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tv   Bloomberg Markets  Bloomberg  May 20, 2015 12:00pm-1:01pm EDT

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debate billions of dollars in fines -- they have agreed to pay billions of dollars in fines. that hurts consumers. we with highly what is behind this decision. betty: as david letterman prepares for his last late show with a look at how the decision to buy the ed sullivan theater back in the 90's has paid off. pimm: good afternoon nine pimm fox. i'm here with betty liu. betty: equity markets are a little bit lower. two hours before the fed releases minutes from their last meeting. the s&p is down 1/10 of 1%. the dow, off by 22 points.
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crude inventories came out this morning. a surprising drop in stockpiles piles dropping by almost 3 million barrels. that put a bid under oil. nymex crude up. rent is higher as well. pimm: let's take a look at the bond market. looking at a decline in yields. a little bit more than 3% for the 30 year. prices did a little bit higher. how the dollars faring against euro. big strength. dollar versus the yen. more strength and sterling versus the greenback, 155 point 39. -- 155. 39. some of the bank's largest banks
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. the settlement claims they conspired to rig foreign currency markets. citicorp, j.p. morgan chase, barclays, royal bank of scotland. ubs will plead guilty in an interest rigging scheme. attorney general loretta lynch says the damage was widespread. >> their actions inflated profits while harming consumers, investors and institutions around the globe. including, the bank's own customers who placed their faith in the market and relied on it to produce a competitive exchange rate. pimm: the justice department says currency traders called themselves the cartel and used online chat rooms to rig exchange rates. target posted first-quarter earnings that beat analyst estimates. target's chief executive is working to get shoppers into the stores with exclusive merchandise such as the lowly
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pulitzer -- the lilly pulitzer collection. shares of lows are following today. first-quarter profit missed estimates. es could fend off a home depot campaign offering online promotions. the spring quarter is the biggest sales period for both of these change. betty: a new study says driverless cars could have an effect on the auto industry. -- the study says would cut back to one car. ford in gm would have to/output in order to survive. tweets are showing up in google searches on mobile devices. to halfs getting access a billion tweets every day turning up key phrases and hashtags.
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united technologies is talking to potential buyers for its helicopter unit. among those interested, boeing, lockheed martin and airbus. sikorsky makes black hawk helicopters and the presidential helicopter known as marine one. the largest auto recall in american history. takata corporation has denied that their air bags were faulty. now the u.s. government says takata is coming clean. hasp until now, takata refused to knowledge that airbags are defective. that changes today. today, i announced that takata has agreed to declare that a irbag insulators are defective . from 11 makers are
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involved and because of a shortage of repair parts it could take years for all of the vehicles to be made safe. the chairman of liberty global thinks vodafone would make an ideal partner. john malone says merging his empire with vodafone would be a great fit but he would not say whether the company's are in actual talks. vodafone's market value is $93 billion, slightly more than double liberty global's valuation. that vodafonerted was studying a deal with liberty. pimm: american airlines plans to compete with airfare carriers. doug parker says american will not lose customers based on price. feel costs have held discount carriers cut fares. american is completing its merger with u.s. airways forming the world's largest airline. and mansion featured in the film "the king's speech" has been sold.
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, jailededward davenport for his role in a fake lending operation. proceeds will be used to repay about $20 million from a government confiscation order. eventse in london hosted attended by the rich and famous. that was a good movie. those are our top stories. coming up, we look at the battle between delta and travel websites. why the airline is holding back data on flights and fairs and what that costs you. pimm: an insider pass view on the big business of sports broadcasting and why it is not seen as much digital disruption as the rest of the television industry. betty: cbs brought -- but the sullivan theater for $4 million.
