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tv   Taking Stock With Pimm Fox  Bloomberg  September 4, 2014 9:00pm-10:01pm EDT

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>> this is "taking stock" for september 4. i'm pimm fox. today's theme is about the numbers. bp has paid a $45 billion since the offshore oil disaster in the gulf of mexico. the number may continue to increase after a judge's ruling in new orleans today. 23 is the number making the barclays operators happy.
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what will this year up hold? we would hear from the teat -- chief executive. you will meet monique, my guest. let's find out headlines. >> the european central bank has announced a final round of interest rate cut its to stimulate europe's economy. mario draghi announced a plan to buy private securities. a reminder that tomorrow in the loop will have complete coverage of the jobs picture including reaction from the chairman of the national economic council. and analysis from economists.
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we will have a ceo roundtable with the founder of staples, tomorrow at 8:00 eastern. stocks today, google shares rose. the federal trade commission alleged google overpaid -- charge customers for children making payments on mobile payments. the burger chain is a kiosk in new york city park. those are the top headlines for a back to you. >> the oil giant bp grant guidelines after a federal judge said the company worked with gross negligence. bp has paid out $45 billion in fees related to that spill. that could change. with more litigation and finds, i want to bring in alix steel.
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joining us, let's begin with you. what did the judge say? >> he stuck it to bp. he blamed bp for most of the spill. 67% of responsibility. 30% for transocean. 3% for halliburton. what is interesting is the gross negligence is difficult to prove. we have to prove wantonness conduct. drilling for oil is risky as is. he came down with that ruling saying bp was grossly negligent. the question now is what will that fine be? way it will be determined is how much oil was pumped into the gulf of mexico, the maximum fine be $4300 per barrel.
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you could be looking at something like 17 billion dollars. that is the big ax and over their head. >> shares of bp are down 6%. what is next? asked right now they have to wait. it is a waiting game until the next phase of the trial, starting earlier than january 2015. the key question will be what is the actual fine the judge will impose? the maximum you alluded to is $18 billion. it could be less than that. one of the questions, how much oil was spilled? there is a difference of opinion. $18 billion is the worst case.
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that is six dollars per share. in some sense you could say the market is pricing in the midpoint. we just don't know. the company will not know until 2015. >> what does that due to the stock in the future of bp? >> today we saw reaction to an extremely negative headline. this was as negative as it could have been. we did not expect gross negligence to be declared. based on everything we have known. bp adamantly rejects gross negligence. they are going to appeal that. in the meantime, the multiple on the stock is going to be pressure.
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it is going to constrain the company. management would presumably light to do that. it is going to be difficult going full words if there is a looming $18 billion liability. >> there is context for this. there have been previous point -- bills and fines. >> this is nothing like we have seen in the past. the valdez spilled a fraction of this. one of the biggest cleanups came from hurricane katrina. bp is by far the worst. they are probably saying this isn't it. there is a lot more to come. the five states that were affected can also go and fire up -- file for claims.
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that could be as much as $12 billion. the gross negligence claim opens the door to punitive damages. these are those that didn't settle for individuals. there is no way to quantify that. is it dollar for dollar? it is up for debate. that is a concern. >> what about the shares of bp? >> we are neutral on the stock because of the legal uncertainty. the reality is, it is not expensive. it is not expensive for a reason. there is this looming liability. we do not know what it is.
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you alluded to the fact that other things could come down the hype. -- come down the pipe. bp has settle a lot. that is behind them. these regulatory legal issues with the government are still a real concern for the stock. we stay away from it, companies like chevron and shell are much safer. similar evaluations, and without having to lose sleep because of legal arrests. >> there other companies that were part of this decision by the judge. much less cup ability. >> they were found negligent but
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not grossly negligent. halliburton already settled for $1.1 billion. this removes that problem for transocean laying the blame at bp's feet. remember in 2010, the fundamentals were gray. as long as you have the oil flowing out the stocks were hammered. the $20 billion in cash. that is great. but the point, you have it hanging over your head. >> i want to thank alix steel. i want to thank raymond james oil and gas joining us from houston. coming up, a conversation stephanie ruhle had on why the best has yet to come for the nets and the berkeley center. -- barclays center.
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>> this is "taking stock." i'm pimm fox. new york has some of the biggest sports franchises. they earn big money. there is another team scoring on and off the court. brett sat down with stephanie. >> it has been incredible. it has exceeded our expectations. new york city is the big event. that was our vision. world-class entertainment to the borough. we have delivered on that in so many ways.
