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tv   Bloomberg Markets  Bloomberg  October 21, 2015 2:00pm-3:01pm EDT

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bloomberg market day. -- 2:00 p.m. in new york and 2:00 a.m. in hong kong. good afternoon. i'm david gura. ferreri drives to its wall street debut in style and investors rush to get behind the wheel. jill biden says he will not run for president after months of speculation. -- joe biden says he will not run for president after months of speculation. let's head to the markets desk. valeant is the biggest story. julie: stocks being dragged down by health care. more&p now down a bit lagging.the nasdaq is health care has been in last
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place throughout the day. released itstron research attacking valeant pharmaceuticals. valeant has reopened for trading following the company's rebuttal of some of citron's claims. shares down 29%, they recovered a little bit. earlier today, they sold for 40%. a record one-day drop. just to recap what we've seen on coming upoen research with a report earlier today asking could this be the pharmaceutical enron? and filed a report on the 19th. whether wexamining are seeing valeant do channel stuffing, selling a product would affiliate -- to an
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affiliate, booking that as a cell. -- as a sale. valeant sing their are not recognizing that revenue in their overall revenue number. does it own that affiliate which it is selling to? there's a lot of questions about what exactly is going on here. stock has beene bad news for a couple of big hedge fund managers. this has the top holders of the stock. the manager of a large well-known fund, 10% of this company. enormously climbed along with biotech for the past several years. even with today's drop, the stock has not seen that much of
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the decline and distal of over the past several years. have pulsed and company in addition to the institutional shareholders. the declines we have seen today have definitely not been good news for a lot of prominent names in the industry. david: i want to bring in cory johnson from san francisco to talk more about valiant -- to talk more about valeant. after the stock stopped trading, what happened? talk about his relationship with the company's that help them sell -- the companies that helped them sell. valeant did not evening knowledge the existence of the company. acknowledge the existence of the company.
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there was a company called called and a company sillidor. groupentioned there was a -- valeant does not by companies. using ahed some option backdoor method. it's a really strange thing. that customers should they have been denied a license to do business in .alifornia it was not clear what the ownership of philidor was. pharmaceuticals and a
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patient who needs to get a foot rno suiteedine -- philidor. david: it is hard to keep this straight. asking us for money, but we've never heard of you before. valeant is saying we contacted rno and told them they os money. -- oh us money. it's unclear what the relationship is. -- owe us money. if valeant is moving a product to rno,eant to philidor
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where are they recognizing revenue? that's the question raised by citron. julie: earlier, you talked to the journalist from the investigator reporting foundation. how did he come across this? did you talk about how he figured all this out? journalism.ches this a company that a lot of big hedge funds and short-sellers own. he's an investigative reporter. he found this link between rno philidor while poring over
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some documents at 1:00 in the morning. there's a lot of questions about this. a very unusual relationship that dor.ant has with phili how much business does valeant do with philidor? so muchhey have business with this agency? why make the ownership so difficult to figure out what that is? julie was going through the list of people who have invested in this company. why is it so attractive to hedge funds? cory: they have the ability to grow very rapidly by acquiring companies. one of the ways it finds that value is by jacking the price of a drug after it acquires it. something that has been talked
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about in political campaigns. it made the cover of business week a few weeks ago. company acqres the drug, they jack the price is rising profits can look attractive to investors. the ability to keep that going exactly how those sales are taking place are now falling under the microscope. the notion that third parties are doing these sales is raising concern. david: cory johnson in san francisco helping us make sense of this valeant news. let's get a check of the bloomberg first word is. mark crumpton at the news desk with more. michael: the democratic race for the white house appears to be set. joe biden announced today he will not be a candidate for president saying time simply was not on his side. biden: unfortunately, we
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have run out of time. time to mount a winning campaign for the nomination. while i will not be a candidate, i will not be stipend. i intend to speak out clearly and forcefully where we stand as a party and where we need to go as a nation. mark: the vice president is 72 years old. could campaign for secretary of state or another presidential nomination -- paul ryan meeting with house republicans about his possible bid to be speaker of the house. his coronation is far from assured. skeptical conservatives are wondering if they can accept the conditions he said for seceding john boehner. john boehner offered right his support. he laid out a very clear
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vision of how he would run the speakership. i thought our members responded well to it. he's very bright, he works hard and has a good relationship with all the wings of the party. mark: his message to his colleagues is simple. love me or leave me. he wants to be impressed as the sonsensus candidate by week' and. testimony from one of hillary clinton's top aides about the deadly attack in benghazi is not helping. democrats investigating the 2012 attack are releasing a full transcript of the meeting with cheryl mills. mrs. clinton will testify tomorrow. carl icahn is putting $150 million into a new super pac. he's planning to push for legislation to discourage texan versions. -- tax inversions.
