we see a big rise in their index of unemployment. that will figure into their calculations. yields might rise a little bit for these lows that we are seeing. more newsetting some from general motors. more recalls here. the company is saying they are reporting five safety recalls, covering about 2.7 million u.s. vehicles. that was outside of the recalls i mentioned about the chevy malibu. the recalls will charge the company up to $200 million.
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based on these recalls, no fatalities. trucks for alling tie rod defect. we'll have more on this. five safety recalls from gm. covering 2.7 million vehicles this morning. the bad news keeps happening for gm. are you as incredulous as the rest of us about this? >> i feel they have their act pretty well together. i do not understand why this is strip teasing one problem after another. >> what do you think is happening to the company? the more they dig in, the more problems they find? >> it is very puzzling. one day it is brakes, one day it is something else. >> i don't know if i want to buy a gm car.
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i am not in the market for a car. hang out with me for a moment. the 9/11 memorial and museum is set to open next week. up next, michael bloomberg talks for theout this project city and the country. ♪
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>> president obama will deliver remarks at the national september 11 memorial museum, 13 years after the attack. it will open on may 21. "market makers" anchor, stephanie ruhle, sat down with michael bloomberg.
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somebody had to pull it together. we had great people who made enormous progress in getting commitments for $150 million. a lot of work had been done with the port authority and the states of new york, new jersey, several -- city, federal, government. the controversy had taken over and he came the story itself. you need somebody to say look, we cannot all do everything. idea.not include every that is not the real world. we want to live -- listen to everybody. somebody has to make a decision. decisions are made by an executive. you don't start out by saying you have an unlimited budget, use it and we will see what it costs. you cannot do that in the real world. we would have to raise an enormous amount of money privately.
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donors wanted to know that their money was going to be well spent and that it was going to be well done. how did you get david cook and john stewart on the same page? i don't inc. they live on the same planet. >> that is not true. most expressed -- both expressed their views. they stand up and say what they believe. if you take a look at who gave the money for the 9/11 memorial and museum, there are seven or 800,000 different people. most of them do not have the visibility or the net worth of these, but they are just as generous in their own ways. they all wanted to be part of this. iey wanted to be able to say, helped make that possible, and they did. has your relationship with the families been? have you gotten pushback? what feedback are you getting today?
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>> after they recognize the power and the names, they all became converts. >> what story do you think should be told? that there were a small handful of people who tried to take away your children's right to say what they want to say, to believe what they want to believe, to associate with, to be in charge of their own destiny and that the world came to our aid when this cowardly act took place and democracy has come out stronger because of this going into it. >> that was michael bloomberg.
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tune into "market makers" and we will bring you the president's remarks later this morning. phil mattingly joins us now. the new york times experience -- describes the experience as of a gut punch. to hit on the resilience of new york city, the resilience of the country to bounce back after the attacks. the other thing, this is something jay carney pointed out, he wants to draw people's attention to this. everybody who was alive at that point remembers this moment with "searing clarity." what he is saying is there were a lot of folks who were not alive and do not remember this. to president is going to try
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make sure the country remembers and remembers with clarity how terrible that day was. meanany will be very notable people there. who is going to be there of note? >> you will see michael , billerg, rudy giuliani de blasio, the president, the first lady, a lot of notables there for sure. >> thank you. as you just saw, politicians united today at the 9/11 memorial. can they stay that way at work in washington? we are back with wilbur ross. as michael bloomberg put it, the world had come together to support new york.
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we all came together. since, have we squandered some of that goodwill ? >> we are in a congressional rescue year. everybody in washington is on pins and needles. remembered this quote -- three things a politician decides before going to bed -- one, i must be elected, too, my arty must regain control and three, don't forget about the first two. where'd he get the money to get control of the senate? >> it is happening of its own accord. for the first time, the business
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, there has not been one candidate get through the republican primary. that is a very healthy thing. continuesee that throughout the primaries. i think all will produce sensible candidates. >> that was not like this for years ago. what changed? changed is some weird candidates got nominated. delaware, i one in am not a witch. an unusual platform. the fellow in missouri, there were a couple that were awed candidates.
