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tv   In the Loop With Betty Liu  Bloomberg  February 10, 2015 8:00am-10:01am EST

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bell. we have some great guests this morning, starting with mort zuckerman. he talks about why he's investing in the so-called uber of the real estate world. he tells us about the big lie in business. it is time to audit the fed again. the new jersey republican sponsoring a bill that would do just that. lawmakers have tried to do this every years in 2009. what is different now? exclusive comments from the city fed governor. it looks like greece is headed towards a clash in the eurozone. angela merkel signaling she is not willing to compromise. eufinance ministers meet tomorrow to decide how much to lend the greek government.
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the situation is getting dangerous, he says. he talked with bloomberg television. >> the risks to the world economy, the risks to the british economy are a standoff -- it is growing each day. it is a miscalculation or a misstep growing as well. >> the greek exit from the euro could be damaging to the continents economy. the justice department turning up the heat on four of the world's largest banks. prosecutors want the banks to plead guilty to criminal charges to settle an investigation into currency manipulation aired. it may take months to negotiate a deal. ubs warning that profits may be hurt by a stronger franc.
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reporting lower-than-expected earnings. they lifted the cap on the swiss franc. here's the ceo. >> the strategy won't change. we have concrete plans that we announced last year in 2015. we are executing those plans. the latest of elements -- developments may speed up the execution of this plant. >> ubs is the world's biggest manager of money for the wealthy. the largest provider of pharmacy drugs in the u.s. posted fourth-quarter earnings that beat estimates, the first full quarter since cvs quit selling cigarette. spiderman will once again be part of the marvel comics lineup of superheroes. disney has turned other marvel characters into box office blockbusters.
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spiderman has been part of the sony lined up for the last decade. the last installment was a box office disappointment. coca-cola just reporting their fourth quarter earnings come adjusted earnings per share coming in better than estimated at $.44. scarlet fu has a rundown of the numbers and how the stock is. >> let's start with how the shares are performing right now. coca-cola getting as much as 4.3%. that would leave it at a two-week high. the numbers better than expected . overall, fourth-quarter profit the decline last year. the drop was smaller than anticipated revenues fell 1.5% to $10.87 million. that reflects the pace of growth will just global gdp. in terms of the revenue
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breakdown north america is the only region that actually posted a gain of 2%. eurasia, europe, latin america all posting declines. it gets so much of its sales from overseas. the company says the strong dollar will hurt revenue by about five points. we have single the cola that's coca-cola lack behind pepsico. -- seen coca-cola lag behind pepsico. >> thank you so much. our critical player inside the federal reserve says he is not yet ready to raise interest rates that ready to take on the push to congress to audit the fed. it has been a six-year push and longer. he spoke exclusively to peter
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cook. peter is here with more from the interview. he says he does not want to raise rates. >> he is not ready to pull the trigger just yet. fed presidents talk all the time, but not the governors. this is the first interview he has done since he joined the fed. he is not confident yet that inflation is moving back towards their 2% target. he says it is getting there and is closer but not yet has the confident -- he told me it was a great job supporter. he still sees some slack. >> it does feel very much like there is plenty of slack left out there in the economy. you have people working part-time, people who want to come back into the labor force. wages have been low.
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they do not suggest any -- those things tend to indicate the natural rate is below. >> the keyword is "patients. -- "patience." he wants to wait to see what the data tells him. >> we did have that good job support last week. he is not ready to pull the trigger. he does want to take on republicans who want to audit the fed. >> we spoke after he delivered a speech at catholic university law school, pushing congress to audit the fed. he and a lot of his colleagues are concerned about this. he was pretty adamant in his speech that this is a big mistake and will threaten the independence of the federal reserve. it you thinks it is being
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oversold by supporters on capitol hill. >> this is about getting congress into monetary policy. over time, we have learned when that happens, inevitably elected politicians want more, native policy resulting into higher inflation -- more accommodative policy resulting in higher inflation. why we would change that now is a mystery to me. >> strong words about this effort. it will be a challenge for he and fed officials to battle republicans. >> you also talked about greece. >> they like to leave these issues to the europeans. he said this is for european policy makers to resolve. there is no guarantee --
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>> thank you so much. peter cook with that exclusive interview. the conversation does not stop here. we will hear from scott garrett, the one sponsoring the audit the fed bill in the house. we will hear what he says. j powell saying the fed patient stance is appropriate after the data last week shows the u.s. in january cap its strongest three-month job gain in 17 years . a blockbuster report to most. for some, it's all fake. economic conspiracy theorists say they have been giving us phony numbers all along. as public policy, this kind of conspiracy thinking can cause the death of -- he is talking tongue-in-cheek,
