tv Bloomberg GO Bloomberg October 6, 2015 7:00am-10:01am EDT
stephanie: we could be in for more volatility. : goldman sachs as the fed may not raise rates until next year. stephanie: happy tuesday morning. it is our second day on bloomberg "go." i'm stephanie ruhle. david: welcome. the most: this is influential conference. let's break down the interviews. jeff smith. that's break it down. bob dry filled, we have tom stier, and we have one more.
one very special member of the family. >> i'm loving it. the best green room in new york. david: bloomberg surveillance is on radio right now. you can catch him on bloomberg radio. he will be with us 30 minutes from now. stephanie: we are bringing you the morning must-read. for now, let's get you with the first word. the news you need to know. vonnie quinn is delivering. budweiser, maker of they have rejected and informal takeover offer. miller's executives. some shareholders looking for an offer in the $110 billion range. backrd if they will come
with another offered. the rain ended in south carolina, but floodwaters are still rising. it may be weeks before officials decide which washed out bridges are safe to drive on. president obama care the way for the hardest hit areas to get federal aid. how many american troops should stay in afghanistan? lawmakers was the u.s. commander in president obama should change his plan for cutting back on the number of u.s. troops. there are 10,000 in afghanistan now. that will go down to 1008 this days after u.s. gunship hit a medical clinic in afghanistan. overraner the taliban an afghan city. thus check the markets with matt miller. matt: features down. across the board. that is after the best five-day in a row we have seen since last
december. the s and p was up yesterday. every day last week, with the exception of monday, as expectations for the fed rate raise gets pushed back. that has caused a dollar weakness. we saw yesterday and we see it today. .he index is down to 98.59 depressing news for me. volkswagen will cancel or delay nonessential investments. shares are up on that news. that means they may not make the audi sport quatro. the supply chain function. i thought if they cancel or delay all investments that are nonessential, that could mean a problem toward suppliers who get to present or 3% -- the german tire maker.
a lot of these companies may look at lower revenues. stephanie: it seems like they are in detention. everything that is fun and exciting -- i'm sorry, you are getting punished. it is like my kids. david: not many new cars coming to volkswagen. matt: they should cancel the on others.and focus offer miller rejected an made last year. it was made over $60 a share. matthew campbell is joining us from london. it sounded to me that this was about price? matthew: that is right, david. the this represents is initial volume. they have a few days to negotiate before a regulator imposed deadline before something hits.
i think there is every possibility the deal gets done and creates the world's largest brewer. onid: how far away are they price? was looking at 45 pounds a share, the offer was closer to 40. when you're talking about a everyy as large as sab, pound per share translate into billions of dollars. you can imagine how there might be cold feet about going up too high. stephanie: it is a massive company. looking at sab sales, they are great. couldn't they say they don't need to do this? they can operate as they are? matthew: that is the argument they will be making. they put a trade update 9 days ahead of schedule showing metrics kicking upward. you can imagine the motives for
a surprise announcement like that in the middle of the takeover battle could be. option to remain independent, but this is an idea everyone in the industry things has been coming. there is an air of inevitability. they do think it gets done in the end. david: what is it tell us? ,att: in the case of sab miller you can see it is coming down on this news at $105.63. 36 .55 in pounds. the white line is the beverage index. ab inbev is performing a blow the -- is performin low the average. sab is performing above it.
stephanie: we have to move on. it is bloomberg's most influential summit in asia, europe, new york city. in london our own editor and chief sat down with my former boss the deutsche bank ceo who just left of the firm anshu jain about his tenure at the bank. n: the transformation which has taken place at the bank. i joined in june 1995. it was a very prestigious and european and german institution in 1995. a decade at the half later it is competing with the best and brightest in the world, asia, the world, and widely recognized as a global threat. stephanie: our editor and chief is with us. the firm ine joined 1995 and for the next decade, he did transform deutsche bank. for the last six years they have
lost their mojo, wouldn't you say? n: --john: he blames the fall of the deutsche bank are most entirely on you leaving. he says his biggest regret was that he did not to do see things going in the right direction before. deutsche bank has had a rough time, as you know better than anyone. david: it is reflected in the share price? john: it is. i think he was caught between what might be described as repeatedly., which wanted to have a big bank in all sorts of way to challenge the american banks. on the other hand you have the anglo-saxon side that wanted to make money out of investment banking. there is a gap between shareholder values being one theort, and the other being
other that went all the way to angela merkel, that germany needed a big european bank to represent germany around the world. stephanie: isn't that a reason many have said deutsche shares have not done well, because deutsche bank is considered germany's bank. they did not really see all that happened, all the structured assets i have sitting there. an element of that. they saw it as a national champion, something that was mary big. they went on to talk about risks generally, and he sees it coming from places where banks are not operating, that being a new problem, through etf and to stuff like that. david: you talk to about deutsche bank and a great deal more. what other things did you talk with them about? especially synthetic?
john: there have been rumors about him going off to do synt ech. banks are being cherry picked by silicon valley. said, look at journalism, music, all of the industries that have been changed by technology. that has not happened in banking . you look at payments, loan systems, peer-to-peer lending, that is beginning to grow. silicon valley is pushing money into them. that is one area where he is rumored to be looking, as well as others in finance. stephanie: could this be anshu giving us a preview that he will go to softbank. bank,e left deutsche there was a glowing op-ed about what an extraordinary man and businessperson anshu is. paving the
path? john: i don't know about istbank, but beyond that it the appeal if that you are leaving investment banking and a big bank at the moment, going to something where technology -- technology could change banking, particularly at the retail level, all the way around the world. the european banks are little ahead of the american things on the retail side. they are doing more clever things in branches, clever things he high into the scenes. in america you have an attack from silicon valley. you will likely see that in asia . it is an interesting time where an old industry -- and finance to that,ike being term but it looks that way in silicon valley -- is being turned over. stephanie: editor and chief of
bloomberg. veryve larry summers deeply involved in lending. david: john is a big fan. he believes that is the future. is theie: technology future. you heard it here on bloomberg "go." philanthropist john stier is joining us. what do you want to ask him? energy, conservation, politics, investments. he knows a lot. tweet us your question. ♪
on moste: one issue investors minds has to be liquidity. in a bloomberg exclusive, here is the former deutsche bank ceo anshu jain. worry about the combination of very tight credit spreads. huge ownership of these assets by retail investments among others. sometimes without a clear understanding of how much liquidity they can expect. in my opinion, and impaired ability on the part of things to provide that liquidity. i think that we forget reasonably high -- i think we could get reasonably high volatility. stephanie: here is howard marks, the cochair and founder of oaktree capitol. what do you make of this? what he saidthink
was essentially right. most things swing from one extreme to the other. my mother used to talk about the happy medium, but they are rarely there. the quiddity is an example. is an -- or liquidity example. sometimes they are really liquid, sometimes they are not liquid, and the swaying from one to the other can be painful. stephanie: who caused the pain? the swing the pain of comes from the fact it was too agh, too easy to trade in nonliquid investments. what made it harder was that people became more jittery and test of mystic. .tructurally -- and pessimistic structurally, it is harder for banks to take proprietary positions. it used to be, on a tough day
when people were panicking, one smart person would walk into the crowd and say i buy. jp morgan in the crash. under the new rule, you cannot do that. david: how much has government regulation caused this? aren't non-regulator stepping in to provide liquidity? stephanie: like you. mr. marks: this is only part of the issue. there are no simple answers. you cannot say, liquidity is down because of dodd-frank. it is one of many things. us, the lower that things go, hopefully they will step in. hedge funds, who are always supposed to be the buyer of last resort's in the panic make it throws, and not be
able to. having transitory capital in a time of declining liquidity is a problem. david: picking up on what stephanie said, wouldn't it was good -- with it in liquid -- id markets beiqu good? to get control of companies? mr. marks: i think they are good for investors and bad for traders. wrote a memo about the quiddity a few months ago, and concluded by saying the best defense is not needing it. not needing liquidity. buying things that you can hold for a long time. a long time. extensive leak, the lower that prices go, the easier it is to do that. stephanie: are we going to see less hedge funds in business? a lot of southside traders have set up shop, and they do not
have an investor background. they are traitors. what will happen come january 1? mr. marks: i always talk about what should happen. i don't know about what will. stephanie: what should happen? mr. marks: the investment business has excess capacity. there should always be a leading out. i wrote a memo in 2004 saying the average hedge fund will getrn 5% or 6%, people will tired of paying two and 20 two make 5% or 6%. hedge funds are bigger where they were. people will come and go. for some reason, hedge funds tend to attract capital. back to the basic question about liquidity and if there is a tightening of liquidity. there was a report that came out from the new york fed that
looked at the numbers, the data, and said at least as far as noporate wants go there is liquidity problems. is there or isn't there? i am lost. we have talked to other people who say there is an issue. saysanie: the trade there's a problem, but at the fed says there is no problem. mr. marks: i have not studied the study, but practitioners think that there is less liquidity. meetingsken part in with some officials trying to .et at why i do not think the concerns were mentioned. the real concern is what happens markete is a real initiative. there always will be, i just got
no win, what will cause it, or how bad it will be. stephanie: you criticize liquid alternatives -- you have in the past. we're waiting for this to get tested. they held rocksolid. the bond ietf's. have you changed your view? mr. marks: we have not had a serious panic in bonds. david: the market is getting nervous, though. at the spread which is ensuring that in this case on high-yield, ensuring that a failure orinst default, it continues to climb. market isith the sniffing something out, even if the new york fed thinks that all is clear. stephanie: what do you think? mr. marks: i think investors
swing from optimistic too pessimistic. they are both extremes, it is excessive. looking at your job, one of my favorite cartoons run the 1960's, has a news reader sitting there -- stephanie: did you call me a news reader? i'm out. mr. marks: it says that everything that was good for the market yesterday is bad for it today. that is how people flip flop. back to want to come this question that is bothering me. thes one thing if regulators and practitioners disagree about what should be done, it is different if they facts.e on the if the investors do not believe there is a liquidity problem and so,tactician or's do think that is dangerous. we can disagree about what should be done, but to disagree about the facts --
it is a debate that will go on. david: what does howard marks in best in now? you must see lots of opportunities. stephanie: lots of locked up money. mr. marks: what matters is value. everything being equal as prices go down, the ability to access value increases. we get more interest. stephanie: oil and china are attractive to you? mr. marks: you have to look at it more. david: how yields bonds has back step. -- high yields bonds has backed up. mr. marks: things are going our way. theave been reticent for last four years. we have had a motto, move forward but with caution.
