tv In the Loop With Betty Liu Bloomberg December 22, 2014 8:00am-10:01am EST
-- with global stocks opening. the year ends coming up fast. shoppers squeeze in their last minute holiday shopping with sales for the weekend. lillie will be with me for the hour. they make everything from candles to coffeemakers to ski jackets. want your ski jacket on. plus, global weather for the economy. energy company will be next. obama won'tdent call the hacking of sony pictures an act of war. the u.s. accused north korea of sonyttack, which cost
pictures hundreds of millions of dollars. i don't think it was an act of war. it was an act of cyber vandalism that was area cost lee and expensive. we take it seriously and will --pond fortunately proportionately. calledcyberattacks was "a new form of warfare." caesars entertainment will merge with an entertainment company. it consolidates properties like many hollywood and value las vegas. the debt load of its largest unit. a possible life preserver for vladimir putin, who is trying to shore up the ruble without the foreign exchange reserve. provideon will assistance and is confident russia will overcome its difficulties.
the prime minister suggested a currencies lot -- currency spot. here in new york, vigils were held for those police officers gunned down on saturday. the shooter approached a police car and fired to the passenger side window. the gunman later took his own life very strong words from patrick lynch, who blame to the civil rights protesters, and mayor bill de blasio. >> violence onto the streets under the guise of protest that try to tear down what new york city police officers did every day. warn, it must not go on and cannot be tolerated. that blood on the hands starts at city hall with the mayor. following michael and eric
gardner decisions. and a major storm can throw a wrench in travel plans beginning tomorrow. heading toward us. reading heavy rain and strong winds to two thirds of the country. 99 million people will be 50 miles or more this year. despite backthat channel talks, sony and the white house still failed to create a response for the hack attack, fueling a debate on when and if they should have responsibility to protect private companies from the cyberattacks. john joins us with more. i am curious to hear what you think the whole situation that unfolded tells you about the
relationship between the government. >> president obama said he was not consulted, and yet sony says they were asking the government for help. legalis not really a structure to allow them to talk and some in the business community -- i think they're both telling the truth. president obama tells them nobody asked them and that is true. sony said they consulted the white house. what we hear is the response to was basicallyns, to give them standard advice and when they made public comments
deciding what to do or what the government was urging them to do, i think they know they were answering a lot of sony's direct questions about how seriously to it mightthreat, that be a difficult precedent to send for the future. >> the president said this is not an act of war but cyber vandalism. but this is cyber warfare. what exactly is the difference? >> the president is trying to draw a line and say that the attack is different from espionage. there are not fatalities involved. they're trying to find a space where they can draw a line. say, you cannot do what north korea has done, which is a
really disruptive attack where you are destroying assets and that deserves a response, but it is not the same kind of thing asked wrapping a bomb another country. so much for joining us. the ongoing story of the sony hack. let's turn to another story here on hedge funds. recently, predicted a rash of bankruptcies. she herself is in big trouble. an investor has cemented my that. her madison avenue office is now on the market. we are joined with more. what is going on here? >> those things in a row do not sound good. the street, at the end of day, does not have that many
stars people really know. hedge funds, you can count on your hands. it is incredibly tilted. people are really pulling for meredith whitney. over the last few months, all the things you do not want to see happen on your hedge funds have -- hedge fund happened. they have had some pretty nasty things, like their biggest a in error.d to the interesting thing is, as far as we know, they said no and did not want the money back. they have major executives leaving on top of that. it was not pretty. >> a lot of people were gunning for her demise. she really pissed a lot of people off.
friends and enemies on wall street. >> that is fair. when i first came to bloomberg news four years ago, i was watching tv on a sunday night and 60 minutes came on and meredith and he said on national said, billions of dollars of cities in new york evolving across america. people were freaked out. that was scary thing. one of the first things for bloomberg, she said when i asked, it was an estimate, and i remember she said, six derivative dimensions had gone out and she did not have specific math to back it up. people were upset not only that it was a very dire prediction about america, but that it turned out she did not have the
civic things. between that and the hedge fund is that the revival fund, it seems she would be putting her feet -- putting into the market and my sense was she had the idea of fly vote -- flyover states, that their economy states would grow faster. cases, that may well be true. but i guess it is hard to make specific bets on docs -- on stocks. we wrote abouty, a retailer in texas who sells appliances in the south. it has been down more than 60% this year. lost a coupleshe million dollars on it on that alone. hard days, i guess. >> thank you. you will be on this story.