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by the way. i want to bring in my guest host for this hour, the real estate and newspaper mogul, our friend mort zuckerman chairman of boston properties. great to see you. you are not a conspiracy theorist. but you don't believe the jobs numbers, either. >> correct. i could pick out a number -- if you take the number of people who are involuntary part-time workers they are counted as full-time workers in the employment numbers. but they work part-time. on that basis the real unemployment rate is 11.7%. these are the numbers of the government. that's why the statistics are a bit misleading. i do not think this economy at the stage of the game is in such shape that we ought to stop the stimulus. we have a very weak employment number and that is the most important thing we have to focus on. >> the trend you have to look at
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-- isn't that trend the economy's friend? >> it has been doing better. well is not the word i would use. we have to give it more time because you do not want to interrupt the gentle improvement we have seen in the economy over the last year. >> why are you so down on obama? let me read a recent op-ed you wrote. "obama likes to go around making great speeches and he could and it would be wonderful if you were advancing a broad agenda that had a chance of reaching the statute book." >> this is the problem i have seen and witnessed up close. >> in your ivory tower? >> i originally supported him the first time he ran. i was fairly close to that administration for the first 3-4
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years. most of the values were political and did not deal with the economy and i therefore became somebody who was disillusioned by this president. >> and you still are? >> even more so. we are in a very dangerous state at home and abroad in both domestic policy and foreign policy. he falls short. >> you pick some winners and losers. you singled out a couple of people. jeb bush -- you said he is one of the most original thinkers. a tie between him and elon musk. why jeb bush? >> i had never met jeb bush until the last several years. i met him twice -- the most
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important meeting he had, he came to new york a few months ago and there was a gathering of 300 businessmen. he was in a very large room and said, look, there is no point in my giving a speech here. why don't i just answer questions? he answered questions for three hours, covering a whole gamut of american issues. i did ask him a question. i asked him about the economy. every single question he had to deal with, he understood the facts of the issues, he knew how to present the issues, he was charming and knowledgeable. that was really impressive. the only other president i have ever met and was in awe was bill clinton. everybody in the audience --
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that tells you something about a man who is really informed and did it in an appealing way. >> we will talk more about your winners and losers throughout the hour. mort zuckerman the chairman of boston properties. in new york times reporter covers the hidden money behind manhattan luxury real estate. lots of company news out this morning. microsoft and apple tapping into investor demand for top-rated corporate security. they think interest rates are going to rise. ♪
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>> and is taking minutes past the hour. let's look at our world news headlines this morning. government troops have broken through -- the new offensive
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comes as the u.s. waves whether to supply ukrainian troops with weapons. and as prime minister suffering a huge setback months after he triumphed in the general election. -- india prime minister. china's richest man has bought this was marketing company -- the swiss marketing company paying $1.2 billion for 58%. that will be lucrative. we will have an update at 45 minutes past the hour. it is known for that international buyers have been snapping up luxury apartments in new york city as investment properties. for the locals, york's status --
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new york's status as a safe haven comes at a price. they are driving up prices in a city they have no intention of living in. those locals could be right. shell companies are buying the most extensive real estate in manhattan. 69% of residences are owned by shell companies. the own 77% of the condos -- mort zuckerman is the chairman of boston properties. do you believe those statistics? >> i have no reason not to believe them. new york is the world's most favorite cosmopolitan center. a lot of companies and individuals want to have a safe haven if they -- >> they want to park their money. >> the value has gone up.
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it makes perfect sense to me. i think we should welcome that. i don't have any problem with it. >> you don't think it's bad for the market? >> i don't think it's good for the market level of these buyers coming in -- i can't think of anybody in a residential business who would not welcome it. so should we. >> i hear two sides of the same story. you hear about how buyers are coming in pumping a property prices. then you hear on the other side stories like yesterday, showing the luxury condo inventory at a record at 2400 condos listed for sale. who is right here? >> if you sold your apartment one story is right.
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>> you hope this story is right. >> when you attract this kind of capital investment into the city of new york new york benefits. the whole market benefits. the city benefits in terms of real estate taxes. the economy benefits because these people are not here regularly but when they do come here, they spend a lot. we are certain to chip away at it? that makes no sense. >> are you getting a lot of phone calls from foreign buyers? people who say i want your advice. >> i do get a lot of collect calls. what can i tell you? i am not in the real estate advising business. >> but i assume powerful people might call you. >> we have done a great deal of real estate development in new york and a few other cities
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washington, san francisco, boston and cambridge. those markets are very strong. we have a lot of office tenants. we are very active so i'm very happy -- i don't see what the problem is in san francisco. >> you are down on the president and down on the economy but your business is going like gangbusters? >> we are in a particular part of the economy. our customers are primarily a lot of companies that are very high end of the corporate world. the kind of markets they develop -- in san francisco, that is the high-tech world, online world. i have never seen a market that strong. >> you could grow a billion-dollar company just like that, right?
