tv Bloomberg Markets Bloomberg August 10, 2015 1:00pm-2:01pm EDT
buffett in a deal for more than $37 billion in cash. betty: we will take a closer look at how exactly is clinton's college tuition plan will work. matt: and facing a new deadline in bailout talks. we will get the very latest from hans nichols. ♪ betty: i'm betty liu. militantly andot for mark crumpton today. taking a look at the markets today, much better -- and i'm
matt miller in for mark crumpton today. taking a look at the market today, much better. dow, ifint game in the that does not hold then something really happens -- something that really happens. the s&p and the nasdaq also gaining by more than 1% stop -- 1%. i keep getting notes from analysts, oh, the fair market is coming. have a 5% drop this year and it would be the only year in all of history that we have not had a 5% drop. but when you get deals like , that gives people confidence in the market. , buthire is down slightly precision castparts is up. that is the premium they offered for the company. is that too expensive? lasttock is down after
month. berkshire is making a hold after one year. betty: ok, oil prices. a rebound here. over the $50 per barrel mark. oil prices in ebay market down 22% since the beginning of march. -- $44 foror a back a barrel of crude. the 10 year yield of 2.23%. and finally in currency you've seen the dollar hovering at those four month highs and it continues to be stronger here.
but commodity currencies, you can imagine tumbling again on chinese trade data, deepening concerns on their demand. the aussie dollar in the new zealand dollar on the way down over the last six months. president obama is using media interviews done before he went on vacation to build support for the deal ahead of an effort in congress to derail it. he told an online news site that there was no way to secure a deal with iran without first inflicting severe sanctions that made life harder for people in iran. he also spoke with npr. president obama: there may be ideological opposition to doing any business with iran. there may be skepticism with any diplomatic initiative with the regime that is admittedly antagonistic toward us, anti-somatic, a sponsor of terrorism.
and that is an honest argument. if you want to just say, we don't week you should deal with iran, that at least has a logic to it. betty: the u.s. senate will did -- will begin debate on the deal with iran just nine days before congress must vote on it. matt: alibaba will spend $1.4 million for a stake in an e-commerce group. it is the biggest -- its biggest deal ever. ma isa chairman jack beating of his presence after a 24% drop in the company's market value this year, bolstering expectations in the midst of slowing growth in china. the u.s. appeals court has upheld argentina's bid to limit the number of investors who can sue to recover the value of on -- of bonds.
on $95na defaulted billion of sovereign debt and since then, they have been fighting investors to recover what they are owed. betty: and congress will probably come to the aid of puerto rico. an analyst at -- analysts predict they are likely to establish a fiscal control board. paymentnd missed a earlier this month. it was pretty because first default. rico's first default. the island is struggling with a $72 billion debt that the government there says his unpayable. a person familiar with the matter, bloomberg news has learned lost jobs at numeral are in fixed income and credit derivative positions. matt: apple is expected to hold a product launch early next month. ish be -- both feet said it
set for the week of september 7. zzfeed said it will be set for the week of september 7. you have the latest tv and the latest iphone and ipad models. betty: and i just got my iphone 6 plus. matt: that is a big zone. ,lthough you look great with it most people look ridiculous to have a phone that big. it looks silly. betty: i don't think so. matt: you look good with it. betty: it is very user-friendly. matt: it makes your face looks so small when you are using it. betty: up next on the bloomberg market day -- matt: a long-standing tradition on the baseball debate. we will see how it backfired in one case this weekend. betty: and take two interactive reports after the close.
we'll tell you what is from the maker of grand theft auto. i know you are a big video gamer. creditors --and is its creditors are putting the final touches on a multibillion-dollar -- a multibillion euro bailout. it could be the end of the story. why would i say that? we are not even near the end. but it could begin the next chapter in negotiations. betty: it does seem like it could never end. hans nichols is here in new york with us and has closely followed this affect drama for us. it is great to see you. hans: thank you for having me. betty: you look very well record -- well rested. matt: he slept on the plane. betty: what are we looking at today? hans: the one thing we haven't heard is confirmation from the german site.