the less prudence with which they conduct their affairs, the more prudence with which we must conduct our own affairs. there is a bull market in prudence on the rise. that means we can turn more aggressive. we have turned very cautious for a long time because no one else was. stephanie: the last time we spoke you wanted to create products for retail investors. given this bike we have seen, is that the right call? -- the hike we have seen, is that the right call? mr. marks: going back to what about the, it is expectations that have been created. you should not create the expectation that you can get into high-yield or high return investments, which are risky by definition, and be able to get out on a moment's notice. they do not go together.
to be involved in anything, they really should have reasonable expectations. rooted investing starts from reasonable expectations. ent investing starts from reasonable expectations. seems to promise more liquidity than high-yield bonds provide. vehicle be more liquid than the underlying assets? stephanie: let's take a quick break. the morning must-read and howard's has a letter. you're watching the bloomberg "go" ♪
i am stephanie ruhle. howard marks with us. william cowan, and now, tom keene. you first word news. a no-fly zone over syria. russian warplanes resumed their attacks. the foreign minister said establishing a no-fly zone would violate syria a's sovereignty. russia rolled out sending troops to take part in ground operations. volunteers could end up fighting there. fed may not raise rates
until 2016 or later. they are still forecasting a december rate rise, but a fed ton may prompt the hold off. ben bernanke blames congress for the lagging economic recovery. the response to the crisis was a and effective. he writes congress needed to do its part but did not. let's check on the markets. matt: not big moves considering the gains we saw yesterday. we had five days of gains in a row. s&p here today, down 3.5%. look at my terminal here. you can see what strategists have done to the target. throughout 2000 15.
s&p targets are coming down all of a sudden. the market did not have a great september, august either. big names come out and cut targets. , 2050n see michael purvis is his new target. goldman sachs, lowering the target to 2000 from 2100. from 2350. getting cut across the board. not a surprise since the market has come down. we are seeing strategists get real. not a shock, but not encouraging. every morning, about now, we will check in with tom keene, to see what our viewers should be reading. tom: i did this for david westin. ago, he talkedrs
about the slick guys and the nerds, like howard marks. there is a great essay. let's read about the big university. up now, mr. brooks with his morning must-read. students have to find new things to love, like oboe. the great works of art and literature have a lot to say on how to tackle the concrete like hows of living, to escape the chains of public opinion or how to build loving friendships. you have written about this, you cannot just be the narrowness that our education system has
become. william: it allows you to draw analogies, to pick ideas from one place and apply them in another. surprising ways you would not have thought. >> we have a tech guru talking about how people should not be getting a liberal arts education, should be focusing on the stem. a liberal arts education makes you more versatile. you went out of queens. when did they get nerdy for you? when i went to wharton. it required you to have a nonbusiness minor. tom: it has been eliminated. stephanie: why?
howard: i do not know. my minor was japanese studies. in 1965, japan was a non-entity in the commercial world. of japanesepects philosophy, which have carried over. tom: i was at colorado and aerospace engineering. great bookough a scores. trend away from core curricula. i had to take a science. i had to take a physiology. tom: did you take calculus? david: i did not. it is on my bucket list. stephanie: take that off my bucket list -- take that off your bucket list.
howard: david brooks did a great column about the different kinds of intelligence that the broad liberal arts teaching foster's and the technology approach and the dealing with machine courses. they are important, but you should hopefully have them both rather than the latter. stephanie: this is going to take me to my morning must-read. howard is great at investor letters. warren buffett likes them. howard begins his last letter quoting charlie monger. said, charlie says -- it is not supposed to be easy. anyone who finds it easy is stupid. there you go.
plain and simple. what does that mean to you? it means it is a complex area. it is a competitive area. task of finding a good company, by definition, cannot be enough. everybody finds a good company. stephanie: how do you make that good? howard: you have to figure out the difference between a good company and a good investment. one of my mottos is that good investing is not a matter of buying good things, but buying things well. if you do not understand the difference, go back to the books. david: i did read this. areare completing -- you competing against other people
in the marketplace. as you look around, where are you smarter than the average investor? the opportunities others may be missing? the import opportunity -- we are not low enough to be b aggressively or to face great opportunities to invest. the big opportunity was the opportunity to turn cautious in the last couple of years and be ready for what is going on now. stephanie: be a risk manager, not an opportunist. tom: i have not seen a cathartic moment that creates a value that howard is talking about. everybody is way too comfortable. william: you see it again with goldman sachs saying the fed is not going to raise interest rates. the market goes up in reaction to that. the cycle continues on. i had a piece in the "new york
times" about how the fed should have the components -- should raise rates. howard: they are refraining from areing rates because they worried about the economy. that is legitimate. that makesother hand it interesting. i wish the government would get out of the business of setting rates. i wish rates would stop being unnaturally low. unnaturally low rates distort capital markets, subsidize borrowers and penalize investors. fed shouldif the not do this, give us the frame rate in the world according to howard. should stimulate the economy it when it is weak and then get out of the business. on of when you get out
is not easy. they have been talking about it now. how about data from bloomberg? i don't know about abolishing the fed. david: i don't know if he said that. has said the fed needs to get out of this, they are causing problems, they are causing bubbles. the biggest distressed investor in the world. looking at, since 1984, the price of oil, right here. this is where investors are seeing opportunity. tom: that is a beautiful chart. stephanie: not beautiful. : do you see opportunity here? i am not asking you to that on the price of oil. a lot of for companies -- a lot
of companies are strapped for cash the cousin of this chart. you said i am not asking you to make a bet on the price of oil. you can look for situations in which the company is not highly leveraged to the price of oil. : -- anie knowing the price of oil in six months is valuable and impossible. talk about it is not easy, that is one thing not easy. is one thing you learn in philosophy.
ought means you can. thing i try to convince people as they have no idea about the price of oil. the way i try to make it clear price out, add or subtract five dollars. i will bet you $100 you are wrong. one guy -- i'm going to win. all over thet place. need to do is you to get the direction right. other investors have to get within the investment. one of the most
important things is the time frame no one can get it right in long term. am i going tos -- be richer in 10 years. tom: part of it is clearing markets. to clearing hydrocarbon balance sheets, etc.. where are we in terms of knowing [indiscernible] they are minting money. last year, jpmorgan had its most profitable year ever. it may not be a great place to work.