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we will talk about a billion dollar company. mort zuckerman back with me in a few minutes. ♪
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>> you are watching "in the loop ." good morning. i am betty liu. here's a look at our top company news. microsoft has raised $11 million in the biggest bonsall ever. the company increased sales by 50% because of demand. apple plans to sell $1.1 billion of bonds. -- has raised $11 billion in the biggest bond sale ever. free money, right? the world's best-selling luxury car brand finished third in that
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category last month. audi in mercedes-benz beat bmw. mercedes up 14%. b&w sales rose just 6%. in the nba, the new york knicks are on track for their worst record ever. they've only one in 10 out of -- shares are up more than 30% in the last year. you win even when you lose. how about that? we are back with mort zuckerman. a billion-dollar company may have never heard of. even mort zuckerman got in
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early. the latest round bellied -- it is just getting started. adam, great to see you. i have been hearing so much about your company. not only from folks like mort zuckerman but others in the tech community as well. you are a real estate company wrapped in the tech sheen, so to speak. how does this work? how have you been able to build a $5 billion company in five years? >> there is no real estate company that can become $5 billion in five years. we are a community of creators. we create environments for our trip and doors and leverage the technology to connect people. it is a new way of working. -- environments for entrepreneurs. people pay anywhere from $45 a
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month to be a virtual member to six of dollars a month to be a physical -- $600 a month to be a physical member. >> do you buy the property? >> we do not buy the property. that would make us a real estate company. we create long-term leases. we paid the space and break it up. we supply health care and financial services. >> why did you want to get into this? >> this was a breakthrough kind of preconception of the way of real estate particularly office space. they provide a whole range of services from television and telephones and office space and furniture -- there is a
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different culture out there. not the corporate culture you and i grew up with. you have a remarkable difference in the way people want to work and are happy to work. it is a whole culture that he understood. when i saw it, i realized it makes perfect sense for a lot of people. we are more corporate -- they are a whole different kind of tenant. individuals, small groups companies growing very fast and want to have a sense of a culture. they don't want to worry about real estate. they take care of it. >> is that a great price? i have talked to a couple of other property developers. there are watching wework.
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the big question i hear from them, how'd you know the quality will be a list? what happens when you rent out to ones that are easily going to go bankrupt? what happens when the tech bubble bursts? >> all excellent questions. we don't have tenants, we have members. it is a month-to-month licensing agreement. we are not looking for long-term commitment. you have traditional landlords that need credit to build -- we have young entrepreneurs starting businesses -- 35% of all people are independent workers. none of them have the credit to buy one of boston propert ies'buildings. there is a disconnect and we are
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bringing it -- only 20% of technology companies. we have graphic designers, lawyers, social media. only 20% are tech and 5% tech startups. >> that is surprising. would you say you may have invested in wework as a hedge against your business? let's say adam grows into another mort zuckerman. >> i want him to grow to be another mort zuckerman without me having to do all the work. if you can have that kind of success, good luck to him. that's why i invested in him. you don't get all of it sitting here -- i watch it work. it is phenomenal and it's a great concept and its continuing to explode.
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it attracts a whole other level of people who are going into the job market. >> a much more freelance driven market -- jobs market. would you go into residential spaces, too? will you expanded to share residential spaces? >> like the new generation needed a new place to work, they also need a new place to live. we have nothing to add in that subject for now. it is a great idea. >> i think there is. he is the master of this particular new concept of office space. a lot of them going into the workforce there is a huge market for them. i would concentrate -- he is going to establish a major national brand and a lot of company's will be happy to go into a space. he has a huge step forward --
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>> you are in new york, san francisco -- >> when he has great here then tell him to go into residential. -- gray hair. >> and wears a suit. you are expanding quite a bit. thank you so much, adam, for joining us. and mort zuckerman chairman of boston properties. check out some wintry images from the new england city the third major storm in two weeks blasting massachusetts with more than two feet of powder monday, and it is still falling. the massachusetts governor has declared a state of emergency. it is not over. more snow for thursday.
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they are used to this, aren't they? >> i came out of canada, so i moved south to boston. >> still to come the price of oil falling for the first time in four days. and the other movers come including cvs. a bill to force the fed it to open its books. ♪
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>> earlier we heard from jay powell and his reaction to the republican push to force the fed to open its books. >> nothing the fed does happens on monetary policy without the whole world watching.
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the idea there is some secret thing happening is just false and violent conflict with the facts. >> what does congress want to do? bills in the house and senate call for the elimination -- joining us now is the congressman sponsoring the bill in the house, scott garrett from new jersey. and mort zuckerman is staying with me on this. exactly what -- this kind of bill has been brought to the house six times since 2009. what do you hope to accomplish with this? >> it is the frat pack. we are trying to build accountability -- bring accountability and transparency to the fed. it is the only thing that stands
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between extensive, broad regulatory powers of the fed and the american people. when congress has constitutional oversight response ability that has not been able to fully implement over the years as the regulatory authority and power of the fed has expanded immensely -- >> a very fair argument. the general concern i would say in the business community is that once you give congress -- get congress involved, their motivation might be political rather than economic. you have to hope that monetary policy and the economic consequences of that come as an independent analysis of the economy and not a political benefit to one party. that is the one thing -- you don't want to undermine the confidence of the financial system.
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you have to be careful how congress gets involved. >> he has a great point, right? there has never been one issue in washington that has not been a subject of partisan politics. >> i guess the push back to that -- i agree with you -- the push back to that is the whole idea that the fed has lived a life independent of politics and the political pressures is a myth the fed continues to perpetuate over the years. look back a couple sessions ago when the democrats were in control of congress and he was berating the fed that they were not doing enough with the regulatory side with regard to what credit card -- an issue the fed had not taken up for forever, all of a sudden they took it. there goes the idea that there is some sort of independent fed.
