tv In the Loop With Betty Liu Bloomberg February 3, 2015 8:00am-10:01am EST
president is out with his new $4 trillion budget. we will get the job report on friday. greece is in a fight over austerity. plenty to talk about with joseph stiglitz. member this ad? one of the hits on sunday night. how victoria secret uses this to kick off the valentine's day marketing push. one of the angels, age rihanna lima, joining us later. president obama's new budget calls for higher taxes on corporations and top earners. republicans, likely to reject all of those. question is whether both sides will be able to discuss overhauling the entire tax code. is this a step in the right direction? a new twist in that story about radioshack filing for bankruptcy. according to people familiar with the matter amazon may
acquire some of the radioshack locations. you shack is moving toward a deal to sell a portion of their stores and close the rest of them. sprint has discussed buying up 2000 radioshack stores. the two biggest office-supply retailers in the u.s. are looking to merge. according to the wall street journal, talks between staples and office depot are in advanced stage. bp feeling the collapse in oil prices. fourth quarter oil -- fourth-quarter profit -- the company reported a $4.4 billion loss after running down the value of oil and gas fields. bob dudley told bloomberg that oil is likely to stay low for quite some time. >> you look at the fundamental supply and demand. it reminded 1986. -- it reminds me of 1986. able be a long time before we
see 100 again. >> oil is up for the fourth day in a row. more than $51 per barrel. there is likely to be a settlement in the government's sub prime mortgage bond suit. s&p would pave $1.4 billion to settle claims before the financial crisis. s&p will not admit it did anything wrong. breaking news. angela merkel is saying they are going to wait for recommendations from proposals as a greek government on their debt situation. i know hans nichols has been on top of the story. what can you tell us? >> here is what we know according to a person familiar with the matter. germany is preparing to wait greece out through this next round of funding may be all the way until april or may. this is a crucial bit of reporting.
that means that the showdown with greece could be much longer . it could go beyond this february 28 deadline which is when greece exits their current bailout package. that is when if they do not have a deal in place greece will technically not be able to have any more funds disbursed from imf or the eu. the crucial question is whether in that interim period if they do not have some sort of agreement by the 28th, will they have access to ecb funds? will there be a run on the greek banks? merkel is going to play the long game. she wants to wait them out and see what the see of greases in a weaker position in april or may before she thinks about renegotiating a deal. an update on where we are increase, last night in london the finance minister gave his
case for what he wants to do. it involves taking a lot of the debt held by the imf -- the ecb and the unit -- the european unions swapping out for different securities that are linked to growth. markets every acted positively to that. i suspect that market reaction to this news out of angela merkel's government is going to be negative. the finance minister does have a meeting with mario draghi tomorrow in frankfurt. >> it looks like the markets are reacting positively to that news. hans nichols, our international correspondent. europe stock up 1.3%. chrysler is out with their sales figures for the month of january. auto sales in the u.s. up 14%. the estimate was for a rise of 13.8%. we know the auto industry has been essentially on fire over
the last 12 months. matt miller, what about these numbers? >> chrysler has been on fire not only for the past month but the past few years. this company has had tremendous growth in sales. it is the leader as far as the u.s. automakers if you want to consider it a u.s. automaker even though it is not since it is now fiat chrysler. headquartered in london or amsterdam or italy. they have been the leader as far as growth over the last year. all of the carmakers have been posting serious growth in sales. over the past few years at the industry growth, it is gone from 13 million units per year to 14 billion -- 14 million, 15 million. we are at 17 million in sales next year. that put us on par with the most sales we have ever seen in the
beginning of the 2000s. the stocks have not been moving in lockstep with the sales figures. fiat chrysler is an exception because they have taken off since they listed in the new york stock exchange at the end of last year. ford and gm have not seen tremendous growth. gm is down if you look at a 12 month chart of the stock. >> why is that? >> the recalls hit gm especially hard. if you look at the newswires every car company is recalling a new batch of cars almost every day. for ford, the cost of creating the new f1 50 have been very high. for all the carmakers, europe has been a problem. russia especially. the strong dollar is weighing on these u.s. carmakers. >> thank you so much, matt miller. as we mentioned, members of the president's cabinet had to
capitol hill to sell republicans on the president's budget. chairman paul ryan is going to be hosting jack glue. eater cook cooked joins us with much more on the budget. -- peter cook joins us with much more on the budget. >> we have to wait and see how this shakes out. this is the first time the administration and paul ryan in his new role have engaged in public over tax reform. everyone knows tax reform is the big elephant in the room that both besides going to negotiate. it will be lou and ryan going forward who would be the point people. a chance for both of them to test the waters. for his part, paul ryan trashed the budget calling and more of the same taxes and spending he says has done damage to the u.s.
economy. he left the door open to compromise saying "i want to work with this administration but the president has to demonstrate he is interested in governing, not just posturing." expect them to say more of the same in public. the big conversation will happen in private. i'm told they are having private conversations already. >> the congressional republicans are going to be putting up roadblock after roadblock on many of these proposals. what are the biggest obstacles to attack steel? -- to a tax deal? >> these are the big issues that the sides have to overcome. first of all, the framework for these conversations. republicans would like to do comprehensive reform. the administration sees no opportunity for that. they want to focus on business tax reform. issues on what the top rate would be for the community.