the s&p has rallied 12% so far this year compared to a decline of 6.5% of equity. the diversions is the widest from every year since 1992. this year's record-setting rally could be a sign that maybe it is time to start investing globally. time -- drain me to explain this is mike reagan. >> whenever you look at u.s. versus global equities, it often comes down to a story about currencies. the dollar has been so strong this year that even a lot of european and overseas markets that are up in local currency terms, on a dollar-denominated basis, that is a big story behind why the rest of the world -- that said, with the dollar
being so strong, it is a boon for the rest of the world and increases our purchasing power. america is famously an importer. with the dollar so strong, it bodes well for the earnings. >> what does history tell us about where we are headed? >> it is a remarkable diversions. it has only happened four times since 1970 where the u.s. has outperformed the rest of the world so much. it is generally bullish for the rest of the world. next year in global equities excluding the u.s., it is about 14% here they tend to outperform the u.s. the following year. , that is only happened four times since 1970. jump for global equities the following year. strategists forecast is looking for a 7.5% gain next
year, which is decent. the estimate backs up the idea that the rest of the world will perform better. europe, the average gain is about twice of the u.s. gain -- 13, 14% gain. more ahead, three shopping days left until christmas. plenty of discounts still to be had. we will hear from the ceo of companies ranging from mr. coffee and the candle about how this shopping season is shaping up. skiing, theg to first day of winter, we will hear from the ceos key resort in colorado. acretle against competitors. stanley luke. -- stay in the loop. ♪
>> last-minute shoppers lock the doors before christmas. sales would hit $10 billion. that would top the $9 billion from black friday that we saw. bargains on everything from winter clothing to coffee brewing. the man behind many consumer products shoppers have been picking up this holiday season, as you can see from a long list of brands. e is the ceo of jarden. you just mentioned, the world's biggest seller of skis? ride snowboards, skis.
-ok. ok.> what do you see that asked weekend? -- last weekend? >> it has been robust. october, november, and of that december have been good for us. we are happy. >> will to succeed what you saw on black friday? robust, but for some retailers, not robust enough. >> black friday was not robust at all for us, but the entire week leading up to it was good. the numbers are still coming in, but we are still happy. saw sales up. much more mobile on tablets than being in the stores themselves. you always say the weather really has the generations, so
people like to see snow. new england is pretty good. out west is pretty good. in california, the drought struggled. no snow in germany right now. internationally, we are a little soft, but the good. >> how do you measure whether it will have an impact on sales? >> anytime you put money on the consumer's pocket weeks before the christmas holiday season, it is a good thing. real wage inflation. sales, our at our store traffic is flat to slightly down. people are spending more when they come into the stores. it is offsetting the traffic. >> speaking about mobile and online shopping in general, google has been expanding
themselves. they have recently gone into same-day delivery. you heard amazon going into that as well. how much pressure to those companies, the fact they want to deliver on the same day, how much pressure is that on your retailers? >> the pressure is on them is matching what other people are doing and making sure they are providing the same level of service. it is good for consumers and good for retail. >> it is great for consumers. it is very costly, i would imagine, are amazon and google. be costlier for people with your company competing online. >> we offer free shipping with our products. today, we just want to get products to a person's home. >> i was shopping this morning
online. >> a good thing, that has not been nasty weather during the month of december. last year, if you remember the problems the company said, we do not have those things going on. one of the bottlenecks people are not too focused on is what is going on at ports. stranded onucts ships, but so do retailers and amazon and google. is a four imports sitting off shore, just the volume of products coming in, then we initially to this -- anticipate, that could really hurt us. i do not think it will, but we are certainly missing important things we otherwise would not have, but we asked people to take substitutions. retailers have the same issues. i think it will cause a level of disappointment for some
consumer. >> before we go, is free shipping essentially a given now? >> the world has set the bar were free shipping is the standard. that is where we are and where we are going to be. >> stay with me throughout the hour. still ahead, the smart phone maker who overtook samsung sales in china, just valued over $45 billion. it is expanding all over the place. we will have more on this company. plus, forget about leaving a voicemail. we will tell you how i drink giant plans to increase productivity next. ♪
>> good morning. here is a look at the company top news this hour. a smartphone bender now valued at $45 billion after a new round of funding raised a billion dollars. the company unveiling new products unveiling growth in china. overtaking samsung and smartphone sales. they are expanding into content and services. $7 billion in debt, generating enough dollars. the company says it settled $24 billion this year.
the ceo says the company -- covers that the set -- despite sanctions limiting access to the capital market. one of the reasons may be why we saw the ruble decline last week. and if you need to reach somebody in the coca-cola headquarters in atlanta, forget about leaving a voicemail. company's chief information officer says it is to simplify the way we work to increase productivity. the change began earlier this month, encouraging callers to use an alternative method to contact. past the hour.s bloomberg television is on the market. julie hyman has much more. >> yes. it is time for futures in focus. a lot of volatility in equities this month. we want to focus on s&p may
futures, doing something different this year. founder is options at the cme. i want to start with you because this is something we have not talked about in this particular segment. let's talk about one. >> traders wake up in the morning and they want to know what the market is doing. i checked the s&p 500 index. traded electronically on the chicago exchange. it is worth a few times the index. it is called the mini because there are big contracts. difference is that is traded on the floor from 9:32 4:15. the mini is traded electronically. of institutions and retail traders. >> todd morris chicago is definitely one of the folks trading this contract. what do you make of the
volatility we have seen here in december? >> it has been expected. we have had selling prices, taking a little fear of what is going on in russia, and what is going on with oil, and we saw ,anet yellen of course come out which related a rally. of volatility for this year is probably pretty much over right now. be.ave seen where we will about 20-80.e we are trading something like 2073. i nice think this is probably a great spot to take a stab on the short side. i think we are up in the upper level here of resistance. it is an old i -- high . we are now in a big range of 1975 to 2575.