ruling is threatening to plunge internet companies into legal limbo in european countries. deal is invalid. it does not protect the privacy of eu citizens. a facebook ofse giving information to u.s. intelligence agencies. volkswagens will cancel or delay nonessential investments to pay for the cost of the omissions scandal. as 11 million cars have software designed to trick a mission's testing equipment. from japan and canada have been awarded the nobel prize in physics. they will split a cash or word -- a cash award. howard marks, final thought. you mentioned short-term
investing. no one wins. we look at the investing environment now, bill ackman, arl icahn, they walk into building, there is a threat of activism, we see shares spike. this is all of the act of activist investors. that is short-termism. the separation of management from ownership so that managers can do well when excessive't and an emphasis on the short term. the activists are great when they go in and put the pressure on the managers to work for the owners and to improve the efficacy of the company. stephanie: should activist be forced to have long holding periods of the stock? what could we do to promote long-term investing in this activist environment?
meyer showedelissa up for the first day of work -- was out of the trade. howard: the question is, if the on fort put the pressure the managers to work for the shareholders, that is a good ink. if they put excessive pressure to make it happen fast, that is a bad thing. you have to strike a balance. some of the activist are constructive. doid:'s or anything you can to change this? you will not change it over night or at all. four -- i read before, it is a voting machine. in the long-term, it is a weighing machine. how do we get into the weighing machine business? hillary clinton has a proposal out, do it through the tax code. thethere the ways
government could shift it more long-term? should bee markets left alone to produce their results. you could require holding periods. all of these decisions are policy decisions. the biggest one in this country be do you want to interfere with the operation of the free market? david: won't that drive transactions to other countries? howard: it could. i am not advocating it. david: is there anything you do advocate? howard: i advocate thinking about it. stephanie: central bank
intervention has served the markets well. it has not served america over the last five or six years. investors have gotten hooked up. howard: asset owners have done extremely well. david: it has not worked for the american people. vers have not done well under quantitative easing. financial bets a for a living have done nicely. some activist investors have a longer-term view. jeff smith, with what he did at in it and is still executing the long-term view. it is interesting. we know bill acma and takes the long term view. dan loeb is much more short-term. stephanie: in terms of management and ownership, would you not invest in a hedge fund where the founder does not have his own money in the fund? it is desirable they do.
stephanie: scandal hits one of america's favorite past times, fantasy football. ♪ david: welcome to the second power of "bloomberg ." i am dated weston. stephanie: i am stephanie role. the founder of oaktree was with us and he is still here. guess who else? brendan greeley. brendan: we try to high-five. stephanie: i am a horrible high-fiber. brendan: that was impressive. stephanie: billion there and willthe past tom stier join us but let's get you
bloomberg's first word. vonnie: thank you. the two biggest names in fear making one not be getting together. sab miller rejected an informal takeover offer from anheuser-busch inbev. some shareholders or looking for an opera and the $110 billion range and no word if ab inbev will come back with another offer. a senate committee wants to know president obama is pulling too many american troops out of afghanistan. all makers will ask the u.s. commander whether the president should change his plan for cutting back the number of u.s. troops. there are about 10,000 in afghanistan now but scheduled to go down to about 1000. it has been called a once in a thousand years rainstorm. the rain ends today in south carolina but floodwaters are rising. some towns are cut off. it may be weeks before state officials figure out which washed out bridges and roads are safe to drive on. that is the news you need to know, let's get a check on the
markets. matt miller? matt: i want to show you pictures. not a lot of movement but a move in a row. five days the longest gain of streaks on the s&p 500 since 2014. take a look at the 10 year. looks like investors are running to some extent or the safety of treasuries right now as the price goes up and the yield goes down. it is not a huge move. what i want to show you right favoriter number one unction on the bloomberg. check this out. this is pretty amazing. this is a 3-d graph of investor's expectations for the curve over time, so it starts back in 2003 before the fed embarked on 17 rate increases in a row and in 2000 six, this is what investors thought the curve would look like. you can see it is decreasing and continues to do so. people do not expect the fed to ever raise rates at the front
and and that is causing the dollar weakness we are seeing today and that we have seen for? a while -- brendan what? brendan: that's an amazing graph. 3-d on the bloomberg, hot, hot function. that's get back to the dollar. we have seen that yesterday, friday, and obviously if the fed does not raise rates, then there was no inflow or rush to get in to u.s. dollars because you will not be earning more money on them. as a result, the dollar index down today. we do not see commodities, really, gold is an exception, arising as a result of the dollar weakness. this is what you would get if you had a week dollar for anything priced in dollars which is everything in the whole world, rises, gold is the one we see game today but copper and crude down. they have also had not a bad run in the last five days. been: the dollar has
pretty strong, down a bit but not a weak dollar by any means. matt: no because everybody else has got qe running full speed and are fed has not gone back to cutie yet. -- back to qe yet. stephanie: our own matt miller. guess who is in the house for one hour? bob cry felt of the nasdaq joins us. bob colden -- bob: thank you. stephanie: we start with markets. we have not had confidence but it was headed in one direction so people that like they could ride it out. now we see volatility. what is this doing because confidence -- is a problem. rob: confidence was there. markets do not rise without some confidence. decisiona positive to buy, they have confidence so i think the surveys are misleading. we see a period of volatility and over the last three years,
the markets have gone in one direction and i think that is there enough and primarily driven by global concerns more so than u.s. concerns. stephanie: but that volatility can spook companies, are you going to see ipo's pull off the table? bob: volatility is good for transaction business, more trading volume. july and august was high and extremely high. when you look at the ipo market, a strong calendar in the last month or two, it has been slow but i think the jury will decide in the next 30 days. we have a lot of ipo's on the calendar and we will see if they get out. last week was not such a great week. i think they all traded lower, so we have got some warning signs. stephanie: have you had in the polls/ -- pulls? bob: a lot of ipo's pull, typically there is one in a week that will pull. we see a larger number of
companies pull and that is when we have a concern. stephanie: hold on, matt miller, you have a headline. matt: freeport is looking to spin off their oil and gas units and as you could guess, that means a big game in the premarket shares right now. report mac friend trading up in the premarket, 11.40 or. if you look at rels in the terminal, go to equities and find other places work freeport maine trade. aboutd germany has traded 5006 hundred shares over germany so far, so look at the bloomberg. german trading is active and a lot more german trading going on than freeport in the premarket, said this is a much more accurate look. ..75% again right there they're looking to spin off their oil and gas. we should have asked howard, do you want to take a senior position of freeport? stephanie: you know the answer.
howard -- i will channel power -- at a price. matt: they might offer the price. this is more deal activity out of the commodities. recorda big deal for deer and anytime a disruption in this market leads to opportunities. people like howard marks. i thought when happened yesterday with ge was a very interesting movement and very clever. ge's stock has not moved for more than 10 yields. positionition, a whenever that activist investors could take. $2.5 billion. we were just talking about the possibility of backing up from an ipo but this is it about you have hedged. it trades pre-ipo shares. is it going to become irrelevant? been a wonderful
year for ipo's. we have seen a resurgence and the quality has then there. even in goodnize ipo times, there are a lot of companies that want to stay private for a longer time. we think it is a valid option and the company should not go public once it reaches the state of a maturity. going public faces a lot. it is our job to provide mechanisms for liquidity for employees known as nasdaq private markets for private companies. david: if you are airbnb and trading on that aspect private market, like a public? stephanie: they don't want to anymore. bob: part of the problem is regulatory problems because as you have pre-ipo transactions going back and forth, at some whereyou run the 1933 act you have to do an issuance. you are sort of creeping into a public. david: so their jobs that change beforeuite erratically, the jobs that, if you have 500 shareholders, you had to go
public and now it is 2000. more importantly, the employees don't count -- stephanie: but you have these massive companies hiding under the jobs act. those are companies that want to go public. i would not say they are hiding. i think the job asked allows the company -- the job act allows the company to file confidentially so competitors don't know what they are doing theallows them to trial run roadshow. when you look at biotechnology, they were in the doldrums for a decade and going through with the assumption that investors would not buy their story, under the job back, they can trial run investors withrt a large appetite and that started the renaissance of the biotech. david: but the market also gave more flexible ready because they can get axis to capital pretty effectively without having to go to public markets. rob: you see more of that with money managers investing in pre-ipo companies.
