tv Bloomberg Markets Bloomberg September 11, 2015 10:00am-11:01am EDT
>> gary robert hedge. michael: a moment of silence marking the collapse of the south tower of the world trade center. that as want to forget people were trying to flee those towers, several hundred people were running into them, including 343 members of the fire department and 71 law enforcement officers who went into the burning building to try and save people, never came out. they gave their lives for their fellow man. folks,might point out,
neither mr. mcgee arrived into the museum. michael: members of my family have, i won't be. tom: i don't think i will be doing that. michael: we salute the people who put the museum together. by all accounts, it's a very, very worthwhile experience. tom: it's supposed to be extraordinary. the media coverage has been done just right. there's another moment of silence in less than two minutes. michael, this is the one that i people not to forget in shanksville, pennsylvania. they've been a very nice job of remembrance. michael: it was a bit of a catch phrase in a way, when the people on the plane decided they were going to let the terrorists win, and when after the plane. roll," was the words heard. the plane went down. it was apparently on its way to crash into the u.s. capitol.
their heroism saved a lot of people, and saved in american monuments. it's amazing when you think about it how many people, at their own peril, rose to the occasion that day. the better angels of our nature came to the forefront, and people give up their lives for so many others. tom: we welcome all of you worldwide. thank you for the e-mails. we have just gotten tons of e-mails today. messages to people for our coverage on television, and on radio at this moment. we go up to this moment of silence, do it every year. year toing for this one get easier than the last year. at that time thing. michael: unfortunately, it never gets easier. i don't know what else to say. last want to mark the moment of silence here in
shanksville, pennsylvania. one of the last moments of silence for the actual occurrences that day, when the united airlines flight crashed into the field there as they brought down the plane to try and save the capital. a moment of silence now. >> little rock central high tuskegee airmen, the martin luther king jr. memorial. we tell the story of civil rights. and during this recent 50th anniversary of the voting rights march, we engaged young people from across the country, including from ferguson, missouri, to walk the 54 miles from selma to montgomery, challenging them to carry on the march for racial justice that began on bloody sunday in 1965. that man's in our, minidoka, and
to relate, we told the story of japanese-american confinement during world war ii. for no other reason than their ethnicity. in just this year with an act of congress, we take on the manhattan project, the development and utilization of the atomic bomb. were already partnering with the cities of hampton, washington, lasalle is, new mexico, oak ridge, tennessee, and hiroshima, nagasaki. harbor, the war the pacific, and via non-, and korea , and the world war ii memorials on the national mall, we honor our greatest generation of veterans. every day we host veterans at the memorials, brought to us by the honor flights. we greet them with the recognition and respect they so richly deserve. and here at flight 93, we take on the challenge of telling the story of 9/11 to a generation that experienced it, to a new
generation that did not, and to an entire population that is still living with the consequences. needs case, the national park service takes this responsibility with the utmost seriousness. each of these national parks represent core american patriotic values. honor,, sacrifice, commitment, bravery, honesty, service, justice, inspiration, and freedom. from the snowy field of washington's army at valley forge, to the bloody cornfields of tickets charge at gettysburg, to this field of honor at flight 93, these fields of pennsylvania represent the nation's resolve to achieve and protect our highest ideals. >> women watching the memorial service in shanksville, pennsylvania. we continue our coverage of the 9/11 attacks 14 years later here on bloomberg television
throughout the morning. in the meantime, want to get started with the bloomberg market day. i'm olivia sterns. let's get you straight what's happening in the markets. we did have market moving economic data coming out of the past few minutes. we got the michigan u.s. consumer sentiment numbers coming out, showing the consumer sentiment actually fell for the third straight month, coming in at 85.7, well short of the estimates for reading of 91.9. you can see equity markets probably moving lower, the dow jones off by 74 points right now. one to show you what's happening in the treasury market. treasuries rallying today for the first time in a week. that is sending yields lower. you can see the yield on the 10-year note off by four basis, trading at a yield of 2.18%. this ahead of the fate -- a fed rate decision at thursday. the bright spot out there in the bond markets, i will show you what's happening to greek bond yields. actually trading at their lowest levels of 2015. this is ahead of optimism over
the elections that have been called for september 20. the last time great bond yields with a slow was back in january before the anti-austerity party was elected. clearly a big reversal of sentiment, at least coming out of greece. i want to get you to the top headlines that we are watching for you at this hour. we start again with economic data. go back to continuing coverage of 9/11 throughout the day here on bloomberg tv. we are covering ceremonies across the nation marking the tragic events in the state 14 years ago. the 9/11 attacks. at the white house, president obama and first lady michelle obama observe a moment of silence and 8:46 a.m. when the first of two hijacked airplanes slammed into the north tower of new york's world trade center. near ground zero in lower manhattan, families are currently reading the names of those killed when the twin towers fell. are also taking place at the pentagon, and at the flight 93 national memorial near hsing chen, pennsylvania.