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we will tell you how that has paid off. pimm: the department of justice clamping down on some of the world's largest banks, charging citicorp, j.p. morgan chase, barclays, loyal bank of -- royal bank of scotland for conspiring. also accusing ubs of interest rate manipulation. betty: with us now is our colleague in london, liam vaughan who first broke the story. specialties include financial regulation and market manipulation. let me start with you, liam. you're the one who broke the story. we have heard from the doj. what happens next year? what do we hear next? is the biggest hurdle the banks have got to get over. the largest -- it is not the
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end. still ongoing investigations into the kind of electronic trading platforms at barclays and deutsche bank. some institutions that were not caught up in this kind of round of fines. this week, the south african competition commission announced it was probing a potential manipulation of the rand. more pain for the banks. you have to consider that all of the individuals with been caught in this are likely to face criminal charges as well. so far it is focused on the institutions but the individuals involved are probably next in the sights of the authorities. pimm: i'm wondering if you could talk about what liam is describing. might there be other banks that are going to get caught up in this investigation? rosa: i believe there may be more banks and there may be
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other types of manipulations. the manipulations that we have been talking about involve the , there mayn of fraud be other ongoing manipulations in effect which we may end up learning later. probably still much to be learned. pimm: you -- betty: you wonder whether the sediment addresses -- the settlement addresses the underlying problem. how could this manipulation go on for so long and to such an extent? does the settlement go toward addressing that problem? rosa: i think the settlement was show that authorities are serious about deterring future behavior. changinghat part of future behavior are a lot of the changes that have happened in respect to how benchmarks have been set. benchmarks are easy to manipulate.
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nobody was looking and gains were humongous. behaviorsding these across many markets and i believe more to come. pimm: who are the victims here and what is next for them? are manifoldtims because the w and waiters rates were used by pretty much every pension fund around the world to determine the value of their assets. if people are fiddling the benchmark, it is difficult to value -- the value of your pension or my pension. settlements, more specific and targeted criminality that is pointed out. corporate will go to their bank and the bank will say we filled your order a certain price when they did not do that. that is referenced with regard to ubs and barclays.
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if you are the treasurer cfo of havege corporate and you been dealing with these institutions you probably want to have a look at the prices you are getting and exchange rates you are getting. just two examples. in terms of users of the foreign exchange market, if -- it is truly global, 24 hours. these guys have got between 50% of market shares between them. of -- when, in terms you say there is likely going to be findings of possible manipulation in other markets, where next white me see authorities target? rosa: there have been concerns related to best execution practices. clients that do not get the best price when trading on fx. there been public concerns about particular types of markets that
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are placed -- markups that are placed on all of the trades. that would affect every trade essentially. other types of practices such as a last look practice in which some institutions have the ability to cancel if the market moves against themselves. along with other concerns related to particular types of manipulations overnight. betty: thank you for joining me. rosavaughan and also to metz. thank you for joining us today. pimm: still ahead. betty: i sat down with the head of fox sports. what does the network have in store for u.s. coverage? you'll find out in a moment.
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pimm: welcome back to the bloomberg market day. i'm pimm fox. betty: i'm betty liu. the market softer ahead of the fed minutes. julie hyman has more. julie: the dow yesterday closed at a record. let's talk about some of the big movers today. yesterday, the yahoo! stocks ed.mmet some comments from an official in washington that maybe this attempted spinoff of yahoo!'s ali baba stake would not be as anticipated.t had it looks like it may not be affected by that and yahoo! says
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it is going ahead with it. analysts weighing in on the matter today. raymond james, cutting price target. we've seen a lot of positive commentary. is aust, saying this buying opportunity. s&p iq is upgrading the stock to uy. we got home depot a couple days ago beating estimates with earnings. exactly the opposite for lowe's. uredeems people were l to bargains at home depot. touched below $16. the company's first quarter net loss hit by currency. pimm: thanks very much.
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some of the top stories crossing the bloomberg terminal at this hour. last week's deadly amtrak crash points out a major problem. railroad unions say locomotives should have a second crewmember. the engineer will in the derailment was alone in the cab of the train. congress stop requiring two-person crews in 1983. you're looking to buy gasoline for under three dollars a gallon, stay away from california. drivers in los angeles are paying more than four dollars a gallon. the reasons, reduced supply because of an explosion at one of california refineries. california has the most stringent clean air policies in the country which makes gasoline more expensive. the owner of american pharoah has sold breeding rights. kentucky.central no word on the price.