strictlyst on not sought terms for different conditions to it and are typically available to a marketplace. when you are in a private market, we think it is necessary, good and they are having great success, but it is only open to credit investors and has a limited pool of investors. anytime you have a restriction of who can invest in your stock, you have some sort of liquidity discount, so at some point in the evolution, the public becomes more attractive. stephanie: this takes us back to the confidence problem. we still did not have full mom-and-pop retail participation back in the equity markets. we have needed to do that for the last three years and with the volatility most likely not going away, are you getting further away from that angle of getting everyone back in? bob: i would agree that the retail investor participation is not fully activated but it did improve. stephanie: are we reversing now? a time,r short period
so if the trend has volatility with downward bias, retail investors will stay away. if you have an upward bias, or precipitation from retail and that is the way and has been. mom-and-pop investors are cut out of the growth because up we have shares trading before an ipo in the private market, have much better information and you do not get that growth after the ipo and what everybody can get into it. bob: when you have traditional long funds investing in pre-ipo companies, the mom-and-pop investor has an indirect way of getting there because they can buy a fund to invest in a pre-stage company. david: to wife very much. bob: -- david: thank you very much. here and tom syre will be here at 9:00 a.m. eastern time. what do you want to ask him -- mastec ceo is here and tom stier
look at that shot. no better place in the world, midland manhattan. looking at the view from bloomberg world headquarters. david: it was all cloudy yesterday. stephanie: today, blue skies. the markets most influential summit at bloomberg and around the world. i am excited. david: so am i. stephanie: let's send it to vonnie quinn with first stories. vonnie: thank you. russia is having a no-fly zone
over syria and they resumed attacks over the islamic state. russia's deputy foreign minister says establishing a no-fly zone would violate serious sovereignty. meanwhile, russia sending troops to take part in bound operations in syria paring yesterday, a russian admiral said volunteers could end up fighting. congress forblames the lacking economic recoveries in his new book where he says the fed's response to the crisis was both an effective and rights that they needed -- congress needed to do their part but did not. something you rarely see for a new york yankees playoff game, precept ticket prices for the wild card game between the yankees and pastors are the least expensive since the begin in 2000 12. price, $180, 40% less than what you pay for the national league game between chicago and pittsburgh.
you cannot convince me to go still. david: what? detroit tigers. it has been a hard year for us. stephanie: is that baseball? david: no, football. jason kelly, to thank you so much. brendan greeley, a full team and this is a great segment about quotes that you found. we spend the world i go throughout the bloomberg empire and we look at what the most interesting things people are saying that gives us insights. i want to start in the world of private equity and alternative and yale. david: as an university? jason: yes. swenson one ofd the best endowment managers on the planet.
jason: they get this sort of was full look an eye when they talk about david swenson and here is why -- what makes you tick is the ability to get great managers. you have been inculcated, nurtured by the master and the next generation. that is all fine and good but when you look at the chart of how these guys have performed, and you look at what we call the gale premium, these guys are killing it. stephanie: as opposed to harvard where they traditionally get killed. david: yale is the blue line on top. blue andle is the yellow are proteges. this is based on looking at alternatives, that was david swensen's they deal. look at -- forget the public market, apologies, and let's go to alternatives like private equity and venture capital. stephanie: matt is moaning over there. matt: harvard has a much bigger endowment and if you grafted to as i have on my bloomberg terminal -- david: show off.
matt: harvard is doing seemingly just as well. stephanie: in terms of asset gathering and endowment but as far as performance -- matt: this is a performance from 2002, ok? is it doing poorly in comparison? are talkinghat we about is doing the best with what you have got. stephanie: there you go. matt: so you are saying that this is because they are attracting more money. i call that the jennifer aniston, five foot, four inches and major step a perfect 10. angelina jolie was warned the harvard. david: i believe to commodities. -- ivy league to commodities. it would take a brave soul to wait into commodities. jason: this is not a huge surprise but let me give you one thing about the bloomberg
commodity index. this is the worst performance since 2008. as billh: and bob -- cohen can admit, any time you save the worst since 2008, that is that. really bad sign. that interesting to see what goldman and others are saying is this could get worse. third quote a little more optimistic, on the valuation basis, this is not once in a decade, a multi-decade opportunity to be buying very cheap assets, so that is michael -- stephanie: hold on the second. this is a franklin, he has outflows out of there in years, they made massive investments in energy space in the spring and a $70 price which then plummeted down to a $20 price and they are losing investors. david: i want to be clear i think he is talking about buying assets in emerging markets,
mexico, brazil, things like that. brendan: how do you feel about china? commodities, emerging markets, but there are a bit on china. who would weighted with one foot much less but? stephanie: i don't want to go to break. jason kelly, that you go with the quotes of the day. bob, we are not letting you leave. you have got to get upstairs. , bloomberg trends. stay with us. ♪
making a long-term bet on emerging markets and equity futures down this morning. sab miller and in the deal not happening and goldman sachs and their call on progress. what story sticks out to you? : the rape story. read the story and i think it is a simple equation. .- the rate story i read a story and i think it is simple equation. i see no reason why the fed to contemplate raising rates when we are this low. that is what the statute says about the fed. bob: two much thinking. inflation shows up, then you have to balance. i am a little late in coming to the rate setting party and the cost of that is manageable. if i am early and a choke up economic recovery, that cost is a lot higher. stephanie: are you saying i told you so? it is not fair and
creating asset bubbles and not yes, lowsavers, so inflation but the fed is creating a bubble and you sell the stock market reaction yesterday because of the fed what goldman wrote. we need to break this cycle of dependence. brendan: there is economic research -- i will split the baby. stephanie: getting graphic on day two. brendan: i went to the philly fed to look at economic research and one of the things that came out is we are learning that it is affecting people differently. david: we split the baby. next, we go to the morning meeting of morgan stanley to find out what companies are really good in social media. ♪
brendan greeley and nasdaq ceo. stuff in this of first half are but let's get to vonnie quinn. thank you. defeat for facebook could have far-reaching implications. the european union decided that a deal between the u.s. and eu is imbalanced and the rolling says that they adequately protect the privacy of citizens and accused facebook of giving information to u.s. intelligence agencies. the world bank says we are one step closer to eliminating extreme poverty by the year 2030. the proportion of the world's population living on less than two dollars a date will fold to less than 10% this year. 20 years ago, the rate was 37%. the equivalent of insider trading in the multibillion-dollar world of fantasy sports. according to "the york times," an employee at one of the
companies involved in fantasy sports mistakenly released data before the start of the third week of nfl games. the employee won hundred $50,000 the same wake by playing on rival sites and date released statements defending their integrity. that's get a check on the markets with matt miller. matt: first, futures down across the board. not a lot of movement in futures this morning that we had five days of gains on the s&p 500 in a breather. or stop,of stories, dupont, you remember yesterday the abrupt resignation from dupont and try on had been activist investor. we will actually speak to an activist investor later and they had been trying to break up the company or at least get them to think about that, trying to get rid of her because she missed expectations and missed her own forecast and continue to lower earnings forecast to they are
replacing her with edward green for the interim, a board member, and investors seem to like that news a lot. he was harder breaking up tyco so he is experienced. in acquisitions, skyworks solutions will pay $2 billion chipmc sierra, a big merger or chip acquisition since one is buying the other but both shares rising. s and p sierra, 32% premium and that is why they are up there. one near and dear to my heart, tesla, tesla down in the premarket, not sure if it is theuse of this but 2.39 is price. adam jones from morgan stanley has cut his price target on tesla to 450, $450. by the way, from 465, so he hasn't taken at the percent cut of his price target which is 80% above the share price because he littlethe model s is a
bit too expensive, priced to high that they cannot make their 2016 all you target. stephanie: they can lower their expenses. salespeopleot need but everybody i know who owns a tesla is a salesperson or representative. the greater talks about has a more than the markets. brendan: and matt miller is biased. matt: i do like internal combustion engines, but i know from driving a tesla that the feeling of the work instantly, as soon as you touched the gas amazing and a low center of gravity. i am not a tesla salesman myself. [laughter] stephanie: i will take over because i have the lowest center of gravity on the set right now and i'll take you to the morning meeting where we hear what banks are looking at today i want they tell their best customers. brian novak at morgan stanley joins us. brian, you put out a note on the company's best position to capitalize on social commerce.
