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tv   Whatd You Miss  Bloomberg  March 2, 2016 4:00pm-5:01pm EST

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♪ u.s. markets closing higher, the 10 year yield at the highest level in months. scarlet: the question is "what'd you miss?" aubrey mcclendon dead today. majort: watch crude as a global concern. one: a roundtable debate, person says there is no sign of a turnaround anytime soon. scarlet: we start with breaking news. alix: aubrey mcclendon died in a car crash in oklahoma city today. for more i want to bring in tina davis. is an incredible loss for the energy community in the united states.
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he was one of six people who underwent the shale revolution. >> he was one of the founding voices. he lobbied and washington, breaking away from the oil lobby. scarlet: chronicle for us his rise and fall. man, acquiringd the rights to drill on a property and tries to sell them for a profit. with is to pay -- chesapeake, he amassed 15 million acres. $13, it wasces were a great plan. under have now fallen to two dollars. alix: charif souki new aubrey mcclendon personally, and aubrey
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of the peopleone who convinced him to go into the natural gas business. >> he was a good friend. like me, he had a high tolerance for risk. we did many things that were complementary for years. he was one of the first people who gave me the idea of exporting liquid natural gas from the united states. scarlet: i know you were talking with the oklahoma state police captain. do we have more insight on what happened? driving, car was veered off the road, and crash. i was interested to see if there were skidmarks on the road. as of now, the police do not know. the car did burst into flames. the question is will the medical
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examiner be able to find enough evidence to determine what happened as he crashed. what happens with the doj investigation? he was indicted yesterday. there are two parties to this claim, tom ward started chesapeake with aubrey mcclendon , explain to us what the problem was. >> the indictment was focused on aubrey mcclendon, so that will be tricky. we do not yet have an indictment for the company called sandridge. do have a statement from the doj saying that the department of justice is saddened to hear of the death of aubrey mcclendon. we offer our condolences to his family and loved ones. wholet: there is no windows
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has got tied up in these rigging charges? , so there may be other investigations in the works, but we don't know about it. scarlet: aubrey mcclendon was what aubrey mcclendon -- was 's doingrey mcclendon exceptional in the industry? there was another company that was supposedly colluding to fix the amount of money it would pay to drill on land. alix: i would go to you and try to get your parents land and leases. i would least that land to a competitor for a low price. there were no bidders, there was no racking up the price, and that's how you would keep those costs low. aubrey mcclendon did start a
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american energy partners, the same kind of thing. i-chesapeake.min -chesapeake. this was part of his comeback. how much traction did he get? >> they got a substantial amount of backing, first reserve, blackstone, energy and minerals group, run by john raymond, so he had backing by serious people in serious money. again,acquiring land also extending into australia. andlet: aubrey mcclendon
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tom more work like a land leased guys. they would least your land and release it to a bigger oil company and pocket the difference. that is how they started. they went from that to building chesapeake, the biggest producer of natural gas in the united states, and then they had to move on from that. this was a transformation and what he was able to do with his career. so these charges and indictment, how does that link up with the financial troubles that chesapeake face later on. withnce they parted ways aubrey mcclendon, they have been trying to undo a lot of the things that he put into place, -- like i said, they were crawl brady with the federal government on this probe. alix: i did get a response from chesapeake energy.
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the company is saying "just because deeply saddened by the news we heard today and our thought and frères are with the family during this difficult time -- our thoughts and prayers are with the family during this difficult time." scarlet: to what extent is the doj's investigation over? how do they proceed from here? happens? does it stop in his tracks because of this tragedy? they will try to see if they can get the indictment of company "b." we reached out to teen keeper andns -- two teen pickens. he said that aubrey mcclendon was a true american entrepreneur.
