tv In the Loop With Betty Liu Bloomberg May 7, 2015 8:00am-10:01am EDT
from bloomberg headquarters. alibaba's new incoming ceo daniel zhang will be "in the loop" in the next hour. the committee reporting a 45% jump in the fourth of the revenue. mobile getting much better. stock is surging in the premarket. able replace jonathan lu -- he will replace jonathan lu. wall street giant hank greenberg joins us. we will get his take on jobs at 8:30 a.m. he is fired up about many things including the president's free-trade deal with asian countries. rolls-royce's north american president is going to talk to us about his committee's renaissance and why he keeps a jar of rape upon on his desk -- a jar of grey pupon on his desk. it is a $2 trillion
selloff. bond yields around the world soaring today. janet yellen poured gasoline on the fire yesterday. she said long-term government debt is overpriced. she warns the dangers posed by low rates. >> low interest rates can certainly incense some investors to reach for yield. they can incense them to take on leverage positions. if they unwind, can create financial stability risks. betty: there you go. after her remarks, japan's yield made its biggest jump in two years and australia's benchmark on his highest level since december and germany's bond rose to its highest yield this year. a huge selloff. the election is underway in britain. david cameron has already cast his ballot. he is one of 50 million britons
registered to vote. the challenger is ed miliband. a change for china's biggest e-commerce company. alibaba naming jonathan lu to take over as ceo. he will take over for jonathan lu who is staying on as vice-chairman. alibaba reported strong quarterly results. daniel zhang will join us in the next hour. september view customers say they are the ones who took a beating in saturday's big fight. comcast, showtime, and hbo are being sued. because it up to $99 to see the about. manny pacquiao revealed he injured his shoulder before the fight. he had successful surgery. will the nfl suspend tom brady over deflate gate?
some oddsmakers say yes. one sports book will not take best on new england's opening game next season. the patriots cornerback is likely to have known staffers were deflating the balls according to a report. those are your top headlines this morning. let's get back to the top story the bond route that has gone global. i want to get straight to jonathan ferro in london. we have been tracking this selloff. can we blame it on janet yellen? >> no. i think you put the nail on the head when you said during gasoline over a fire. the fire was already burning. the german 10 year at a yield of about five basis points. a blowout over the last couple of weeks. as for the why, i don't think it
is a primary driver that we can single out one thing, but i will point out two things. a tremendous rally. a phenomenal rally. global bonds. you have seen multiyear lows on japanese debt, u.s. treasuries. you have seen record lows from france, italy, spain, germany. eventually you get to weigh risk that you get two-way risk. this is the second point and the important one. the debate going on globally right now.remember the back drop to the yields? the idea investors would accept a ridiculously low yield because they didn't think the deflation -- oil rebounds. data picks up.those two things and into inflation expectations picking up. this is the reflection a lot of people were waiting for. this could go on for years.
that could speak to the idea that the bull market in bonds is over. the debate on that right now is really strong. betty: it is very very strong and hot. thank you so much. i grace synopsis of what has happened and why there is this debate. back to one of the big company stories, it is alibaba. the management shakeup their eclipsing somewhat the earnings news. daniel zhang was named the new ceo am a replacing jonathan lu. this is on some of the earnings that came out. revenue beating wall street estimates. i am joined now. is this a complete surprise? >> it was a complete surprise. we knew something was happening that we could expect some kind of news tied to earnings today. this is a reflection of ma's desire for efficiency and his
big business. he said alibaba is not too big to fail and then a couple days ago we saw him raising hiring to 30,000 employees. he said they need to stimulate innovation. naming daniel zhang who is an accountant by nature and was a cfo and now coo, in charge of operations is a signal this committee wants to be more efficient and focused on the fundamentals. betty: they seem to be. the earnings came out. the monetization appears to beginning momentum. this and that was some people criticize them for? leslie: absolutely. some analysts we spoke to said they tempered down to expectations this time. they gave wall street more of a sense of where the earnings could commit. they did beat those estimates despite the slowing chinese economy and despite more competition from other
e-commerce players. he is coming in at a good time. the shares are reflecting that premarket. betty: they were up 10%. they are down considerably from where they were in november. clearly some work to be done to get the shares back up. the cofounder was speaking on a conference call i don't want to play a little bit for you what he said about daniel zhang and some of this being more efficient part of alibaba. >> in addition to investing and computing logistics, they dated technology, cross-border trick of ability, and our ecosystem partners, we believe it is important to invest in our talent. this is needed to embrace the challenges of high growth scale and complexity. betty: he is talking a little bit about where they see the growth. cloud came up in this conversation. leslie: cloud computing was a
huge thing for them. mobile is huge. international expansion is key. daniel zhang is known as an international guy. ion the call today, he spoke with not a strong accent. that is seen as strong. betty: easier to communicate. thank you so much. be sure to stay "in the loop." we will hear directly from daniel zhang in the next hour. you do not want to miss that interview. tesla reported their earnings after the bill yesterday. a narrow first quarter loss. the carmaker said it is on track to deliver 55,000 vehicles this year. construction of its massive battery factory is running ahead of schedule. elonjamie butters joins us now from detroit. tesla shares are falling after morgan stanley called it cry --
called it by watering. just a word like that in the stock goes down 2.5%. jamie: the cast dropped quite a bit from $1.9 billion to $1.5 billion. the companies making cusip investment -- is making huge investment in the batteries. there is a lot of investing going on. it really puts a lot of pressure on a really solid launch of the model x suv later this year. if they get down to perhaps a billion dollars in cash he has to deliver on time and it has to go smoothly and the have to ramp up reduction quickly before they find themselves in need of more cash. betty: that is true, but in the meantime, everyone is fixated on a tesla growth story.