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he voiced his support for donald last month. ofis rock is the next host the oscars. his second term as host, the first coming back in 2005. the academy awards show will air on february 28 on abc. that's a look at our first word is. you can find the latest news on bloomberg.com. david: coming up in the next 20 minutes, ferreri makes its new york stock exchange debut. more on the automaker's big day. michael dell buying emc. why he is no fan of carl icahn. ♪
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david: welcome back to the bloomberg market day. time for the bloomberg business flash. closer to a wireless is offering a hybrid cellular and wi-fi service using verizon's network. the move comes as the rice and the deal is valued at $4.5 billion.
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44% higher than the company's price on october 8. if you beat not a subway sandwich stop in 2003, you may have been shortchanged. a judge has approved a class-action lawsuit that begin in 2012 when customers complained their six inch and foot-long sandwiches came up short. only the nine named plaintiffs will be compensated and each will get up to $1000. you can always get more business news at bloomberg.com. go back to julie hyman. you are reacting to the subway news. that is amazing to me. a look at oil prices today. a big drop once again in oil prices, down for the seventh and
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eight sessions and well below $50 a barrel. again.declines once inventory report happened at 12:30. inventories showing the biggest back to back build since may. coming in twice what analysts had estimated. as refinersing processed more crude for the first time in five weeks. if you look at crude inventory numbers and that we have seen in terms of the build, you have it going out over the past year. we still have a lot accrued in the united states. a seasonal chart of the crude -- the yellow line is the average of the past five years.
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we are 100 million barrels above where we typically are seasonally at this time of year. oill not good news for the -- stocks declining today. ,ome of the worst performers the whole energy complex down. ferrari boss ipo got off to a boring start this money, raising $893 million in shares. the stock climbed 17%. they are up about 8% right now. matt miller spoke with the ceo at the new york stock exchange this morning. an incredible investor demand. >> the brand is extraordinary and important. we will keep it as it has been.
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there's no doubt what ferrari means. we've seen this today with the incredible interest from everyone. the general buzz and excitement about it. that will be kept. david: talk about that excitement. was it expected? reaction wasor overwhelming. that excitement was on the floor of the new york stock exchange. , the price was in the top range. we raised even more money. questions -- many semi requests for the ipo that -- everybody was affected. .he price was right for them it rose 17% at the opening.
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you mentioned how this is structured. talk more about that. what happens to the rest? in80% will be distributed the beginning of 2016. you get ferrari for free if you own fiat chrysler. owned by the son of the founder. he became a billionaire thanks to this today. you guys were asked about volkswagen. bit of what he had to say. we collectively will pay the price for that failure. andrnment regulation
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compliance engagement of this industry will have -- will be forced on us. it will become tremendous. else you wereng asked about, the potential for mergers. scandal will cause more regulation. we have to invest -- his ideal partner is gm. gm says no thanks. david: thank you very much. , with joe biden oncome of clinton weighs in the vice president's decision not to run for the white house. ♪
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david: welcome back to the bloomberg market day. after months of deliberation and speculation when joe biden finally makes his decision. the vice president says he will not seek the white house in 2016. moments after his announcement, fans on both sides reacted on twitter. "joe biden is a great friend and great man." says "joe biden made the correct decision for him and his family. i would rather run against hillary because her record is so bad." for more, we are joined by phil mattingly. -- theas not a lot of
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reason was he still grieving the loss of his son. it's just not the time for him and his family. phil: his family was ready and behind him, but the emotional toll was just too much. we of the interesting things noticed today, if you take out the first four lines of the speech, it was the same speech he would have given had he announced he was running. teame you talked to on his had no idea. there were so many different elements. the decision was finally made today. it just wasn't the time, the window had closed. david: did we get a sense of what role he will play in the campaign going forward?