republicans have been talking 25%. a treatment of small businesses as well. big questions to come. >> thank you so much, peter cook are chief white house correspondent. either will be back with us for more on -- peter will be back with us for more on taxes. joseph stiglitz, professor of columbia university who says this taxation is one tool that can help reduce the spiraling income inequality in the united states. we will hear his argument in the next hour. radioshack is preparing to shut down its chain in a banker's best in a bankruptcy deal that would sell half of its stores to sprint and so the rest. there are reports that amazon is also looking to acquire some of radioshack's locations. cory johnson is looking into why sprint and now amazon are
looking to buy up the stores. >> location. radioshack, over many decades, has been building a network of stores. their struggle has not been real estate it has been what to put in the stores. they continue to make some boneheaded decisions or bad debts with this company. at the heart of it, they have a huge network. it is multifaceted. there are some good real estate, some crummy real estate. in the u.s. the end of last year with 4291 stores. they have dealer outlets franchise like arrangements with nearly 1000 stores. a lot of those are crummy real estate. stores that made a lot of sense in 1972 that do not make sense today. the problem is reassure borrowed against the income of those stores, promising to only get bigger.
the debt holders would not let radioshack back out of all of those leases. we have shaq came up with a planned a year ago to get out of over a thousand of those stores and could not get out. now they have this footprint that is of interest to sprint that may be of interest to amazon. a private equity group is looking at it. radioshack is still considering a plan to rebrand itself. there are options of the table. >> lots of options. in terms of amazon, speaking about physical locations for amazon what might we expect them to do with those locations? >> amazon is taking a look at this. amazon takes a look at a lot of things. it is a company that's corporate coulter is about trying new ideas, throwing things against the wall. one of the things that is a big
push across the business with amazon is to get closer to the customer. once they agree to start paying state and local sales taxes they can open operations in the places they can avoid. they move for film and centers closer to big urban areas. -- for film and centers closer to big urban areas. -- fulfillment centers closer to big urban areas. as might be a way for them to expand her -- their amazon blocker business. >> cory johnson. buying assets, selling them. that is just one of the areas that will keep bank earnings up despite the slump we have seen in trading. we will talk about the bank outlet with thomas michaud. ♪
>> it is 15 minutes past the hour. chinese e-commerce strong -- giant, ally baba offering u.s. customers loans through lending clubs. as mrs. can apply for short-term credit for his much as $300,000. ally baba wants to reach some 2 billion individual customers and 10 million businesses outside of china. european stocks went soaring today and saw greek bonds rally. weighing on stocks is chancellor angela merkel are expect negotiations with greece to drag on. it is prepared to play a waiting game until april or may. what is she going to forgive in greece?
the top court has rejected claims of genocide by serbia and croatia and the yugoslav wars of the 1990's. both sides alleged each had committed genocide on the other. no appeal is possible on the verdict. that is the latest world news. another update at 45 minutes past the hour. it is the end of an era possibly for bruce berkowitz. it was five years ago that morningstar named him domestic fund manager of the decade for his performance. since then, he has to explain why in a conference call. his nearly eight in dollar fund has had the worst risk adjusted return of any large diversified equity fund in the last five years. like other investors berkowitz has gone from star performer to struggling manager after big bets. joining us is thomas michaud
ceo of keith bruins and woods. good to see you. people say that if bruce berkowitz cannot get it right how can i get it right? they have been struggling. >> bruce is taking a big bet on government intervention. as i understand it if you are investing in the gst the legal situation which he had come is the legal outcome. that is different from the core dynamics of what is happening in the bank industry. >> the core dynamics have not been great. you look at any of the banking shares. the big tanks -- big banks have not been great. when you look at regional banks, they've been worse. is that going to continue? >> i think you're right to talk
about the big banks versus the mid mid-and small cap banks. they have been doing better than the biggest banks. you saw that in the quarter. the biggest banks struggled with revenue growth and generally missed estimates. with small-cap banks, everything looks good except for one piece which is the outlook for net interest margins and interest rates. loan growth has been solid. this quarter was the 20th straight quarter in a row they have had declining nonperforming assets. the capital is the best it is been in 70 years. there's big pressure for earnings growth is of the outlook for low rates as well as a flat yield curve. we have cut estimates for more than half of the banks that we follow this quarter because of that change. >>it is -- >> this is not a new situation. >> it has been building over the last six to eight weeks.
our analysts have been pushing back the fed pattern of increasing rates. that was important for margins to inflect. instead of 10% earnings-per-share growth for smaller banks, we now have 7%. if we do not get rate increases th -- >> 25 basis points. why would investors discount stock prices so much? >> my personal opinion is they have discounted them too much. it is a question of has the pendulum swung too far? an example of that is, we are writing research about dividend yields. there are fine banking companies where i think the dividends are solid that are yielding 3% or more. we recently mentioned that jpmorgan, their dividends are coming into question. they are being attractive
because the stocks of come down so much. >> do we include huntington bancshares? >> they are in that group. you can see dividend yield in companies like -- it we are talking about a different reason for buying stocks. many of them are becoming young players. >> are our earning estimates unrealistic? >> my own opinion is the danger is that they end up working their way lower because of this margin compression. is it in the stocks? in many cases, it is. >> great to see you. thomas michaud of keith pruett and woods. to pull a spent eight years under mcdonald's's arches. executives are speaking out on
>> you are watching "in the loop." good morning. i am betty liu. verizon, preparing to sell up to $11 billion worth of wireless towers. verizon will use the money to help pay for wireless airwaves it bought in an auction l. the state attorney general's office as accused retailers of selling supplements that were fraudulent. four out of five products did not have the earned a name on their label. be careful.