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we are asking that it be more transparent. some of the arguments -- there was a blackout period. when they come before congress and we ask them basic questions over here on regulatory points they say we are in a blackout period. that has nothing to do with the regulatory questions i had. >> i think there is some credibility. it was not that long ago that we were witnessing ben bernanke e in washington being lambasted for his decisions around aig. we have seen stories about incompetence at the fed. i don't disagree that there are issues that need to be cleaned up there.
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his opening them up to congressional approval the right answer? >> sure. it is part of the answer. all other regulatory agencies have a conflict of interest rule in regard to their employees. does not apply to the fed for some reason. why not? the president agrees with us on the issue of bulk benefit analysis. all agencies had to implement cost-benefit analysis. does not apply to the federal reserve? why not? >> richard fisher says "who in their right mind would ask congress who can't cobble together a fiscal policy to assume control of monetary policy?" >> we have legislation that goes to the issue of saying, ok, here's what we are asking to do. let us set up a standard and abide by that standard. if you find that you need to go
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outside of the standard simply report back to congress and tell us. they say, no, you can never ask us to do that. why not? we are not hamstringing you are telling you have to go in particular way. >> it sounds reasonable. sounds like something any company would be subject to. >> we are talking about the national economy. it is one thing to have a board of directors. another thing to have a country. making these decisions -- the problem you have is i don't think congress enjoys that kind of confidence in the financial world. it would unsettle things and a way that i'm not sure is worth it.
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i would move it very slowly in the direction the congress wants even though i have great respect for the congress. >> didn't you say that lawmakers who continue the same old policy or agendas are boring? >> i don't remember that. >> did you miss remember? let's go through some of your other winners and losers. capitalist of the year -- some romance going on with you on must. -- bromance going on with elon musk. worst lie -- >> this argument has been made by various companies in the industry.
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you don't see the rates being lowered. >> best photo op, obama in asia. you did not like his purple suit? >> i have always wanted to wear a purple suit until i saw him in a purple suit. >> great to see you. think you so much for hanging out with me. -- thank you so much for hanging out with bp or we have less than an hour until the opening bell. >> let's begin with coca-cola. it could give the dow jones a lift. reporting a better-than-expected fourth-quarter. if coke can hold onto these gains, making the premarket --
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the third time in which it has gained on an earnings report. cvs trading lower in the premarket. front of store sales dropped 7.2%. we did see demand for drugs more than make up for that. let's move on to retailers. a bunch of them pre-announcing fourth-quarter earnings last night. holiday sales did not fall as much as analysts had anticipated . urban outfitters singh fourth-quarter sales top $1 billion -- saying fourth-quarter sales topped $1 billion. >> thank you so much. coke reporting their earnings with a new product in the works. how they sell it to consumers. milk made by coke. ♪
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>> let's look at our world news headlines this morning. international aid energy agency picking global -- china's inflation had a low in january. the shanghai composite rose today. inflation in china has remained around five-year lows for the last few months, highlighting the persistent weakness in the world's second-largest economy. nbc news reporting thousands of ground troops have been deployed in jordan. they ramped up their campaign against islamic state who recently executed a jordanian pilot. that is the latest world news at this hour.
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one stock we are watching his coca-cola, the soda giant posting better than estimated fourth-quarter results, helped by cost-cutting efforts. the newest product coca-cola is hoping is going to juice those sales is not a soft drink or a juice, but milk. they're betting big on its new, expensive lactose-free milk. the drink boasts less sugar and more protein than regular milk. olivia sterns is here with more. what makes coke think they can get this? >> i drink all meant milk these days. -- alllmond milk these days. it will cost twice as much as
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your average gallon of milk. they think this is where the growth is. fair life could rain money. >> tell me about the opportunity. what are the numbers? >> milk sales traditional -- sales of whole milk have fallen off a cliff. sales of skim milk are pretty much flat. alternative milk, soy, almo nd, rice milk surging 36%. coca-cola wants to tap the growth. they want to find a way where they can have some pricing power, so they are coming up with this value added milk. >> soft drink sales are flat. >> did you know coca-cola said a
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sparkling beverages? that's what they mean by carbonated beverages. it is totally anemic in north america. they want to go somewhere where they can create a brand and market it up. >> sparkling beverages sounds better than carmel -- caramello l colored sugar water. ♪
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>> much more ahead on "in the loop." the details on how -- trouble ahead for for big banks.
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that's four big banks. ♪
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>> welcome back to "in the loop ." we are 30 minutes away from the opening bell. features and kate stocks will be higher at the open -- indicate stocks will be higher at the open. the new greek government employing 30% of the reforms -- angela merkel not willing to rewrite. the british chancellor warns the situation is getting dangerous. >> it is clear the risks to the world economy and the british economy is growing each day.