what does that mean? who is selling on the internet? brian: we have a meeting on social commerce looking at the weight softline retailers are increasingly looking -- using social networks like facebook, interest, pinterest, and extending new reach in race to build up followers and lead to more transactions going through social networks and platforms. david: there was a decision from the european justice saying that basically vista cannot move their data freely back and forth across the atlantic. does that put a wrench in your analysis? brian: i think the ruling from the eu is something we are watching and the appeals process is something to monitor but at a higher level, though it to think about the e-commerce opportunity, just because there are one billion people on the pop up every month, every day, and in the way in which the retailers and what we see from the limited lands and building up more followers and likes, and facebook rolling out new by its buttons and also looking to
build an online ball on the platform, it is likely to drive consumer behavior and purchasing behavior onto the social networks. for retailers, big opportunity in new distribution channels online and facebook an opportunity to further prove advertising of all the retailers and spending. david: stephanie and i had breakfast for macy's just recently. you are the one with the invitation, but we were talking about e-commerce and macy's has been quite aggressive. but we were talking about how modest the e-commerce is compared to regular store traffic. i was surprised because i shop on amazon and i thought -- it is of that big a percentage purchasing. brian: it is incredible how small it is. overall, it is about 10% still. social peace we are talking
about today is even smaller. the social peace is 1% of total ,-commerce, so the retailers like macy's, limited brands, michael course, they get more dollars online from their traditional dissertation channels but the part that we are really digging into today in the analysis is this idea of a new dissolution town through social networks. stephanie: make us some money so we can shop on the sites. we like limited, michael kors, who else? brian: limited and michael kors stand out as the ones with the most followers in the top 50 retailers that we looked at our southland retail and analysis. i think after that, nike does have a big presence, but a lot of the retailers are out of my main purview. in my world looking at the other retailers, i am very bullish on facebook, i am bullish on google, i am also bullish on amazon. david: are those the only three platforms only talk about social
commerce? and social commerce is specifically facebook or you can see how you had this engaged audience on facebook and instagram and the way in which facebook can continue to change behaviors of what people will do on the platform and get them to buy things is going to be a big leg of growth for more ad dollars to move on. david: what happens when people start disliking things on facebook? what happens when they dislike some of the retailers? is that going to make people want to move off of the facebook platform you are advocating for? youn: retailers will tell that they like the feedback. if someone like the victoria's secret page for the last three years and all of a sudden they know longer want to get that information from the retailer, that is actually positive information that you want as a retailer. i do not necessarily see the like or dislike as changing the
way people use it but more so giving retailers more information on the social platform. david: we don't have a dislike button yet. stephanie: not yet. david: thank you for joining us. bob, i want to get to you because we have been asking our viewers and we had a viewer who wanted to ask you -- how do you see the future of banking versus thin tech? is important to realize that they give today has a large component of tech built into it. if you look at a company like goldman sachs with 30 thousand employees and 10,000 involved in technology itself. at nasdaq, we have half of our employees within technology. and a banking system, exchange system today is fundamentally built on technology. they are technology companies, so i do not see a line of divide. certainly as a fintech industry to provide support is
going to prosper. a block chamber transactions, pretty forward thinking. bob: we like to think so. we see block chain as a way to change the whole way that trades, processing is intermediated today. i think it's effect will be pervasive. we are going to put our share trading in mastec private market on the block chain. the clearing selling will happen on the block chain and you will be able to clear and settle a transaction within 10 minutes. david: bitcoin in a different form. stephanie: don't get matt miller started. brendan: are we going to see public share trading? bob: i think that is in the future but we can control the vertical stack with private markets with a trade will clear and settle in three minutes, and 10 days in the public market. stephanie: another twitter question -- what would be the faith of unicorn tech companies that will never make a profit? welcome back 1999.
bob: the end of the day, companies are valued on some measure of cash fund. you cannot escape that reality. how long it takes to get there? i'm not here to predict but you have to generate cash. david: do you have any views of private market valuations? bob: i make a general statement that we are a big believer in private markets and we believe more companies could stay there for you cannot really compare a private market violation to a public company. public company takes all investors and private markets do not have to do that to represent a price where a couple of people agree to and there can be special terms which inflate the valuation with respect to warrants and other rights you have they would not get in the public market, so the direct analog between the two is a mistake. bill,nie: bob, brandon, do not go anywhere. you stick with us on twitter and on air.
let us know, billionaire tom stier will be joining us at the 9:00 a.m. hour. what do you want to know from him? send us a bloomberg message, tweet as your questions. we will have it at 9:00, but next, the supreme court decision that could make it harder to prosecute insider trading. not good news. stay here. ♪
investigation into the shipping of the cargo ship near the bahamas. one body, ave found life preserver and a heavily damaged lifeboat. the ship sank last week as aquincane jo approached. 33 people on board, 28 americans. the study comes from the economic policy which advocates for workers and says that a two child family pays more for childcare then rent and in 80% of the killing the surveys. -- in 80% of community service. stephanie: it is time for power go where he talks about government and lost. the supreme court decided not to review an insider trading case. the move could make it harder to prosecute insider trading in the future. some convictions may be reviewed as a result only have got to ask the question -- what does this mean for the legacy of manhattan u.s. attorney?
sheila joins us now. you have spent more time since landing outside the courthouse them inside bloomberg headquarters. what do you make of this? sheila: this is a big deal. it got a lot easier to make money if you have confidential and viable information. use an example that pete or are a roadmap fors is unscrupulous traders. if you are a ceo of a company, you could, in theory, decide to get a present to your nephews or nieces and you could say, my company is getting taken over in two weeks. go do with that what you will and they could literally go and trade. stephanie: that's crazy when you break it down like that. is that what this really is? sheila: a possible implication. as long as the person who gives out the information does not get anything substantial to return as a benefit and as long as the
person trading on it does not know about the benefit -- even if the person got the substantial benefit and got the information, and they do not know they got the benefit, then they can get away. let's back up, what the supreme court did was not decide the case. it decided not to take the case. it could come up there a different circuit and this could come up a different plays down the road. sheila: it could come back to the supreme court down the line. i was going to say you could seek most companies have policies against what you describe. we have that at nasdaq and i think that will be pervasive. companies do not want that kind of trading to happen and they have the right to prohibit it. sheila: you are right. i think most companies make it clear that they need to protect this information and it is a violation if they share the information. however, a lot of the cases -- stephanie: all right, let's see. has happened next on
the record and it is the first change in the armor. david: do you think they will begin to focus on prosecuting other white-collar crimes? once upon a time, they may have been able to prosecute wrongdoing leading up to the financial crisis but that has passed. david: there is an investigation going on in involving albany, if i recall. sheila: lots to keep them busy. i'm not worried. he basically said this could lead the category of cases and prosecuted. david: how many current cases might be affected? there have been quite a few convictions. they can't go back and say, wait a second, the law is different. sheila: that is right. anyone who pleaded guilty is calling the high-priced lawyer right now and saying, kelly revisit this? -- can we revisit this? they think only 10% of the cases are vulnerable. stephanie: walk me through this again. since they are saying we are
simply not going to rule on this, why would you then be able to open back up? david: because in the second circuit, which includes new york, that is the law of the land unless the supreme court reverses it. the supreme court did not take the case but they could come back later. for now, that is the law. >> throughout the convictions of jason and the other fellow. sheila: the land and lot in new york city. david: thank you, sheila. story.portant staying on insider trading new allegations in fantasy football on insider trading. that story coming up next on "bloomberg ." cryingie: teenage boys everywhere as monster shutdown their accounts. ♪ their moms shutdown their accounts. ♪
stephanie: welcome back, "bloomberg ." newsish, we talk about been elected scandal in fantasy that ball almost as important as inside trading. "new york times" says draft kings are in hot water after insider trading. $350,000 on won rival site using pre-released data from his employer. first, let's break down who plays fantasy football. david: my sons. who has 13-year-old son been lobbying me hard saying, look, 20 money i can make. i have had the debate saying they do not all make that much money. stephanie: they do if you have inside information. david: i am strictly a ravens postseason football fan. stephanie: he is a stable shoddy
fan. i have -- david: i have a son who plays but i do not. stephanie: companies will not allow you to do this. clearly, jack kingston is ok with it. bob: my recommendation is draft kings and the other site need more aggressive actions and looking at the market, they should get ahead of this before congress gets involved. they need to set up an independent regulatory finding and i thought their reaction was underwhelming yesterday. they need a self-regulatory finding that can find and remove employees. david: that is a great suggestion. i was surprised they would let their employees trade at all, on their system or somebody else's. you cannot do that. stephanie: could it be an oversight? maybe this is immature, but you are part of a startup. these are not mature companies.