10, the plaintiff. the government says u.s. wholesale prices were little changed last month. higher food prices were offset by falling fuel costs. core prices not getting food and energy rose by just .3% for the month of august. slow price increases do pose a dilemma for the federal reserve who want to see inflation closer to the 2% target before raising interest rates. harvard economics professor tells bloomberg the policymakers want to make sure of their ground. mouthsst think after the of and also offer show long, -- has been off for so long, you kind of want to the -- want to see the inflation more than usual. olivia: fed policy members meet next week to make sure it's been pegged at a record low, near zero, since late 2008. those your top stories this morning.
the commodity meltdown is continuing. in the weekly decline amid a global supply glut. this is goldman sachs came out today cutting its price forecast and crude could go below $20 a barrel in the near term. joining me from philadelphia is orckpresident of the sch group. thanks for joining us. they say $20 will is not the base case scenario, but it turns out the global surplus and supply of oil is even greater than they initially thought. do you agree with that analysis? that goldman has put this on the bear market, it seems like we've seen the bottom of the market. about a bank that was telling us oil was going to average $100 a barrel. seven years ago to the day in 2008 said oil in 2009 would average $140 a barrel.
we nearly missed that by $80 a barrel. let's take these long-term forecasts for what they are. they are nothing but guesses. let's focus on what we know right now. it seems like everyone wants to talk about supply. it's been ugly and u.s. oil. this been more than 70,000 job cuts this year alone. withthe banks get done re-determinations in the fall and the credit lines dry up, it's ugly. it's going to be murderous next year. therefore, we are looking at a significant cutback in production. that's in the u.s. alone. the u.s. doesn't export crude oil. now we focus on opec, and we are talking about saudi arabia. saudi arabia has very little incentive to cut back production. mainly because of a ron. -- iran. we see iranian barrels of the market. the saudi's are not going to seed market share to iran. more portly, the saudi's are not
going to finance iran's nuclear ambitions. the saudi's will continue to produce. outcome ofonger-term the saudi's have the issue of alternative fuels. they don't want to see elon musk anymore, they want to see the entry barriers for alternative fuels higher. we do that by lowell -- lower oil prices. people are talking about demand enough. we are talking about the canary in the coal mine. it's not just oil prices that have collapsed over the past year, it's all industrial metals. when you look at industrial metals, you think of smokestack economies. you look at these economies in the majority of the g7, the brits, the asian tigers, all of their smokestack economies over the past year have been contracted, which not coincidentally, correlates to the pullback in all of these metal prices. it's not all rainbows and unicorns out there. can we go below $20 a barrel? absolutely. will we go there?
that's anyone's guess. supplies when the last next year, we don't have enough demand. as a template for lower -- lower oil prices. olivia: i take your point that saudi arabia has no incentive to finance iran's nuclear ambitions , nor do they want to cede market share to elon musk. it's not all rainbows and unicorns. what does this lead you to conclude about where the price of oil is headed? stephen: through the end of the year we are headed lower. we got to see a pullback in demand. olivia: how low? stephen: we've gotten down there. the next psychological target is the lows that we hit during the great recession, 3240. certainly between now and sometime into the fourth quarter, i would expect to see oil pass that $30 range by the end of this year.