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before headset i will support whoever wins the primary. >> they said hillary clinton faked her concussion, and now they say she is auditioning for a part in the walking dead. there is some looniness going on. politicalve is a good operative. stay with me for a moment. we will talk more with wilbur ross. we will be back. ♪
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>> we are back with wilbur ross. you are not slowing down by any means. you are taking a step back in your firm. that is thenow if right word. what we have done is taken the two main components, the research and portfolio side and everything else, the marketing, the administration, the compliance, all of that, and put one person in charge of each. -- i am doing what was my best function, which was the strategy, figuring out what
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factors will happen, trying to translate that into an industry, trying to translate the industry into a company. just take off?u you don't want to? >> i am a creature of habit. a couples i can play of sets of tennis every saturday and sunday -- >> then you are happy. i hear that all the time. work is what keeps you going. >> we are in florida a lot. , ahave seen too many times ceo stops and you ask him what he's doing 12 months later and he says he does the new york times ross were puzzled to keep my brain going. >> does that send chills down your spine? you don't want that to be you. >> absolutely. >> you have just entered greece.
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was country whose economy based on yogurt and ruins, how can you possibly complain? more seriously, greece has gone through really terrible years. the president has done a good job of turning it around. >> how were they able to pull it off? civil service had been a huge problem. start, he got them to paying taxes. he made a few examples out of some high rollers and brought criminal charges. did some things at the street level. that is a pretty amazing thing.
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euro bank is much the same group that went into bank of ireland. >> great to see you. we will be back in two minutes, right here on "in the loop." ♪
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>> it is elon musk versus boeing and lockheed martin. elon musk may get help from a russian politician. he says the air force has illegally blocked him from launchingspacex from into space. 'sr force rejects musk contention and says it is spending $60 million to certify spacex for rocket launches. musk is getting help from an
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overweight, spiteful russian politician. deputy prime minister has threatened to quit selling rocket engines to boeing in retaliation for sanctions on russia. that would give the air force a reason to use musk's rockets. you can read it at bloomberg.com/view. ." are "on the markets we saw good economic numbers, particularly on jobless claims. lower-than-expected. down below 300,000. equity futures are lower on that data. we are "on the markets" again in 30 minutes. more recall trouble for gm. just reporting five more safety recalls covering almost 3 million vehicles. details next.
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>> we are 30 minutes away from the opening bell. here's what we are looking -- working on. the government reported the first-time jobless claims fell to their lowest level in seven years. gm is announcing more recalls. 2.7 million vehicles for a number of problems. gm will take a $200 million charge in second quarter. walmart cannot seem to shake off the sales slump area and they missed estimates are at walmart shares are down. in the lead up to the 2014 world cup, there is a battle being
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waged. the two biggest sportswear company in the world, and nike and adidas, are locked in a struggle to own the soccer mark get -- market. we got an inside look on how these companies plan to make billions around the world cup. >> my god son is playing soccer for his club team. so are a lot of kids. in his little brother has keeper shirts. soccer jerseys are the only form of currency they accept. it is not just me buying their love. sportswear companies are competing for it, too. adidas, they sponsor and partly own the team.
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adidas sponsors the national team. marcus bauman is adidas senior vp. >> it is part of our dna. everything starts with this. this is our founder. >> bauman is talking about germany's unexpected win at the 1954 world cup in switzerland. it is still a big deal in germany. >> this is so rooted within the company. the worldhas been leader in soccer. thed cups are good for company. >> this year is what adidas calls an event year. >> we will achieve a new record of sales. we will break 2 billion euro
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barrier. >> that is about $2.7 billion. it starts with putting national teams and adidas. nine of 32 teams will be wearing adidas. >> we have japan, mexico, they are all a great showcase for us as a brand to the world. fifa,idas also sponsors fee which sponsors the world cup. >> the world has always had these magical moments. we began in 1994. over $2 billion. >> nike is larger, but adidas still outsells nike and soccer.