we did hear an important member from germany on german radio. i'm not so diehard that i'm listening to german radio over here. betty: dedicated to your job. reported merkel deputy is still saying, not so fast. one german publication is saying the price tag could be close to 90 billion. matt: euros, euros. hans: yes. matt: with that include the last bridge loan? hans: no, that was 7.2. that would not be a part of it. ecb: greece has to pay the by august 20. they need to make this deal and the cap parliament and then european parliament to pass it -- hans: not all of them, but six
of them. matt: the bottom line is they have to get it done before august 20. iss: and the german position arguing for another bridge loan. germany wants to take its time on the $86 billion or $90 billion package. don't do anything haste to meet this august 20 deadline. in some ways, the germans are talking about releasing maybe just a bit of money. when you talk about the 86 billion, they are talking about doing it in trenton is. do it a little bit, then come back and make sure you are reforming full -- do it in tranches. do a little bit, then come back and make sure you are reforming. betty: what is driving the optimism overall? ways, it is that
everyone in athens, the negotiations are taking place between the entry get, the four important partners, and no one is being negative. is an absence of negative news positive question mark it seems like that is -- is an absence of negative news positive? leading toke that is drying conclusions. matt: you through a new jargon term, quadra go. it used to be the troika. when did we add another player? hans: the european bailout fund will be transferred -- matt: is that not the eu, the european commission? hans: no, in a lot of ways it was easier before because if it is just the eu, you have to have unanimity among member states. but with the european commission, you only need 85%.
about esm is that you can afford to lose finland, because you don't need unanimity. matt: and you might lose finland, because they were saying it won't work. finlandu won't lose because they have a tenure coalition. you could lose good luck you -- lose slovakia or slovenia. timeline?t is the hans: you could have votes on the 12th or the 14. you need to have one before august 20. and that means german -- that means calling germans back from their holiday. you do not want to do that. matt: they don't like that at all. angiegh i don't think would mine that -- would be on vacation. matt: no, she is in the outside
now. putting --ey even bother putting the money into greek accounts before they take it right back question mark hans: it is all digital. it is a digital transfer. betty: it is some dude somewhere. hans: yeah, the western union guy. matt: it doesn't have to be a dude. hans: you have to show your passport, right? matt: whatever they take out will come immediately back to them. maybe there is arbitrage. maybe someone hopes that the sdr drops. betty: i think we are giving you another assignment here. hans nichols, thank you so much. matt: when you originally moved to berlin, because you were a white house correspondent, were
the markets. some under the radar movers this afternoon. >> before we get to those movers, let's take a look at how the market indices are performing. the s&p 500 is up by 1.25%. the nasdaq of more than one. the dow is up three -- 1.13%. -- 1.3%. seven-daye breaking a losing streak. now to some of the individual stocks, let's go to food as less commodities and industrials. .ood first, dean foods it is down by nearly six point -- 6% right now. it makes milk and ice cream and cheeses. one of the reasons is that there is the sudden resignation of its chairman, tom davis, effective last friday. the company has declined to comment, but a new chairman will
course."ced "in due matt: that is a problem when the chairman of your company resigned and you don't get any explanation. that raises serious questions. >> right, and many investors are frustrated with the lack of transparency. we will see how this works out in the next week or so. moving on to the commodities sector, freeport mcmoran is popping by nearly 9%. is coppere world's producer. it wants to sell a to $1 billion in shares in order to pay back loans. this at the price of copper has fallen about 19% and past three months or so. this is in a shared dissolution agreement with j.p. morgan chase. and back to food, post holdings is popping nicely. this is the maker of raisin bran and pebbles. the big factor here is that
citibank think that the outlook for crereal is better. and in the industrial sector, caterpillar is up by nearly 3.7 percent. -- 3.7%. rally in shares that the downturn is past. fruitywhen you said pebbles, what made you choose that one? >> it was my favorite in childhood. i liked the cocoa pebbles. i waited for the chocolate milk at the end. milk am a chocolate
fanatic -- a fruity pebbles fanatic. betty: there you go. matt: donald trump is under fire describes megan kelly, the fox anchor. her performance during the public debate last thursday. now he sent out a tweet saying he spoke with the fox news chief roger ailes. trump had described kelly's question about how he had referred to the fact that women are nasty or inappropriate, i think he went further to say she was hormonal and used some other terms. betty: yes, which i would not repeat. matt: why would a call with roger ailes make things ok? shouldn't he call her and should call him