olivia: talk about what's happening with u.s. production. when does u.s. shale hit the trough? there's an iaea report out saying they think u.s. production is going to fall by at least 385,000 barrels per day. that's over the course of the next year. we have all been expecting there to be this big bloodletting in the oil patch in the u.s.. it hasn't happened yet. what is your outlook for u.s. production? stephen: it has happened to extend. where the bulls got themselves into a pickle was in the fourth quarter -- the first quarter of this year when oil dropped to $40 a barrel. the whole production was production is going to fall off. that did not occur because we had a rally in the second quarter. in the back end of the curve, prices didn't come down commence or with the drop in the market. with the banks re-examine their credit lines in the spring, they kept dishing out the feds easy money, which kicked the can down the road. now we are going into the fall,
and the banks are in a less the incentiveiven for producers to edge forward. we are going to see a significant pullback in production. if we look at the job cuts in north america -- in the united states, not counting canada, more than 70,000 job cuts of already occurred in the first eight months of this year. means we're far exceeding anything we've ever seen. the blood is gushing down the street right now. in it will be a tidal wave the fourth quarter, and in the first quarter. it's indeed going to be a very poor picture for production going forward into and through 2000 -- 2016. olivia stephen schork. :thank you. still the, on "bloomberg market day." get how wall street's
olivia: good morning, welcome back to the "bloomberg market day." i'm olivia sterns. let's get a check where u.s. equities are trading. i head over to julie hyman resources from the newsroom. julie: after the university of michigan confidence report that showed the lowest reading for confidence in about a year. that after we saw slumping global markets in the month of august. now it's continuing to some degree here in september. that cause a little bit of a selloff in the major average. they were already down, and then again taking another leg lower, weighing on the major averages what's going on with oil. you were talking about it was
stephen schork. if you look at my bloomberg terminal to get a feel for the effect, these the top movers in the s&p 500, both on the upside in green and the downside in yellow. by my count, all 10 of the worst performers in the s&p are indeed energy stocks. as we see that oil pullback, couple of examples of the biggest percentage decline are williams companies, transocean, murphy oil are some of those that are following the most. here's another look at them percentagewise. in the drop that we are seeing within these companies. about thelking goldman sachs call that we could see oil as low as $20 a barrel in sort of a worst-case scenario. goldman sachs also downgraded the midstream sector on that less robust outlook for oil prices. midstream would be the companies that transport oil and other types of oil products around the country. that sector was cut to neutral from attractive over at goldman
sachs. a number of the individual stocks were cut from cell to neutral. you see them listed here, another of -- a mongrel of them memorial production partners as some examples there. one note and planes all-american also downgraded by goldman sachs. one energy stock has been upgraded, and that's over a jpmorgan, talking about chevron. shares are not by much, but considering they are up in a environment, the analysts say that what we've seen happen is a worst-case scenario. interesting to see some analysts calling a trough on oil makers. we are just one week to see the fed's most radical policy decision in years. wall street is all over the place ahead of that meeting. no one can agree on when the fed will raise rates, or what the potential impact of a rate hike would be. for a look at how tough the rate cycle is now, and bring in
alexander sacks. is try toat everyone figure out. it's surprising that we are here. if you think about one big consequence of the crisis, it's been this era of unprecedented formal guidance. now we have fed press cabins is, it was his new fed it was totally telegraphing to the markets what it intended to do. how did we get here that wall street is so divided? alexandra: they are almost telegraphing too much. you have one fed official out one night saying that we think that low interest rates should stay for the rest of this year. no another fed official the next morning, fewer than 12 hours later saying we need to raise rates immediately. are getting people sony different signals that they are not quite sure what to make of it. olivia: what are the biggest topics of debate? fed isra: whether the looking at the u.s. economy, which is looking pretty good, or
whether they're looking at international stuff like china, emerging markets, other areas where their weakness. olivia: the chief economist at elian's had an interesting piece out this morning on bloomberg aying in his estimation, it's 6040 risk. if you look at what's going on domestically, yes, the u.s. economy is strong enough to raise rates, strong enough to sustain that. i think you would agree with jeff flat are, the richmond fed president who things we need to line rates the u.s. economy between 2% and 3%. the other side is the global economy strong enough for the fed to raise rates? it seems like the answer can be no. alexander: we saw larry summers say raising rates could be a really big problem for the global economy. keep in mind, he was one of the people who are really been reactive during the asian financial crisis in the late 1990's. that's a big focus for him. it really depends on where you are looking.