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the risks of a miscalculation or a misstep leading to a bad outcome is growing as well. >> the greek exit from the euro could be damaging to the continent's economy. shares of coca-cola up more than 4%. reporting fourth-quarter earnings that beat estimates helped by cost-cutting and the shift to higher priced drinks. cvs beating estimates. a warning from ubs earnings may be hurt by a stronger swiss franc. reporting lower-than-expected earnings. here is the ubs ceo. >> the strategy won't change. we have concrete plans that we
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announced last year in 2015. we are executing those plans. the latest development may put pressure to speed up the execution of those plans. >> ubs is the world's biggest manager of money for the wealthy. spiderman will finally be able to team up with the rest of marvel's superheroes. a sony has agreed to coproduce the next spiderman film with disney. spiderman has been a part of sony's lineup for more than a decade. the last sequel was a box office disappointment. ironman and other marvel superheroes will be able to appear in spiderman flicks. we are under three minutes away from the start of trades. -- 30 minutes away. number 10 -- jetblue making it easier to pay for those cocktails midflight. announcing plans to be the first u.s. carrier to accept apple pay in the sky making mobile
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payments at cruising altitudes simple and speedy. we just wrote their tagline. >> i hate digging around in my purse when i'm in a plane. apple patent still going to be -- apple pay is still going to be about whether or not they can convince people to change how they do their daily payments every day. >> i have never used apple pay. i use bitcoin and paypal religiously. for day-to-day stuff, i use cash, which is so easy. money, the easiest way to pay for stuff. >> we will see. jetblue gets the ability to say
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they are the first u.s. carrier, a nice marketing statement. number nine, if you have a samsung smartphone or tv, you might be want to be careful what you say in front of it. if you say yes, you are allowed to record they will get their conversations and maybe sell them to third parties. >> you have to buy the tv and start using it. you have to say no to opt out. they are automatically listening to everything you say. not for nefarious reasons, but this is not the only device that does that. my xbox listens to everything i say as well. >> you have to think about -- this blew up on them yesterday. who is this third-party overhearing it?
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they are saying, be careful what you say in front of your tv. it's an interesting time -- >> where is it safe to have any conversation privately? nowhere. >> not e-mail. >> not phones, not social media. netflix streaming in cuba. one of the first u.s. companies to operate their after president obama moved to restore diplomatic relations. some numbers here -- 5350 broadband scrubbers in 2013 out of a population of 11.3 million people. -- broadband subscribers. >> the government controls broadband. international is an important market for netflix. we will see if the cuban market --
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>> i do a lot of traveling in europe and i rely on netflix for entertainment. i get angry when i'm in spain and i can't access netflix. in cuba -- the instantly go to cuba? why not offer it for free in cuba? you get people addicted and then later you charge them, right? >> i don't think cuba is the moneymaker for netflix. they get the opportunity to say they are in cuba. >> only 5000 people have broadband. >> number seven ibm suing priceline for failing to reach a patent licensing agreement. priceline group has not paid for royalties on two pence issued in the late 1990's. -- patents issued for the in the
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late 1990's. >> ibm have the biggest muscles to flex when it comes to patents, but they rarely sue. we went to priceline, kayak, opentable. they are using patents from the 1990's. they are not having a conversation with us, using our patents we want to be paid. >> do they have a case? >> the supreme court has laid at some rulings down that make it difficult to win on these patents for software. they will have to take a good look at it and see if these are a broad sweeping statement from ibm. >> i envy you. covering these patent suits must be riveting. >> public filings are amazing. >> number six, pension plans
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cutting into companies bottom lines as people live longer. many copies are paying insurers to take over their plans. this is a problem that is a long time coming. >> what is this stock video? stock video of older people, i guess. >> this idea of death derivatives -- there are too many pension plans, too much volume out there. the financial community might come in and say, hey we will invest in some sort of derivative and you can trade on it. >> better than the alternative, right? >> death? >> living shorter. >> right.
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>> i wouldn't say that. >> in record high as profit topped estimates. frozen will it be enough to take the lead? we will discuss that after the break. ♪
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>> we continue to count down to the opening bell. it is time for our deep dive, number five is hasbro. shares hitting a record high as fourth quarter profits topped estimates. strong showing from transformers nerf and marvel. nipping at the heels of mattel after winning over licenses for
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disney princess and frozen brands that will start next year. will that be a game changer for hasbro? chris burns is a content director -- >> nice to be with you. >> is this going to be transformational for hasbro? >> i think it will be very good for them. they have tapped disney in the past and they are getting the princess brand and they will do a good job with it. it is time to reinvent that brand. mattel introduced -- it was time to move to a new perspective. >> what is hasbro going to bring? >> what's interesting about hasbro, you look at the last couple of years, they have reorganized their product development and focused on play. what's driving their sales is good voice. -- toys.
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they're going to bring that same level of creativity. >> they had never been strong in dolls. >> they had the cindy doll years ago. they have a question and girls the human alter egos of the my little ponies. -- equestrian girls. they have done a good job with that and had strengthened themselves in the tall category. -- doll category. >> there you go. mattel is possibly in danger of going bankrupt? >> i don't think i ever said that. mattel as a challenge in terms of developing product. >> is in our notes. they are in big trouble. >> they have challenges with
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product. they've had the challenges with barbie. mattel have reinvented reorganized -- they have a team of two great people running product right now. you're looking at product from the ground up. the 2015 line looks encouraging. they have core brands that will help them throughout the next year. >> like barbie? >> barbie is being reinvented. there has never been a superhero for that 3-6-year-old girl. it is very creative. they have their challenges, but they have a good team in place. >> i have two boys and they asked me this question. there is a superman out there. why isn't there a superwoman?