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phil: if today is an indication, -- that's not a good thing for hillary clinton who he took a swipe at today. when asked to list her enemies, republicans were among the entities that came up. that was ann that error responsible way to deal with it. that should be responsible way to deal with it. there's no better surrogate in the midwest the joe biden. you will see them active on the campaign trail. they are active inside the white house. we have some movement on who might take over for speaker boehner. >> paul ryan has given the members until friday to decide if they can unify around him. two of the three segments in the republican conference likely to get behind it. , it takes 80% of that
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group of 40 two unify behind a single candidate. being he needs more family time on the weekends. they need to unify behind him 100%. most importantly, that nobody can challenge has been a ship. -- his speakership. he's talking to them this afternoon. there's a lot of work that needs to be done. it is this or absolute chaos. david: phil mattingly joining us in new york. still ahead, a hedge fund that knows no losses. platinum partners. we will talk about it, next. ♪
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david: from bloomberg will hit chris new york, this is the bloomberg market day. day.oomberg market
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netanyahu was in berlin today trying to explain what he believes to be the motivation behind the ongoing violence that has rocked his country for weeks. conference alongside angela merkel, the prime and said the dispute is not about -- >> they all said they are killing israelis not because they are frustrated by a lack of progress -- they care nothing for peace. jews and to kill destroy the state of israel altogether. mark: mr. none yahoo! is scheduled to meet tomorrow with isn kerry -- mr. netanyahu scheduled to meet tomorrow with john kerry. ayatollah endorsed the accord in a letter to assad rouhani.
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he warned his government to be vigilant saying the united states cannot be trusted. authorities will allow interviews with two suspects in connection with the 1988 bombing of pan am flight 103. the two suspects are believed to be imprisoned on unrelated charges. fewer americans are traveling abroad to join islamic state. the fbi is aware of six people who attended to join the organization in the last 3.5 months. that's in contrast to the nine or so who officials say used to try to go each month. the number of u.s. adults who smoke marijuana has doubled over the last decade. pot is now used by nearly 10% of adults for more than 22 million people.
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the trend reflects a cultural shift and increasingly permissive use. recreational use is now legal in four states. that's a look at our first word news right now. you can find the latest news on bloomberg.com. david: it was a rough day for commodities. i was just talking about oil. the selling has not been limited to oil. lco.g look at tlc oh a way to pull up all of the commodities. this is the daily exchange here and the declines we are seeing, we have seen some strength in the agricultural commodities. let's take a look at them one by one. you talk about oil and the fact that we saw a build in this oil supplies and that is pushing down oil prices.
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an unexpected build oil inventories last week putting pressure on oil. it is now on a losing streak. we've been watching the metals. seeingven though we are some risk on environment, we are missing the benefit and gold prices. commodities taking a tumble. any forare not seeing need for andge -- a inflation hedge. we do see gold prices taking a late lower -- leg lower. in theeen an increase flows to gold and silver. let's take a look at copper. not seeing as much movement as the others. right now, down about .4%.
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wells fargo is making some changes. the largest u.s. bank by market value just made a deal with credits wiese to bring on private bankers. -- credit's wiese -- credit suisse. erik schatzker is with us for a quick preview. suisse layingedit out his plans to reorganize that particular bank. talk about what that will mean for wells fargo. suisse isit retrenching. that creates opportunities for well capitalized growing institutions like wells fargo. 300s fargo hopes to bring private bankers from credit suisse while they shipped their strategy. one of a number of deals wells fargo has done recently. you saw them in the news buying
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assets from ge, $32 billion. taking advantage of a retrenching by general electric. these are opportunities that are not available to all banks. wells fargo has been growing. when i came out here for the first time in 2007 and interviewed the ceo with this company had not -- nobody was thinking they would be the largest bank in the world by market cap. that's what it is with a market value of two or $75 billion -- $275 billion. david: home mortgages, there has been a downturn. what is happening for wells fargo? erik: wells fargo has kept a good mortgage business. it's very seasonal.