growth seems to be batteries. we were just showing some of the photos of the tesla battery that was unveiled last week. elon musk said he can't keep up with the demand. he might have to increase the size of his factory in nevada. is that going to eclipse and he of those cash burn concerns -- any of those cash burn concerns? jamie: he said there was a tremendous overwhelming response and demand for the stationary batteries. if you think back over the years, there has always been the talk of is this a battery company that puts batteries in a car or is it a car company that created a battery? there is a sense that maybe it could switch from being 70% auto
and 30% batteries to the other way around. there was the question if you are making higher margins on the stationary batteries should you prioritize that over the cars? he said no because they have a whole factory the has to stay busy in cars. it is a huge potential for them. they are getting a lot of demand. that is exciting but it is always this balance with any start up. elon musk plays like a start up on a very high wire. betty: he does. jamie: $1 billion investment in big burns. betty: what other ceo is allowed to pivot like this and everyone goes yetay? still ahead, we will hear from one wall street titan who just won't quit because he is going strong at 90. hank greenberg, the ceo of to be
betty: here is a look at our top stories this morning. a key test coming up for the iran nuclear bill. the bill would give congress the ability to stop iran from building atomic weapons. president obama said he would sign it. iran sibley later said -- iran's supreme leader has final say over most matters in iran. four of the world's biggest banks will confess to currency rigging. the banks will admit to reading foreign rates and pay billions and find. barclays, citigroup, jp morgan, and the royal bank of scotland included. the report says a settlement
could be announced as early as next week. many investors hang on warren buffett's every word. one manager says the billionaire talks from both sides of his mouth. during a las vegas conference daniel called buffett inconsistent. he says buffett criticizes hedge funds and financial services companies but he invests in them. he is like one, he says. whole foods is going after millenials. the chain is introducing a line of lower-priced stores to attract younger shoppers. the company known for its organic foods is using traffic -- is boosting traffic. revenue came up short and sales growth slowed down. we are focused this week on jobs. within the next 15 minutes, we will get the latest read on jobs claims at a 15 year low right now. that comes ahead of the government's monthly labor
report on friday. we are working with someone who works 20 47 but that doesn't mean he wants to stay all day on the court. and greenberg now the chairman and ceo of star. we wanted to say happy birthday to you. mr. greenberg: great to see you. betty: what are you seeing through your businesses on the economy in jobs? mr. greenberg: it could be better. jobs are created by the private sector. government created jobs, they are not very good. to have to tax to get funds to do that. there are a lot of funds offshore. american companies have kept money offshore because they would be doubled taxes and bring it back. if we can straighten that out those funds can come back and be put to work. betty: you have been pounding the desk on that for so many years. do you really have any hope that
that kind of move will happen in the next two years? mr. greenberg: it will only happen if the president takes the initiative. has to be for it. has to come out and say let us do that. we have a congress that would be very supportive today. could it be a better time to do it. betty: have you given up on that? mr. greenberg: no. you have to keep pushing for it. why would you give up? it is the right thing to do. betty: is the economy still good to you? mr. greenberg: yeah. better than last year. betty: any credit to the president for that? mr. greenberg: i give credit to the private sector into having a republican congress now. that balance has made a difference. betty: there is one issue that you actually agree with the president on. that is the past track trade
authority -- the fast track trade authority. mr. greenberg: congress can vote up or down so there is a safeguard but i think it is important to do that. betty: looks like the senate will take it up. it may or may not pass. members of his own party are the humanly -- are opposed to it. one said we are already deep into negotiations with the european union on a trade agreement and big banks on both sides of the atlantic are giving up to water down financial regulations. she is worried you but any more agreements on the table and wall street will benefit. mr. greenberg: dodd-frank is going to far. and needs to be overhauled anyway. the pendulum went too far in one direction. you cannot grow if you over
regulate every company out of existence. it doesn't make any sense. we have gone too far. good jobs will be created by the private sector, not any other way. betty: are you saying then that in some ways elizabeth warren is right? that we may see trade agreements benefit some of the banks by rolling back some regulations? is that the right thing to do? mr. greenberg: you can't generalize. you have to see what the change in regulations are going to do. you don't pass anything without having a lot of debate. it will not open overnight. we do have to have a balance if we are going to grow jobs. betty: on a final note, i know you can't talk very much about this case at all because it is with a judge but your case against the government, how do you feel about it?
had closing arguments a few days ago. mr. greenberg: i went down for the closing arguments. i could be present in the courtroom because i was supposed to be a witness called by the government. but they didn't call me. i was not permitted to go. i am very pleased with the way it went. i can't say anything more. that judge is making his decision. it would be inappropriate for me to talk about that. betty: great to see you this morning. and greenberg -- hank greenberg the former chairman and ceo of aig. much more as we await for the jobs numbers. there is a mobile apps second connect your business to a smartphone armie of temporary workers. a really mobile workforce. that is next. ♪
betty:betty: you're watching in the loop live on bloomberg television and streaming on mobile and bloomberg.com. want to stay focused on jobs because we will get jobs claims numbers at a 15 year low. if you are one of the millions still looking for a job, this is likely the image that comes to mind. you have to stand in line at a job spare. you have to fill out forms and go through a lengthy interview process. my next guest as a new way to look for a job. he doesn't call them jobs, he calls them gigs. you find them through your phone and you take on as many as you want. copies from microsoft and pfizer are using the app.
david am a great to have you on this morning. i tried to explain a little bit but explained to us exactly how this works. someone who is looking for a job downloads this app and there are companies waiting to hire them? david: giglock is a disturbing of workforce platform unofficially connecting people with work. betty: what kind of work is it? david: they can be a variety of jobs. something as simple as taking a picture of something happening inside a store and relaying information to one of our large clients like pfizer or whirlpool or redbull. it could be taking a picture of something that might be happening in other retail locations to give those customers a better picture of what is happening inside the retail location. betty: i am looking at some numbers here.