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maybe there is more room for more action heroes and a brand around that. >> it is such a core play fantasy for kids. having superpowers is kind of cool. >> you say the disney princess brand going to hasbro is one of the reasons why mattel's ceo got let go. >> i did not say that either. overall sales have been down. when mattel introduced their princess line, that was really strong. you are going into competition with me, time to have another look at that. that was possibly the innovation that happened. i don't count mattel out. we have another year with disney princess. >> the content director at time
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to play magazine. much more ahead. fiat chrysler leading electric carmakers. we will have much more in a few moments. ♪
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>> time for a quick look at the global market your did the euro is down as the uncertain situation in greece weighs on the currency. stepping up attempts to reach an agreement on the nation's funding needs. the oil market fluctuating today after the international energy -- sprint is up while wti is down.
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let's get back to bringing you the most important stories you need to know before the bell. let's head straight to number four. u.s. prosecutors putting pressure on the world's biggest banks come asking them to plead guilty to criminal charges. investigations including currency manipulation. >> i thought this was pretty shocking. i did not expect the justice department to ask banks to plead guilty to criminal charges. those are things that historically they have not done because they're worried it will have a negative effect on the u.s. financial system. >> i agree with you 100%. >> do the guilty charges fall in the subsidiaries in question? some customers might not want to or be able to deal with planks that have pled guilty that some
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banks that have pled guilty to criminal charges. >> on the other hand, a little part of me was sad the age of frontrunning your clients is coming to an end. >> wipe that tear and let's move on. oil fell for the first time in four days amid speculation that he was supplies -- sergio marchionne beating the london mosque as the guy who is now the ceo of the best-performing car stock. -- beating elon musk. >> he has done a lot of things right. he got chrysler and used their own money to finish the purchase. jeep sales have been on a tear.
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low gas prices have helped recently. he has been doing his job quite well. >> does this bring back -- >> they have done some amazing things. thethe alpha romero is an incredible car. what they're doing with for re: is enticing to shareholders. -- ferrari. you have to keep them fairly low weird it is an exclusive brand. -- you have to keep them fairly low. it is an exclusive brand. >> greece offering to copper mines on the terms of its bailout with angela merkel who is unmoved by the compromise.
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wednesday is the day. >> one of those exciting debates. citi saying if greece gets out of the eurozone it will be so awful for the greek people, so tragic for the greek economy that nobody else will ever want to leave the eurozone again. a lot of people today are saying germany maybe has the most to lose. which 1 -- it is this classic game of chicken which is exciting to watch but not great for people. >> they are saying they no longer just need the cash. they want to make some structural changes to their economy. the question -- it has gone on for so long. >> there will be more.
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will this be worse for germany than greece? we will get a check on where futures have settled. they are slightly higher. the opening bell is next. ♪
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>> welcome back to "in the loop ." number one story today is the fed governor j powell, a political player inside the federal reserve saying he's looking for evidence that big gains in u.s. jobs market is pushing wages or prices up enough to justify lifting interest rates. >> it does feel very much like there is plenty of slack left out there in the economy. you have people working part-time for economic reasons that people who want to come back into the labor force. wages have been low.
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they do not suggest any tightness in the labor market yet. those things tend to indicate the natural rate might be lower than it has been estimated. >> a sitting fed governor making the case that despite what the markets believe, 2015 might be too early to raise interest rates. >> of course the fed is looking for wage growth. we have been saying that every single job support for the last six months. -- jobs report for the last six months. >> as stocks get ready to start trading, i want to bring in jim bianco. you recently got a nice shout out by a bloomberg view columnist. pointing out how this is one of the best starts for 30 year bonds in 40 years.
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can we bring that chart up? the yield fell more than 19% in january. everyone who as been calling for the end to the bond bull why is everyone on the other side of you and maybe gary? >> i think they view the bond market incorrectly as if you will, gdp futures. they think yields have to go up simply because the economy is strong and the bond market is a lot more dynamic than that. it is about liquidity and fed policy and yes, also about economics in the u.s. and also about crises in europe and what is happening in the rest of the world. when you mix all that together in a stew, what you have is lower yields over the last several years than january. we pretty much reversed the gains in the league of february.