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award shows, the nets. to college basketball, boxing, family shows. we are doing it all. we keep growing. ask how much more programming can you expand into it? you have everything. hockey is coming. >> hockey is coming. that is going to create an opportunity to be selective in our programming. we are excited. with the volatility, we have been in the concert business for years. but it is cyclical. there is going to be a downturn. guarantee ring us 44 nights is a big deal for us. having the insurance policy of knowing that every day you wake up you have 90 dates filled is a
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great thing. >> you have the garden here and the barclays center. how are you bringing these live events to the barclays center without costing you a lot? >> i would love to take credit. i can't. i think it is brooklyn. up-and-coming artists want to play there. they want to create their own legacy. it is an incredible dynamic. they lost 20% of their audience with the vma's in los angeles versus brooklyn. there is just this madness that we have been able to create in brooklyn for consumers. >> could you quantify that? taking the nets from new jersey to brooklyn, a similar distance. what is so special about brooklyn? >> you are right. we moved 13 miles. we were the last in revenue.
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we were in the top five last year. we were 31st in merchandise sales. we were number three this past season. we transformed our brand into something of brooklyn. our food speaks to brooklyn. our employees are from brooklyn. we have been able to embrace this dynamic. it was free. >> how is this all-star we going to work? the next, and the nets, cohosting. i can't see the mets and yankees putting the rivalry aside. >> we are putting the rivalry aside for a week. we are working with the guard. they have some exciting plans. we have incredible plans leading up to all-star week in on friday and saturday night. we are thrilled to bring a huge global event to the borough. >> i can't stop thinking, you
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are in the running to get the democratic national convention in brooklyn. >> that's a big moment for us. it has been led by -- [inaudible] we recently toured the building, and we are excited about the opportunity. it will validate us. it is an iconic venue. it puts us on the world stage. >> it has been an extra ordinary two years. >> at the end of the day, do i think i am there? we are not there yet. we are on the landscape when people start thinking about the biggest and greatest venues in the world. msg, barclays, we are in that conversation. we have only been at this for 24 months. the dnc validates that. >> now that you have sold out,
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do you wish you put more seats in? >> no. not really. we hold 17,000 for basketball. one thing that is great is the intimacy. i'm not sure we could have captured that if we went larger. it is nice to have, to be sold out and create scarcity. when you look around the nba, those last seats are not easy to fill. >> some people say the intimacy is the best thing. others say the nets are. what is the start of the season? >> i'm excited about the team. we got younger, faster. billy king has put together a great product. our cap opens up in three weeks, earlier than most teams. we aspire to be local. we are playing in shanghai and beijing. we have to start the season earlier. flex my thanks to stephanie ruhle.
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that was at the bloomberg sports and business summit sponsored by bloomberg. september means back to school. that means back to school shopping. i'm going to talk about a professor who wants to make learning less stressful and more fun. details ahead. ♪
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>> this is "taking stock." i'm pimm fox. not many educators get a chance to teach 200,000 students in their entire career. my next guest did it in a month. repressor -- professor barbara oakley, she just taught an
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online class on coursera that was viewed across the world. thank you for being here. tell people about your journey into the world of math. it didn't start with numbers. >> i flunked my way through math and science. i hated those subjects. i had no desire. i love language. i am listed in the army to study russian. i learned russian, worked as a russian translator up in the bering sea. then i begin realizing while i was having these adventures, -- where i met my husband.
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i had to go the end of the earth to meet that man. i had all these great adventures. i realized i was not having an adventure in here. i wasn't experiencing a different perspective. i realized that if i really want to try, there will be nothing more alien to my personality than learning math and science. why don't i give that a try? at age 26 years old i decided to try and retool my brain. i'm a professor of engineering now. if i had known then what i know now it would have been so much easier. that is why i wrote the book. >> revealed the hands that people can use to be less fearful about learning math and science. >> when you look at a math book,
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what happens is the pain centers of your brain light up. what you often do is you look at it and there is a very easy way to get away from that. put your attention to something else. instead of doing that, trick your brain to look, for 25 minutes, work without distraction for 25 minutes on your math. that allows you to get into the flow without worrying about the task you are working on. worrying about the task, looking at something and saying that is the task i have to do is what triggers the pain. if you trick yourself, and then do that, you can get into the flow.
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that is key. you want to do a little bit every day, not a bunch at once. >> you set the timer. you mention in the book that exercise and sleep are essential for good performance on exams. >> absolutely. exercise is one of the few things. that allows you to learn. how did those neurons survive? you exercise. exercise is one of the most remarkable drugs around. illegal or legal, to help you learn effectively. sleep, what happens is your brain cells actually shrink during sleep. during the day these toxic metabolites, out. that is what is washed away in sleep. >> i want to thank you for sharing those insights.