sales at fiat chrysler, up 14% last month. ram pickups up 14%. -- 24%. chrysler sales have risen for 58 months in a row. they are on fire. it is a tale of two different -- you like that? wendy's just came out with their preliminary 2004 team results -- two dozen 14 results -- 2014 results. the burger chain like mcdonald's is struggling to fend off competition. one company is chipotle. finesse along joins us with more. -- vanessa lwong.
what has made their success? how did they learn from it donald on what to do and what not to do? >> chipotle has an interesting history that many people might not know about. mcdonald's invested in the company in 1998 through 2006. through that partnership mcdonald's invested money in chipotle, help it grow. the companies have had different paths to gross -- to growth. mcdonald's finds partners who can develop their stores. chipotle has wanted more tight control over what goes on in their restaurants. the culture in the restaurants which they say is important to their growth. chipotle has experimented with franchising.
they had three mcdonald's franchisees open eight restaurants. it did not work that well. they bought those restaurants back. >> wendy's is trying to fill this gap. i spoke with amel brawley -- emil brolic. i want to play for you what he said about that niche. >> if you think of us in the context of quick casuals what we are giving people is a comparable experience. at a significantly lower price. our average check is 45% lower than the average check at one of those -- >> like at a chipotle or something like that? >> correct. >> he does not name them. [laughter] >> the big elephant in the room. >> it seems like there is this
gap that wendy's is feeling. >> wendy's yes there come sales fell short of estimates. rochus still better than mcdonald's. -- growth is still better than mcdonald's. in terms of the franchise management, wendy's seems to be going more toward the mcdonald's model because they say they are going to transfer ownership of 500 of the restaurants to franchisees. the ultimate goal is to own 5% of their own restaurants. you can look at it from the consumer facing perspective. you can also look at what they are doing from behind the scenes. it looks like they are trying to tighten up the operation. >> chipotle is having problems themselves. it is not all roses. they are having to answer questions about their meat. >> it is a luxury problem to have in a way. the problem is, chipotle is
growing so quickly that it is having trouble getting supply to meet that growth. it has stringent requirements for it supplies. the issue is, with its pork, it said at 600 of its restaurants it will not be serving pork. >> because of the pork issue. >> one of its soprano -- one of its suppliers was not meeting its criteria for the animal. the problem is finding enough farmers who are willing to do it in that way. >> is there enough fresh organic farm raised meat out there to meet the demand as chipotle and other companies like chipotle grow? >> it is a question they will have to continue to struggle with. as they grew, they said they have added farmers at a ratio of one new farm per restaurant they
have opened. as they have grown at a quicker pace, we will see if the agricultural sector can keep up with the demand. i think farmers will say, if you're willing to pay us -- >> they will build it. the economics of farming in this way are, located. if you have to convert your farm, does the margin that chipotle will provide you make up for the cost of conversion? typically, you can raise many fewer animals in the same space. it is not just the difference in cost per pound or per animal, it is that you are not producing as much meat through these kinds of methods. >> fortunately for mentees, they of not their brand about making promises of sustainable ingredients. >> by the way, neither has burger king or taco bell or others. how are they doing? >> taco bell is doing great.
[laughter] >> the doritos logo taco or whatever it's called. where they doing well? >> taco bell has stuck with brand positioning of being a popular late-night spot. you items with shock value like the lawful taco. -- the waffle taco. mcdonald's has added chicken, coffee salads, which do not sell that well. a whole line of premium items. the dollar menu is not really a dollar anymore. they have something for everything. they are not the best at anything in many consumer mind. >> nobody is raving about their burgers these days. everyone is talking shake shack and others. thank you, venessa wong. julie hyman, as well.
peter cook is also back with us as well. congressman roskam, what would you like to hear from the treasury secretary that might change her views on the budget -- change your views on the budget? >> i would love it if the treasury secretary came in and said, there is a new day and this could be great. we will take on the long-term debt questions. there is an unprecedented opportunity with the senate and house to do things we never contemplated before. i would love it if he said we are going to take on the totality of reforming entire tax code and rain in the irs and not give them an additional $2 billion. >> congressman, you're probably not going to hear something along those lines. what is there in the president's budget that you can agree with? >> i think the president
discussing tax reform is a good thing. he is not defending the status quo and neither are republicans on capitol hill. there is a recognition that the way we deal internationally on the tax side is a failure. it is putting u.s. companies and workers at a disadvantage. there is common ground there and i would love to be able to build on that. >> the president put forward his most detailed plan to date. he put numbers behind it particularly in dealing with offshore profits of u.s. companies. 19% minimum tax on all forms -- all foreign earnings going forward. can you support that? >> that is fair enough. the general discussion about repatriation is something that is robust and dynamic. i'm hopeful that we can get to somewhere positive with the administration. there is another point that is this money is not going to be
sitting offshore in perpetuity. european countries are making moves to attach those profits for themselves and make it a taxable event for u.s. companies to bring that back. there is an urgency to this now. >> go-ahead peter. >> the linkage that the president is trying to achieve. dave camp was trying to do the same last year between infrastructure investment and corporate's nest tax reform. is that the linkage republicans can support? doesn't that make some sense? >> it is a useful way to talk about it. i would not presume to speak for all republicans. you stated the advantage. the disadvantage is that you give it up as a pay for for overall tax reforms. do you take that now with an urgency to move forward or do you say that to lower rates generally?