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when you compare this quarter with the second quarter, there is a decline. the company does have a good reason -- is the largest mortgage originator in the country. where it's less and less refinancing going on as a percentage of total origination. purchase money is new money these people are buying homes, not just refinancing. we will talk about housing policy. is the government doing the right thing and housing policy? what is the future of fannie mae and freddie mac? david: thank you very erik schatzker in san francisco. he wasn't down with the ceo of wells fargo. it's been a rough few years for hedge funds. one has been bugging a trend.
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platinum partners has never had a down year. joining me now with insight, thank you for being here, talk about how this is structured >> platinum partners has gained 17% year for 13 years. that's on par with the best funds in the world like millennium orbital admin's fund .- or bill admin's fund -- bill ackman's fund. i saw platinum looking into payday lenders. what is this fund? there's not much out there about them. it's only $1.4 billion fund. i started digging into them a little bit trying to figure out how they made so much money over
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the years. david: you talk to people who said this is a fund raising some pretty big red flags. their investments are all very different. what example that caught my attention was the strategy they use that involved variable annuities. guaranteed investment contracts that insurance companies will offer to regular people. to entice people to invest, they , we will put ae 5% bonus on your account and your kids can inherit. these accounts cannot lose money. of the some percentage gains in the stock market and a bonus when you die. seems like a good way to pass on some money. the broker came to the fund and they said let's buy these contracts with your money in the names of people who are about to die. get the 5% return and in just a
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few weeks or a month, you cannot lose. was --d collected dust the fund put $56 million into the strategy. they got the attention of the fcc. they broke some rules. up company the fund had set had to pay $4 million fine. david: a rabbi was involved. broker turned to a rabbi in los angeles who volunteered with hospices. $200,bbi was given trick the ill patients into giving personal information so that bonds can buy these annuities on them. david: regulators have looked into this fund. it has not been implicated.
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>> there are so many of their investments that caught the attention of various regulators, but never has the fund got in any trouble. david: tell us about who is running the fund. >> he is a commodities trader, der.father was a trai he took over his father's seat. people remember him as being more sophisticated -- you did not have to be a citizen to trade commodities. he got into the hedge fund business in 2003 with a couple old friends who made a lot of money on internet penny stocks in the 90's this in the 1990's. he founded the commodities brokerage that blew up in the mid to thousands when it turned at its biggest customer was
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gold trader at bank of montreal. david: thank you very much. minutes, the next 20 joe biden will not challenge hillary clinton. he says he will not run for president. michael dell proving critics wrong. ♪
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david: welcome back to the bloomberg market day. there is some breaking news about valeant. julie: bill ackman is taking advantage of the plunge in the shares today. that reporting coming from cme, saying that he has acquired
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additional shares of this company. he was already one of the top shareholders. sharesseeing valeant with a bit of a leg up. the stock is down by 19%. 40%, a recordh as drop in the stock. all of this coming on the heels of the citron research report earlier today asking if valeant is the pharmaceutical and run. -- enron. it is pushing sales to affiliate -- an affiliate as revenue. valeant says it was not recording those deals as earnings. headline is that ackman is acquiring 2 million additional shares a coating to cnbc. take a look at the top holders of the company. -- according to cnbc. a spot inbump him up
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making the second-largest shareholder of this company behind the operator of the supply of fund. -- sequoia fund. it was also looking at where this situates valeant in bill ackman's holdings. these are sorted by market value. multiplied by the current share price. largest publicly disclosed holding of ackman's. followed by air products, his other investments that have been a bit more successful as of late. , overmentioned earlier the long-term, this stock has been an incredible performer. i went back five years, up 300%. -- the folks who upheld that for a long time, they've been pretty well.