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professor barbara oakley. coming up, a fashion powerhouse. ♪
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>> this is "taking stock" on bloomberg. i am pimm fox. for today's market movie headlines, i want to go to my colleague in the newsroom, su keenan. >> there are signs that the recent talk of a truce between russia and ukraine, the scheduled cease-fire talks may not and the five months of fighting.
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the nato-ukraine commission is condemning russia's annexation of crimea. they claim that russia is still violating ukraine's sovereignty. bob mcdonnell and his wife were convicted of trading political influence or loans and gifts, such as golf trips and shopping sprees. the corruption case involving the one-time potential republican presidential candidate and his former nfl cheerleader wife prompted the state attorney general to call for ethics reform. both sobbed as the guilty verdicts were read. sentencing will be january 6. joan rivers, stand up comedienne, writer, and outrageous tv personality whose jokes brought laughter to several generations, has died at age 81. she was hospitalized last week after complications due to a throat procedure. bus -- best known for hurling barbs at fellow celebs, she had installed herself as a fixture on runways, commenting on fashion in a way that no one had ever done before. she will be missed.
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back to you. >> thanks very much. su keenan in the newsroom. when it comes to red carpet fashion and bridal couture, monique lhuillier is a household name. she and her husband, tom but we -- tom bugbee, turn her name into a multimillion dollar business. they are joining me now. thank you for being here. you are here for new york fashion week. you are based in los angeles. you were saying that from a from an early age, you knew this was what you wanted to do. -- you were saying that, from utterly age, you knew this was what you wanted to do. -- from an early age, you knew this was what you wanted to do. >> as i grew up -- >> you were in the philippines. >> i came to los angeles to go to fashion school. when i started looking for a wedding dress 20 years ago, i felt like there was a void in
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the marketplace. that's what started our company and how we got into bridal first. >> when you said 19, your husband here kind of rolled his eyes. you know it is 20 years. you are an accountant by trade. you have an accounting background. how did you come to be part of the fashion empire. we will get to the proposal in a second. >> i was intrigued. she had a great passion for fashion. it was a great opportunity to build a company and build a brand and be together and travel the u.s. and the world. it sounded like a fun idea. >> now, monique, that being together part is quite important. it was the proposal of marriage and your subsequent search for a wedding dress that started you
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on the path to bridal could tour. what happened? >> i went to fashion school first pick -- first. i love fashion. i was a young bride looking for a wedding dress and i felt like there was a void in the marketplace. right after we got married, six months later, i came up with my first sample line in bridal. not knowing the business, we said, ok, let's build it from scratch. we went to all of these different stories that supported us and carried the line. editors noticed. it was step-by-step we built this brand. for the first seven years, it was solely bridal. then we said, why are we dressing only around the special day of the wedding, we should dress her for all special occasions throughout her life. we started doing red carpet and special occasion dressing. now we are happy to say we have started the lifestyle category. we do a bunch of other collections. >> we are going to talk about that. more on the bridal couture and the bridal collection. you have said that what you do is you take very traditional fabrics and very traditional materials, but you use them in a new and modern way.
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>> i think it is very interesting to start with something that has tradition and history. it is how i cut it and it confuses a more modern touch into the dresses, which i think is what brought us to where we are today. i think it is a passion of creating these beautiful pieces. i cannot describe it. it just happens when i have fabric and i drape it on a form. >> after you've created this wonderful dress, what does something like the top could tour -- top bridal couture down go for -- top bridal couture gown go for? >> from my sickness -- signature collection, it would be something like $4000 to $20,000. we have another collection that starts at $2000 to $4000. i have a couture line, one-of-a-kind, where i come and work with the bride, and it is
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true custom, multiple fittings involved, and that starts from $30,000 and up. >> now that you have the bridal piece working, just step back for a second, how do you decide where to go next with the collection? >> it started with her wanting to do something more than just working with white and ivory. going into special occasion eveningwear was a natural extension so that we could capture the customer again. it is a very similar product in the construction, the type of product qa -- of fabric you use. >> but it costs more money. you are branching out, you have to raise more money. how do you do that? how do you go from one step to the next? >> we have been slow and deliberate. we have taken small steps. we did not just jump into it and start showing at new york fashion week. we came up with a small collection and tested it with
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retailers and slowly built season after season. i think in our third season, we took the plunge and came to new york and showed at fashion week. >> is an overnight sensation, but it has -- it is an overnight sensation, but it has taken 10 years to get there. tell me about what is going on with the world of celebrities. what we hear about high-end fashion, we talk about the red carpet. so much attention is paid to wearing fashionable items. >> i'm fortunate that a lot of celebrities continue to wear my dress is on the carpet. what that does is -- >> drew barrymore, reese witherspoon, halle berry. >> it has helped us grow internationally. people recognize my work. >> the first lady, michelle obama. >> a big honor for me to dress the first lady lady. it was a dream come true. >> what was it like when you get to meet michelle obama? a lot of secret service. did you have to go through metal -- through a metal detector? >> i can't really talk about it.