that is a debate that has to happen. >> do you applaud the president in anyways for at least saying we waited long enough on corporate tax reform, it doesn't look like we are closer to an overhaul, so why don't we do something for the country now and bring some of that money back and invest it in infrastructure we need in the united states? >> the other side of that argument is, what happens to the small companies that are the framework for our economy? the so-called pass-throughs, the llc's? if you do corporate tax reform and say to the next group, we are going to get to you soon, my prediction is, you never get to them they are pressing their nose up against the glass, looking in. our argument is, if you're going to do see corpse, you should also do -- do c corps, you
should also do escorts. s corps. >> how do you know that is going to leave small businesses out? >> mike spirits of serving this number of years -- my experience of serving, if you let a big part of the coalition go, no one will be actively participating. my prediction is that it is true. that if c crorps go alone, you will not get the relief we need. >> europe in critical about this president putting forth a budget that is more political. it is not going to go anywhere in this congress. you all are about to vote to repeal obama care for something like the 60th time. argue all playing politics as well -- are you all playing politics as well? >> you could make that claim.
there are a number of members of congress who have come in a huge weight of election running against obama care. they made a pledge that they would do exactly what they will accomplish today, that his vote to repeal it. the work is on the house and senate to come up with a replacement. this is going to be driven by the possibility of a supreme court decision that could put a body blow at the taxing structure of obama care. also, the majority leader has tasked three committees to come up with a replacement. >> this year? >> this year. it is for real. >> all right. >> contra, thank you for joining us. also -- congressman, thank you for joining us. also, peter cook. about 45 minutes until the start of trade today. futures are rebounding after one of the worst monthly declines in
u.s. markets. scarlet fu has a breakdown of some of the stocks set to open. >> we're focused on office supply retailers. the big names left in the business are in merger talks. no price was mentioned so in the absence of details, office depot and staples surging. both are among the most actively traded company stocks. is this the beginning of the end for the 3-d printer bull market? stratus gave a 2015 outlook that missed estimates because of higher expenses. the stock will likely stay depressed for a while. we're seeing other 3-d printers move down in sympathy. notably 3-d systems. stratus is on its own up by 27% right now. a couple of movers on the back of results. ups which had announced last
month it forecast -- it's forecast would be disappointing. full-year growth this year will not meet a long-term growth because of pension expenses in the long term -- and the stronger dollar. aetna is higher by 9/10 of 1%. cliffs natural resources fourth-quarter profit and sales beat estimates the it sold more iron ore to u.s. steel makers than global customers. >> thank you, scarlet. much more ahead. at 9:00 a.m., we will be speaking with joseph stiglitz. his take on greece, the u.s. budget and on tax reform. plus, from super bowl ads to valentine's day, a busy february 4 the torilla secret angels. we would hear from adriana lima.
>> and al jazeera journalist held in prison in cairo must give up his citizenship. the journalist was told to give up his nationality or his freedom. his australian colleague said all held should be released. >> i still feel a sense of concern. if it is appropriate for me to be free, it is right for all of them to be free. >> us trillion a unexpectedly cut its main interest rate overnight. -- australia i expectedly its main interest rate overnight.
it follows china, canada and india in loosening monetary policy and an attempt to boost growth. carlos goheen has said the russian car market will shrink by a third of a percent this year. >> this is not the first decline. last year was an 11% decline in russia which should be followed by a forecast a decline of 20% which is one third of the russian market is appear. i think with a forecast we have in 2015, we should be at the end of the tunnel. you never know. >> that is the latest world news. this morning's bloomberg big number 114.4 million. that is the size of the american audience that watched the super bowl. the most-watched program in u.s.
television history. the prior record for last year game -- last year's game. so many people watch outside their homes. they watch at bars, restaurants and parties. that is six times the number of people who watched the state of the union last month. what does that say about america? staying on the super bowl, this year's adds stole the limelight. l brands called on its victoria's secret angels to fuel buzz. angels known to rock down -- walked down a runway while wearing fantasy bras to show the world in a hundred play ball. -- show the world they know how to play ball. ♪ >> that was a nice arm. joining us this morning adriana
lima, live in las vegas. the super bowl ad is meant to push their valentine's day marketing. adriana, what kind of reaction did you get from the super bowl ads on sunday? >> i was very excited to be part of the super bowl commercial. just to know that it was the most-watched super bowl ever. that is unbelievable. to be part of the commercial. with the torilla secret it is -- with the torilla secret, it is one of my favorite -- victo ria ♪ secret. they helped me tremendously.
it was exciting. >> i know it has launched many a career the on commercials like this. how different was it to work on this campaign, versus one in prior years? >> the difference is the last commercial i did that we did for the super bowl was t 2008. we had all the angels together. besides us being together the commercial was one of the most-watched commercials for the whole super bowl. to be part of it i am speechless. >> other victoria's secret
models have gone on to great success. giselle, number one among them. tyra banks, as well as heidi klum. do you have aspirations to be as big as them or earn as much as them? giselle earned $47 million last year. >> it is wonderful to see somebody from my hometown from brazil to be successful internationally. i am proud. thanks to her for opening so many doors for other models as well internationally. i'm grateful to her, which he did for us. >> thank you so much. adriana lima. we'll have much more ahead on "in the loop." ♪
>> welcome back to "in the loop turco here's a look at our top stories. teachers indicate stocks will be higher at the open. -- futures indicate stocks will be higher at the open. big checks -- s&p will pay $1.4 billion to settle claims. that suit filed by the justice department. the ratings firm is settling a similar case with the california -- s&p will pay town first hundred $25 million.