make 100as a chance to points on the downside is it works out, with very little limited risk. one of the things about the s&p, for people who trade, this track 500 shares. shares, so you can get in and out of this much easier and faster with the same benefits. questions to put it in layman's terms, you can sell is between here and 2065, 2075. that would be a move of 20 points. 12.5, you actually have the potential to make a profit of $5,000 on a trade. about the santa claus rally frequently, where we send to see stocks strong in the last couple weeks of the year. do not know if that will happen, but what do you take? >> did not look good earlier last week.
if you look at what traders are focused on right now, the dollar starts to rally, crude oil bottom, and bonds the before equities took off. that is what traders are focused on. they just added fuel to the fire. that is when we get wednesday into thursday morning. assuming they stay in place in thee other markets, i think rally could see an attack. that is what traders are looking at right now. >> how big of a risk is it we will see continued rallies? has got a maximum risk of $400 with a chance to make 5000. >> ok. risk, reward, is what it is all about. thank you. i appreciate it so much. we will be on the markets again in 30 minutes. >> thank you so much. coming up, there may be a lot of but not for shoppers,
>> at the mall this weekend, you're likely hunting for bargains. a lookyman is back with at stock valuations among retailers. >> if you look at these valuations, we are seeing near the highest levels we have had in more than a decade. a little lower than this time last year, but relatively i still. is 26.7.ing basis it compares to about 18.3 for
the s&p 500s. considerably more expensive. the s&p rallied about 12%. on ae seeing these stocks relative basis as more expensive. if you look at the highest and lowest valuations, the highest are coming from tractor supply which is aindex, home-improvement type retailer. trading at more than ready times trailing. rounding out the top valuations. on the lower end of the spectrum, the game stops, macy's, which a lot of investors say is a top thomas but the valuation is relatively low. that the on, rounding out the lower end of the evaluation spectrum. goodbyes and
bargains? where can investors find that? >> of course, depends on who you ask, but with you look at an index of most love retail stocks, according to analysts, you see some of those we just talked about, including macy's. the variousr about home-improvement tractor supply, home depot is also on the list. fact, coverage of home-improvement retailers came out. liquidators continuing to like the home-improvement trend, but liking a smaller trend versus the home depots and the lows of the world. retailers, apparel not a lot of optimism. coming out with a note recently saying it is neutral on the softline sector. we have seen so many sales being offered this holiday season. there is concern about margins for many of these companies. we do not know what the sales
numbers we will see, we do not know if all of this will pay off. it is a mixed bag when you look at retailers and which stocks you want to be buying coming out of the holiday season. >> thank you so much. our senior marcus corresponded. i want to bring back our guest host for the hour. jim lillie. i want to bring up your stock and how jarden has done. over the holiday season, you might expect your stock to hit the highest this year. in fact, not that expensive. around 17.8. not too bad compared to some of the other retailers. chart,u see the stock while you are happy you're sitting on a higher stock rice, does it worry you that going to 2015, you have got to build on that? >> not at all. look at our history. the equity is up 37% plus. coming off the 15% gains this
year, you really have to look at a year ago, you are up that 50%. but that future. we trade at a multiple discount. there is still earnings growth, but also mold old spansion. the stock has a long way to roll. , we are at analyst 46 today, and there is a lot of runway, but we are patient. >> what are you hoping will drive that valuation higher? >> it is about putting up the numbers, laying out a report card for investors so they understand the roadmap of where we want to be. ourant 3-5%, to continue prices, improve our income 10%, generate $700 million cash a year. inwe keep doing that year and year out, the stock will continue to invoke -- to evolve. >> you are a lucky ceo does not need to take back capital and
buyback stocks. your shares are doing well. where you actually putting the capital? as we are opportunistic about putting capital to shareholders. do m&a.done -- we the nice thing about that is we do not need to do deals to make our numbers. absent a great opportunity on the m&a front, we are happy to buy back our shares from a debt basis. we have smoothed out maturities. we feel good about where our structure is. >> have you locked in rates 30 well? >> yes. we feel pretty good about the structure. the content flow maturity really going out over the next 10 years. >> what about hiring? >> we are cautious on the hiring front. been, i would say, a fast follower, not a fast leader. when it comes to hiring, i see
improvement in the employment outlook. adding talent to our bench as we move through 2015, make sure we have the bandwidth in all parts of our organization. we are investing more, making sure we have a second generation of leaders, being developed. we are spending a lot of money on training and development this year. focus, i would suspect we spent about 10% more on training and developing evil. a good roster of talent in the organization and we can always be better. >> what about international? i was looking at a map of where you are internationally. your presence in china and australia and parts of western europe, but latin america i thought was interesting. you are well saturated also in that market. cuba is now just opening up. branchou look across our all of the brands really
resonate in cuba. opening of cuba is a great opportunity for us and a lot of other companies. it will be good for cuba and the world. policy shift in the last 50 years has not really been working. we think there is a good opportunity for us to establish a toehold in cuba and help grow the marketplace. >> and home the market of consumers. did you spring into action last week? i am curious what the discussions were when you hear something like this. what happens afterwards? >> i would say during obama's speech last week, i blessed an e-mail out to our business leaders saying changes coming to cuba and we should look at our latin america, export businesses , and think about what the opportunities are. the legal opportunities need to be defined in little better, but our teams are meant to report
back to us in the middle of january to say, i think these products are viable. clearly, it is a very popular .rand and very well known as are our other products. we will have to not breaking cold. because there is knowledge. >> right. there is already familiarity with the product. stay with me. we have a lot more ahead. over to juliek hyman again because we have got breaking news on american apparel. >> that is last week, bloomberg news reported we had gotten a takeover bid from urban place capital. the company is now confirming that the takeover offers for a share, it-- $1.30 per could entail the return of the founder to the company at least in some capacity.