and apologize, depending on who was wrong? betty: moving on, president obama was seen golfing in martha's vineyard this weekend, kicking off a two-week vacation. he credited alongside robert wolf, the former ubs chairman. and larry david, the creator and star of curb your enthusiasm was spotted crying out from the rest as he attempted to make his way out of the sand pit. that is a look at the top stories of this hour. maybe they just made them selves look bad so that obama could have that one. matt: we have a reality tv star running for president and them we have the president playing golf with basically a reality tv star. betty: good point. matt: coming up, hillary clinton's education pitch. her $350e outlined billion plan for college affordability. we are awaiting her to take the
matt: welcome back. i matt miller in for mark crumpton here with betty liu. few moments,t a and hillary clinton will be rolling out one of the biggest proposals of her campaign. she put the spotlight on higher education. matt: and she will propose steps educationthe higher financial crisis. jennifer joins us by telephone. what are we expecting secretary clinton to propose? jennifer: secretary clinton will lay out a $350 billion set of
proposals, in one category helping it to become more lower and middle class americans to go to public universities and big colleges. and the other part of it is having to do with making it possible for people who have student debt to refinance those loans at the current rate rather than some of these rates that are well over 10%. it,e are the two pieces of current and future students and in helping people who have student debt that is too hard to be able to manage and do other things to contribute to the economy. betty: how is she going to pay for this? : they are expecting .temized deductions the campaign has not gotten more specific about that. actually raised
more than the $350 billion higher education proposals. some of that money would go to other proposals they have yet to announce. but it is not all that specific at this point, but it all points to what she's been talking about in general, which is trying to find ways to shift the tax code to make it a little less favorable to those at the very providing interest of were government services and funding for programs that help those at the bottom of the economy. so, sort of redistribute wealth along the lines of president obama, his plans when he was running for president. jennifer: yes, these ideas are very much in line with what has come from the obama administration.
a lot of her advisers on economic policy in general and education policy in particular, were very influential especially in the first term of the obama administration. also talking about continuing to get tough on the for-profit college industry, and to continue commercial gainful employment regulations, going after those. and they are also going after bad actors in the industry. it is an extension of what the current administration has been doing. jennifer, thank you. jennifer epstein of bloomberg politics on the trail with clinton. i will be signing off here. matt: are you sure? can you stay for just one more half an hour? betty: you've got it handled. ♪
greenspan, the formal fed chairman appearing on "bloomberg surveillance." he said he's keeping a close eye on bonds. mr. greenspan: i think if we merely structure equity prices and we have the price of bonds and instead of in a -- instead of an expected equity return, that leaves bonds in an extraordinarily unstable position. goes is towhere it reach back and ask ourselves, where is the normal interest rate? matt: greenspan also said that low productivity is also one of the major challenges of the u.s. economy. russia's gdp shrank 4.6%.
lamenting oil prices could deepen russia's recession further, along with western sanctions. the country relies on oil and gas for about half of its total budget revenue. and the powerful typhoon that slammed china is now blamed for 22 deaths. half a million people help -- had to flee their homes. planes and train travel to a halt. british will send a team to the maldives to determine whether a wing plane -- a plane determined towas makes 370.aysia -- flight 370. and it doesn't candid and unpublished photos of prince charles and princess diana's wedding reception are set for auction.
they were taken by a relative who was the only photographer allowed to take informal photographs of the couple and their guests. the auction is scheduled for september 24. those are just some of the top stories for you. next half hour, we will hear from vice-chairman stanley fischer. he will give us his take on when the fed made in -- may raise rates. and midnight madness raising over three -- $3 million for charity this weekend. but right now, getting back to the business story of a. warren buffett and berkshire hathaway pulling off a purchase , beefing up its holdings in heavy industrials.