companies are lining up to grab a chunk of radioshack. the chain is preparing to file toward bankruptcy. in many as half afraid of shaq's 4000 locations. there is word that amazon may want to buy -- in as many as half of radioshack's 4000 locations. there is word that amazon may want to buy. ram truck sales rose 14%. fiat chrysler sales have risen for 58 months in a row. we are under 30 minutes away from the start of trade. matt miller and leslie picker joining us this morning. hopes are high for a resolution in the standoff between greece's government and euro area leaders. greek stocks and bonds rallied after the new finance minister -- to swap some of his debt for
securities. >> that is what it looks like. somehow they managed to conquer the continent financially. greece did not get the memo. now, they are realizing -- sit burress seems to be realizing he is not going to be able to write down debt the way he thought he would. he is going to back off of that and go after other goals now. if he wants to spend more money, throughout structural reforms it seems he is going to run into problems. >> there is a recent poll that shows over 50% of greeks actually like being in the eurozone. you like having the euro. he has to contend with that. if he forces too hard a line, it might force -- >> that is on my band words list.
[laughter] >> it could not go well with the greeks themselves. the iphone maker just issued $6.5 billion of debt on monday. fueling speculation u.s. interest rates are getting ready to rise. >> apple is this giant. 30 year treasury's hit a low. they said, why not take advantage of these rates? do our own bond sale, that way we can lock this in before rates rise. this is an indication that we could see rates rise. >> another good indication is rates are almost zero. if something is this low, it is going to rise eventually. if you are giving away money for free, the question is not, will you borrow, but how much. it is a no-brainer. >> it is cheap money. janet ellen -- janet yellen seem to give all indication last week
that the fed is ready to raise interest rates no matter what. >> i cannot imagine her using the phrase "no matter what your ." >> bruce berkowitz was morningstar's domestic starch -- stock fund manager of the year. >> this is a bold guy. he takes bold bets. you does not diversify and do little things and try to beat the s&p. he takes bold bets in companies like sears who have obviously underperformed. that is come back to haunt him. >> bank of america as well. >> and st. joe's. >> i always find it so interesting how these fund managers go from being the best in class to suddenly being the worst.
>> nobody stays on step -- only stays on top. >> bill gross. >> bill gross has a long track record of winning. everybody comes down to eventually. if you are an investor and have done well with a guy for 10 years, maybe it is time to switch them out. >> lenovo seeing its biggest gain in almost two years. a quarterly profit that beat estimates while expanding its global market share for pcs and smart phone sales. every once in a while we are so obsessed with companies like apple and google. we forget there are silent killers out there who are killing it, including lenovo by doing traditional things like selling pcs and cheap smart phones. integrating acquisitions. they bought the smartphone business from motorola. >> they bought the server
business from ibm and they were a perfect example of how to integrate acquisitions in a way that help their bottom line. i think that showed through in the quarter. >> they bought the pc business from ibm. they've been crushing it. the pc has not died. it is actually showing growth in sales. lenovo's market share is getting bigger. they are winning on all counts. >> speaking of hot companies we always talk about, uber is one of them. the tables have turned. google preparing its own right hailing service, most likely in c driverless cars -- in concert with driverless cars. >> i do not see it in conjunction with the driverless car anytime soon. google employees are using the rideshare at. a lot of people have been mentioning while the driverless
car is ready to hit the roads regulators are not ready to allow it. it will be a long time before he can hail a driverless car, even in california. >> goal has never really been the first mover in a lot of major businesses. when you look at e-mail, search. there were movers before them. they came in, and proved it and now they are dominant in those spaces. if i were uber, i would be looking at this and saying, we have to do something. >> apparently, uber is countering that they want to start its own driverless car business. or build its own driverless car. it is difficult since google has so much time and money invested over so many years of research and development. >> i am curious to hear your question on this -- your answer to this. the you believe that uber is going to really put a dent in american ownership of cars? >> i think the car sharing model
is -- as well as the driverless car, going to put a dent in american car sales. we are probably at deke cars the next few years because kids do not care about cars as much anymore. if they can get in it and it will drive them with a want to go, they do not understand the joy of the independence and freedom of mobility. >> i fall in the category of being driven. >> let me get you out on the track. [laughter] >> i have been but not everyone is a race car driver like you. >> i think -- there was a great story about lord marsh who runs the revival festival. the self driving car is going to be catastrophic for modern cars. people do not realize the value of this machine that is at once
>> we continue to count down to the opening bell. it is time for our dive. i want to dive into loans. alibaba is offering loans through lending club's to help u.s. buyers store products from china and boost the e-commerce giant's presence overseas. a record-breaking eye appeal of $25 billion. in december, lending club was the first peer-to-peer lender to go public. joining us now is leslie hacker