he was fired by american apparel on december 16 after a month-long investigation into his conduct as ceo of the company. in addition to the confirmation of this indication of interest, as american apparel is calling it, it was also appointing a new chairwoman to the board. formerly on the board. colleen brown will take over as the sole chairperson a miss this takeover offer. >> all right. thank you so much, julie hyman. more ahead. warren buffett once again topped the list of the country buses biggest donors. number one is a billionaire and number one as a billionaire's donor. we will look at key trends giving by the world's wealthiest. plus, the 85th anniversary the new york stock exchange. a lot of work ahead.
and othersuffett, have popped up this year as the world's's biggest derisive 2014. donations nearly back to pre-crisis levels. leading the way with over $2 billion into the bill him when the gates foundation. let's take a look at other key trends. david freeman. also still with me is jim lilli e, the ceo of jarden.
david, a predominant area that education., >> that is correct. if you look at the list, it is a microcosm in what pulls at the heartstrings. largest donations were foundations. six out of 10 support educational institutions. >> harvard. >> that is right. it shows up quite a bit. about thisting thing list and cameras from hong kong real estate tycoons, is that it is the largest nation in the history of harvard. a you think about that for second, here is an institution that is part of america's history. the interesting contrast is the lantern he is such a part of american history. a new concept in asia, relatively new. and here you have the largest
gift coming out of hong kong. >> thembut why are so many of going to universities? it was not just harvard. it was notre dame, the university of wisconsin, the university of southern california area why so many? -- california. why so many? same thing whether you're selling a private jet, asking for a donation for a private school, and it is all about the affinity for that rant , and the memories you have. people have a strong affinity base for the university they went to. and think about professors experiences they have there. when it comes to approaching them to give, it is not a hard , to as -- hard thing to ask give took place you had an amazing experience that. >> they are pretty good at asking you to give.
i got caller id because the university of wisconsin calls every three nights. guess.orks for them, i developmentect teams at ivy league schools, the other universities, have the most sophisticated data and analytics analysis for donations and donors that would rival any private day. it exceeds them in most cases. especially in the eyes of larger private schools. >> i looked on your website ofterday and saw that one the services you provide is to actually give people statistical research to help them with fundraising. is that a trend you think will keep continuing? a 15-20 pageo dossier and it gives you a 360 -- view ofew of the the heart, mind, and soul.
the nonprofits have been doing this for a long time. the area where it is new and there has really been no data is internationally. that is one area where we sell. we are the only firm that has data. it is new to rain. tos obviously underscore everyone in the nonprofit world that there are huge opportunities. just as a parallel trend, we have seen that in the art rose. everyone has been focusing only on the people who collect are today. there have been major purchases this past year by asian art collectors who were not substantial collectors for basic a rock the world in terms of what is going on. there is a major shift to look at other markets. it especially goes back to the gap in terms of wealth. we think -- we see cute
tremendous wealth being generated. >> now jim, you do gift. >> i do. i like charities where i can see the impact. the better chance really helps talented high school kids move into a community come out of the inner city, to have an opportunity to go to a great school out in the suburbs. in the donors help these kids go to college. i like it in a charity. good ceo would. also, education here, to my point. putting money into education. david, thank you for joining us. and thank you, jim, for staying with us through the hour. still ahead, alibaba's -- ipo. also starting new companies. we will be back. ♪
>> big number this morning, how much the third installment of the hobbit trilogy reduce. according to numbers, it beat out the sony's remake released online by hackers. obama urgedrack americans to continue to go to the movies and yes, i also sat through the hobbit movie. 2.5 hours. 56 minutes past the hour, which means bloomberg television is on the market here in equity futures are higher and you can do it is a blessing after a big run-up we saw last week based on the fed. on the markets again in 30 minutes. caterpillar is celebrating its 85th earth day. for a look back at its long history and a look
>> welcome back. we're 30 minutes away from the opening bell. here's a look at our top stories. futures indicate stocks will move slightly higher after equities posted their biggest -- sincein six october october. a fourth weekly drop for oil. saudi arabia to maintain expert levels. reversing an earlier gain. that was created by lack of cooperation from outside of opec. caesars entertainment will merge.