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nike says it made $1.9 billion on soccer. made two point $4 billion. nike wants to own the soccer market. lobal brands, we had to compete in football. we committed ourselves to being a football company three under 625 days here. >> that strategy is beginning to work. national league's reach audiences year-round. onsorship every four years doesn't mean what it used to. when they see great moments for most players, they tend to love those. >> this doesn't mean nike ignores the world cup. they are sponsoring 10 national
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teams, one more than adidas. nike has made ads that show some kind of world soccer of that, they just never mention the fifa world cup. if he ends up being the keeper for the winning team in brazil, adidas will have a very very good year. >> joining us is brendan greeley. very interesting to see what the two companies are doing and both of their strategies. what does nike have to do to get ahead of adidas. >> it has to sponsor more teams. nike has had a steep climb coming into this. it picked off brazil. umbro.ht him grow --
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valid --very little value, except the contract to sponsor manchester united. nike paid more money than has ever been paid for any national team to acquire france, which did not perform very well at all. it is not a great asset. nike has to figure out how to sponsor more club and national teams. sponsoring individuals, nike is taking a different approach. they have always tried to get the best athletes. specific kind of athlete, somebody who is flashier, who might have a bigger social media presence. you are picking athletes that people love or hate. gareth bale is a player, but he
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does not have the big personality that we money does. -- is bale is in the this and adidas sponsor. rooney cuts through. even i know his name. >> the other things that nike has this way of taking the assets that it has, the teams and the players and creating elegant fiction around them. they hired guy ritchie to direct an amazing commercial, which shows the point of view of a lead player who gets called up to the english premier league and place in the world cup. that is something that adidas has not been able to do -- take all of the people that have sponsors and put them together in some sort of -- and tell a story with them. >> thank you so much for joining us. bloomberg, to read businessweek cover story, it is
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online at businessweek.com. it will be on newsstands tomorrow. up, the serious business of comedy television. i will talk to the creators and writers to see what it takes to keep the laughs coming and how you attract young male viewers. it is so hard to make it in the honey, but the tide to be changing. fewer bees are dying. ♪
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>> one company we are watching is walmart. they posted a five percent drop in quarterly earnings. afterrt's results come lowervernment reported results. same story you hear.
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the consumer is struggling and so are retailers. my next guest studies shopping habits. great to see you again. theanything changed with consumer in the last six months? >> everyone suffered a tough winter. retail uses the weather as the dog ate my homework excuse. case, they are sort of a loud. if you set -- sort of allowed. was a stepped outside, it legitimate excuse this winter. retailers should have planned ahead. i am cutting them some slack at the moment. problem. was one the other seems to be that with technology, things are changing so fast, consumers have more information, they are getting
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pickier, retailers have to respond. all of that stuff, we talk to the former ceo of atari and i want toeese and play one thing he said about i.t. and how plays in retail. >> when you deal with goods, you have too much of something for too little -- too much of something or too little. that is why the i.t. side is important. there are probably 50 different trends going on in the united states right now. there is no way you could manage that without data mining. >> is having better technology going to give retailers that edge? >> it is important. talk about how discounts have more than doubled in just 10 years. the reason they have is because
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there's too much stuff. retailers are not managing their inventory well. it is just loading up on stuff. why the retailers exist? they know their customer. if you don't know how to do that, shouldn't you be fired? >> i think a lot of retailers, there's a magic formula for retail. manage inventory well, have a shops. loves has had its own issues, but there is also this crisis of confidence within the company itself. gawker has been on this story, as have we. we got an e-mail from a target employee, who wrote this whole
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rant about how the company is faltering. -- when i started, they were excited about by online, pickup in-store, as if that was a new invention. how many other stores have that and do it better than target? he also said regular customers don't know about it because they hate target's website. timesws how behind the they are. >> doing it well is crucial. it is not a separate business. i think of target as the madonna of retailing. it is not that: the more. >> madonna is not that cool anymore? >> we love madonna, but she does not occur finger on the zeitgeist anymore. she is a little behind it and target feels a little uncool.