-- leslie picker. >> lending club is a great choice for alibaba in the u.s.. if you wanted to do a traditional bank, that puts them in a bind. as we know from their ipo process, they are about giving traditional banks equal responsibility. lending club is a disruptive part of the process. it is a marketplace model similar to alibaba in that it has a platform where buyers and sellers come together. they mirror each other past business models. -- each other's business models. its record is squeaky clean when it comes to the financial services. they are not ruffled any feathers besides having a disruptive business model. >> the banks might be upset. bank of china is being replaced by lending club. how does that affect bank of china and their relationship with the chinese banks? >> it is difficult to say what
other role bank of china will have with alibaba. we know alibaba is in the process of planning their own banking system in china. there was friction on that and already. i think with this deal does is it is more of a benefit to lending club than alibaba. the number of u.s. merchants that are using alibaba.com, according to my sources, are not widespread. what this does is it gives us-based institution to get u.s. investors buying into alibaba. the upside is tremendous for lending club as well as alibaba. >> speaking about u.s. investors and consumers they want to know that alibaba is doing everything straight. there was a story last week about alleged fraud on their website, particularly taub out. the results with regulators? >> i put resolved in quotations
because this is been a roller coaster ride for alibaba for years. part of the respecter's that people would be selling things that were not true on their website. that is the thing with these marketplace models. uber is an example of this. other e-commerce sites. you do not control the people that are always selling on your sites. it is difficult to monitor the different sellers that use alibaba. from alibaba' back to, they say they do the best they can. -- from alibaba's perspective, they do the best they can. it remains to be seen whether that will pop up again. >> joe tsai was on with us. he said, we put guys in jail if we find any fraud on her websites. he answered my question about the tie up with yahoo! after they spun off their alibaba
shares. i to play with he said about spin co. >> we do not into sedate entering into -- we do not anticipate entering into a relationship with yahoo! or spin,. this is something that is the right of yahoo! to do. the board has decided to do the spinoff. from our perspective, operating the business day today today we have a 15% shareholder in us yahoo!. after the spinoff, we will have another 15% shareholder, the spin co. it does not change anything. >> is that going to put to rest any of the speculation that we could see something happened on the line? >> here is what he is saying. we, alibaba are not going to actively help yahoo! is a taxes or spin off the stake in us. that said, as matt levine
pointed out last week in an article on the subject, now that we have spin co which is purely alibaba shares down the road it would make sense for alibaba to acquire spin co using their own shares and change up their capital structure. while alibaba is not actively involved in anything yahoo! is doing now the remains of yahoo!'s decisions could potentially be something that alibaba gets involved with. >> thank you so much, leslie picker. as we continue to count on the open it seems like everyone wants a piece of radioshack. its stores are up for grabs. may be the charm. two big office supply chains may combine. we will be back. ♪
>> time for a quick look at global market. european stocks climb today. greece's government retreated from a plan. greek stocks shirts -- searched our markets in spain and italy saw some gains. a look at how commodities are trading. oil prices are showing a 12 year low. brent crude is poised for a bull market. up more than 3%. the bloomberg commodity index is showing gains. let's get back to bringing you the most important stories you need to know before the bell. matt miller and leslie picker
joining us. we saw chrysler sales were up 14%. they reported. ford's light vehicle sales up 15.6%. that is more than what people expected. >> f1 50 sales up more than 16%. this new truck is so far working out very well for them. it put a damper on their total sales last year. the f series is still the best selling pickup truck series in america for 38 years in a row. the best selling vehicle in america for 33 years in a row. that is what is helping them now. it was tough last year when they had to pay to change over the factories because they are producing with aluminum. it was expensive. now, it seems to be paying off. >> how do you compare that to
chrysler? >> chrysler -- >> on fire. >> chrysler has been doing very well. coming from a lower bar. >> they had some struggles. speaking of struggling, radioshack, preparing to shut down in a bankruptcy deal with sprint. it looks like both sprint and amazon could be interested in radioshack stores. i would feel more sorry to see radioshack go because it is been around since the 1920's, if the company had tried harder to be a better retailer. the stores were terrible. >> amen. >> look at what happened, comparing it to best buy. best buy seems to have turned things around, gotten an online store to be better. try to market that way. did you see that profile of the
guy who worked in the radioshack store? he was an employee there and he said he would sit there for three hours with no customer coming into the store at all. >> that touches on one of the main problems radioshack. her locations are not great retail locations. i am a customer of radioshack. i love going in that store because i'm so old. it is difficult for me to find one. you have to go into more desolate areas. they have 4000 locations. sprint or amazon each want 1000 or 2000 him at the rest will close. >> staple in -- and office depot. they tried to merge years ago. >> this was a case study story about what defines a market. office depot and staple both sales big -- both sell big-box office supplies. antitrust regulations prevented that merger from going through.