the transaction will consolidate big properties like planet hollywood. the will also help caesars entertainment restructure the debt load of his largest unit. president obama will not call the hacking of sony pictures and act of war. the u.s. hasn't used north korea sonye attack, which costed hundreds of millions of dollars. here is the president speaking to cnn over the weekend. not think it was an act of war. it was an act of cyber vandalism that was very costly and dairy resident we take it very seriously and we will respond fortunately -- proportionately, as i said. >> republican senator john mccain called the cyber attack a new form of warfare. saturday, adown on shooter approached a parked police car and shot to pass
through the window. the gunmen later took his own mind. >> -- his own life. >> those that try to tear down what new york city police officers do everyday. -- ited to warn, it must must not go on and he cannot be tolerated. the blood on the hands starts on the steps of city hall in the office of the mayor. >> protests following the michael garner and eric round decisions. in hawaii, president obama condemned the killings. minutes from the start of trade. a county down with the open of the top headlines hitting our radar. olivia sterns is joining me this morning and you look christmasy
with the green. and matt with his type. geter 10, google looking to partners for its vision of a self driving car for markets in the next five years and to the wall street journal. in plan is to start testing early 2015. matt, you are in some of these driverless cars. >> he is. toyota or lexus cars mostly for self driving cars here in they are in talks, with specific carmakers. but they didesting just hired the former see me at -- former ceo of ford. just for the initial prototype. i'm sure eventually google will want to partner with many different automakers. they will not want to confine themselves to one.
this is for a 2020 prototype. >> he makes sense. why would they want to get into manufacturing cars? life they definitely would not want to. nemye is also a fre situation. >> number nine, apple in russia. they have raised prices in russia by 35% to account for the ruvell's pledge against the 30%ar area the ruble lost versus the dollar this quarter. we saw last week to rally is incredible. very difficult to price everything in russia, from cars to iphones. >> they have already been increased by 65% a year before that. much more expensive this year,
but obviously. >> they are basically the same in dollar terms. if you saw your currency collapse at this rate, you would be looking to buy hard assets. is retail value today probably worth more than the ruble. >> right. well through the -- wealthier russians are probably buying basketball teams, and i mentioned the football. >> this falls into the larger inflation story in russia, which they are not already feeling the hyperinflation pin number eight, another data breach. almost 1.2 million payment cards have been affected in a series him -- series.
>> it sounds said to me. it only has 1.2 million cars out there? target has 40 million and 70 million addresses. initially, i was shocked there were 1.2 million. >> i am looking for target. 50 plus million for other retailers. >> right. whereint of sale now malware, i am looking forward to the update to jets. >> right, it comes to mind when i think of staples products. >> i love this story, commode commerce. there is cash surfing and now this commerce, basically shopping from your toilet.
of respondents0% to their holiday shopping while they were sitting on the toilet. >> have you done it? >> i am not saying -- [laughter] flex i am sure everyone has used his or her own smartphone far too and on the toilet. i was doing research on my desk and i saw a lot of studies showing that spending too much time on the toilet can give you hemorrhoids. you should not do this. --i was shopping this week this weekend looking for presents former brother and take a look at what i found. i did not buy this because i do not want it in the house, but this is extraordinary. there is actually a booming business. >> let's ring the bell.
>> i will say it is unhealthy. that's number six, alibaba's millionaires, who have made their fortunes off of the company's ipo. beginning to emerge as a contender to silicon valley erin chinese companies have raised over $30 billion. >> they raise a lot more, six believere, but i do not they are merging as serious contenders to silicon valley. give me a break. >> tons of money in silicon valley through alibaba. >> he talk to people about what makes silicon valley work, and they talk about the ability to fail and resurrect itself. >> where do wealthy chinese people want to go when they have made a ton of money? go to silicon
>> we continue to count down to the opening bell. we are more than halfway through. we're doing something a little different. number five is the ski business. the unofficial start of ski vacation season. it means increasing competition among resorts. one of the biggest changes, multi-mountain ski passes, often
sold at a loss. ,50,000 of these last year putting pressure on smaller and independent resorts. have you hit the slope already? make of this trend, which i hear is being watched very closely, these big resorts that have only gotten bigger, now selling these across all of their properties? that is the name of the game. the seed business is -- ski business is stable. 56 million visits in the u.s. the game is how do you grab a bigger slice of the pie. and theyd to make it just tried to take a bigger
chunk. >> how do you compete with that? >> cannot go head-to-head with them on that kind of stuff. the way you get your ticket deal, it is basically 46% of the lead ticket price. it really does hit your bottom line if you drop. we tried to be different and understand why we are a little more unique and special. it is a lot of things for us. want a different that is what we are really trying to focus on. >> the kind of money are you spending this year to prepare for this year? what are you doing differently? we are just like farmers. we depend on the weather. when it does not produce, we have to be there. we spend a ton of money on snowmaking so we can you more efficient. we spent more than 1.6 billion
dollars making efficiency do not need toe pump water, and we also took some snow guns and spent a ton of money on those, where we used to spend about dixie of., to make snow, we can then -- we can now do it with four. we save 30% on our utility bills by doing those changes. >> where are you now making most of your money? like you are talking about with the big guys, they may cast their money on other stuff. each number has a dollar figure. ski school, you get about four or five. it all adds up. we are in the same boat. we make most of our money off of tickets, but food and beverage our next he does leading generators. >> i know it is not that convenient for those on the east coast to get over. you have got to take several
flights for some people. the tickets can be expensive. lower gas prices? will that help? >> it will definitely help. we are harder to get to, but, we can get around nine direct cities, only an hour away and a beautiful drive up here. but you are right that we focus a lot of our effort on the regional driving markets. instead of just blasting out e-mails and doing other stuff, we went into the markets and develop personal relationships with ski shops and we know the ski managers and we told those guys, you sell $500 worth of equipment and we give you a free ticket for your guest. it is a partnership and we try to be different by doing relationships instead of just kind of mass-market. christmas, weor are not getting snow. we are actually getting rain. it is actually pretty warm here on the east coast. is that affecting your business at all? >> i'm glad you mentioned that.