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gap has a man who loves shopping in charge. very clever. crucial formula. stores, stopping the oversupply. the magicought in woman behind the collection of style. thewill be running all of design studios. i think gap, in five years time, will be taking management classes and how well the comeback is. >> i will be watching. ped into a gap in a wild because nothing appeals to me. maybe i need to. minutes ♪ back in two with more. ♪
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quick's gm announced a recall for a range of fault. it is the second recall of the year. they just recalled an additional 2.5 million cars to fix a defect of a connection -- ignition switch. sort all this out for us. there have been so many recalls lately from gm. is this related to the big recall that was the subject of those congressional hearings? >> in the sense that gm is trying to show that it will actively recall things, that will not delay. that was the problem with the ignition switch recall. they knew about it for more than a decade and did not recall. now, when they see a problem, they are trying to recall it quickly. none of the defects they are
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recalling four are as serious as the ignition switch problem. they say they were not linked to fatalities. >> is for problems with headlights, tail lights. no fatalities on any of these. rodmost serious one is tie problems that can disable steering on pickups. that is for a few hundred people's -- a few hundred vehicles. >> we are hearing about all of the recalls this year because they are now -- they are much more vigilant or what is going on? >> gm has recalled more than 11 million vehicles this year. that is more than a recall all of last year. they are trying to show they are more vigilant. under criticism about gm dragging feet on
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recalls. now they are going to the other extreme, trying to say they're going to address things as soon as there is a problem. toare they sensitive recalling their vehicles. >> we have seen recalls of almost 20 million vehicles in america so far this year. there were 22 million recalls. first-quarter earnings, they were taking a $400 million charge because they were increasing the recalls. everyone is trying to show that they are safest and they will recall the quickest. it is a race to see who will recall. >> thank you. additional recalls covering almost 3 million vehicles. we are a few minutes away from the opening bell. we have the top 10 trade you do not want to miss. right after the break. ♪
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>> welcome back. i am betty liu. it is 26 minutes past the hour. we are "on the markets." scarlet fu has a look at futures. >> it looks like stocks are heading for a second day of lost. futures are pointing lower. -- they moved in a narrow range yesterday. indication is they will do so again at the open. outside the world of stocks, treasuries are rising. especially on a long and. it is part of a global bond rally. the yield at a 2.51%. that is the lowest about six months. an 11 week low versus the dollar.
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the ecb will announce some kind of stimulus measures when any -- when it meets in june. we are on the markets again in 30 minutes. >> thank you. let's count down to the open with the top 10. these are the only trade you need to know about today. boston scientific. the company has agreed to buy bayer's interventional devices. boston scientific expects the deal to close in the second half of this year. agile and technologies. they reported a drop in second-quarter profit. they plan to split into two companies later this year. -- health services.
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shares surged after kindred made a bid to buy the country. they rejected the offer. vip shop, chinese online retailer posted fourth order adjusted earnings of $.63 per share. that beat analyst estimates. they also issued a promising revenue forecast, driven by a pickup in customer orders. >> whistle buyers. drug.w hodgkins lymphoma outperform,s setting disappointing data for another cancer drug. >> advance auto parts is number five. shares are on the rise. first quarter process -- profits surged.
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they also boosted their earnings outlook. number four, kohl's. same-store sales fell, it was encouraged by the improvement as the quarter progressed. systems top wall street estimates, putting the shares higher in the premarket. also saying orders are climbing in the u.s.. number two, walmart. a five percent drop in quarterly profit. they blame severe winter weather. forecasting estimates missed.
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number one, general motors. they announce five new safety recalls. this includes more than 140,000 share of be -- chevy malibu vans. now is a time for a call on the markets. a lot to bring in the senior portfolio manager at wells capital management. the u.s. is still the best place to be in the coming years. said -- fed is going to fade into the background, the u.s. might not be the best place. >> what is driving the u.s. equity market is not simply just the direction and interest rate. we are starting to see a detachment. stocks will go their own way. treasury rates are going to stay lower for longer and have less and less relevance to stop level.
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improving some sectors of the economy will take stocks higher. by whatwill be affected we see happening on the inflation front. mike mckee has a real deal on inflation. >> we are nowhere near a danger zone yet. the numbers we got this week toht be a bit of a lack up traders. they are not pointing to a real problem yet. it is a sign that maybe deflation is the danger that we were fearing. partleveland fed took a the inflation figures to find out why prices were not rising. they found half of the decline came from the weak economy. figures out a few minutes ago concerned the empire
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numbers. overall, people feel the economy is picking up. a quarter of the drop came from stagnant wages. some prices rising. house prices are up. medicare was cut back. hospital prices fell. that is out of the numbers now. bond yields are falling because of what is going on in europe. look at the inflation expectations indicators, at this don't know what is coming. >> yesterday was interesting. we had the ppi numbers take a big jump. orestors either do not care they regard it as a short-term transitory move in a backdrop where they will be under
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pressure lower. you say the u.s. is still the best place for equity investors. i cannot say that i see a lot of excitement in your note of rounds. it seems tempered. is. think it in a low growth world, you have to lower your expectations for the very high returns we have .ad since they will do better than fixed income alternatives. it is a good place to be, whether the returns are mid or high double-digit. >> it is not just u.s. stocks. there are certain places that say you -- that you say will give a better return? >> health-care stocks will --tinue to be a fertile area
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fertile. we have new devices coming out of the market. industrial companies have high cash flow, high margins. they have been great innovators. they are the new leaders going forward. materials companies will also benefit. >> thank you. >> we will hear from president obama, who is in lower manhattan, for the dedication of the 9/11 memorial and museum. we will be carrying his comments live. ♪
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>> i have been watching the headlines. advertisers are being announced and they announce new renewed shows and those that have been canceled. cvs surprised viewers by saying thein a half men will be show's last. the 12 season. comedy central will replace stephen colbert. brickleberry has been renewed. thank you for joining us this morning. >> thank you for having us. >> cbs canceled 12 and half men. to get younger viewers. were you surprised by that?