>> welcome back to "in the loop." matt miller and leslie picker joining me this morning before the open. let's talk about oil prices expending their gains -- expanding their gains. health care was a final point of contention that caused talks to break down between oil workers and major producers like shell. not sure that will have much of an effect on prices. we have been asking for the bottom in oil. maybe , we've hit that. >> at this stage, it is all about supply. when you look at what is going
on on the labor side, it does not seem to have as much of an impact. >> i think anybody looking for an excuse to find some bottom. any piece of news to say, this is it, we have seen the bottom. >> four days of gains for oil is like an amazing headline for us. not just because we are sensationalist, media here. it has been down for so long. every day for so long, it was down. first time in five years a couple of $50 a barrel. it says something that after four days we are saying, should we call a bottom? >> exactly. goldman sachs -- on the foot side of this, they said this is a $125 billion tax cut, lower gas prices. >> only in america.
look at it globally as well. >> i want to bring in jim tierney, chief investment officer at a be. --at volatility is your number one. oil is the last thing you are worried about? >> i'm really not worried about it. it is a huge cut for the consumer. i filled up my tang on $41. it is amazing. >> ok. i agree with you. i have seen a 50% cut when i am filling up my gas tank in my own pickup truck. my imaginary one. why aren't we seeing that more priced into the market these days? >> you will see it when consumers start to spend. consumers have been banking the money for the most part it over time, as their banking accounts get the -- get repaired, they
will say, i feel better, and then they will start spending that. >> i think you are seeing it already. look at general motors just out right now with the u.s. sales at 18%. ford was up 15% and crisler was up double digits as well. what you're seeing now with ford and gm posting crisler-like numbers this is having a real impact. people are going out and spending money and they are buying trucks thankfully for the u.s. automaker. >> you may -- you believe we might be at peak auto sales peaking in the auto market. could we see -- for next year? >> i think mns couple of years. morgan stanley came out with an estimate of 20 million for this
year, which is higher by 3 million of any of the automakers have come out with. i read a lot of adam jonas over at morgan stanley, the analyst there. he is saying, look, this is the top of the cycle. 2017 for sure. after that, this is maybe off-topic but it is probably just a down, down, down. the western world has turned away. it used to be 1.2 cars for every person in the country. now it is down. >> i totally agree. >> other things come in and pick up the slack there it -- slack. non-durables can pick up the slack for that. >> jim, you said volatility is your top concern.
>> volatility, what we have seen is scaring people away from a market. you have to remember we are up 50% in the last two years. to be down a little bit is not a big deal. the volatility is spooking people. >> speaking of volatility, currency swings have been part of the reason why people have been spooked. >> absolutely. 2014 was interesting people and. -- interesting. people ignored -- not -- you need to find companies that are u.s. focused or can outgrow the currency. >> i want to point out today, i am reporting what you see when you look at automakers equities compared to sales. the sales are up, up up since the crisis but one of the
reasons is the strong u.s. dollar is not good for u.s. automakers. you are finally starting to see them complain about it more. ford was saying it is a $10 billion boost to toyota. that is a big boost. >> oftentimes when you do not see the organic growth companies do engage in mergers acquisitions. unix at to see more. >> there will be a lot more in 2000 and team because the topline growth for most companies is not there. >> are you saying you need to make up a portfolio now of u.s.-focused companies? >> no, i think you need a balance. you can put companies in there that are almost entirely -- like a mastercard that really make up the balance. just u.s. growth will not get you where you want to be long-term.
you need some of the international growth long-term. >> thanks for being here. also matt miller is staying with me throughout the open. we will -- we will be asking a nobel laureate what he thinks of the president's budget, the health of the u.s. economy, and what is next for greece. he says we should forgive recent that. stay in the loop there it -- stay in the loop.
when the economy is doing well, we are making investments. we are growing. that is part of -- not all agree that taxation is the way to pave -- to pay for roads. an editorial in the wall street journal says "he is -- he won't give up. the terminator of test question and not in a good way." i want to bring in joe stiglitz. professor, thank you for joining us again. you can imagine republicans are up in arms. conservatives are as well. they say the list of the president has proposed in his six years so far goes on and this is yet another one. why? >> the basic point is that to make our society function, you
need to collect revenue. the index of our economy that need to be addressed when you think about how you're going to raise revenue. i emphasize tedious things. -- two things. one, we have a growing -- >> by the way, that has grown under president obama. >> it has, absolutely. the recession that began under the bush administration has been devastating. until we can get our economy growing again it will be very hard to do anything about that. to go back to the second very important aspect of where we are today, our corporations.