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it has been a disaster seven days for the bond market right now. >> what do you read into that, jim? >> so far, nothing yet. i think you have to stick your head out and say, did the bond market break down? i do not think it has for the moment. we're used to this kind of volatility and we have seen it in the last couple of years but the trend has always reasserted itself to his lowest. >> how about the fact we added 400,000 jobs in november and 300,000 in december. 200-7000 jobs last month. did best wage growth of month over month in six years. 2% wage growth year-over-year. the fed, surely you will capitulate now, the fed will raise interest rates this year no? >> i will not capitulate. i will shut -- tell you a million jobs created in the last three months and the fed is got
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to be happy about that, but my whole idea about the fed never raising rates has always been on the idea they will raise rates when zero is perceived as the problem. it is not perceived as a problem right now. i do not think the fed wants to raise rates because i think what is high on their list is financial instability. it is all the fed's fall, that is what will hold them back now. you heard jerry speak a second ago. he is looking for wiggle room. charlie evans is looking for wiggle room. williams is looking for wiggle room. i think they will eventually find it and i know the payroll number is not what they were looking for. click they will find it where? >> they will find it in the lack of inflation right now. full employment, you have got great employment numbers right
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now. i think that is where they find reason to not move. plus i love to talk about the company side of his right now. looking at the u.s. being a haven, the buzz word friday and spies dragging down earnings this last quarter. how big of a concern is that moving forward? will it a toll for earnings? >> 45% of revenue sales you have heard dozens of companies not just a handful, site the dollar. it has already taken its toll. look at estimates. negative quarter earnings, first quarter negative growth. the first half of the year, there is no earnings through for
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revenue growth. last time that happened was a great recession. there are no earnings right now. even if you pull energy out of it, you are still left with were numbers right now. that will be the biggest hurdle the market will have. no earnings. >> is there is no earnings, you have to admit there is pressure for the fed to move, why would not the stock market fall especially since it is not cheap right now? >> i think the stock market, look, monetary policy, you have got a very loose bank of japan. there is pressure on the fed to raise rates. i think you a held back, that could be an offset to the lack of earnings. they will try to rationalize the earnings away and say it is all an energy. there is a component of truth to that. earnings numbers are often not that good.
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and in the evaluation of markets, pretty full right now. if you ask people in the abstract, they say a fully valued -- that is exactly what we have right now you request we had adam parker on yesterday from morgan stanley who had the almost view of what you have on earnings. above analyst estimates on s&p earnings. i do not have a sound bite for you, but i will paraphrase what he said, which is that we have a lot of arrogant people who say things like, we do not want to set expectations too high. 2015 we're all talking about the fourth quarter in 2014 and we have not seen what happens. the u.s. economy is improving and business is benefiting from lower castes and lower rates here that is why he is above estimate. >> is he -- if he is right, that
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would be a reassessment of the view. i'm looking at the consensus and the consensus expects no earnings. if the market price itself is off the consensus, then we will have a problem. i am talking about first and second quarter consensus. typically, the estimates are still too high and they typically come down more before we get into earnings season. right now, we are already negative and i expect they will get worse negative, to use that language there, as we move forward. and if that is right, and we surprised the upside, then he is right, the market will rally and that is not the consensus. classes he is right, then we all win. >> you know typically -- why would that be different this time? >> that has always been the case and that was the case in 2008 1 earnings were collapsing.
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i think that is a nonissue and everyone was expecting that. earnings hacked into the start and then they get a little bit better. the question is how negative they will be for earnings starts for q1 and q2. your only -2% growth right now. you could be minus four and then you get 75% and are at minus one. >> jim, thank you so much. of course, thanks to alex and also to matt miller. we are staying all over the markets this morning. we want to keep you updated on what is moving, including a hotel spinning off its vacation. plus, interactive has granted otto? it is evolving beyond. just a few moments into the session, stay in the loop. ♪
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>> trading is just underway. we are just up under 96 points on the dow. we want to get to scarlet fu, who has more on a big moves, including yelp a mover because it is making a purchase. as helping to claw back the plunging that to get from 67-40 two dollars per share. also buying the company, i went and after a online food service. full-year sales and full-year profit. back to $34 a share. online coupon companies have not successfully made the transition to mobile. plunging the most since last year, when it was expected to turn a rough it. goldman sachs downloading this.
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retail me not, the best figure out there, it has only got an $840 million market cap. the first quarter outlook is like. mobile devices, people are using that more and more. but, a lower monetizing that form. you would think they would have caught on to this a couple of quarters ago. fourth quarter just a earnings top highest analyst estimates. limited some games but the news here that investors are reacting to is a tax-free spinoff of its vacation ownership unit on a time share unit, into a separate company area >> scarlett, thank you so much. it is known for his success of gaming hit grand theft auto, but it is releasing his new buster
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eve all, which it hopes will be just as big as grand theft auto. cory johnson has a closer look at the debut title. cory, what do you think or what -- what did you think or what do you think of you well. press it is a big deal for the company but nothing will be bigger than that have thought of. this is an interesting time for the game business. we have had a bunch of lab form losses last year -- launches last year. a year of game markets, to create a base into which the game sellers are selling games. sellers growing faster than any other cause -- any other launch. so many game units out there. new titles coming out are coming into a world bigger than they have ever been able to launch into. more interestingly is not just the growth of sales but the growth rate of those -- those sales, we have also seen very
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interestingly, the notion that china is now leading them into the country, and what does that mean for game makers? i asked that very question yesterday. listen to what he had to say. price overtime, the chinese government will recognize entertainment properties do not stand in contrast to the values of the chinese culture, that they can coexist. i also think over time and chinese government needs to protect property with more vigor if they want international media companies in the market. >> that is the real question. willful sex and violence the ever seen in china -- people will steal it. >> that is a very big question. we mentioned grand theft auto, as you say, nothing could be bigger than grand theft auto.