750,000 gig walkers you have. the jobs you described it to me sound like they are lower paying jobs. can you really make a living off of this? we would view this as supplemental income. it is a second paycheck. one of the interesting trends we see is the growth in multiple part-time jobs where people might be doing this as a second income to pay for a one-timers miniature or to help them get through the end of the month. betty: on average, jobs are $2.50 an hour. david: no. there are two uses for our platform. one is people that would be performing gigs in stores and another is for our customers to use to minister large -- to
manage their large workforces. we have staffing companies that actually have w2 employees that would use this to disturb or their workforce as well. betty: we looked at a number of jobs that are out across 6500 cities. we looked at the biggest one, new york. we zoomed in and we found just one job in manhattan and three in brooklyn. why are there so few in a city as big and dance as new york city -- and dense as new york city? david: there are people out there looking for it. as soon as jobs are posted, they get picked up fairly quickly. you would only see the jobs that people are not taking. a soon as they are posted, people accept those and they would pull off the map so you would not see them anymore.
betty: do have the highest turnover in new york city? what is it -- where is it? david: i would say just across the city -- actually i am not entirely familiar with new york in particular. generally speaking, about 70% of jobs get completed and picked up within 48 hours. betty: tell us about the other side of your business, which is the gigwalk enterprise. that is for internal use. companies like walmart or others can keep track of their mobile workforce. david: yes. companies have very large distributed teams. it is very difficult to broadcast assigned work to those people. they need mobile technology.
companies have not leveraged mobile technology to its fullest to manage large distributed teams. betty: thank you so much for joining us. i appreciate it. you can find a job within walking distance of your smartphone. jobs numbers are just out. 255,000 is the print. scarlet fu has more. scarlet: looks like 265,000 job claims holding that the lows we saw at the previous week of 252,062,000. since late fall, we have held the low to 300,000. this is a good number for those who want to see the labor market
continuing show signs of being robust. it doesn't factor into tomorrow's jobs report because it doesn't get folded in. nonetheless, it is a good print for anyone looking for the jobs report on friday. one thing we should mention is we have the challenger job cuts as well. that shows a 53% pickup in job cut announcements for the month of april. the payroll numbers we looking for tomorrow is for an increase of 230,000. the estimate has been missed in the previous month when we got a disappointing 126,000 for march. 255,000, lower than what economists were looking for and it is holding near the lows we have seen over the previous two weeks week. betty: thank you so much. we will keep track of how the markets are reacting.
a watershed moment in stock and bond markets worldwide. more than $2 trillion has been drained in less than two weeks. bond yields across the world are soaring today. many investors say janet yellen poured gasoline on a fire yesterday. she said long-term government debt is overpriced. her words about stock prices were heard far and wide. >> equity market valuations at this point generally are quite high. they are not so high when you compare the returns on equity is to returns on safe assets like bonds which are also very low. there are potential dangers there. betty: after her remarks, japan's 10 year yield made its biggest jump into years. australia's at its highest level since december and germany's rose to its highest yield this year. the election is underway in the u.k. prime minister david cameron has cast his ballot.
he is one of 50 million britons registered to vote. the challenger is ed miliband. the greek finance minister says he hopes a bailout deal is just days or weeks away. she spoke today to take -- he spoke today at a conference in belgium about a deficit bre ake. its neighbors will not send money until greece starts to fi x its economy. alibaba's ceo is now daniel zhang. he succeeds jonathan lu. become a reported strong quarterly results and revenue increased by 45%. daniel zhang will be joining us in the next hour. don't miss the interview. forecasted sales of 55,000 cars electric cars. tesla reported a --
statement saying it is halting flooring. and director will finish the review of the certification a laboring labeling process. the company also tried to reassure customers saying it is monitoring the flooring of some customers and more than 97% of those customers according to independent tests showed for marta hide concentrations within levels that are safe. the stock fluctuating a lot and fairly active in the premarket. let's talk about zynga the game maker that was once popular on facebook. more job cuts at the company. after eliminating 18% of its staff, that is 364 jobs and closing a studio in orlando.
all part of a bigger plan to save $100 million annually. we should mention revenue last quarter topped analyst estimates. and taylor has seen the biggest increase in readership of more than a .5% on a report. according to reports, it is valued at $2 billion. we just checked the market cap as of yesterday was $1.7 billion. betty: that would be a premium. been in play for a while. when it comes to the electric car market, tessler steeled -- tesla steals the limelight. in the credit world of luxury auto, tesla is buying for attention with conventionally fueled cars including the very premium rolls-royce. the 111-year-old maker is
turning the corner. here with me is eric shepherd the president of rolls-royce in north america. >> i could be the stuffy old british dude. you are on your way. a nice tie and jacket. he is a car guy. betty: you are unveiling something on friday. >> the inspired by passion car. this is a car that changed the direction of the company when we launched rates a year and a half ago. it shows off what we can do in some of those new target groups. this car appeals much more to women and guys are looking for a more powerful alternative to a ferrari. this car gets into different paint schemes, textures, leathers, silk.
the seeds are leather but the door insert has a silk motif. and gives us an opportunity for a female audience to play with something that looks incredible he dynamic. matt: you haven't tied it to any specific designers. maserati will do something with a designer but you used your own designers for this. it is interesting you are showing it for the women of influence in fashion conference. >> it has been fantastic. we were lucky that we had increased up to 10% female buyers. that is expanding even more with this. serenity is a one-off car but it showed off what we can do we are doing that on a smaller scope with this car but it shows off what we can do.
the fema buyer is one that really enjoys that. betty: hallelujah. a car for a woman. matt: more than 50% of the car buying decisions in the u.s. are made by women. eric: absolutely. an overwhelming majority. if they are not the buyer, they are the influencer. betty: you are also going to be unveiling this broadcast on periscope. eric: we are. i am not a big twitter guy. this will be new for me as well. betty: a grab for the millenials. eric: the people that buy cars are tech oriented. they are combining all of this of it is a great chance for us to test this out friday night. betty: rolls-royce has been trying to get away from this dodgy image that this is
something old british men drive. it started in 1984 with the ad. >> pardon me. would you happen to have any grey pupon. betty: i heard you have a jar of that on your desk. eric: it is the ad i cannot escape. a colleague as a joke left a jar of that in the cup holder one day. thank you for reminding me. betty: i hope it wasn't from 1984. matt: it started in 1905 when they can together and started making this brilliant car. last year, you had the highest record of rolls-royce sales since the two guys met and started working together. are you going to meet a record for sales again? china has been a rough going in the first quarter. eric: the chinese market as a whole is off a little bit.