they have been around for a few years. could this is something they had not thought of yet and now it is, oh, my god, clearly, we should change the role? [indiscernible] is not surprising it wouldn't happen and it is surprising they allow their folks in one firm to work in the other firm. brendan: i am shocked that gambling is going on but they did strike a deal at end of september with the nfl players association. they are going to have to do it soon if they're going to shake these things out. david: what will happen with the gaming industry because it will become a competitor? it is a $3 billion a year business today and they predict it is going to $20 million. they need to get ahead and get --f revelatory practices self-regulatory practices in place. stephanie: you are a nerd. david: what is not clear is what this guy got from inside information.
jeff was tuning up a storm is today about this but what impact did this guy get? knowing what other people chose? david: he knew how everybody else was driving so he knew some people favorite players and he went in. david: but the teams are set. stephanie: but he is playing probability. david: he knows information my 13-year-old son doesn't even know. they quietly placed their bets. stephanie: we have to leave it there. thank you, bob, bill cohen, bloomberg contributed editor brendan greeley joining us for the hour. erik: next hour, billion of financer tom stier. ♪
is when eric shafter joins us. david: with us for the next 30 minutes is blair efron. this is thell you standout ebony from wall street. he had $72 billion in transactions. billion, amazing productivity. that is why you wanted blair efron here. how does it feel? blair: the business is volatile. the industry has been good for everybody. david: that is a topic we have been digging into -- will be digging into with much depth.
we are just about 30 minutes before the opening bell. matt miller is here with features. show you how little these markets move on this tuesday. i think everybody has stopped to watch "bloomberg go." we had a selling earlier. the numbers on the dow are moving up. take a look at the 10 year. refuge.eople seeking that turned around. the yield is going up. people sell their bonds. when we look at commodities, we saw a little bit of movement there. now we see it is starting to pick up, the crew is that more than 1%. 46-73 per barrel. copper features are rising. gold has been up most of the day. we take a look at the dollar weekday's -- weakness we have
seen. the only currencies i have seen that are actually weaker today are than a dollar are the new zealand dollar and the canadian dollar. the u.s. dollar is losing to everybody else. stephanie: the canadian dollar never loses. david: there is a loony and a tyranny. thank you very much. it is time for the five stories that matter to markets right now. erik: first up miller says no to ab inbev asked -- invest. a formaled down officer equivalent to a hundred billion dollars in total. equivalent to $100 billion in total. let's find out from somebody who might have an idea. here is what i wonder. does miller's board need to be careful?
, they are the only potential buyer. nobody else. up with over $100 billion. a.b.u play hard to get, invest said they wanted it be a negotiated transaction. that is a good point. in the u.k. we saw that. also, they put up a strong defense. actually ended up doing well. in this situation, without ,alking with what they would do i would say they are very disciplined buyer. where there is 12% or 13% of sales energy, this has geographic overlap. when there is, temperatures are problematic. it could be a lot lower. three groupshe
embedded in other situations, they are disciplined. so, they are methodical. matt: that is the money. brian: they will watch the shareholders. i think they are being true to their word. david: here is what i do not understand. this has been 20 days it has been going on. if he said there disciplined it smart, did they have a sense they would get rejected? is a like they would know where the deal would fall apart. blair: that is part of the business. a lot of times you go in and you might get rejected. ,hat said, before you do that you would do a very careful analysis. theget a careful sense of company. what you think your shareholders will support. and can you a reasonable span of time, two years, do better on the table?
david: is it harder for a.b. invest to go hostile? and the u.k. everything is open and transparent. if you're not too successful you have to declare the prime table. you actually have to walk away. let's go from one thing to another. the fed. out sitting the federal reserve could delay their rate increase past 2016. david: our chief economist posted at a december rate. they want the fed to hold off. my question is, is this news? we are sure getting used to the zero bound. blair: i think you are correct. what you saw in september is, across the board tough on people.
that, it is very difficult to project the quarters in years. the environment we're in, what type of environment, in terms of markets: --, does it lead to? and why has it not had an impact on wage growth? stephanie: you advise companies. we talked to how the fed will impact investors, companies, what should they do? should they jump out the window? blair: most companies have already jumped. they have been very well-prepared over the past few years at describing the market post. they have markets and financing, they have good manage of the environment. they are also very prepared for what happens when rates turn
against them. wonder,re is what i disney, the ceo the people you , they use this as an opportunity to borrow money and take risks. because rates are so low. or do you look at the global to see the demand is not materializing anywhere? i do not want to speak for bob, although he has been for a fewplined, years ago he went out for long-term bond. david: they got very low interest. they are capitalized in a very healthy fashion. they are going way out of the future. blair: it is a form of deleveraging. most companies are very well-capitalized. i think company step back to tediously first, and then they plan strategically.
that is something they do for the first couple years, then it becomes something they want to do. then they step back and say if sucks, thenronment they can get a cost sheet. stephanie: do not fall the fed. memoir, blaming congress for the slow recovery. he says, "and all the crises there are those who act, and those who fear to act. if anything, congress hinders that helps the economy." if he is correct, what should congress do? parts there are two story. the first part is that congress came through in 10 days. they had $787 billion of package money. they helped out park and the autos. if you look at the first six
months, they tried to fix the company and the economy. second, i think they do a good job. stephanie: even now? blair: absolutely. thes difficult to stimulate economy through fiscal policy in the short term. i think they are not as functional as anyone would like. are not inclined to spend a lot of money in the short term. whether or not they have a budget deal come between now and the end of 2015. in the big debate, obviously, has been what does your sheet look like in 10 years ago -- years?go -- she ran to pot for seven years.
edward green will secede her on an interim basis. i do not know, you have to wonder whether this is something that will fall out of the challenges she really has to hurt ministration. she is under a lot of pressure. erik: she had a large battle with nelson phelps. stephanie: she is the one. erik: blair is the downside of activism. shareholders have decided that they did not want a takeover of the board by triad. five months later she is leaving. on a general basis, the downside of activism is when a basis is focused too much on the short term. erik: it is too much on the income statement. blair: too much on a portfolio move, and not too much on the long-term. many people are focused both onshore and long term. in this case, he had a difficult fight. they support her on the basis of thriving under the
vote. the you think now, is at boards, like most boards is doing its own decision. most boards are. today, it is very hard to see any board that is not very proactive and very engaged in all matters. erik: they are a lot of pressure. david: this is number five. stephanie: a holder level. pick .5 --ompany six six point five companies will not be able to conserve cash for the payouts. suspending all nonessential investors. leading the mold when you program at risk. blair you are not advising this. -- to my knowledge maybe this will happen. if you were, what will you be telling the board to do? this is a company that reminds me, and a lot of other people like bp.
they have no idea when this will stop. difference,mportant in bp nobody claimed that bp intentionally blew up the rate. stephanie: it was a next day. blair: somebody intended to defraud the government here. so this is worse. david: i do not know, but in terms of nonessential, i think most companies will focus on the nonessential. blair: they want to make sure they are investing. so, i think he is sending a signal as to what is nonessential. i will also tell you that if you are an investor, you are to see somebody who is very proactive. you want to see somebody tried to create certainty. and you want to have a relationship to stay with them. erik: and make tough decisions. david: that has to be careful. blair is with us with our partners.
those are the stories that matter to markets right now. stephanie: billionaire philanthropist tom stier will join us this hour. what do you want to know from him? send us your questions. there you go. you can sit in the anchor seat right here when we return. we will see what stocks are up and down in the premarket. less than 20 minutes from the open.