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what we heard from charif souki. he was a cowboy and this is what he did. he change the world. industry whathale it is partly because of what aubrey mcclendon did. governor, my deepest condolences go out to you. what is the reaction to the passing of aubrey mcclendon. was still aclendon young man. he had his first grandchild recently. he is one of the owners of the oklahoma city thunder, a centerpiece agenda and oklahoma city. was my own experience, he the most generous person i have ever known. when my wife and i chaired the salvation army, move the fundraising campaign, he gave $5 million to the campaign,
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business school at oklahoma wesleyan, anybody who needed help, any project needed to be funded, he did. he was a person of interest goodwill, enormous personality. obvously, he was a swashbuckler. he was a giant in the energy business. if there is any connection and thehis death department of justice, i think it would be very tragic. anyey mcclendon is resistant indispensable citizen. there is no point about it. was 56 at his passing. had you spoken with aubrey mcclendon recently? >> i had lunch with him about a week ago. we just talked about this shale revolution. he was very instrumental in making america energy independent. oiled about how the low
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prices were impacting him, how $30 oil does not help anyone who is out there searching, exploring, and producing, but he was very up read, very happy, always had a smile, goodwill. say he my duke friends was a typical duke guy. when i heard he died to come i thought that was impossible. there was too much vitality there to die. he was always interested in what was going on. i do think oklahoma's going to how do you think oklahoma is going to vote. there was no gloom and doom. what is your sense of his state of mine after when the indictment came down. did you get any sense there was something coming in this capacity? i did not know.
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did he know? i don't know. he had counsel advising him during the process. my initial reaction when i heard about an indictment was, 81 count indictment for an antitrust violation. for a criminal violation. i had never heard of that. about an indictment one count and diet meant for a criminal violation. i had never heard of that. there is a connection, it is a great tragedy and great laws. if there is no connection, it is a great tragedy and a great loss. was anmcclendon indispensable citizen in every respect. the: i'm speaking to captain of the oklahoma city police department, and they were
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trying to understand what was happening behind the wheel, there were notes get mark, but he did go off the road and crashed and burst into flames. was he in good physical health as well as you know? >> to my knowledge, he was. when he wasndon head of chesapeake had a state of the art gymnasium for all employees. he would be in their exercising with everybody else, but i have no knowledge that there were any health issues. i hope there wasn't, but you don't know. this is very unusual event. he's a founding member of the american natural gas alliance, went on to inform ,merica energy partners obvously very ford looking incapable of vision. what was his next great vision when it came to the energy industry? >> was very excited when the
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congress and president agreed to let america cell exports abroad, but he was always and in energy -- he was always in energy independence person, why deal with the saudis, put up with the iranians, it made no sense to him, let's become energy independent in the united states and build the great economy on the face of the globe and continued the greatest economy , sohe face of the globe isaac he was hoping for a change of direction in the future, particular with respect our ability to really compete in the world and be energy independent here at home. alix: on the local level, aubrey mcclendon's great uncle was the governor of oklahoma. it really separates him from others. you yourself as governor of
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oklahoma, what did he do for the state? he brought in as a result of his genius and entrepreneurship, creativity, the horizontal e shaleg -- th revolution was a big part of his success. that iave been people talked to in houston who give him credit for commercializing what occurred. he created the second-largest natural gas producer the united states, a clean burning feel ane at home, and he was incredible genius when it came to creating wealth for other people and jobs for other people and in oklahoma city where there where chesapeake arena the oklahoma city thunder play, what he did for the salvation army at my request, or the oklahoma school of business of my requests, and other things. you name a good charity, and he
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anda personal contributor is a company, and was enormously oferous, cheery, a person total goodwill, a real wonderful human being. alix: governor, thank you very much. we are very sorry for your loss. scarlet: just to recap, shale deader aubrey mcclendon after a car accident and oklahoma city. he founded that gas producer in 1999, jumping to more than 39 billion dollars. his death cons the day after he was charged with rigging bids for oil and natural gas leases. aubrey mcclendon was 56. ♪
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. and carson will speak about his political future on friday of -- at the conservative political action conference in maryland. mitt romney will speak out ,omorrow in an address in utah laying out his case why donald trump should not be the party's nominee. that is according to a person with knowledge of the remarks. romney does not believe donald trump is the right person to lead the republican party. the source says that romney probably won't endorse another candidate or enter the race himself. the pentagon is looking for a few good hackers. the defense department recruiting experienced and vetted hackers to find
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vulnerabilities and flaws. the new program called "hacked the pentagon" gets underway next month, hackers hunting for flaws networks. with five months to go before the olympics, brazilian organizers are struggling to sell tickets. only 47% of the 7.5 million tickets have been sold so far. the revenue from ticket sales stands at $194 million or 74% of the total target. opening ceremonies are in august. global news 24 hours a day powered by our 2400 journalists and more than 150 news bureaus around the world. i am mark crumpton.