the north american market is the largest. for a couple of years now. the gap is so wide it will take a long time, maybe a decade for them to catch up. we see a sixth record year and a row ahead of us. will he be 2% up -- will we be 2% or 20% up? we don't know. the market is strong for us as far as generally along the globe, china has issues but we are seeing a record. matt: are we going to be able to buy one this year? eric: you won't be able to buy one this year but give me 12 months and i will have you behind the wheel of one. matt: i will hold you to that. betty: every time we do this, you get a free car or something like that. matt: a little personal story, i went to betty's house in one and showed it off. betty: shall we say what happened to it? eric: one of our directors --
betty: there is a look at our top stories this morning. j&j is launching a pilot program for dying patients who want access to expand mental drugs. johnson & johnson will turn to new york university's medical division to review requests for compassionate use of drugs. the program will cover one j&j drug the company has not named but it may be expanded. zynga cutting jobs.
the game company wants to make sure the hits keep on coming. it is cutting 18% of its workforce, more than 350 jobs are going away. the move will save the company 150 million -- will save $100 million a year. those are your top headlines this morning. there is a new leader at china's online retailer alibaba. daniel zhang is going to replace jonathan lu. this is after the e-commerce giant announced a 45% increase in revenue last quarter. that hardly makes up for a slump in alibaba's shares. have dropped markedly since a peak in november, wiping out $90 billion in market cap along the way. with me is someone who knows a lot about the e-commerce state and cable television because who was once at showtime. scott kurnit is a chairman and
ceo of keep the clothing retail up and the former ceo of showtime. scott: event television where we did pay per view. betty: let's talk about that in a moment. let's go. first on alibaba as a been a surprise to you the shares have slumped this much since november? scott: know because when you have something that is that hot, you see something like that with facebook. a goes through the stratosphere and then it falls back to where it should be. they are a great company. the greatest e-commerce company on the planet. betty: were you impressed with their numbers? scott: we are 80% mobile and if you are not mobile because mobile is the future, google has said mobile is the future. mobile is it.
they will get even more mobile as they go. betty: you are 80%, is that saturation? scott: i think it keeps going. that little computer in our pocket and now we have a watch app. between those, -- apple is not reporting those yet. if we don't report them, we don't get it. it will be small. betty: paper view. we have the showtime ceo someone you know very well. [laughter] matt was doing a victory lap. it was a great moment for showtime and hbo and pay-per-view. there was a story out that fans are suing because they feel like they got ripped off. scott: welcome to boxing. [laughter] scott: for better or worse, i
had the greatest influence on the first decade of pay-per-view. we did the last to tyson fights which were the biggest events in television at $70 million at that time. this was about $400 million. most of the money goes to the fighters, not hbo. betty: they get a lot of it. scott: it is awesome to see hbo and showtime work together which doesn't happen often. as far as boxing is concerned you know what it is. it could be a knockout in 10 seconds. you want to sue and the court says what was the misrepresentation? betty: exactly. you get what you pay for. scott: watch it for free on periscope. betty: hbo now just launched. they are at $14.99. we will have the glue guy on next at seven dollars 99 -- at
$7.99. netflix is at $9.99. scott: it was john who started encore and invented having different stuff or being in trouble. it is really one or two or three shows that make networks. you have to have the house of cards network, netflix. the hulu issue is they have to get rid of the ads. given your choice of will i buy netflix or hulu netflix is pure. they are smart enough to say i will not pollute my network. there is room for all these guys. betty: nice to see you. we will be back in two minutes on "in the loop." ♪
betty: welcome back to "in the loop." we are 30 minutes away from the opening bell and a look at our top stories. teachers indicate stocks will open lower. first-time claims for jobless benefits rose slightly last week after a 15 year low. many investigators say yellen added fields of fire at a big stock and bond sound out around the world. bond yields around the world are soaring today. the fed says she thinks long-term government that is overpriced and she also warns of the dangers posed by most. >> low interest rates can certainly consent certain
investors to reach for yield. they can insert them to take on conditions and can create financial stability risks. betty: after yellen's remarks japan's 10 year yield made its biggest jump. i will show you benchmark on. germany's benchmark bond also rose to its highest yield this year. the election is underway in the u.k. prime minister david cameron has already cast his talent. he is one of 50 million birds who are registered to vote. the challenge is of the labour party. a change for china's biggest e-commerce company. alibaba named the new ceo. he has been chief operating officer are nearly two years. he succeeds jonathan little and he is staying on as vice-chairman. alibaba reported strong quarter and revenue jumping by 45%. mobile up as well.
stay with us as the new ceo, daniel john, will be joining us in a few moments on "in the loop." will the nfl suspend tom brady over deflategate? they want to take bets on you england's opening game next season. and you report says patriots quarterback probably you that they were deflating footballs. those are your top headlines. if you can't read them, you join them. that is the motto cable giants have adopted. in the face of rising competition from streaming services such as netflix and hulu. showtime ceo talked about comcast and its restriction plot. >> comcast now has more broadband scriber's event video subscribers. if you are a video provider what message does that send you? it sort of says, wow. if we want our networks to grow and we want to reach more homes we need to take advantage of new distribution opportunities.