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it has been reported that the family has been inundated with offers including some for more than $20 million. belmont next month's stakes would make american pharoah the first triple crown winner since 1987 -- 1978. my goodness. betty: decades. pimm: ira member secretary at. a bill to give president obama fasttrack trade agreements is moving closer to senate passage. mitch mcconnell moved to end debate on legislation setting up a possible vote that will take place tomorrow. betty: opponents are upset that terms are being negotiated largely behind closed doors. bill bailey does not see this as a big issue at all. daily joint bloomberg's market makers. : if you were
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negotiating, and you cannot do this on c-span or bloomberg are yet it is not going to work that way. give other countries who have their internal political issues, agricultural issues, manufacturing issues that they have to deal with. they have to make judgments around labor rights and environmental issues. not that it is all in total secret. they have access to see what has been done so far. in tpa, this congress has demanded -- they will demand, that this agreement must be out for at least 60 days for discussion, debate and then move forward. i think it is an honest position if a member of congress says i will give the president the authority to get a deal done, but i will withhold judgment on whether or not i will vote for the deal when i see the deal. i think that is honest and the
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right thing to do. if they deny this president the authority, he will be the first president other than nixon, since roosevelt who is not gotten fast track authority. i do not think that is right in this economic time. erik: what about the criticism raised by senator warren? that the treaty, the transpacific partnership, if signed, would allow for a backdoor rewrite of the dodd-frank because a treaty would supersede congressional legislation? bill: i have not seen the proposed parts of the agreement. the thought that this president would undercut dodd-frank, which he proposed and fought for, and which he has taken an enormous amount of heat from those of us who are in the financial service sector for parts of dodd-frank, is ridiculous. erik: why is it ridiculous? what if he has been persuaded by
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some of that criticism? what if he has decided for himself, i signed that bill, i think some of the criticism is valid and perhaps this is a way to allow something to some of those critics because they have a point? .ill: i know this president i spent a year with him as chief of staff. that is not in his agenda. reportedng -- you earlier about the actions taken by the justice department against banks. i don't think this president is going to do anything that is going to undercut dodd-frank and the ability of our system to improve the financial service sector. i do not believe it. pimm: william daley speaking with erik schatzker. still ahead, the fight between airlines and travel booking websites is taking off. a fight that may shape the future of the airline industry. betty: delta is withholding
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information from certain websites as it tries to keep fees for its self. his delta bending the rules? ♪
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pimm: a battle for bookings and is pitting airlines against popular travel websites. that beltre claims has removed its schedule and fair information from a number of sites including tripadvisor and cheapo air. is not alone. and united continental holdings opted policies allowing them to restrict the use of their data. i think it is interesting when you read through the report that came out. the bottom line from these economists who put this together for the travel association is
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that this is going to cost consumers more money. if you don't allow them to compare and you start to bring all of those prices on to your own individual sites, they are never going to be paying more for these airfares. pimm: one of the things that the airlines want in terms of getting you to go to their site, then you will add more fees to the actual fair. re. betty: i can't believe you have to pay a fee now for legroom. pimm: it really demonstrates the value of having the price information. whose information is it anyway? does delta own its information or do they have to be forced to offer that in a nondiscriminatory way to all of these websites? betty: delta' on to this. -- delta's response to this. delta calls their prices content . they say delta reserves the right to determine who it does
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business with and where and how information is displayed. they said this to the wall street journal. this is their pricing information. they are not obligated to disburse this to whomever wants it. pimm: this was the death knell of the travel agency business. once they lost control of the price, all the discount websites came in and said it did not matter. we're kind of going back to the original system where they were all closed networks. betty: it will be interesting to see how this bleeds over to other industries at the hotel industry. pimm: i'm handing it over to you. in good hands. betty: coming up. , much more on fox sports. ♪ we live in a pick and choose world.