it is $27 billion in cash. berkshire will borrow the other $10 billion. meyer joins us now. the main criticism i've heard this morning from some investors, reportedly from some investors, is that buffett paid too much. do you share that conviction? meyer: i have certainly heard it. i don't think i share it. if you look back a few months before reserving seeing the down wasil and energy prices, it certainly near where he made his offer and payment. broadly speaking, are they overpaying for a business that will eventually come back? i don't think that's fair. .att: they did pay a premium that basically makes the company hole from where they had fallen
from last year. what about other similar industries? similar do you see similar earnings going out, or is that rich? meyer: i guess it is on the upper end of normal. matt: what do you think of buffett getting into this business as the u.s. dollar strengthens? about 20%, a little bit less saleshat, of pcp total are overseas, but the dollar has strengthened in the past year. surely that's with them at a disadvantage. absolutely. if you look at all of these perspectives, the concern is thetimate will stop where dollar is going to go and how that will impact international demand. but when berkshire makes these acquisitions, they are made to be permanent. at some point time you will see the price of energy rise and in
those cases, the timber a weaknesses in the near term that are relevant will fade. matt: what does berkshire hathaway become? a a kid, i thought of it as mutual fund that took stakes in brands that warren buffett liked and held them for a long time. now they have kind of become this industrial conglomerate. meyer: i think that is a good way to describe it. in the past, you had berkshire hathaway using money that was similarly there because of the insurance business. theyhey were smalling -- were buying small and midsized businesses. now they are getting cash, the product of a generation of its businesses, using those to make acquisitions. fundamentally what they are is a thatomerate of businesses earn or generate cash and that cash is used to buy more businesses. it is absolutely a conglomerate. matt: it is interesting, because
we used to look at buffets successor choices and he wanted great stewards. now it looks like it will be great stewards of businesses. meyer: when you have $20 billion worth of capital, does it go to the stock i or two current businesses to invest or two more acquisition?i think you will see some friction there. matt: and he is turning 85, so the succession discussion becomes more real. at risk of offending warren buffett. meyer: we hope you lit -- he lives for a long time. matt: let's talk about whether he is still hunting for elephants. andpent $27 billion in cash this acquisition. he had $66 million as of our last calculation, so he still haven't -- he still had a ton of
money. does he make another huge purchase, or is this a limit he hold?to meyer: the limiting wants to lose about $20 billion in cash. broadly speaking, it really depends. if an opportunity presents can use $20 they billion of the remaining cash, then they will. if you need to wait a year or two, then they will. her: meyer, think of joining us. we really appreciate you, meyer shields. the day,tory of berkshire hathaway buying precision castparts for $37 billion. a big m&a monday when we all woke up this morning. still ahead, the new york yankees outfielder brett gardner got hit after a fan through back a home run ball by the blue jays jose batista. we will look at the long-standing tradition of
seven-day losing streak over the past. let's dive into the bloomberg terminal and i will show you the leaders and the laggards happening right now. energy is up by 2.4%. materials is not too far behind at 2.3%. looking to individual energy up, we go to transocean. five --an is up by 5.6%. this to holdising from underperform. but their price target is $13. we are already passed that at $14.35. we are seeing this because of the rising oil prices today as we were approaching a five-month low. so good news there. transit ocean -- transocean is not the only riser.
up between 6% to 9%. i want to look at the industrial sector. alsondustrial sector seeing a pop. most important, precision castparts is getting a huge bump. up by more than 19% on the news that berkshire hathaway wants to acquire the company. the company is a maker of industrial parts for jet engines and also parts for oil and gas. caterpillar is up by more than 3.5%. this because barrens is saying that caterpillar shares could the nextup to $90 in year. the reason is because of a downturn in orders for minors as well as oil drillers could be nearing an end. good news across energy and industrial stocks. matt: interesting that we don't
moving down- stocks a little bit. i was going to say getting crushed, but i don't want to be sensational. we are here right now because the fed's lockhart is saying he's very disposed to a september liftoff. he said september remains a live probability. it would seem he is signaling yet again, because he did this last week, that september is going to be it. for any equity investor hoping the fed would wait until december, it's starting to look less likely that is on to happen. remain attocks session highs. the dow is up to a hundred 33 points. interesting stuff. -- the dow was up 233 points. interesting stuff. stocks, here is an update. >> mining companies shrugging
off disappointing trade. oil companies following crude oils gyrations lower and higher. look at the index in athens. what a day. is slightly different from last monday when the afc fell by its biggest decline ever. look at the big gainers. it was all about the banks today . there is hope that they may conclude talks with creditors in greece by tomorrow. would give time to assess the deal so funds could be does first by -- could be dispersed by august 20. they had a deal that fell by 59% last week. the market cap of greece's banks is 5 billion euros. in 2007, it was over 80 billion euros.