take apple and google. the fact is they would not exist without investments the government made, creating the internet, research, universities. they have been as clever in avoiding taxes as they have been in creating new products that the world wants. apple was able to claim that all of his money was gained in a small subsidiary in ireland. >> right. ok. we spoke with a republican congressman just about an hour ago. peter from illinois, on the house ways and means committee. his view is that big corporations it will actually hurt small businesses because we
do not get the entire corporate tax reform put on the agenda. let me play for you what he said. >> what happens to the small companies that really are the framework for our economy that pay at the individual tax rate the so-called pass-throughs and so forth? if you do corporate tax reform and basically, we will get with you very soon, my perdition is you never get with them, they're pressing the nose against the glass, looking in, and we are at a real visit manage. >> he makes a good point there. have we missed this chance and has the president is the chance? >> the answer is given the differences in perspective about what is necessary this is one thing both parties can agree is a crime that so many of the big
multinational corporations escape taxes, and the structure of our tax laws right now encourage jobs created abroad -- it is exacerbated by our free-trade agreement. they scape taxation abroad and then they can bring all of those goods into the united states. we have to recognize the multinationals represent a very special problem on which all sides can agree. there is a much more difficult question about what to do with firms that operate just in the united states. i think there are difficult issues. i think the capital gains provisions are an outrage, that the fact -- >> what of it is an outrage? what do you mean? >> the fact that people work for a living pay higher taxes than
those who speculate on land and make profit on land speculation, for instance. you work hard, and why somebody like a plumber pay much higher taxes than somebody who speculate on land? a lot of the profits come a lot of increase in wealth that has occurred in the last 25 years has been the result of that kind of speculation pay that kind of speculation has destroyed our economy. that kind of speculation is what led to the crisis. we can have a stronger economy at the same time he raise more revenue, as we divert more of our resources into wealth creation real wealth creation, real job creation. >> and some would say look, there is to join dollars, millions of retail investors who
have been left out of the bull rally we have seen. why punish them now by raising capital gains taxes. it helps the wealthy but it has also been an encouragement for people to go in investments in assets and stocks. >> the question is, do those investments, as people move in, just increase the price? the real force behind that is quantitative easing, the creation of money that has driven up the price. we know who benefits from that. it has gone all to people at the very top. >> ok, but hang on -- >> the fact of the matter is we know the statistics. we know who is getting 95% of the benefit of this. it is the people at the very top . yes, you try to sell the ordinary american that he will suffer. >> but the jobs market has gotten better. the economy is on better
footing. >> the job market is better than it was thanks to steady work on the part of the president, but let's be clear about it. the labor force participation is as low as it has been for 30 or 40 years. we are not back to health and that is why the resident emphasized the need to change the macroeconomic framework. let's stimulate the economy more. the reason it is so weak is it has had austerity since 2008. the united states has done better because it has not had austerity. >> all right, thank you for joining us. on the president's budget. we have got more news out from the senior markets correspondent, julie hyman. movers in the market right now. julie? less i want to start with the latest we have been getting on auto sales. honda is the latest to report in
january, vehicle sales rose 11 point 5%. the estimate was for a 12.6% gain. we have been seeing double-digit gains for automakers. toyota should be out in the next hour. we have seen honda shares trade in the u.s. a decline even before we got the numbers are they continue to decline as we get the numbers. i want to look at the oil prices. energy stocks propelling the energy crisis overall yesterday. that seems to be continuing today. oil is now up for the fourth straight day. a strike in refineries. people are talking about constraints for a change. we will be back with more "in the loop." ♪
advertisers like this one from nationwide are still being talked about on social media. >> my best friend. i won't ever get married. i don't -- i couldn't grow up because i died from an accident. >> nationwide's chief marketing officer will be here to defend his controversial commercial with market makers anchors in just under -- just under 15 minutes. it was really somber and depressing when people want to be happy. >> or did they win? two days after the super bowl i'm not talking about mcdonald's or coca-cola, we are talking about nationwide. it is about brand recognition. if you look at twitter, even though 12% of the tweets were positive nationwide, they got more twitter traffic from that morbid, rose, crushing advertisement than anybody else
did. >> for those who did not watch it, the other hundred million who were supposedly not tuned into the super bowl, this is about a kid who comes back from the dead, from the great. >> it is nationwide talking about the fact that this kid died in an accident, something nobody wants to talk about but maybe in a perverse way it is a reminder, i guess, that we need insurance. it does not mean we will bring the kids back to life. it is not an advertisement for healthy living. the kid died in an accident. i am interested to understand the case nationwide will make. he got a c on "market makers" today so maybe that was a win. >> thank you. we will be back in two minnis on "in the loop." ♪ -- in two minutes on "in the loop." ♪
business and tom just co-authored a book, "yes and" which offers that improv abilities help onstage in the workplace. how does improv actually help in the workplace? >> curveballs happen and you see that in your business all his time. we found the same skills our improvisers have translate really nicely into business how to listen and read a room and think on your feet, all of the things our people are really good at. they translate nicely into the business world. >> tell us a little bit about how you're working with other ceos and corporations, some of the skills you already have and a second city, how do you translate that? >> astley. we do a lot of work with individuals and teams things of that round presentation --
things around presentation, how to make a connection with our audience, which are people are so good at. it is a common thing we do. we have a lot of work where we use comedy to help t up tough and thorny issues things around ethics and compliance, hr and training practices, things were you would typically not find it cap -- compelling content. >> can you give us some examples of clients you work with? >> over half of fortune 1000 and compliance business is the new york stock exchange services. >> and baseball, you worked with them as well? >> absolutely. really using comedy and improv to help them better handle the stresses they will experience down the road. >> you mentioned authentic storytelling. i found that is something that is very difficult and only if you can't these have really
mastered that an individual's themselves. how do you work, specifically with ceo's. talk about authentic storytelling without crossing the line where you might reveal too much, you might be almost two authentic in the world. >> for us, is understanding what makes you credible and authoritative may be different than what makes me credible and authoritative. a lot are prescriptive. use this and do this and you'll be great. a lot of times executives, it is like close that do not fit well. you have to be confident in your own approach. we help people identify and hone those things so they can be better in the moment. >> all right, tom. grace you. and giving us those tips on improv. the ceo of second city and author of the new book "yes and." that does it today. my guest host will be joining us. he will weigh in on the austerity fight, the budget by
>> live from bloomberg headquarters in new york, this is "market makers" with erik schatzker and stephanie ruhle. >> americans flocking to rooms to buy pickups and suvs's. >> everyone wants a piece of the shack and amazon is poised to snap up some of those stores if radioshack files for bankruptcy. >> doubling down why this hedge fund manager is one of the world has his best. you will hear from bruce richards. good morning, everybody.