betty: there you go. comcast providing the avenue for that. joining us now is one of the disruptors targeting to satisfy cable customers. tim colony, the head of this division at hulu who also partly own -- is owned by comcast, disney, and 21st century fox. they are together investors in hulu. he attended the previously known cable show investors. great to have you on the program. we have been talking for the last you days really the last few months, of the growth of over the top. hbo now just coming out, 14 point $95 a month with their over the top channels. showtime looking at it as well. how do you make sure you stay ahead of the game? tim: i think we really don't think of the world as a zero sum game. we find, even with our primary competitors like netflix, that actually most of our subscribers
literally, more than three quarters of our subscribers, also have netflix. we think that a lot of our subscribers also have hbo and showtime. we don't think of it as a zero-some manner. we think there are a lot of very passionate video customers out there who want to get access to all kinds of great video including hulu including netflix, including cable tv. that is why we are working with cable tv operators because consumers really love video. they want to get anything -- everything and we want to bring it to them. betty: that is interesting. why do you think they are also going to you when they have netflix as well or amazon prime? tim: because most of the way that the content deals are working these days is that we are mostly focused so our amazon and netflix on exclusive content as well as our own originals. we recently cut an exclusive content deal to get "seinfeld,"
"empire" which is the number one tv on -- number one show on tv this year. as well as cable network fx. doesn't exclusive deals for other content as does amazon. -- netflix does exclusive deals for other content as does amazon. between the three of us, you get a lot of that content. for consumers, it makes sense for them to have multiple subscriptions. betty: it does, but you need a lot of money. netflix is spending billions of dollars in grabbing content and forget about other cable networks who are -- you have tons of cash they can throw at creating content, so how do you make sure you have that cash to keep a hand -- ahead in the content game? tim: it is becoming more competitive in the content acquisition world. when we look at our eight dollar price point and netflix has a nine dollar price point, we think we are a really good value for consumers.
kind of rounding out their video package. betty: ok but you are much less expensive than hbo which is up $14.95. the services like yours -- might that be a new price point? might you be reconsidering your price point? tim: we are not reconsidering it right now because we don't need to. obviously, we run a business and need to make sure we are bringing profitability to the company and to our owners and we are. we are happy with the price point where we are right now. we don't see any need to increase it from the seven: -- $7.99 where it is today. betty: we just had scott turned in on who is been in the cable television world for many years and he was talking about your company. he was saying that one of the things that he is puzzled by is this free offering and prepaid
subscription offering. the advertising offering and the limited advertising. is that -- should you be going that route or should you just go all in on subscription which seems to be taking hold among consumers that are willing to pay for it? tim: that is right. when hulu started as a company seven years ago, it started as a free ad supported service. about four years ago, we launched our subscription service and it has grown really fast. including we grew up 50% just in the last year, so we are almost at 9 million subscribers. really over the last couple of years for us, the subscription is this become primary business. we still think there are good ways we can introduce people to hulu through our free service, get them to sample the product and understand the value of upgrading into the subscription product. we are actively doing that and we think t thewo can coexist.
-- the two can coexist. betty: it seems to me it is a vote among viewers that they hate ads. they don't want to see ads. they will pay whatever they pay a month just so they don't have to see ads. tim, thank you for joining us. tim connolly, the head of distribution at hulu. coming up next, alibaba incoming ceo daniel zhang will be in the loop in a few minutes. we will be back. ♪
betty: let's bring you the most important stories before the bell. i have olivia sterns and matt miller. your top three stories. let's start with the first one. daniel loeb, guys. throwing down the gauntlet. really telling his story. matt: it is a great story. betty: he basically called him a hypocrite. he said, he criticizes hedge
funds and he criticizes the fact that many of the 1% to not pay high tax but neither does he. olivia: he made these comments and apparently got a round of applause for criticizing buffet. one of the two said his buffet likes to criticize activists but lopez said he is essentially the first activist. matt: i don't know how much criticism it is. i am sure warren buffett realizes inconsistencies. he constantly criticizes financial service companies and yet he is one of the biggest investors in u.s. banks that there is. i think warren buffett would probably agree that these are the inconsistencies. betty: don't forget one of the biggest ones that before the crisis. he called derivatives weapons of mass destruction and yet he was also right underwriting them or writing them as well. exactly. you just said, look, i have to know how they work. matt: i think ian davidow should
have a couple beers and hang out. betty: i'm sure they would love to do that. olivia: maybe some catch-up and hamburgers. it is unfair to criticize them when you think of anybody was given away a greater portion of their wealth. matt: i think you can still criticize people. olivia: that's true, but i think a more accurate criticism -- double bill. the acquisition of -- we always to go warren buffett as constructive and long-term investor. matt: this is going on and on. they don't even care about the bell. betty: when you get two women together. number two, the electric carmaker reporting earnings after the bell, narrow first-quarter loss. one of the highlights of the earnings, the giga factory and elon musk says they are on track to begin production. they will be producing the by 2016. matt: the coolest thing as he
said if they wanted to, the giga factory could make power walls and power packs which are these storage, i guess, modules for your home and i have been a super excited about this ever since i heard about it. you can hook up your home and take it off the grid so that man does not have to see your power. olivia: the man? matt: still more expensive than getting your power from the man, but if you are willing to pay extra just to make that independent statement, which i would probably be -- olivia: if you've got a big problem with the man, you are probably working in the wrong area. matt: 30,000 people -- well, this business was started to get away from the man. betty: alibaba is the other big story. naming a new ceo after the 45% jump in revenue firing all cylinders. daniel zhang will replace jonathan lui who will remain on the board. emily chang in san francisco who
was standing by with alibaba's incoming ceo daniel zhang. emily: thank you. the incoming ceo joining us from hong kong. first of all, daniel, congratulations and thank you for joining us. first question, alibaba has lost $90 billion in market cap since the ipo, what will you do differently from jonathan? daniel: well, we always said ipo and alibaba manage our business by creating value for the long-term customers. by creating value for the disappearance in the entire ecosystem. -- for the participants in the entire ecosystem. we believe that they will like us as long as we continue our belief and continue creating value for the customers. emily: alibaba has changed out the head of team all, aly mama