olivia: we're showing a picture of one of the biggest hedge fund managers in the world, warning that if the fed does move to raise rates, it's going to be a big policy mistake. -- the federturn will have to reverse track as we saw the central bank of new zealand do and actually lower rates if they reason in september. alexandra: the question is which will be at the top of fed's mind the week. janet yellen is a labor economist. she might not be paying as much attention to the inflation aspect. if you have this long-term downturn like larry summers says, it could really force eventually easing, potentially. olivia: we have this function on the bloomberg television terminal, this shows what futures traders are betting the likelihood of a rate rise is.
-- bet traders have a that is less likely that the fed will raise rates than analysts on wall street do. i question for you alexandra is what does all this uncertainty mean for the market? alexandra: more volatility. even over the next week. we had a good story about how the next five days of trading could help determine what the fed does. olivia: thank you, alexandra skaggs. read the full story on bloomberg.com. bloombergd on the "bloomberg market day," we continue coverage of 9/11. king.ile teresa robert king junior. lisa king johnson. ♪
attacks. we were approaching another moment of silence that will mark the falling of the north tower. 14 years ago. we've already had several moments of silence already this morning, including one at the white house. and the two moments when the planes went into the south and north towers, as well as the memorial in shanksville, pennsylvania one flight 93 went down. coming up to that moment of silence, again, observing the time the north tower fell. let's listen to the reading of the names at ground zero. >> kenneth bruce castle. moke if you. >> patricia e carrera. >> victor watch a. >> thomas joseph could vegas. >> angela reid kind. >> raymond hugh. >> cal and the plot. names]g
olivia: we are listening to the reading of names at ground zero. over 3000 new yorkers were killed in those attacks at the world trade center. coverage, bring in my colleague, pimm fox who joins us ahead of this moment of silence when the north tower fell. at 10:28, we will spend a moment just remembering those who died, and those emergency
workers who gave their lives, and gave their time to help those in need. a couple ofe had moments of silence early this morning, first at the white house, and when flight 93 went down in shanks will, pennsylvania. were coming up to the moment when the north tower fell. >> you are a true american hero. you are my hero. you are my son. i love you. your family is here today with us, i know you are looking down smiling and shaking your head. saying that i'm nervous, but i am. god bless you, i love you, keep smiling. [applause] [bell ringing]
when thoses forget towers were falling, there were several hundred men and women, the bravest in new york, running up and of his buildings to try and rescue people who are trapped. pimm: they will read the names of all of the victims, based on past president, that's expected noon.e on about half past eastern time. that will be followed by vice president joe biden, who will be making remarks at the 9/11 memorial. p.m., the secretary of defense ashton carter will be speaking at the defense department -- at the pentagon john of those workers, and those died ons of the dod who this day, 14 years ago. incredible to think how much the city has recovered since 2001. back then, nearly 20,000 people lived down there, 10,000 people left immediately after the 9/11 attacks.
70,000 people live down there today. it's no longer just a place where people, working wall street. and by 5:00 :00, it's abandoned. it's become a residential neighborhood. real estate prices are record highs. 10; 12 this evening, eastern time, a shaft of light will illuminate the skyline of lower manhattan. affectedall of those by the september 11 attacks. it's beautiful. you can see it from far, far away. we continue our coverage here on bloomberg tv. the will be back with us on "bloomberg market day," later. hovering over the markets, will they or won't they? i'm talking about the fomc. it's a big question when the fed meets to decide whether or not to raise the benchmark interest rate for the first time in nine years.