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only at a sleep number store. save $500 on the memorial day special edition mattress with sleepiq, plus 36-month special financing. ends monday! know better sleep with sleep number. >> welcome back. i'm betty liu. turning to the first on bloomberg, the president of the
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hedge fund, now called .72, is talking in his first ever the cancer spoke with kathy and joins me now by phone with much more. kathy, first off, what did he share with you? >> he shared a bunch of stuff with us. of big news is he hired a new coo who spent 33 years at ibm. that sort of focuses on the fact they are doing more big data at the hedge fund as a new .ay of adding to their research betty: explain that. >> we have previously reported their adding big data analysis as a research tool.
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doing language learning. they are doing that at the research side, and also compliance to make sure people, employee conversations with each legaldoes not cross any boundaries. betty: this is something they have to be very careful about. but did he tell you about his strategy? >> already, they added a few things. they have a multi-strategy firm they did not have before. they had a venture group private equity investments they have quietly been building. and they have hired 100 people in the last 12 months, mostly analysts. a lot of people out of school
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are between one years and five years out of school. betty: so they are really ramping up. why did he want to speak now? >> because it has been about a year piece -- since he became a family office. they are high on being transparent, because they feel that is the best way to hire people and also the best way to show that they have the highest standards in the industry. betty: because they're very conscious about that and cap -- and about creating this culture. productiveeating a culture, not one some might think would be a culture of paranoia. did he address some of those issues, cultural factors? >> he did it he said the reason they liked hiring young people now is so that they can grow
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them in turtle he and learn all , and that compliance they could train them themselves rather than having someone come from that side with their own practices and habits. did he mention other positions he wanted to fill at the firm? >> yes here they will continue hiring. they have a class of interns coming in, people coming right out of college this year. they are just about to hire someone who will be in charge of their big data project. he will give -- will not give us the name yet. he said they would definitely start looking at other strategies, though he would not tell us what they were. he mentioned earlier
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about the hiring of the coo. tell me more about the hiring. i know you mentioned it is to lead the egg data project at the firm. do we expect there will be more of these egg tech hires? >> he will not only do the data, but it is the fact he comes from ibm, they said that was significant because they think of themselves as a technology firm. more, likel be doing everyone is doing more artificial intelligence and big data. every hedge fund is really adding. many are adding to those capabilities. technology is huge for everyone these days, particularly if you want an edge in this. thank you very much, our
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reporter who just spoke with the president of the new hedge fund. let's look at some of the other top stories causing -- crossing the bloomberg terminal at this hour. how much money the world passes largest banks will claim. four of the banks agreed to plead guilty. city court, jp morgan, barclays. their businesses will run unimpeded. the banks received permission they need to continue operation. a bank of america was also fined. ubs will plead guilty. loretta lynch says the damage was widespread. >> their actions inflated banks profits while harming countless consumers and investors and institutions around the globe. major corporations, including the thanks his own customers who relied on the market to produce
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competitive exchange rate. currency traders call themselves the cartel and used online chat -- online chat rooms to rig it. the discount retailer posted first-quarter earnings that beat wall street estimates. a.c.l. is working to get in the stores. the products sold especially well the last quarter. those first-quarter profit missed estimates. shares of the retailer are moving lower and lows could not fend off a home depot campaign offering in stored discounts and online promotions. time for biggest sales both of those retailers. the end of an era in late time television. closes out his career after 33 years of hosting. it is more than 6000 episodes.
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no word on hulu be his final guest. tonight's show will be full of surprises. cannot wait. they appoint -- stay up late to watch. let the countdown to the u.s. open begin. off its firstking year as the official media partner of the u.s. golf association. i sat down earlier today with the fox sports president and asked him the increase in golf despite the decline. >> golf went through an era of, what do we do without tiger? i think now we know. will do ricky and are oriented will be fantastic. i think ratings are up 22% for the pga tour. masters were up big this year. have no doubt that the u.s. open ratings will be up this year.