and the ceo. how many more management changes are we likely to see auras management going to stabilize now? daniel: we change leadership and our business and we believe that today is the right time for us to bring young generation to the leadership. alibaba once to live for 100 two years. this is a long journey. we need a solution for the participants in the leadership and leave the company to the next journey. emily: how will you bring more young talent into the leadership and management roles? daniel: today, if you look at our key business units and all the leaders are younger. we are also trying to bring more and more young generations to the middle class level and to
the leadership level. we believe this will -- of this will be the foundation for our growth. emily: he says he won 50% of revenue to come from outside of china, currently that number is more like 9%. what is your target for that number this year? daniel: well it is one of our cost strategies in the future. we start with our strategies and we help the supplies on the platform to china -- to chinese consumers. on the other hand, to our express retail platform, we hope to drive to customers all over the world. at the end of the day, we want to build a global sales network or global platform so -- to serve all consumers around the world. emily: if it is 9% now coming
from international, what do you want that number to be? daniel: we are positive that business from international globalization will continue to grow and now is just a starting point. emily: so what kind of countries can we expect to see alibaba popping up in? where are we going to see a greater presence from alibaba abroad, more specifically? daniel: today i retail platform on express, we sell a lot of products to developing countries like brazil, like russia and in those countries, a consumer product is very expensive, so we are help trying to get supplies for those countries. we will cover a lot more countries in the future and on the other hand, we will
participate in the growth of certain countries large investments and eight. we will try to help the young generations and the young entrepreneurs in the local countries to boost their own business. emily: how do you plan to do that? daniel: actually, we have a very close strategy of mobilization. -- strategy of globalization. we will go further to build a global network. today is just the beginning as a long journey. emily: we have heard about the hiring freeze, capping employees that, what, 30,000 employees today? how long -- how likely would layoffs be if layoffs are potential next step? daniel: the freezing
[indiscernible] we will adopt a zero debt policy this year but we will definitely continue to hire talented people to join us and praise those guys as employees. the purpose is to improve our efficiency and we did the same thing three years ago and they gave us productive results. in five years, we have a dream that we will one trillion u.s. employees. the headcount in our group should be moving 50 people. today, we adopt policy to
increase efficiency and we are prepared for future roles. emily: the chinese government has made some pretty harsh accusations against alibaba about knockoffs what is the state of your relationship with the chinese government right now? daniel: like all global companies, alibaba has a very transparent conversation with china government. we share our views and our plans of business development and we also address their concerns. we do everything we can to make sure all the business is in compliance with the laws and regulations. emily: should we consider the latest accusations a warning of some sort?
daniel: no that is not a warning. as i said, we have a very good conversation with chinese government. emily: i mentioned that since it is -- since it's peak they have lost about $90 million in market value. from your perspective, how is life changed since 5 p.m.? -- since the ipo? daniel: duets, we do what we always do in the past 15 years. as we said, ipo process, we manage our business by creating value for long-term customers. we don't want to manage our business by revenue growth and margins. we believe if we can create value to the customers and ecosystem, we will growth and be recognized by the market. emily: you have been in many
industries, pharmaceuticals, movies, what kind of businesses is alibaba not interested in buying? daniel: we have very clear investment strategy. first is that we try to acquire new customers that we try to invest to extend our existing business to new categories and new areas. the last one is we try to invest and capture the opportunity in technologies. we follow our strategists to make investments and we will continue to do so. emily: there have been a lot of concerns of growth in the chinese economy slowing down. how concerned are you about the economy in china slowing down? daniel: from our platform, we can see that the consumer
demands from china are huge. today, the chinese consumer not only likes roddick's -- likes product in china, but products from all over the world. that is why we set our initiatives to sell to china through our platform. we are confident that if we can meet the demand of chinese consumers, they will continue shopping and consume our platform. this is benefit for the chinese economy. emily: incoming alibaba ceo daniel zhang. thank you for joining us a great to speak with you for the first time today. daniel: thank you. emily: back to you. betty: thank you, emily. emily chang breaking down alibaba's outlook with a new ceo, daniel zhang. a quick check of futures were they have settled. it has been a global selloff the last 24 hours. we are lower heading into the
betty: welcome back. we will bring you the most important stories before the opening bell. matt miller, get all caps on. what are you doing? olivia sterns. bonds and stocks -- ok, this is a big deal. market declines around the world extending losses and erasing more than $2 trillion in the last two weeks. index lost be present in the last three days. partly because of what janet yellen said yesterday at this ims meeting for the conference. olivia: perhaps she added field
to the fire but look at the one week move. german blend it back up and two weeks ago we thought that it was heading to zero. it has been a one-to week and huge turning of the tide in the global bond market. the question is if this is healthy unwinding, people getting out of crowded trade in a positive way or is -- if it is what they told eric and stephanie about something fundamentally changing and that we are specifically seen a rise to the eyes of inflation. matt: i don't think we are seeing the whites of the eyes of inflation. the federal bank would love it if that was the case. olivia: oil is over $60 employment index is up let's see what happens in the job report. betty: in many ways, this makes the job report more important for tomorrow. stop anybody to start trading. that's pretty and paul, standing by as the cofounder of the investment group who is not surprised by the market's reaction to janet yellen's
comment. paul: anytime the fed official makes a comment it will spook investors. if you look back historically at fed officials and the commons on the market, the track record is not great. in 2007, you had telling us everything was great. betty: he was like, we could absorb any. paul: lastly, we had mixed comments about stocks. those are pickups -- hiccups that come back. i think olivia was saying is it it is more fuel to the fire. it started in the last week or so so you are not concerned she would make any move. if she saw a bubble, for example, in the equities market, it would be fairly easy -- olivia: let me tell you what she said. >> not so hard when you compare