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>> i was broken up by it. >> i can tell. what are broadcasters not getting right here? do a lot of highbrow political satire. that is our whole thing. we're really good at it. >> clearly you are. what is the secret sauce to getting younger viewers? >> the edge year, the better as far as the young males, high school, college guys. they want and your material, further than you can push it on the network. aat is why cable is winning lot more of the younger audiences. you can get away with more than a regular network sitcom. >> you can be edgier. do you have to be a young male to be able to create content for
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young men? >> i would not say so. you have to get in the mindset pee pee world and that these kind of kids like. >> we just never grew up. really hits them? what has been a big hit in terms of the episodes that you have put out? >> we did an episode where we learned our main character was a the 1970's. that seemed to be a crowd favorite. >> i can see why. you know another place you can have energy content is online.
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you have tons of comedy channels on youtube. you probably know way more of who they are and what they are. is that area going to be -- are you looking to do anything in that area on youtube and on digital? >> we are on youtube. we had a show in 2005 on mtv 2 and to bridge the gap, we started a youtube channel and did a hundred videos for youtube. >> what was the difference between doing that and television? >> no paycheck. we got a 10th of a penny for every view that we get. it was a few rough years. on the other side, you could do what you wanted. it was not censored. your garage and you don't have anybody giving your notes or anything. would prefer television. >> are you making more money
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now? >> i would not say a lot more, but we are paying the rent. we have a house in burbank. >> you are not doing too bad. ordo you look at digital look at these comedy channels for material for your own television content? >> we do not. we have been locked in a writer's room for the past five months. we have to turn off the internet, no television. you guysas changed for since going on comedy central? >> we moved. we lived in athens, georgia, for a long time and moved out here. a big difference. you like it. we love it out here. >> george is pretty nice. you cannot beat california. thank you so much for joining us. more on "in the loop."
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>> time for the outlook. computer will be released in china as the company tries to compete with apple and samsung. the announcement was made at a conference in beijing. late at night. tell us about the details of this event and this tablet that going to compete with the big guys. >> bloomberg reporters are 24/7. always that beckon call. when news is breaking. beck and call when news is breaking. the ipad is a global marketer. itsmi wants to leverage cellular.