♪ back.welcome i'm here if you're premarket mover. fedex is not moving at all. has a gains, but now it buy rating as nicholas says the practice is doing well in terms of margin. the ground business is going to pick up compared to what it has been doing. also, texaco came out and not only beat estimates in the reporting quarter, but also
raised its forecast. pepsi is doing very well, at least as far as the current quarters it is reporting four. if you look at pepsi's growth, versus coca-cola, it is not good. even if you take a look at pepsi's growth versus the industry, which is the white line here. it is well underperforming. pepsi has a lot to fix. also, take a look at the container store. it's missed second-quarter estimates. a lot of analysts are coming out, at least from a couple of firms, they are saying they are disappointed with this number. as you can see, investors in the premarket are 10% disappointed. it looks like it will get worse throughout the day. in 10 minutes we will speak with tom stier here on bloomberg go. stay with us.
♪ blair we are talking to off front, partner. and cofounder of the washington boutique. he is advised on more dollars and deals than anybody else. erik: so, in short, he is having a good year. blair, it has been a record year. we are on track for a record year. it feels difficult to see a future that will not end, but what happens after that? us will think, most of tell you we are in the latter part of the current rise. this is the eighth or ninth inning. multiple innings are at 13 times typical. that is a lot. over $10ad 47 deals billion.
that is a record. the overall volume this year surpassed the record of $4.5 trillion in 2007. all of these become data points in the big question of, are deals going to be too fraudulent? -- faulty? when that happens -- erik: it is the mere fact that people are asking the question? blair: i have already seen it. most people in the business, since the middle of the summer, had a bit of caution. it goes hand-in-hand with what you think of the economic environment. slowdown in the u.s. for 2% growth. and companies are very disciplined. david: what about an individual sectors? you see commodity business
plunging, prices coming down. to encourageying sales, we talked about glencore selling off their business. what are other sectors that you can see with opportunities? blair: great question. for the third time energy in the quarter was the second busiest sector, behind health care. it was a great time when the market saw a decline. i think you have seen that in energy. we also think that in certain energies like help in technology, and media there are industry dividends that supersede the general market. erik: you're talking about consolidation? stephanie: like what? is an health care incredible cash flow generator. whatthing is also about kind of disease and drugs you will treat.
the one that has been the busiest this year make sense to me. most of the year was incredibly busy. are activists going to say a more or less active role over the next stage? blair: great question. activists generally, come in all shapes and sizes. there is activism that works better than others. thatact of the matter is there is a force in the markets that is here to stay. so, i think they play a big role. my hope is that as they are doing that, they become more focused on the company's long-term. erik: you do not work with activist? blair: no we do not. erik: thank you blair efron. it has been great. tomfornia's hedge fund king stier. that will be next on bloomberg
♪ david: welcome back. joining us is philanthropist and hedge fund tightened tom stier. thank you for joining us. we have a lot to join us -- talk to about. sidelines largely in terms of your investments. tom: i have not love at a stock quote almost three years. david: we will not ask you to pick any stocks, but give us some sense, do you wish you were back in it. what would you be looking at right now? tom: the fact of the matter is
that i was a professional investor for 30 years. i loved it and i love the people i worked with. i love investing. cold turkey at the end of 2012. since then, i have been doing a different job, i've been going out as hard as i can. i am really glad i did it. does market volatility incentivize you at all? of few days we have a lot of men chomping at the bit, not necessarily buying big, but volatility is when true investors see great value. nothing here makes u-turn and say i need to get in? tom: actually, i see the world a little bit differently. what i see in terms of investing a longerthing else is time span. from my point of view, is a good
growth and time spent, over 10 years, price gets washed out by growth. stephanie: one more time? tom: you think about a company does over 10 years, that is very relevant to the short term. the longer you go, the better it is about how they went. erik: david: david: when you say it is longer rather than shorter, that is how you look at -- added? that gives an advantage to people in the short term. people have quarterly liquidity. tom: think about warren buffett. warren buffett is measured in terms of stock bets. brags about his ability to look 10 years out. stephanie: that is what makes in the smartest guy in the room. does he have an unfair vantage? no, he has the foresight to lock the money up.
tom: another thing that is true, if, one of the mistakes i think of investing is the idea of beat the clock. it is a good idea until it is not a good idea. i honestly think that is a huge mistake. the real thing to do is have something where you feel the wind at your back. the longer you wait the better it is. are you laughing at your neighbors? a california guy at where everybody has the best idea. are you saying that you will see a lot less of them? tom: no. the idea of starting a company that will change the world is a california idea. to go into a garage in change the world, i think that is great. i'm a huge fan. stephanie: people in new york do not have a garage. we will talk with some of
the new tech companies. before that, we know you have been out for a few years. if your sense of business itself changed? would you go back 30 years ago would you do it again? done -- no regrets about my investing career. if i did not think it was something that absolutely was necessary for me to do, i would , i would be compelled to work on issues that pulled me in. one of the things, you are very active in climate change. you are the majority shareholder. policy, which i talked to think about. to try to calculate the cost of the economy in the companies of the impact of climate change. the thing about that is,
companies get this already. what i do not understand is that if the companies get it, and the chamber of commerce is traditionally the group behind the republican party, how can the republican party come around to that point of view? stephanie: oslo to give it to give an opinion, i would say amen. -- if i was allowed to give an opinion, i would say amen. tom: if you look over the past few years, the majority are asking candidates to come out with a plan to get us to 50% claim energy -- clean energy by 2030. the majority of republicans want that. it is not a question of convincing people, everybody agrees that this is something that they have to do together. the real point is that people need to care about it. if this is your 10th most
important issue, you will not change your vote. it does not matter. people need to see this as the generational challenge. this is something we have to do. a lot ofreate businesses. capital.reate a lot of we will have a growth strategy for the entire company. the nra has done this on gun control. this is a tall order. i wonder, that makes sense, i in,er if the problems come they think the problem is difficult to address. they think it is difficult and expensive. people tend to put off things that they think will be very difficult. that is true, but they are wrong. the cost of global energy has that solaro far, utility, and wind are often the cheapest sources of electricity in the united states.
-- the fact is, david: even without subsidies? in most places in the united states it will be the cheapest energy. and lots of places in the united states is already the cheapest. -- it is already the cheapest. getting created by technology. think of a cell phones. every year they got smaller, more powerful, and cheaper. that is how technology works. stephanie: help us. with technology, what are the investment opportunities ergo which should we be -- opportunities yet go -- opportunities yet go -- opportunities? tom: i will give you example. fridayity announced last that they had a new solar panel that was a substantially more efficient than any solar panel
that had been put out. wherere on a cost curve they have a generation of electricity through solar, it will drive everybody out. drop,ting that continuing that will happen. that is the way it happened with microchips. they get cheaper every year. there's one problem, markets matter. companies have to raise equity, they have to satisfy a business. at some placesok by the hedge fund, they are marked up 55%. may not be the long-term investor you would like to see, but the point is, it is the investor loses faith in the promise of solar power, what happens to that industry? thatthere is no question there are individual companies and individual timing may differ. it will be early sometimes investing.
the old saying is that being early is as bad as being wrong. the fact of the matter is that i'm looking at an industrywide basis. it is an economy wide basis. the fact that we are moving to different energy generations and hold industries, the electric car industry. tesla. we are seeing things that have to happen. by that will happen company company, that is the job of people looking at stocks. they also happen in a rich person's world. if you look at the economy and income inequality, and prices we face, how to get people to say this needs to be my number one issue? you have people making minimum wage who cannot feed their own family. how does this become more important? tom: simple, this is the job engine for the future. this is how we get good paying jobs. to preventwill push climate disaster, but only if it
promotes prosperity. we specifically address the point. this is a good paying job that we can support. this is our chance to do this in the future. it have to be profitable on an up subsidized basis? the most powerful forces for good in this country has been capitalism. when a company is going to make some money. looking at doing good versus doing well. to persuade countries that it is their best interest, the bottom line, this is where we will go. david: i have a few different questions. first, most of the companies in the united states have but the investment. they want to make money. tippingre past the point where most of the big companies, the walmarts, the big companies know this is happening. they make it work for them. i think we will
have companies fighting against as aat will be looked at rogue companies. they are on the extreme. the fact of the matter is that the united states is going this way. these will be the jobs of the future. this is a gigantic task for us. job, it has toc be done here. we will create new industries to make it happen. tom: my senses have seen a real shift in the position of united states versus china. china was perceived as holding back. stephanie: a little bit of smog. tom: we need to catch up. they have changed their position recently. now, it seems to be that they are leading. dealing with the competition of china versus the united states. let me make two points.