the returns on equities to the returns on safe assets like bonds which are also very low, but they are a potential -- there are potential dangers there. olivia: she told kristin, the managing director of the i am and that they were high but not too high. to me, that does not sound like she is trying to burst a bubble. matt: i'm just saying if she wanted to, she could. if she starts talking about equity markets and if you think she is doing anymore the job owning, you have a reason to be dead. if you don't think that is the case, and i don't think the fed would try to -- paul: third could be action if they are really that worried about things, but the equity market valuation, we are above average valuations. to say the market is cheap would be -- matt: we are not very far above -- paul: that is my second point. we are above average historically but we are a global market in the later stages of the low market. you typically see above average
populations at the end of the loan market. the markets and on euphoria and euphoria causes multiple expansions. matt: is this euphoria? paul: it is not euphoria. i'm saying you could have the potential for more room in the market to go and more multiple expansion to go higher before we even got the levels we would consider -- matt: in a sense, a fed chair of making a comment like that is could -- kind of -- could be a reason to get in. he is not going to do anything about it but he is saying don't look behind the curtain, right? everyone is going to take that q and go. paul: i think what janet yellen is doing is preparing the market. there will be hikes presumably in september, most people are thinking or later. we will have to see the data to improve, but it is a matter of -- the fed is telling us rates will rise and what we are seeing in market is positioning on
progressing what these -- what these work historic rallies in one direction and big moves in the other direction. when you think about that, you are seeing investors move out. i think it is more of a -- betty: someone was telling to me, the former cio of one of the biggest pension funds said, look, it is not the rate rise in september or even the one after that that worries me but it is like, what happens from that rise until, let's say, two years that when we finally get back to normalized rates? olivia: it's a trajectory. betty: four normalized rates. that is what worries me. what happens in that timeframe? paul: when you have the fed for an extended period of time and then they go to hike rates, every time when the fed hikes rates, you see short-term pullback in the market. that is one thing investors should be cognizant about.
there will be unforeseen consequences of zero interest rates. where the will show up will be surprising most people. if you want to take any worry about what has happened in the last week, it is liquidity in the markets. a safe asset like a 30 year german bonds dropped 30% in a matter of a week -- betty: not a lot of buyers? liquidity is that drawing? -- is that dry? paul: they can keep inventory is in investor lost the position, there is a lot and they will have to figure a move on the market to get that done. olivia: what is your take on first-quarter gdp and outlook for the u.s.? you think it is a soft patch because all of economic data that has come out recently seems it is china's estimates. paul: -- it seems shy of estimates. paul: we see it showing
improvements but weaker than expected expectations. employment data in the right spot. we saw a lower reading, 15 year lows in that measure. that is positive there but again, we want -- that is a worry. we were all expecting to see april and spring day to pick up a we have not he that yet, so it is still early and we have not seen a lot of data yet. betty: that makes tomorrow very important? paul: yeah, like we were saying at the beginning, you want to see a solid job number but if you are up on the equity market, you don't want to see a lot of wage growth. olivia: goldilocks scenario. matt: we want to see wage growth? in your american heart. paul: as fellow americans, you want to see americans making more money but in the short term, negative impacts. betty: cofounder of the spoke investment group, thank you. thank you to matt miller and olivia sterns. we will be sticking with the ceo
betty: trading is underway and the selling continues. i will get back to our chief market correspondent scarlet fu. a trifecta of losers, we hate to say that, -- scarlet: topline failing to impress investors. they .6% and overall revenue growth is 10% from one year ago. revenue has visited by 9% or 10% and has not excluded that. whole foods has been cutting prices to fend off competition and keep its customers from dispersing. that means lower margins and the there are worries that revenue is not making up for it. cold foods at a six-month low.
a green -- whole foods at a six-month low. down by double digits of 10% after cutting its earnings forecast. they expect earnings to fall rather than increase. the strong dollar is to blame but keurig is synonymous with single serve coffee machines and they are working to sell their next generation system. inventory is now a stacking up at retailer study. betty: thank you so much for some of those movers, not losers. back to chicago to the internet and television expo. the first year the event has had internet in the title. previously it was known as the cable show but that name is now out dated. evidence of the evolution and influence of digital video. digital tv and more households are itching cable and -- in favor of streaming by this chart
. 60 million homes in america will be broadband only. while, by 2018. my next test -- my next guest is the ceo of vimeo the video sharing site that is becoming a player in the content creation and video on demand. great to see you this morning. the cable show has finally caught up. they probably should change that name a few years ago. the viewers have been on top of this and for vimeo i was. as. we had hulu on and we talked to showtime yesterday. everyone is content content and original content. how do you played that game with vimeo? >> thank you for having me. we are in a major shift where people are consuming video directly through ip connected
devices, whether it is the phone, tablet, pc or increasingly the television. because vimeo is a globally available open platform for creators to upload and share content and viewers to consume it, we have moved naturally into allowing creators to charge that content. because consumers are increasingly comfortable with receiving that continuity on the device, they are comfortable with purchasing it through vimeo on demand. why we have seen the catalog pro two over 20,000 titles, many of which are uploaded directly by creators we now have also started producing our own content. betty: producing your own content, you know, there is a big difference if youtube is finding out between uploading cute cat videos or the recent obsession by my kids sales -- fail type videos, there is a difference between seeing that
and creating premium original content which costs a lot of running. kerry: yet, there is a difference. our first original series, "high maintenance" you up on vimeo. one of the reasons we are excited is it because it exemplifies the different content you see uploaded to vimeo. we don't traffic tie the in the fail or cap videos. we have been a high quality sharing platform and for more professional creators. "high maintenance" is a great example of that type of programming. it is still not costing with typical broadcast or cable production might cost. the quality of the writing and direction and cinematography is awesome. they have developed a passionate fan base and the type of revenue they are able to generate far out trips anything they would be able to command using youtube's at based system. betty: watching youtube and how