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they rose to number three in the china market behind samsung >> novo, selling about 11 million smartphones. they broke into the top 10 globally, supplanting blackberry. you can see the crash of people lining up to the event today. ,he founder took the stage launching this first tablet, the mi pad, on par with the ipad many in size and specs, but half the price. let's hear from him. we want to make the best android tablet out there. i hope our efforts will put some pressure on apple and prove that not all android tablets are being hidden away in drawers. tablet thatake a everyone likes to use. adopting the steve
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jobs, laid-back look. product, are they going to go international? they are. they're going to launch it in china, but right now, 97% of their phones are sold in china right now. the company is entering 10 new markets, including india and latin america this year. malaysia is next, even this week. they're going to use that model of using the leverage off the phone base and then selling tablets. the overseas push is being driven by a familiar name in the u.s. and that is google's former android head, hugo barro. he told me they will introduce the mi pad later this year after the launch in china. further down the road, even the united states. let's hear from hugo barro. >> the u.s. is not in our plans
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for this year. it is a competitive market. getting there requires working hard and being ready. we do not know when it will be, but that is the goal. executives would not bite when i asked about sales projections, but i talked to one of the lead investors and he says he would be happy with about 4 million to 5 million sales in the first year. to surpass that in the first year because of the frenzy demand for their products in china. >> thank you. here in the u.s., you can call this a buzz kill. beekeepers are being driven out of business. this is according to an annual report by the department of agriculture. us, is it the same
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thing killing the bees now than a few years ago? >> we do not know what was killing the bees a few years ago. there was a syndrome that was never ascertained what the cause is. there are three big factors that are killing the bees. one is mice. -- mites. it eats away at what bees need to survive. you have habitat loss as we have gone to a more monocultural system of agriculture. they do not have the same diversity of pollen and lance to feed upon. the controversial link is pesticides. there is a class of pesticides is accused of killing bees because of the toxicity. the companies strongly deny this. >> how are we going to change this? >> you are seeing a push from environmental groups to try to
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ban the chemicals and play. at the same time, there is a two-year ban in the european union. there's a lot of conflicting science as far as what the impact may or may not be. beekeepers think that pesticides are a big issue. that is what people will look like going forward. >> what else will we take away from this? >> this report shows a decline in bee mortality from about 30% to about 23% in the past year. that isvey is voluntary sent to beekeepers. it is not as scientific as you might think. it will take a couple more years to see whether this is something lasting or an aberration in the data. intell us about the decline the death of the bees. how rapid is that decline or is it small. >> when you see a drop by nearly one-year over a period, the survey is voluntary from beekeepers.
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it is about a fifth of all the commercial beekeepers in the united states. that does not count what might be happening in wild populations. i talked to one guy in maryland a couple weeks ago, he would not be considered commercial scale, developinga has been more and there are more gardeners. pesticides may be causing a higher toxicity level in his bees. it is a complex situation. >> thank you for joining us. that does it for today on "in the loop." stay tuned to bloomberg television. president obama will be speaking at the 9/11 memorial and dedication. we will have live coverage. that is a live shot right now, right before he speaks. we will have live coverage. you can watch it streaming on our live events channel at bloomberg.com/tv.
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>> it is 56 minutes past the hour. we are "on the markets." 30 minutes into the u.s. trading day. stocks are falling. industrial production declined. we are seeing a selloff in small-cap shares extend. drop from its high. the s&p 500 losing 14 points. the dow jones at 16,500 even. real estate, the s&p real estate index is up 13% so far this year. that makes it the biggest gainer. we want to bring in mike reagan
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for a look at why these real estate stocks have done so well. these are real estate investment trusts. >> all but one are reads. group that was left behind in last year's rally. real estate companies were the only ones to fall last year, even as the s&p 500 rose 30%. a little bit of a snap back this year. a very well improving commercial real estate market. the bidrts this week, for the town in new york show -- people getting more comfortable with the stocks this year for sure. >> the macro environment plays into this as well. are being held at low levels for longer than people expected. >> that is the predominant story for this. everyone assumed bond
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yields were going to go up. that has not happened. yields going even lower, to the lowest of the year. because of that is the european speculation of the central bank. is what happens to interest rates going forward, not only for raising the costs to buy money, but the dividends. higher, if yields go they do, it is a much safer bet. theomists are looking for yield on 10 year treasuries to rise above the dividend yield as soon as the end of this year and go above it in 12 months. if those analysts are right about treasury, that is going to -- >> what are the dividend yields on the s&p real estate index? it is about 2.9% right now.
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that is only about a quarter percentage point above the 10 year treasury yield. that attractiveness is shrinking quickly as the real estate rally continues. >> how about the fundamentals of this group. >> solid earnings growth this year. the 24t growth of groups. slowing down for projections in 2015 and 2016. them to room for increase their dividends. the projections are to about 3.2% in 12 months. those treasury yields are forecast to go even higher. it will be an interesting battle to see which yield is more attractive by the end of the year. are they all commercial property, health care space, how does this breakdown? though one of as the real bright spots. htc is a health investment like senior assisted living.
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they are among the biggest gainer and biggest dividend increases. >> we will be back on the market in 30 minutes. "market makers" is up next. >> live from bloomberg headquarters in new york, this " with erikmakers schatzker and stephanie ruhle. >> cisco's big beat. the stock is searching this morning. we will talk to the ceo john chambers and ask him how he did. life in the fast lane. decision- fcc nears a to change the internet forever and it looks like a big win for service providers like verizon and comcast. they may be able to charles -- charge websites like amazon for preferential treatment. showdown -- not

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