are just getting hammered right now. i had to walk over here. now, we have had close to 108 inches of snow already this season. 16 inches of powder last sunday at eight inches on thursday. the reason i am skiing is because it is incredible out there right now. >> thank you. i am sure it is. still ahead, sony has other plans. they insist they will still release the interview. private equity firms are feeling pain, but it is not stopping some investors from diving in. ♪
>> welcome back. let's get back to getting you the most important stories you need to know. joining me, ok, number four, is now in deepy trouble with her hedge fund, down 11% this year. investors want to pull out. her madison avenue office, big troubles for her. troubles. underperforming benchmarks. i have heard a lot of people saying they have this thing >> -- >> i cannot believe her husband would do poorly.
five years ago. everything should go right. >> she went on 60 minutes and said every bond in america is going belly up. it turned out that was dead wrong. >> if i may just defend for one moment, because i know there are a lot of haters, other calls have been wrong. john paulson. >> ok. number three. true. .> i think it is great >> hold on. number three. sony may have canceled a december 25 release in the "the interview" will be distributed. how will it be distributed? will it be mailed to all of us?
>> david said this on "meet the ." ss a letter to all media organizations last week saying, stop spreading all the gossip the hackers are releasing. he is a u.s. lawyer. he mentioned the film will be distributed. i do not really take his word as bedrock for that. look. eventually? i am sure. but they are too scared to put it out in any decent way in the next few months for sure. >> netflix is too scared and comcast is too scared. you are essentially making --rself a target very lacks target. >> even through all the contra see, i still do not want to see it. it looks terrible. know.on't have you seen "pineapple express." it is awesome. one of the greatest comedies. if this is anywhere near as good
as that. >> private equity firms have billionombined 11.7 dollars. 27 publicly traded producers since june according to bloomberg data. no surprise. everybody is feeling the pain of lower oil prices. many. that theyteresting think over the next five years, there is a huge amount of money to be made. of their be one biggest that's for the next five years. they said it is probably going to go down in value. if you have a lot of untapped money to invest, it is a great time to buy. >> if you are still bullish on oil and energy. how could you not be in many ways looking at the global economy -- global economy. maybe this is a correction in oil. do you waition is, for it to hit the bottom?
>> welcome back to "in the loop ." let's get back to the most important stories you need to know before the bell. matt miller and olivia sterns. >> you are so excited about it. christmas.re >> number>> one, this year's record-setting rally in u.s. stocks. a gaptime there is between the u.s. and the rest of the world, every time the gap de, gotten so wi republicans is caught up within the next 12 months. in other countries caught up within the next 12 months.
i think that is completely ridiculous. correlation, not causation. why would your money abroad? >> i like it. >> enough said. >> are you looking at yourself in the camera? >> great point, olivia. the divergence is only going to get worse. i got to say, if i could call something like this, i wouldn't be sitting here. >> and maybe you could open a hedge fund. >> i would run a hedge fund from the deck of my yacht. >> gas of the coming off of its best week in two years. -- s&p coming off of its best week in two years. i thought this was so interesting. the 10 year treasury yields also rose on this news, along with the s&p. stock and bond investors are interpreting the fed must
statement -- the fed's statement in two different ways. joining us with more on this and his best guess on what the fed meant is this chief investment strategist at sanibel captiva traveler. what do you make of this divergence the train what bond investors believe the fed is going to do and what equity investors think? who do you listen to? >> equity investors are hardwired to be optimists and bond investors are hardwired to be pessimists. the more interesting divergence that you are referring to earlier between the u.s. and europe. there are excellent reasons to buy europe, largely based on valuation. is 20-25% cheaper than the u.s. a lot of companies are driven by em demand, not domestic demand. the fact that the economies are slowing does not mean that much to u.s.-based companies. >> answer the question, though. who do you think is right, bond
investors are equity investors? are you an optimist or pessimist? >> more of an optimist than pessimist, but the expansion of the earnings ratio in the u.s. over the past five years has been a huge driver of this rally. in the multiple expansion is not a good bet to make. >> we have a chart to my believe, of this. it is amazing if you look at the ratio of the s&p 500 on the upward trajectory. i guess market prices have been on that kind of trajectory as well. why do you think we will slow down? is it because we have hit the historical threshold? >> we certainly could. there's no telling what animal spirits will do. i'm civilly saying that it is not a bet that is prudent to make to make expectations on. in terms of your planning and
your expectations, i think keeping those filed down to about the rate of corporate earnings growth, which is historically been 7% nominal, that makes a lot more sense to me. >> everybody is trying to figure out how to make money off the falling price of oil and whether they will buy back into energy stocks could we did a story about how steve schwarzman and david rubenstein are licking their chops looking to buy energy stocks. i know you like colfax is an oil services play. tell us why you think investing in these fracking services companies -- you said they are like manufacturers, not like oil companies. what do you mean by that? >> the business of fracking. historically, exploring for oil was let's go out and try to find a giant hole and stick to it and hope something comes out. million and if nothing comes out, oh, well. >> i love that. that is fracking in a nutshell
to >. >> no, no, that is not fracking. >> that is vertical oil drilling. 60, 70%decline rates of in the first year, you do things over and over again on a small you can turnmeans up the stated or turn it down quickly, but also it means there is more room for technological improvement. if things are not working well in well a, you will be drilling f quickly to, and improve your abilities. we are seeing different techniques on horizontal well drilling, getting better recovery rates. that is because we have the opportunity to do it over and over again and get better at it, which is more like manufacturing that spending $700 million on the d12 rate and not getting anything out of it. >> we have to leave it there. thanks so much for joining us.