they are developing and going to a subscription service or model, what kind of page do you want to take or not take from youtube? kerry: that's a great question. the jury is still out on what will happen with youtube's paid services. no doubt, youtube is successful in advertising and the way i think about their evolution versus ours is this -- i view youtube as the broadcast phase of the internet. when you think about the first 40 plus years of television, it was broadcast television. last content, generally comedy and free to consume with ad supported. in the 1970's and 1980's, you had cable. the idea of premium experiences that you pay for that had different created themes and a different user experience. this is hbo, showtime, itunes. that is the world where there is two different types of experiences. if youtube is the open platform for anybody to deliver podcast experience, vimeo is the global
platform for anyone to deliver a premium cable-like experience. betty: you would go toward that youtube model if the ad rates continued to go up, but they are being compressed, aren't they because there is so much content out there? kerry: you are correct, ad rates are not going up because you have an explosion of supply from youtube and now the entrance of facebook into the ad supported video scene. even if the ad rates were more attractive, which they are not we would not be entering that market because frankly, the bigger opportunity is the emergence of this paid market. we really do believe, as i was describing of the shift from broadcast to cable, we are in the midst of a fundamental shift of not only add supported experience is but premium paid experiences. when you look at the off-line video world, the supply and demand side are well proven. producers want to deliver premium content that is not
appropriate for broadcast or add supported models and that consumers want to buy and consume it are both proven independent of the internet. we are focused on bringing that platform to the world because we think youtube does a nice job with ads but we think the bigger and more interesting opportunity that is befitting of vimeo is delivering that premium played -- premium paid platform for users worldwide. betty: thank you for joining me from the internet and television expo. carry trade, the ceo of vimeo. we will be back in two minutes with much more heading "in the loop." ♪
betty: news on the controversial surveillance program. a federal peals court has ruled that the program to collect telephone data is illegal. chief washington correspondent peter cook has details. peter: this is the latest twist in the debate over the government surveillance program. seven legal reviews of the
patriot act and particularly the collection of american phone records by the national security agency. the appeals court has ruled that the program exceeds authorization in the patriot act itself. the program itself is illegal. does not rule on the constitutionality of this and what is important is that congress needs to, by next month, decide what to do with the program going forward. we authorize it and allow it to move forward as it is currently with government holding this data and enabling to search it and look for evidence of terrorism or should the phone companies, perhaps, collect this data. this will affect that did they going forward. this is a blow to supporters of the patriot act. particularly a blow to supporters of this program and will shape the debate in washington to come. not the final word but a major turning heart -- turning point in the surveillance program. betty: huge ramifications.
peter, thank you. now to vegas, where the conference is underway. lots of headlines being generated, including by our team there. market makers -- "market makers" anchors are speaking with some of the biggest names. they join me now. what is happening? erik: that is the reason to be here. the biggest names in hedge fund industry are here in las vegas. we have been talking to them and the best part is they are in one place. we can ask similar questions of all this range of people. talking to him on why there has been such a big selloff in the government bond market in treasuries and across the pond? this is what mark told us yesterday. >> i think it's time to get off the train. we are entering a bear market. how did it happen? markets are interesting. it will be confirmed once the fed raises rates. betty: there you have it.
stephanie: we came for more than britney spears. today, things are heating up again. in a few minutes, we will be speaking with john burbank from passport and talking to larry summers. we will talk to jim chain us. a big morning. erik: and then pickens. stephanie: if you thought last week was good, boone talking about the stucco bathtub. i think he may have said elizabeth warren? erik: let's not forget about lee cooperman. stephanie: elizabeth warren could not be eggs -- beat eggs. how good is that line? so much in store. you've got to stick with us. betty: thank you. erik and stephanie at salt. that is coming up in the next hour. ever wonder how big pharmaceuticals became so big? we will take a look at the big business of design is a pharmaceuticals and why some companies are staying competitive eye raising, -- by
competitor also registered an increase of 16%. this has all occurred 13 times since 2009 where prices have dominated the global market for long acting injectable insulin. $11 billion in combined sales that have gone up in tandem. robert lang greg wrote about this. he joins us now on his story. what is going on here? price matching or what? robert: very curious. we surveyed literally hundreds of big selling drugs on what was going on with prices in the last five years and we found dozens of them of their prices have doubled when inflation was low. one of the most intriguing things we found was some of these drug category competitions seem to drive prices up. in fact, as you said, diabetes and insulin markets we saw exact price matches for some of these competing drugs.
literally, sometimes down to the decimal points. the prices rise in tandem over a period of time and all the prices are matched. betty: is this an antitrust violation? robert: if the companies are setting prices independently even if they follow each other an expert we spoke to said no if they are working independently. if they decide that is the best strategy, it may be -- that is not the competitive violation. betty: they are not colluding together to do that? robert: right. really only three companies in the insulin market, so a small company. -- so a small number. prices need to go up or these drugs in tandem. betty: how often does this happen? we are talking insulin, but are there other areas where we see price matching? robert: in the industry they call it shadow pricing were
competitors go out there in tandem. there are other areas where it happens. it happens where literally some of the same prices. another area where prices went up quite a lot are scoliosis drugs. drugs for neurological diseases. some of the old drugs that came out in the 1990's, caught -- cost 8000 or $10,000 a year. more expensive drugs cannot win old drugs raise prices to catch up with new drugs. all drugs cost $50,000 a year to $60,000 a year. prices keep going up. betty: you looked at prices here versus overseas. are the much cheaper overseas? robert: yes, we looked at the database in some european countries. in france and norway, the prices are one quarter versus list prices here. betty: ui.
>> live from bloomberg headquarters in new york. this is "market makers," with erik schatzker and stephanie ruhle. erik: "market makers" can't get enough of las vegas. we are back for a second day of the salt conference. finance and politics. stephanie: he is running with the bulls. we will stick with one of the world's most famous investors leon cooperman. erik: too close to wall street? hillary clinton fights against the perception that she has forgotten on main street. larry summers will be with us. good morning.