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it was a highlight of my career. >> tell me about the athletic wear trend we see. under armour signing gisele bundchen as the model for activewear. that's a big trend in the fashion business right now. >> people want fashion to be more organic and not so forced. i feel like the infusion of athletic cuts, whether it is something i'm wearing today, something more sporty-infused in high fashion is very interesting -- our product is made in america. we have a factory that we set up in los angeles of 200 artisans. for me as a designer, it is so interesting to look -- to walk in and carve out what the dress is going to be. the process has been wonderful. >> is it challenging to find the right level of skills, the people that have this
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background, the experience? >> it is getting harder and harder to find the skills of talented artisans. we also train people. we have been doing it for 18 years. when we were starting in the business, we were lucky to inherit some talented artisans from other countries that were closing in los angeles. we had that pool to start with. then it was trial and error, pushing it, how we make the product better, and he kept evolving. one of the exciting things -- and it kept evolving. one of the exciting things is the brand has to keep elevating itself. >> when is the show in fashion week? >> tomorrow night in lincoln center. >> you will be in the front row or backstage worrying? >> i will be backstage with butterflies in my stomach.
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seeing the girls line up. taking it all in. >> i'll be in the front row. >> you're going to check the reaction. i want to thank you both very much, tom bugbee and monique lhuillier. good luck tomorrow. >> thank you. >> coming up, we will talk about a humorous video. a take on a serious issue of net neutrality. we will find out what the connection is. you will meet the creator of the video and it's very -- popular. you will meet the founder of a bourbon company. all about making un-american -- an american whiskey. they make it on a boat. this is national bourbon month. this is "taking stock." ♪
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>> this is "taking stock" on bloomberg. i am pimm fox. net neutrality is the idea that all web content should be treated equally. it should flow through the internet pipes and everybody get it at the same time. it is a hotly debated issue facing the government, but a new video is trying to make a
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serious point about that neutrality. joining me is james percelay, the cofounder of thinkmodo. also with me is hillan klein, the chief operating officer of namecheap. great to have you both with us. let's start off with james. for people that don't know about net neutrality, that's a kind of but now named -- of banal name that has you up in arms, sort of. tell me what's going on. >> it's a very simple concept. we all expect that the net will be able access for everybody. you don't have to pay more to get higher speeds. that's what men neutrality is all about. it is now being threatened -- that's what net neutrality is all about. it is now being threatened. the more you pay, the better the speed, kind of like cable models which none of us like. >> the cable model includes private companies that have built this network. they are saying if someone wants to pay more to get on a certain channel or they want to be able to, like netflix, offer their movies, which take up a lot of bandwidth, we will take a lot of
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money and we will stream it faster, quicker, right to your door. no? >> we don't have a choice. you cannot get a smaller package of just what you want to watch. we just want to make sure that the government -- the government created this, the defense department created the web. >> the taxpayers paid for it. >> it should be equal access for everybody. >> her point is that none neutrality is being flushed -- your point is that net neutrality is being flushed. >> our rights are being flushed down the toilet. that's where this viral video from came from. >> hillan, it's your turn. when you heard the proposal for this video, maybe you want to describe it, what was your reaction? >> we got excited by the proposal., being an online business focused domain
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registrar, we like to be creative and innovative. we thought this video idea and the context of flushing our rights down the toilet was doing exactly that. >> do you agree? obviously, you must, otherwise you wouldn't use this as part of the namecheap campaign. >> we do agree. we believe strongly that millions of small business customers will be affected by this if we don't take a stand and protect their rights. >> what kind of reaction have you gotten to the video, james? >> the reaction has been outrageous. this is a complex subject that we happen to have made real simple. everybody is familiar with toilets and the concept of flushing. it really has resonated. we have gotten tons of media. bloomberg was first. next week is going to be nearing the deadline where the fcc -- >> the public, and people -- the public comment period. >> we are at the trough of the wave that is about to hit.