the last time they raise rates was in 2006. is the u.s. economy right for tightening, or were -- will emerging-market turmoil give the fed pause. caron, he joins us from new jersey. things for making the time to join us this morning. what you expect the fed to do next week, and why? they're going to raise rates, but talk about the forward-looking path. the reason they need to raise rates is because you've got the unemployment rate, which has moved down to the low end of their long-term projected range for where that rate should be. number two, the fed is going to be looking to maintain some credibility. they been talking about having to raise interest rates this year. and now that we've got some firming up of the labor market, they need to follow through with that. if they don't move, then there's the question as to if the economy continues to improve as quickly as it has been, if we
get a reversal in oil prices, and affirming of inflation, could very quickly become the case that the fed is then seen to be behind the curve. they have to move more quickly. i'm not sure, my best guess is that they move next meeting. but then they have to talk down forward expectations. agree, kevin. i believe the evidence is compelling that the u.s. economy is strong enough that perhaps it's time to raise rates to align with what's going on in the real economy, with interest rates. spending is upcoming comes up, unemployment at 501%. the question as to what extent do you think the fed is going to give consideration to what's happening in the rest of the world. do think the global economy is strong enough to sustain a rate hike right now? kevin: that's the $1 trillion question. the fed has been put on notice by the imf and the world bank on that point. i think the real question is -- how much of the rate increase is already priced in?
over the last year and a half or so, we've seen a strong move up in the dollar, recently, not so much. the dollar has basically been strong. that fact of growth has many other areas of the world emerging markets in particular, and it's put a lot of emerging market economies under some stress. going forward, was that trend continues, and if that trend were to be reversed, lets him have a falling dollar, then the reverse would hold true. it really does depend what happens once the rate increase is put in place. if it's already been priced in, has been,e part of perhaps going for the dollar may become -- it might become less of an important point. a month ago, the chinese eval -- devalue their currency. it's been very choppy. we've seen a huge uptick in volatility. how do you make money in these markets? money by looking
at where you can put money out and make investments for the long term. we've been saying to clients is that you want to be defensive and be focused here in the united states. our equity call for most of the year, we've been underweight equities in our asset allocation portfolios. we've had some cash and equity portfolios. we put some of that to worker couple of weeks ago when the market called into us. i think the key is going to be for equities to focus on balance sheets, consistency, cash flow and price. and we still like the u.s., we think it's the best area to be as far as growth is concerned over the next 12 to 18 months. oil is selling off today, goldman sachs said it could go as low as $20 a barrel. how about energy stocks? and analyst at city just price for chevron. are you ready to buy in energy? price,we look at the oil
it's funny that you mention price targets in portland been cut. if you months ago people thought $40 was the -- $50 was the floor. now it's certainly $20. i'm also aware that non-opec forces of production i think are expected to fall. cuts inted to see some the margin. i'm not sure the bottom is. say if you were to normalize the price you would see good values. setia: this seems to be no of inflation anywhere, but gold looks pretty cheap. it dipped below $1100 an ounce. gold?ou think about insurance asset. anything about times when the economy was very stressed, mostly because of price instability in the 1930's and 1970's during the financial crisis, those were all places where you wanted to have gold in the portfolio as kind of an insurance asset. we don't really room for gold to go up because it usually implies you are rooting for more troublesome things in other parts of the portfolio.
olivia: welcome back to the "bloomberg market day." the tradingour into session, it's time to get caught up on the market action. i want to start in asia where the shanghai composite closed up just under 1%. the hang seng closed down by 25%. the nikkei in tokyo fell about .2%. softbank shares are down on the
news that the chairman tried to take the company private. we have this report from hong kong. >> it would have been the world's biggest management buyout ever, costing $70 billion. the japanese billionaire said to have entered talks earlier this year with an overseas partner to take his flagship company private during stock prices fell sharply this year, coupled by its division in the united states and a crushing debt load this sparked the ire of shareholders. sources tell bloomberg, they scrapped the privatization plan on disagreement over financing terms. spokesperson declined to comment. from hongb eckert kong. >> stocks are down today but on track for the biggest weekly advance in a couple of months. his only one thing that matters now.
next weeks's federal reserve policy meeting. investors are confident that china will stabilize financial markets and its economy. that sends shares up for the first week, chinese stocks rose for the first week and four. glencoe last week had its worst week ever. this week it's up by 11%, earlier this week in announced plans to sell shares. it wants to get rid of its $30 billion debt costs. that's what's happening with roughly 50 minutes left of today's session. overe we look at sterling the last week, libya, point 1.6% come on track for its biggest weekly advance against the dollar since june. the bank of england yesterday admitted from the meeting and had in september. asa gray said we're going to look through the chinese turmoil and the time for rate hike is approaching. i gave a lift to the pound against the dollar. this is the euro against the dollar this week.