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is there a danger for take two that they are so focused and so reliant on one title evolve is one of their great moves. >> they have got breakfast auto and nba franchises the best-selling basketball game for 14 years. a very big game in china. they have a partnership in china where they get a version of that game for free. evolve is a very big deal for the company. first-person shooter game, it goes up against very successful games like call of duty or battlefield. call of duty from activision and blizzard. this game is a very big deal for the company because it has gotten fantastic reviews from the gaming geeks that review these things. listen to what had been said about it. >> it is unusual they would ship the product and the retailer and then with how it sold through,
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although it does occasionally happen. it still remains to be seen and we never lie to claim victory before it occurs. >> in an industry littered with failures of big games, he has a lot of guts to say it would be unusual for them to ship to retailers that would not sell. he has done really well, a company that has had a horrific past but is doing well right now. >> korey, thank you so much. bloomberg west editor-at-large. staying intact the big number, 975 million dollars, that is chinese regulators have fined qualcomm in an antitrust case involving smartphones. also agreeing to a cheaper pricing structure for licensing. the company's chip, most of the world's phones accessing the internet. still ahead, more on the 2014
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hedge fund. the president of the world's largest publicly traded hedge fund can outperform. that story is next. ♪
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>> bloomberg has been talking to some of the best hedge fund managers in the world. those named in the market magazines top managers of 2014. one of them is the president of the world's is largest publicly traded hedge fund who said machines will outperform people. with me now to discuss, mrs. market makers anker stephanie ruhle who will be sitting down with him in the morning. >> all the greatest minds in the hedge fund world, when their machines, who will be grading him all day? joining us now, he will talk about just that. back in a really big way, up 32% last year. thick about schismatic with
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suffering, down 3% the year before and they got $70 million. they think systematic is the way, but what we really need to find out, they have been on a hiring spree for the last five-years, acquiring all the smaller funds and europe and asia, especially in the u.s. when you look at the performance of most funds in the last years why would you buy them up right now? if you are a small fund, you can afford to exist anymore. he can afford the back office. guys will come in and say, guess what, i have got 70 billion in management. i can provide the technology and the back office. come to pop up. >> give me the theory, the basis, the macro view. >> if you are not listening to all the macro trends and i waiting for the tea leaves coming out of janet yellen and are using the black box and
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highly developed algorithm, on top of algorithm, it seems to be working. >> we will see. maybe it will be robots moving robots. much more ahead, a 2015 outlook for the energy industry. what to ask for prices and m&a. he will be surprised at what investors think. we will be back. ♪
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>> one of the most watched stocks out there, apple, just hitting another all-time high. scarlet fu has more. >> look at how apple shares are performing right now, reaching a high of 121 27 in early trading. the news of the day for apple is that it is selling at least one
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billion swiss francs of bonds, taking advantage of low interest rates in the country, according to people familiar with the matter. as part of the offering, they're selling 700 million francs in three major million francs a 15 year notes. plenty of cash, money every civil time, and yet it is the case of a company taken that -- taking advantage of low interest rates. money every minute, it seems. thank you so much, scarlet, with apple. today, we heard crediting only a partial recovery in oil prices in the next five years. he just conducted a quarterly survey of the energy industry. we're joined now with more on this. you have looked gathered the investor sentiment. what is the outlook on prices for oil? >> regarding price, respondents have suggested that wti west cap this would be roughly around $57
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in 2000 and 13. $61 for 2015, on average. this is obviously still some dude relative to levels of 2014 but it still suggests you have a supply demand balance that is still quite lose any need to demand to tighten the balance is to with that price as you push forward. >> i get the sense that consensus is around, because i have heard from others as well, 50's and 60's is where you will see oils at the end of the year. what does that all mean for m&a at the sector? questions ponders right as the one play in the u.s. that would attract the most m&a interest. this does not really surprise us. the basin is a legacy conventional light. it has been -- attacked via unconventional means, across multiple horizons, across multiple basins.
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the permian basin in 2014 and the date top $16.5 billion, up 90% versus the prior year. valuations the peer group is trading well above the broader emp. the -- peer group 30% premium to broader peers. seems the opportunities are fairly known to the investment community. if there were to be any m&a activity from within the play itself, rather than a buyer outside and to enter into the play. >> before we go, any other surprises in the survey that you found? >> from an output perspective it seems the respondents are coalescing around the view that output will be resilient in 2015, something bloomberg has offered that he output be the efficiencies, productivity in
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the lower 48, will offer a greater resiliency and output in 2015 at least through the first half of the year. >> thank you for bringing us the first half of that survey with bloomberg intelligence. "in the loop" tomorrow, london mayor johnson joining me for a conversation right here in new york city. he has been touring the east coast. talking about everything from tech to terrorism as well. why he's -- why he is concerned about security. ceo armstrong to get his take on the company's result. a merger in the works all tomorrow at 8:00 p.m. eastern. ♪
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♪ >> live from bloomberg headquarters in new york. this is "market makers." stephanie: cvs cashes in because the flu shot was not effective enough. americans are flocking to the drugstore. the aftershocks of a greek exit from the euro may be a lot worse than you think. things go better with milk. coppola looks for alternatives to sugary drinks that are not selling like they used to -- coke


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