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we've seen this big deterioration lately. the valeant soap opera playing out all afternoon. joe biden will not be our president. he will not be seeking the democratic nomination. hillary clinton just released a statement that reads "joe biden is a good man and a great vice president. serving alongside him in the senate, i saw his action -- passion for our country and our people." her statement should have been boiled down to one word. whew. out, heeports came would make an announcement in 48 hours -- we got 10 minutes notice. to talk aboute the reporting of my colleagues. people knew a decision was coming soon. not want to do this after
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the bank as a hearing. -- benghazi hearing. he decided he wanted to get this done before that. there's a big dinner and i went this weekend. -- in iowa this weekend. the timing seemed obvious. you have a lot of people talking to joe biden who don't have any idea what they're talking about. his family doesn't speak to too many reporters. mate?ll be the running this a lot of aaron information that comes up. not that people are lying or being deceptive, but they did not know. errant information that comes up. because the reporting about what
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his final hours, what his actual decision calculus was. wasmain thing here to check his family. he said his family was ready to go but there were -- but the window had closed. to me, this has come down to joe biden. in his heart, whether he was through the himself rigors of a presidential campaign. he would be starting from behind with a strong front runner in hillary clinton and strong challenger in bernie sanders. did he really want to go through that? he is 73 years old. he's been running for office since 1972. saying he will be
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vice president for another 14 months. a guy who has only run his whole life. his last run is now behind him. david: he had to have given some thought to fully. just pulling. it was there enough support for him to make a run in these last two weeks? >> you don't really know how strong a candidate is until it's been announced. people still view him as a hypothetical entrant. bernie sanders and hillary clinton are running ads. joe biden is more like a hypothesis. would his polling numbers have gone up or down? none of us really know. he was always going to be a bank shot in some sense. would there be an opening for joe biden -- it was always a gamble. reasons, it was a
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forbidding electoral landscape. david: thank you very much. john heilemann. up, we go to austin where the dell world conference is underway. what is michael dell have to say about the emc deal, going private and carl icahn? ♪
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david: welcome back to the bloomberg market day. it has been a busy day in austin where the dell world conference
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is taking off. talk to the biggest names in the tech world and she joins us now with the highlights. deal of talk about this that dell has forced with emc. emily: the biggest deal in tech history. a lot of customers, a lot of people wondering how this will work. one of the interesting things i learned is that they were talking about this for the better part of the year. being a private company really helped them. there one thing he missed about being a public company? michael: no. i'm sorry. there is nothing i miss about being a public company. emily: why not? michael: it's so much to easier to operate a private covenant. the speed and agility we can a surveyn, we do
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called net promoter score. scores are ater the highest they've ever been in company history. survey do an employee across all of our 100,000 members. we call it tell dell. those scores at the highest levels ever in the 15 years we've been doing this. when you line up the investments we are making in innovation and r&d with our leadership and ownership and they are and there aregned no disgruntled activist shareholder selling the company what to do, it's extremely popular. we are growing and investing. emily: what do you think of the
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carl icahns of the world? michael: there is a role to play for activists in investing. canhing taken to an extreme be a bad thing. i don't have a particular fondness for mr. icahn. emily: michael dell not mincing words about carl icahn. you don't want to end up like carly fiorina who was known for making the worst tech deal in history. we will have to see -- i followed that up with the conversation of michael dell and the ceo of microsoft. you will see much more of that coming up on bloomberg west. we will dive into a lot of the trans-we've been talking about. seein talkinge been about. when: my favorite part was
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you asked him about the prospect of being deals. he said he lived for this. we are looking forward to this. she will be on tonight with satya nadella and michael dell. coming up in the next hour, erik schatzker with that exclusive interview with the ceo of wells fargo. ♪
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♪ "the bloombergto market day."
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it is 3:00 in new york. from bloomberg's world headquarters in new york, good afternoon. i am david gora. and the wells fargo ceo, find out what the ceo of the largest bank by market cap thinks about the state of the global economy, and sales of valeant are tanking. research says they are using phantom pharmacies to drum up sales. they were making a comeback report isng citron's wrong, and fiat chrysler sells part of its ownership stake. let's go over to the market desk, where julie hyman has the latest. seen stocks go higher, just as valeant

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