up by 1.2%. worst -- first weekly gain in three. doubts persisting the fed will raise interest rates next week. have a look at the euro against the dollar. today it rose through 110 against the swiss franc for the first time since the s&p, this was central-bank actually scrapped its euro swiss franc payor. that's important on the psychological basis. there is still doubts that the fed is going to raise rates. they haven currency is also important. money coming out of the swiss franc. julie: there's quite a bit of suspense surrounding next week's meeting by the federal reserve. we were seeing stocks declined today across the board. it has a lot to do with what's going on with commodities. take a look at my bloomberg terminal, the major groups in the s&p 500. we are seeing utilities as the
only group that higher, energy and materials writing lots of the drag along with financials of the major averages. that has to do with what's going on with oil prices. as we see declines today, take a look at these oil prices. debbie ti here in the united states. we do see the fullback. barrel, a 3.4% hold back in oil prices. goldman sachs painting a worst-case scenario $20 a barrel. supply is just even more ample than goldman had predicted. the worst-case scenario is that production will not be cut quickly enough to make up for that. if you look at oil on the week, is the worst week in three. the reasons for the prior two weeks. now we are seeing -- and not sure if this is the week or not, this is the past three weeks. seeing that up in the downward movement this week. if you look at my bloomberg terminal, in terms of production
, it's still near the highest since 2008. when goldman is looking at the prospect for production, even though both the u.s. and the international energy agency have come out and cut their projection forecasts, there is still some skepticism out there among some analysts that the production can be cut quickly enough to meaningfully bring down supplies before oil falls further. six is lower for the past of seven sessions, down in the 1%. it's interesting that these declines in commodities are happening even as the dollar is also lower, typically you get an inverse relationship. if you look at the dollar on the week, it's down for the first week in three. to have the dollar? we don't have the dollar. believe me when i tell you what's going on with the dollar. olivia: i believe you. thank you, julie hyman. here are some of the top stories we are watching for you at this hour. federal investigators say the
failure of an engine on the british airways jet earlier this week is extremely rare. the engine caught fire tuesday during takeoff from las vegas. the engines are made by general electric. the grease from the engine was found on the runway, that's never happened to since the engine type was introduced 20 years ago. a desperate search is underway for at least 22 people missing in a flooded japanese city. in a raid --ain inundated the area north of tokyo. three deaths have been reported so far. brazil's state-owned oil producers the new king in the global junk bond markets. is the largest non-investment-grade corporate issuer. standard & poor's downgraded the company and downgraded the country earlier this week. those your top headlines at this hour. can't afford your own apartment in pricey san francisco? now you can share a bunkbed with a stranger. pimm fox is here with me now.
forasically is a hostile tech? will get you month a bunkbed that you have to share with someone else in san francisco. bunks are put head-to-head so there's not a lot of room. you share a bathroom. it's a 30 day minimum. it has raised the attention of local regulators because there's this little thing called hotel occupancy laws. and how you can charge and what kind of facilities you have to make available. it's a 30 day minimum, $1800 a month share your bunk bed. olivia: it does come with the kitchen is fully stocked with food. bring backes memories of hot racking in the navy, in which you have eight hours to use your bunk, and then someone else takes over, hence the concept hot racking, the bunk is always warm up. olivia: that's what they were
doing in the balkan. it's incredible in san francisco. we will see how popular it is. airbnb offers this $1800 a month bunkbed. they have to find out how often they change the sheets. hot racking, you only do it once a week. we will see what happens in san francisco. olivia: i don't know if it's a full-service, more like an extended stay motel, or are you really renting? off-site storyn for olivia sterns. olivia: i bet there are a lot of 23-year-old post-collegiate guys. pimm: you could do it. olivia: i'd rather not. he's back for the next hour of the "bloomberg market day." still ahead, borrowing to build. colleges are taking on big debts to build fancy new stadiums. some economists say if you build
olivia: coming up next week on bloomberg television, a conversation with ray dalio. in conversation with tom keene and mike mckee. welcome back to the "bloomberg market day," i'm olivia sterns. tulane university is a known as a sports powerhouse, but that didn't stop the university from building a multimillion dollar football stadium after 39 seasons at the mercedes-benz super bowl in -- superdome, they now play at a shiny new stadium. so far, the stadium is in translating into wins. the football team is only two