i was told on friday that they had 400,000 protests last year about air quality. 400,000 protests. that's over 1000 per day. stephanie: that does not make the chinese government care. actually does, that's how they get trouble. the air quality is terrible. a live there, their children live there. they're serious about avoiding the problem. they are also very serious about the global opportunity to generate energy. this is the biggest industry in the world. if they dominate that industry, that is a rocket ship. they can be a rocket ship for us to have american-made energy right here. stephanie: let's go from rocket ship to car. omissions, and clean air. false wagon. -- vw. to wagon [laughter] what we make of this?
all these people that said they wanted to drive the right car. tom: the green believer. they think diesel is better than unleaded. i think that this was a shocking company not being honest, not just with the governments, but with their customers. the idea that you have a relationship of the transparency and integrity with your customer seems to me the critical part of the 21st century. and the idea that you would be lying to everybody in the most fundamental way is, when you think about how important faults vw is as a company, when you're that essential and that involved, to do that seems to be unthinkable. how did before this going to a room and decide we will cheat. stephanie: never. erik: it just happens. david: even in america we have
that history. erik: i want to go back to the point that you made about needing to make climate change the first item on people's list of priorities what comes to politics. you are putting your wallet to work to spend money to try to get people to think of these things. you are not alone. the koch brothers said they will spend nearly a billion dollars. -- $1 billion. to what degree will money decided this outcome? tom: i do not think it will decide the outcome. the truth is that money makes a lot of difference and politics the way the rules are set up. it is distorting, it is a scary thing. it is scary for the democracy. the other thing that is true, i think people have gotten that americans are smart. we believe that 300 million americans are smarter than anybody.
americans always do the right thing after they try everything else. we are really smart. information gets to americans, they are very brave and smart. they will do the right thing. david: that is the central bet that was made by the founding fathers. it was a crazy idea. we will trust everybody. tom: one man, one woman, one vote. stephanie: with all of the money and campaign-finance it is out of control. getting 12 the americans is coming at hyperspeed because of all the money. tom: there is an ability to try to obfuscate. i think, over time, american see through it. they are smart. we will come to the correct decision. we will lead the world. this is the generational
challenge. i do not think americans turned on that challenge. stephanie: how to feel about hillary clinton? saying inwe have been 2015, we are asking every candidate to come up with a plan 50%how us to how we get to clean energy by 2030. including misguided. david: has anybody done it yet go -- it? stephanie: all of the democrats have said it. tom: nobody has had a full plant. in our point of view, this is a minimum requirement. if you cannot get to that, then we are not on par. david: is this the role the politics needs to play in getting us to clean energy by 2030. erik: is a solar cheaper than coal and gas? let me add one thing, national politics. those go beyond state and local. it is not whether we're not we relied the federal government. tom: the way i think about this,
is that the government sets the rules, the companies make it happen. american industry, american entrepreneurs, american know-how makes things happen in the context of rules. if you're saying subsidies, let's talk but subsidies, fossil fuel companies are polluting. they are not paying for their pollution. have isest subsidy we allowing them to pollute without paying anything for it. i would say that if i had a --, ie company combatant collected or but's government -- garbage and put it in david's yard. i would have a really cheap company. stephanie: the neighbors would not agree. david: the fossil fuel companies, in the course of extraction they might be doing some polluting. in the course of mining they're doing polluting. the real pollutant is me. i am the guy who puts the nozzle of the gas pump into my car.
i'm the guy who decides to burnett fuel. as a society, that is why we need to have this. you ask what his government matter, government needs to put a price on everybody's pollution so that when they make a decision, they make the correct decision. that we can maximize what we it is free to pollute, people will pollute. stephanie: i do not even pull -- like that thought. people are going to pollute their butts off. david: let's move on. erik: twitter question of the day, what is the best way to structure a carbon tax? what do you say? and make it,
palatable enough to enough people dedicate supported. , of whom i have many, wanted to be revenue neutral. they are worried that this is a backdoor way to get a lot new money into government. they are saying that if you will do this to change people's incentives to use energy, do not use it to just build up a bigger government. use it to return it directly to citizens, or to reduce other taxes dollar for dollar. you are saying it is a way to make sure we have the right incentives for generating new energy. it is not a way for us to build up a government chest. stephanie: what kind of card you drive? tom: i drive a 14-year-old honda hybrid. stephanie: you do not would you go the tesla wrote? tom: i am not that fancy. stephanie: you could be. this has been an extraordinary day. we had a lot of ground that we
covered. david: great opportunity. you: i hope it is one that think is well executed. we were delighted heavy. david: thank you. rik: what we call you? we calm a billionaire philanthropist. stephanie: he is a great american. erik: he is participating in bloomberg's markets. the intellectual summit today. later on, he -- i am sitting down with coming your way. the interview live from the summit right here at 7:31. you are watching midtown manhattan on bloomberg. we will have more "bloomberg go."
"bloomberg go." we have the first word headline. federal investigators are going to florida to find out why a cargo ship sank and the bermuda triangle. it fell and waters and nearly three miles deep. the hurricane when it was a category four storm. 28 americans were on board, one body has been found. russiater is saying should contact the pentagon about its flight over syria. its flights over syria. skies are increasingly clouded since russia's started to jet attacks. jets flew into turkey. u.s. officials want to talk with russia to prevent accidents in the air. california is the fifth estate with a right to die law. the governor was talking about it yesterday. and let's terminally ill californians and their lives with a doctor.
oregon, vermette, and washington are the others. that is what you need to know at this hour. let's check in with matt miller. the majors look at index. you do not see a lot of movement. the s&p is unchanged. the nasdaq is down. the interesting thing is not the 35,000 foot view of the average. this is where the markets get fascinating. of 248 a dead even split gainers. two and 52 losers. looking to bloomberg here, this is a function i do not normally like to show. oreither have all stocks up all stocks down. i will dig into this on my terminal. if you to check this out. i can quick on the health care part of the pie. splits up the industry. i can clicked into the biotech part of the health care pie.
amgen, all big losers. it is the biotech's that are the reason we are dead even waited on top of the serial and health care. as far as volatility, this is why we have down days every day. since august 20 20. it is below 24 the first time in basically two months. volatility is coming down a little bit. that is a look at your markets. stephanie: all right. thank you my friend. we have to have a recap because this is been a very special few hours. we had some big names today. let's take a look. >> investments are good for investors, they are bad for traders. the best defense against illiquidity is not keeping it. buying things you called for a long. of time. is a greatld bond
opportunity for many people. >> there is a bull market improving. turn more we can aggressive. i wish the government would stop setting rates. i wish they would stop being unnaturally low. the fed should wait on holding rates. they should not raise rates until inflation is clear and present. when you look at the market there has been a very strong calendar. the last month or two has been slow. bob: i think they'll traded lower. so, with some warning signs. was a professional investor for 30 years, i loved it and i love the people i worked with. i love investing. i stopped cold turkey. tom: this is the generational challenge, this is something we have to do. if we can do it will create a great businesses and jobs. we will be internationally that ifive in a way growth strategy for the country.
stephanie: there you have it. extraordinary insight across the board. therd marks is delineating challenge of going to a traitor investor. this is great. they say i wish i owned that stock for 20 years. if you dig into bloomberg, and look at day-to-day volatility, it is hard to hold on the stock. erik: growth beets price. if you are willing to hold on for long enough, that is why the advantage goes to the private equity guy. the guy who spent the money the longest. favorite was tom keene onset because of matt miller strike. that does it for an other day of "bloomberg go." join us tomorrow with secretary larry summers. ♪
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for now. limerick has earned that sap miller has turned down the anheuser-busch takeover for $100 million, or 40 pounds per share. a.b. miller says it is not enough money. how much does anheuser-busch want a.b. miller? that $6.5 says billion will not come close to covering the cost of its omission cheating scandal. they are suspending all non-at -- nonessential investment. detail from germany. deja vu all over again. shreveport mack brown is reconsidering its business plan. he told shareholders that the company might spin off natural gas and oil businesses because of a slump in commodity prices. what are the options and how much money could fcx actually raise? ♪