>> there are 2 million truckers on the road in the u.s. they can lock up to thousands of miles and 70 hours a week, which causes fatigue, exhaustion, and even disease and illness. thanks to a recent decision by congress, soon they may be driving more. goes with aon female driver on the road to understand that the perils they go through. give us a better understanding of where you went over the week and who you want with. sure. we drove from michigan to tennessee and back up to
michigan and then down to kentucky and back up to michigan for six days. i went with a woman driver named tracy livingston, who drives for usa truck, and she is also a trainee -- trainer, i should say. >> what did you learn along the way? >> i learned that talking is a very difficult job. for a lot of people who spent time in their cars, they see truckers and they think that they sit there and drive all day, but really, is a huge responsibility. they are in charge of this 80,000 pound machine, 72 feet long. they have to avoid car drivers who are not necessarily watching out for them. they have to comply with all swords of april and state regulations, as well as make sure that their load is safe and that they are getting it there on time. and they are all of the same time battling fatigue as well. they are working long hours and
are on the road and have a huge responsibility. did you witness that yourself or do you feel that when you were on the road? >> for sure. bys schedule is dictated shippers and receivers and a lot of times they don't have any control on whether the shippers are receivers are ready for them and can load them on time or if they are loading the load properly, so they can wait for hours, and is happened to us, we were delayed because we had a load that was too heavy. it would set us back an entire day. these drivers not only are tired 14-hour days behind the wheel and driving for up to 11 hours. they have to cope with these delays. imagine.i can certainly a top business to bn in. what about the changes by congress? how will that affect trucking standards and truckers themselves? >> some truckers say, like
tracy, she drives a dedicated group. it -- they call it a milk run. she will go the same way and for her it won't make a difference. what it will make a difference for is those who drive different routes every week, independent drivers. it depends on the time crunch you are under. if you are under a big time crunch and you are paid by the while you might drive more in this does lead to more fatigue on the road. >> thank you so much for joining us. timefer oldham on her driving for a week with a trucker across the country. on to more of a glamorous business -- real estate and real estate in particular in miami and how the prices are rising. with stronger than ever demand at record levels. we have been talking a lot about this on the program.
"market makers" anchor stephanie ruhle sat down with gary stern to discuss the latest project in south beach, a gleaming project right on the beach. >> betty, it would blow your mind. groundars ago, miami was zero for the housing crisis and guys like gary stern brought up many of those properties when they were in deep distress and they are not starting from the ground. they are going to major overhauls, multimillion dollars. the biggest beachfront property in miami and barry is pretty excited about it. >> i think miami is the singapore of the united states to your getting all of international travel, international buyers, europeans, spanish. was selling units -- not one unit to a guy, it units. -- eight units. >> isn't it a risk when you have international buyers? they are not setting up a home here. >> i think it is slightly
different and i don't think of this market -- unlike maybe new york -- these people will come here. >> it is not just south americans. he is seeing more new yorkers who are sick of paying the price is they are here, especially all the taxes to you are seeing hedge fund-type guys not go to perjury go does not go to puerto rico. are going to miami and barry likes that. >> hear her entire interview with barry sternlicht. up next, the 85th year on the new york stock exchange and where he sees the industry having a tough time for them. ♪
sales down 6% in november, mining sales down 23%. chairman and ceo doug oberhelman is with me now from the new york stock exchange. 85 years on the near stock exchange. you have seen many cycles. how tough is this one? >> we have seen a lot of cycles. i can't imagine that the leadership team that came out here two months after the crash of october 1929 issued their public offering and raised money and 85 years is history. we have seen cycles over the last 85 years. the cycle we are in right now is fairly stable. we saw a big downturn in mining in 2014 and before that, being in 2009 -- big drop in 2009. we would go through this one as well. i will beast -- someone will be standing here 85 years and
smiling as well. in 85 years for someone in your exact same spot. mining pulled back quite dramatically in 2012, 2013. what about 2015? at what point will we be in the mining sector? >> we are looking across all of our business for 2015. we will have good news and bad news. the u.s. economy is committed -- continuing to grow slowly. everything outside the u.s. is kind of flat. we are watching oil and gas in a big way and we will have some impact from that. mining has been bouncing off of the bottom for the last three years and will probably continue to do that for a while longer. we are waiting for the replacement cycle, which should be coming fairly soon. we are just in the meantime taking advantage of this and doing all we can to strengthen our walls.
we are focused on our balance sheet and making sure it is efficient and productive. what about energy? energy had been a bright spot for caterpillar but you have had a dramatic lunch in oil prices the -- plunge in oil prices. might that cause energy capex?es to pull back on of ourvast majority energy business burns these old fuel and we will see somewhere along the line the benefits of that. we will see the impact in 2015 as drillers cut back an exploration declines in which we see and fully expected the rest of it should be positive into the future as the world gets this huge stimulus package of energy. it should be a net good for us over the next couple years. >> does that mean you see oil prices bottoming out towards the middle of 2015?