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betty: sports broadcasts are locked up for 10 or 15 years by the broadcasters, by espn and others. how do you grow spot -- fox sports when your rivals have a lot that these live sporting events? what theydy locked up thought was important to them. the trend has been to go longer rather than shorter, whether it is baseball. we made significant investments in the last five years in not only renewing nfl and baseball the fee forwe have world cup rights through 2020 six. we have made significant investments adding our scale and portfolio as well. betty: how do you stand out from the pack? have,is the rights you the live event rights are key. and what you do with them. betty: do you believe they will be 10 or 15 years from now?
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>> absolutely. 97% of american homes last year watch sports. no genre of programming gets watched more than sports. those home watched on average 200 hours a year of sports. sports is, you know, people the value of sports rights. you pay with their worth and they are becoming more valuable every day because it really is the one thing that now brings a community together. everything else this time shifted. front you're on a digital , as are other networks. you have the buzzer, which is extremely popular. -- are bringing perp personality very popular on the video side and bring them out onto the channel, like katie for instance. are pursuing the strategy and how important it is, particularly to get viewers younger than 25.
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>> we embrace every platform. we are not successful unless people are consuming our content. embracing is facebook, instagram, snapchat, each one of those platforms is unique. you cannot just take a 30 minute news show, put it on facebook, and expected to be successful. >> cable operators are going through an internal crisis. are they going out cart, what are the different channels they will offer, verizon files, just coming out with skinny bundle packages. doinguing verizon for this. how do you feel about it? >> i see a lot of opportunity out there. we have seen cycles in the past when new competitors have come into the pay-tv system. they each look a little different. directv and dish looked different than your cable company and probably set off a great era of pay television,
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both from customer service, quality, and innovation. then he saw at&t and verizon come in and now you see sony view and google come in. each and every one of those are run by smart people who know what they need to do to succeed. betty: you have had a difficult time with at&t. cut the little bit of our programming is not available to customers. as it stands right now, they would not have access to the u.s. open golf and some soccer coverage. that will get worked out. before june 18. betty: or you would have a lot of angry customers. >> but there is a certain amount of flexibility and we also know some of the new over-the-top entrance are absolutely going to
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embrace sports. and that sports will be a differentiator for some of them. betty: so you are for elkhart pricing? >> there is a big difference between over-the-top and a la cart. i think over means you do not own the pipes you are delivering, the content through. sony does not own the pipes delivering the content to the playstation's. cable companies work out right away so they have access to their own pipes. there is a big difference between over-the-top and a package of content that has a lot of value, versus people choosing each individual show or each individual channel or what the economics are around that. interviewt was my with the president of fox sports. much more ahead, david letterman says goodbye. we will take a look at how cbs and dave blessed their way to
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success right here in new york. ♪
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betty: welcome back. i'm betty lou. julie hyman has the big story of the market day so far. you never went anywhere. you are here. with stocks, we're not seeing much change for the major averages. we have been trending of the lower after stocks hit some highs yesterday, record highs. we have not been able to maintain that. we had a balancing act. you were just talking with the
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head of fox sports. cable stocks are doing well today, particularly if you look at cable and time warner cable. cablevision is the best performer in the s&p 500. a euro deal is raising optimism that maybe there will be more consolidation in the u.s.. luxembourgased in buying the seventh largest cable provider in the united states, privately held, called sudden link. there is no talk of who else they might be going after. take a look at airline stock today. they are plunging and it does not seem as though there is a lot of news out. we did hear from the head of american airlines, who spoke here at bloomberg yesterday and one thing he talked about was vowing to compete with lower cost carriers. perhaps that is raising concerns about price competition among
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the airline companies and we are seeing them fall. we have been talking all day about the series of settlements between the banks and the justice department and other regulators related to currency rating investigations as well as live or rigging investigations. rigging investigations. we are seeing some reaction. andsaw ubs and barclays jpmorgan little changed today. jpmorgan closed at a record today. betty: thank you so much, our senior markets correspondent. david letterman hosts the late show for his last time tonight here in show number 6028. he promises a lot of surprises. sullivan theater became his professional home.