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the namecheap connection fits perfectly here. >> hillan, there are a lot of other technology companies that have weighed in on this debate about net neutrality. you have some good allies, haven't you? >> we have some great allies. we stand strongly with them. we do so really because, as i said, we believe that small business and innovation startups, all of these companies that are starting today, and our peers in this space would not exist today -- netflix and youtube would not exist if we were to lose net neutrality. >> -- would you be in favor of some kind of tiered system? i've read statistics that on a given evening, most of the internet traffic is dominated by people watching the bees on netflix. -- watching movies on netflix. is there a tiered approach that would work?
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>> we don't really see that tiering will help as a solution. we believe it is out -- about the future netflix and the future startups that are trying to build themselves. if we enable tiering, what's going to result is there are going to be greater barriers to entrance and startups will have to raise much greater levels of capital to compete on the same playing level -- same level playing field as the likes of netflix. >> will this be a trend where any event that is -- i don't know how to describe it. you can turn it into a two-minute video, any kind of position. this is going to be standard operating procedure? you want to get the attention of the public, you have to make a two-minute video, blast it around the net -- the internet, that is hopefully net neutral for you, and you get millions of views that influence public discourse? >> yak. -- yeah.
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i think all brands want viral videos. the reason is that they are a concise way to attract people. people are not watching longform programming as much. you can get the message across in two minutes and articulate it smartly. it is a really desirable -- it is really desirable. >> have you gotten any response from politicians or regulators? >> not yet. >> you still have phones? >> we are getting a whole bunch of press. that's the whole idea behind what we do. it reflects well on namecheap and their net neutrality -- their website, where they are paying money to perpetuate this movement towards the fcc did to -- fcc decision-making. >> we will see what happens with the fcc and net neutrality. james percelay from thinkmodo and hillan klein from namecheap. coming up, i will introduce you to the founder of jefferson's bourbon and find out why bourbon
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is having its busiest year in 40 years. we will also learn about why it is flying out of barrels and into customers' drinks. coming up on "bloomberg west," a longtime bloomberg exec has been named the nation cost new chief technology officer -- nation's new chief technology officer. find out more at 6:00 p.m. eastern. ♪
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>> this is "taking stock." i'm pimm fox. since being declared america's native spirit 50 years ago, bourbon, the american whiskey, has seen an increase in demand, no surprise. according to the kentucky distillers association, over 1.2 million barrels of bourbon were filled last year, the most in four decades. trey zoeller knows this better than most, because he is the founder and master blender of
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jefferson's bourbon, a small-batch bourbon company. he joins me now. thanks very much for being here. >> thanks for having me. >> before we get into the details of how the bourbon tastes, what is this about bourbon on a boat? >> it's one of those ideas that comes after you've had a few drinks. >> clearly. >> it seemed to take some legs. i was on my 40th birthday on a friend of mine's ship who is from kentucky who catches great white sharks, releases them, find out the data behind them. >> giving them some bourbon. or he's had some bourbon. >> maybe so. we were on the bow of his ship drinking some some -- some bourbon. i thought, if this is happening in a bottle, it would happen in a barrel. he was dumb enough to allow me to put five barrels on his ship and sail it around for 3 1/2 years. >> 3 1/2 years. >> we put in the bourbon and it
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came in as clear as water. i got a call that some of the bands had corroded. i have my own theory. i think the crew might have found their way into them. as it bobbed around in the ocean, it's lost -- it sloshed around within the barrel and the barrels breathed in the salt air. it took on a briny taste. when we tap into the barrels after 3 1/2 years on the water, we found it was very dark, very caramel in flavor. we sent some barrels back to find out that the sugars had been -- >> it is a different kind of bourbon. >> kind of like a dark rum. >> you buy the whole selection of organs -- you bought a whole selection of bourbons with you. how many different bourbons do you make? >> we have eight different labels and a couple of varieties
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within those, different ages. we have three more we are about to debut this fall. >> what's the oldest urban you make? -- bourbon you make? >> that is in your hand, aged between 30 and 33 years. we have a very limited amount of that. >> what does 30-year-old bourbon from jefferson's go for? >> it would retail at around $300. secondary market, people sell bottles for around a couple of thousand. >> what's the total volume you are doing? >> we are approaching 80,000 cases. last three years, we've enjoyed over 50% growth each year. it is really trying to keep up with demand, which is very different than it was 17 years ago when i started. >> i can imagine you are a popular guy. i want to thank you very much, trey zoeller, jefferson posner -- jefferson's bourbon founder and master blender. thanks for "taking stock." i am pimm fox. good night. ♪'
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