>> i will not make an oil price forecast, betty. i don't have a clue. forecasters are sitting tight and they tell us they will take a look and january and see what happens. but we will feel it. after long years around 100, there is no question about it. >> i know caterpillar has been one of the big voices calling for change, diplomatic change with our relations with cuba. now last week you finally have got to not change. there is the opening of trade relations with the about -- with cuba. what kind of action did you take my after or during the announcement? >> well, i smiled. it is finally a step in the right direction, a very small step. nothing will change in terms of commerce for business or for that matter, relations, but it is an opening and i am happy about that. it ought to be good for america. i have said many times that the cuban system is the cuban system
and hasn't changed much in a long time and this maybe affords an opening. i like that maybe in a few years, maybe puerto rico could be a great ally of the united states and good market for us. there are a lot of cuban-americans in america but it has to be positive down the road from somewhere along the line. >> i would think so. caterpillar has been on the forefront -- were you more ready than other businesses? were you ready to be right there when the market opens up? how quickly can you spring into action? > we can spring into action probably yesterday on this subject. we have distributors around the territory that know a lot about the cuban market. it is a question of when it opens for business and commerce. i will think we are close to that yet but we are -- i don't think we close to that yet but we are ready. >> jpmorgan put out a report saying that caterpillar is on
the hunt for a multibillion-dollar acquisition. could you eliminate us on what that means? >> i'm not sure on the hunt for we are looking for growth opportunities. we have stayed away from oil and gas opportunities because the valuations are so high. a balance sheet is strong and we have lots of capital to deploy, which i would rather use growing the business. we are looking for those kinds of things. i would not say that there is any target or deal in mind at all. we have a group looking at it long and hard and if we find something, it would be good. >> what are the aussie find something in 2015 -- the office you find -- one of the odds you find something in 2015? >> pretty small. in terms of anything day, it is a pretty small chance. >> thank you for joining us.
>> always good to see you. >> doug oberhelman, chairman and ceo of caterpillar, saluting their 85th anniversary on the new york stock exchange. that does it for today on "in the loop." p forrow, the new whatsap teenagers. the anonymous messaging app is drawing plenty of cash but also a lot of controversy, especially among parents. bottoms up -- we are testing the holiday season with a deep dive in the champagne market. tomorrow at 8:00 a.m. eastern time on bloomberg television. ♪
percent.q is up .2 last week's gains were spurred by comments by janet yellen. havee treasury market we yields rising to some extent of the 10-year yield only at two point 17%. there is a lot of uncertainty over what the fed statement met last week. there's a lot of parsing afterwords, poring through it. the fed said it would be patient when raising rates. the bond markets seem to have the verdict, that the fed will hike rates sooner than investors previously thought. joining us with what this means on treasury market is lisa abramowicz. first of all, let's clear up some confusion here. it seems as though janet yellen in her comments said that the second half of the year is what we are looking at. is that significantly different from what investors were expecting? >> she didn't seem to be
concerned about oil prices plunging. she did not seem to be concerned about the u.s. economy. she voiced confidence that the u.s. will be able to avoid the general slowdown globally in economies from japan to germany. confidence that she was looking for every excuse in good -- they could. people were pricing in a june rate hike rather than 2016, as they had been earlier in the year. >> how is this affecting the yield curve? >> the differential between 30-year bonds and five-year --ds has shrunk to than ours the narrowest in years. they are not expecting long-term inflation to pick up. longer-term bonds still look attractive relative to the rest of what is out there.
do we actually see an inversion of the yield curve where the bond rates are higher? if that happens, what are the implications of that? >> usually pretty negative. we have a ways to go to get back .o 2006 levels we still have a ways to go before the inversion happens. still, people are watching this and people are concerned that, frankly, someone was talking to me and saying, look, the fed good hike interest rates and then have to engage in another round of quantitative easing. frankly, the economies and accelerating enough. -- the economy isn't accelerating enough. prices will rise again, as janet yellen seems using just, or is in a longer-term reality we are going to be facing? >> i don't know if there is
consensus on that but what are you hearing? >> another good year for treasuries next year, which flies again in the face of the consensus last year -- >> but the consensus was wrong in the beginning of this year! >> is there a growing consensus that treasuries will be a winner again and will that -- is that consensus wrong? >> oh, man. thank you very much, lisa abramowicz. we will be "on the markets" again in 30 minutes. "market makers" is next. ♪
from bloomberg headquarters in new york, this is "market makers" with erik schatzker and stephanie ruhle. takeover target -- american apparel confirms it has been approached by a potential buyer charney'smean dov returned to the company. we have an exclusive interview with the embattled founder. whitneyn -- meredith down a whopping 11% this year and her biggest an answer -- biggest investor wants o-u-t come out. and no real ruby -- nouriel