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♪ manhattan inn broadway outside the ed sullivan theater, which cbs bought for david letterman back in 1993. the network eight $4 million for the building and more for renovation. still a steel. hired david letterman away from nbc. a big decision, keep letterman in new york or move him to los angeles where there were newer, bigger studios. incentives were offered to keep letterman here and cbs picked this center, building that was once home to his friday show. is where the beatles first performed on live tv in the u.s. it was a big deal for a network to buy a whole building for a late-night talkshow.
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this is all about symbolism. we see it as a restoration of the theater and were new and revitalization for a network and even the city. it certainly coincided with the renaissance. the rebirth of time square a few blocks south, the ed sullivan theater became a tourist attraction and monthly rent has gone up dramatically since 1993. it was around $33 per square foot back then. it has now more than doubled to just over $72. every time one of the shows changes hands, new york and los angeles duke it out. york offered cbs $11 million of state tax credit and $5 million in grants to keep the today show in new york. >> september 8, in a building now with many more than what was paid back in 1993.
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bety: is anyone going to like david letterman again? >> know and i was thinking about this the other night. i watched him when he was on the late show at nbc. it was so different than what you saw. he did not want johnny's's audience, he want johnny's audience's kids. that is what letterman wanted as well. so off the beaten path, so different, like when he stuck himself to the wall with velcro. sillyowed people to be and i do not think there is anything wrong with that as you can tell working with me every day. >> absolutely. i think it is remarkable. daytime talk shows have been struggling since oprah left. but live nighttime entertainment is still thriving in this era of digital.
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>> we will talk to brad about that coming up. betty: all right. i will see you in a little bit. much more is ahead. fashion week is going out of style. we will find out why mercedes benz is withdrawing. ♪
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betty: fashion week looking for a new title sponsor. mercedes-benz, the sponsor since 2009, has decided to leave. the partnership falling victim to a change in the way automobiles are marketed. me now with this story. we are all waiting. why is it pulling out of fashion week? >> it is a great questions. fashion week does not have the lower it used to have. it used to be a crown jewel in the fashion calendar and now a
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lot of things have moved downtown. bit.s lost luster a little sponsor wasig of a mercedes? >> huge contracts. there are logos all over. massive. betty: will anyone take their place? be seen.ains to probably not a big carmaker. haveal luxury automakers been approached with the opportunity to sponsor and they have declined. we will see, but from what it looks like right now, no luxury automaker. >> it looks like a big load to fashion week and you mention other designers have taken their designs and unveilings to other places in other ways.
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cynthia is one what did she do? >> virtual fashion shows. there is may fashion week, located downtown with smaller sponsors. alexis has been sponsoring it. these are up-and-coming designers, more entrepreneurial and a little fresher, not name brands, but showing a move, a trend toward smaller brands. betty: what is fashion week to do? what is their plan? >> they say not to worry, it is all part of the big scheme of themes -- of things. they will get smaller sponsors and not one big title sponsored. just smaller sponsors along the way. mercedes has told me they will's ill spend money on fashion, just not on fashion week in a grand stint. they are putting their money in other places.
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betty, all right. thank you. much more ahead on the market day. winding down some of the world's biggest tank have agreed to by $5.8 billion to settle charges. we will look at how this impacts their business next. ♪
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betty: it is 10:00 a.m. in san francisco. 1:00 a.m. in new york. -- 1:00 p.m. in new york.
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to payhey have agreed billions in fines. betty: then the market for rentals is booming. inside a newyou york city townhouse that costs nearly $22,000 a month. letterman& steers prepares for his last late show, we will look at how we decision to purchase the ed sullivan theater in the 1990's has paid off. white paper. give me that. afternoon, i am betty liu with mark crumpton. mark: i have my notes. let's start e

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