and five. economists say the place could end up being a big money loser. willem marx has the story. willem: finding a college party isn't hard, and they are no strangers to tailgates. on the campus of tulane university in the heart of new fun is, the ball driven a new phenomenon. the southern iv long known as , two laneswerhouse football program is no darling of athletics. this might just three wins last year, fans happily filled the nearly 30,000 seats of the new stadium that's named for its biggest benefactor. stadium was the easiest capital project to raise money for. willem: yvette jones has raised more than $17 million in pledges. before all those generations arrived, the school needed cash
to kickstart instruction. -- construction. fund, theyo a 2013 borrowed and -- against their anticipated take. >> their people that say using sportslanthropy for facilities is not mission-critical. we don't believe in them. using some of our debt while the full at the became in was a decision that made a lot of sense for us. willem: other countries are borrowing to build, relying on tax-exempt and the low interest rates to save millions of dollars a year on large projects. likee athletics officials brandon mcneil cedi alumni fund the stadium cost the college on was nothing. it one team can increase revenue. >> the more success we have on the field, the more people are going to donate. the more people are going to buy tickets. what is it we are going to do to get this program going in the direction people wanted to go/?
for tulane, it was a facility. willem: new stadiums do not always prove profitable. >> think they're going to get more donations from boosters of the team. they think they're going to get more applications from students, from haskell students receive them on television and say i want to go to that school. actually, almost none of those things never work out. the 128 colleges the computer that level, academics pending on a per student basis stayed relatively flat over the past decade. spending on athletics rose dramatically. >> for a like tulane, do they need a new football stadium? >> is the same story as every other place. i think it's a move that's going to pay off for chilean. they would have been better off spending the money on better programs. william: i think every student i spoke to was excited about the new home. stadium, and the
question for donors is would you contribute to issues of safety and health and security and sustainability and diversity and inclusivity. willem: perhaps one day big donors will lend their names to those types of programs to. : joins us from new orleans. a great piece. who are the major donors? will him: there were three major donors. gave $20s millionaire million over the course of several years. , sheglaeser, and alumna married into the family, who on the tampa bay buccaneers. tom benson, who runs the saints in new orleans was a big football guy. there was a lot of pedigree in terms of the donations and lots of other donors as well. what was interesting was that these people specifically wanted to give to the football stadium,
it's been talked about for decades and is now on campus the mix of a difference for the students compared to the superdome, where one point they had 150 students on average attending their own college games. it looked incredibly empty. olivia: is this a risky strategy? they are borrowing against hope for future gifts. -- willem: they have a good record of raising money. they were able to save their lenders we have this background, we have this pedigree of fundraising. we are going to be going for this money. but they're still taking a risk that if people suddenly go belly up, you don't necessarily have a recession proof business. if that money doesn't come in, you are left on the hook. to you didave operating expenses which means tuition. olivia: yesterday took us up to colgate. what is your conclusion? is all this spending on sports worth it?
there, if you were a kid is a lot of fun. if you were a parent looking 15 or 20 years down the line at tuition, you may think i wouldn't go for that school where they are spending big on projects that maybe i don't care about. if you are an alumnus, what's to lose? is,yone knows who he everyone is excited about the stadium, everyone is grateful. olivia: if you are a science professor, it might be annoying. great stuff, thank you willem marx. check out his pieces on bloomberg.com. much more, the "bloomberg market day." coverage of the 14th anniversary of the 9/11 attacks continues. ♪
"market day." paying tribute to those who died in the 9/11 terror attacks and honoring the emergency workers who were the first responders. breakdowne commodity continues. goldman sachs cut its forecast saying crude could dip to $20 a barrel. >> kroger reported better than expected quarterly profits helped by operating expenses and higher gasoline margins. the cheap fight -- the chief financial officer of kroger will join us. ♪ olivia: good morning, welcome back. i'm olivia stern. : i am pimm fox. let's look at how markets are trading. u.s. stocks, the s&p 500 down .5%.