how times change. above, greece's biggest ambling company, shares up today. on friday after the market releasedpap better-than-expected numbers. shares are up. -- that is lower, petrified petrofac. back to you in new york. matt: mark barton in london. after rallying5% on a potential megamerger. bloombergs zeb eckert filed this report from hong kong. --zeb: chinese stocks rallied after posting a
megadeal in the industry. the market jumped on speculation the country's two biggest shipping lines, china's shipping group and cosco would merge. the combination is a global powerhouse. a merger would if i china's latest overhaul of its state-owned enterprises. of its effort to boost efficiency and create global industrial giants. matt: thanks for the update from hong kong. the top stories of the hour, starting with a sad one. frank gifford is being remembered today. he was a star both on and off the field. he died in his home yesterday of natural causes. giantsm.v.p. with the before spending decades as a newscaster. his wife of nearly 30 years, kathie lee gifford, call his
life "a triumph." he was just one week shy of his 85th birthday. funnel nearlyto three times more content into twitter than last year, a commitment that will include more video and highlights and pictures from payment in progress. progress.mes in that is a look at some of the top stories. staying on sports, the blue jays completed a three-game sweep of the yankees this weekend. in the fourth inning of victory, pose a --ista hit a home run into jose batiste hit a home run into left field. following tradition, a fan grabbed the ball and threw it -- i don't know if it was at, but into yankee outfielder brett gardner's head. it caused a minor bump.
he did not come out of the game. what do you make of this? traditionally, you are supposed to throw back the balls of the opposing team, but you are not supposed to aim at your own players. scarlet: i don't think he was aiming at his own player per se. it was a bad throw. cubs fans have been doing it for decades. it is a way to show support for your home team. matt: did he ever better armed than the typical yankee fan? it when: i did see brendan bell hit a home run off of hendrix, i think of and they threw it the ball back in. at the ink again, gardner joked he had a hardheaded and that was a good thing. and it ricocheted off of the warning track. that is a really hard throw. the fan through it with a lot of power, but with really bad aim.
scholars: really dying -- scarlet: really bad aim, or aim depending on how you look at it. i don't remember what happened at think he's the idiom when i went, but when you go to -- at yankee stadium when i went, but when you buy a bottle of water, they take the cap. so you do not throw it onto the field. matt: i hate when they do that. longert two cans of --lager and they opened both. now i'm walking around with two of them. mark teixeira said, we know you are upset and we are sorry, but let's just keep it to insults, not a false. matt: i like that, clever.
surely they will not cancel this tradition. scarlet: they will be enforcing the no throwing stuff onto the field for a little bit and then it will pass and people will move on. matt: if you get paid millions of dollars a year, you can get hit in the head with a baseball every once in a while. scarlett: if it doesn't do any damage. matt: even if it does, i would be doing that for millions of dollars a year. scarlet: we are going to talk about how it is getting harder prices inom falling the equity market. five out of 10 sectors in the s&p 500 are projected to post falling revenue in the second quarter. it shows weakness in the commodities market. matt: you are channeling alix steel today. scarlet: i will try. i'm not as fluent in commodities
franchise. if they don't have a lot else, do they? cory: it will be an interesting earnings report for what it tells us about the business industry -- beginning business industry at large. i think what is interesting is when you look at the change in the rate of sale, you look at the last fiscal year. take two is drastically underperformed. compare that to activision or electronic arts, you see it contracting. that contraction in sales is all about grand theft auto. grand theft auto did so well upon its release, even into the smaller market of these new game consoles, the smaller market of the playstation 4 in the xbox
year-over-year results mask what else is going on at this company. matt: why do you say smaller market? what else is there besides xbox and playstation for? cory: at the end of last year you had probably 25 million xbox and playstation force out there. that number is supposed to double according to predictions this year. when you get into the sweet spot of having new releases now and you look at some of the other games that take to have, a monster game, well over a othern and they have some strengths. consistently, take two has some of the best rated games by players. fans are more likely to come back to their new releases. and maybe it means their development process is a little bit better. and future releases we might hear about tonight might bode
well for future sales. matt: i am an excited gamer enthusiast. do you think we will hear anything new coming out? cory: who want to listen for the timing of new games they might release. the other thing we want to listen to is the conversion to digital. of revenue coming from digital this last year. when it comes to take 2, 30 7%. are they seeing big day -- when it comes to take two, 37%. are they seeing big gains there? a much.ke is coming up, the latest on all the turmoil at twitter as the board can others a big shakeup -- considers a big shakeup. ♪
few of the things we discussed with family fisher in the us of interview. >> has brazil hit bottom? bond yields at record lows. a lot of investors think it can't get much worse. matt: too much tv. areceo of netflix as we nearing the end of the content bubble. good afternoon. i'm matt miller here with scarlet fu. look at the markets. u.s. stocks at session highs. the nasdaq. the dow and s&p 500 of the best level of the day. nine out of 10 groups either. volume pretty dismal. trading and s&p 500 companies down 14% from the 10 day average. a