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alix: have emerging markets found a bottom? there's are saying recent stability just a head fake. when you take a look at valuations, you can make a call for the fact that perhaps we bottomed,of -- have why are you still bearish? true that on price the book value looks attractive relative to their history. price-earnings ratios come he get a slightly different picture. what has been happening is that analysts have been consistently over optimistic it the emerging auity market, and you seem
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downgrading of ernie's revisions. if you look at the asset values, that has not happened yet. what needs to happen with the asset valuations is you will see write-downs, particularly in the banking sectors, and the two biggest samples -- examples are china will and india. also with nonfinancial companies as well, you have an overstatement of assets. falseions give a slight comfort. they are genuinely cheap at the moment, but violation is not the only story about emerging markets. it's one reason why you would select emerging markets in a cautious way. tell us what a turn would look like here. before we get into specular, long-term bullishness -- in the
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short term, this is a practical view. china seems to have gone through a bit of a -- havedity prices seem to made the bottom here. recession in the u.s. appears to be behind us. are attractive, and technicals are quite positive. looking right here at ic stocks, and basically oil prices need to bottom. or two,y have bottom, there is more to go. would you think? -- what do you think? >> you have seen it china
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prices --ut commodity and i admit there has been a recovery from the bottom in china, the equity market in china has started to seriously underperform. the equity markets have byinated -- are dominated china, so it's possible to be constructive about dollar or hard currency debt and be errors on an equity benchmark, which is -- is dominated by china. get some serious underperformance by chinese equities. scarlet: were looking at the widest spread of emerging-market local debt to treasuries. pimco has turned constructive on emerging markets. morgan stanley has as well.
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the view by many that the worst markets,er to emerging does that give opportunity? emerging markets are the tail and china is the dog. there is a complete autonomy to that decision make it -- making at this point. the issues of leverage, excess capacity, rebalancing, political issues emerging -- those will not be turned around. the only positive is that they have the ability to stabilize over the short term. the balance sheets of the public sector are quite pristine and they have the ability to control capital. short-term, the ability to stabilize is there. long-term, the challenges are quite severe. alix: it sounds like your on the same page longer-term, but
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shorter-term you see more of a pop. >> exactly so. fixed income has value in that. carrie in the emerging markets is quite attractive. alix: what would make you more constructive on emerging markets? like to see improving policies capable of implementation on the ground. we spend our times looking at companies in the relationship between companies and the state, and one of the problems in china, and i completely agree on china, there is no sign of a turnaround at all. what you see is his relationship at the local level between companies in the state. local government makes it difficult for beijing to implement the policies they need to turn around. alice c the key across most of the emerging markets. alix: thank you very much. scarlet: we will be back on more
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on aubrey mcclendon. ♪
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to first wordt news. marco rubio insists he still has a shot at winning the presidential nomination. after heto reporters and his wife cast their early ballots and florida's march 15 primary. tuesdaybio says super was positive given his win in minnesota. ae white house is vetting potential nominee for the supreme court, according to the new york times citing a person with knowledge. neither kelly know the white house is commenting. background checks for gun purchases surged 41% last
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month, 2.6 million, making february the third week's month on record. there may be a new clue in the nearly two-year search for that missing malaysia airlines plane. an airplane part found along the coast of mozambique comes from the same type of plane, a boeing 777. global news 24 hours a day powered by our 2400 journalists and more than 150 news bureaus around the world. i am mark crumpton. close atu.s. stocks session highs, climbing for a second day, and extending their eight-week high. paul allen is in sydney. where expecting that positive lead from wall street to spill over here in the --a-pacific the new zealand the asia-pacific. the new zealand stock market is up.
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we're expecting the same on the nikkei and a sx. theassx. a tailings dam burst open and killed 17 people, so a deal has been reached, one $.1 billion in compensation paid over the first three years, expanding to more than $5 billion over 15 years, but does not include all the civil suits that bhp and its subsidiaries are likely to face. back,t: taking a step where expecting more economic indicators out of australia and china. tell us what they are. chinaservices pmi out of expected to show slowing but positive growth as china transitions away from manufacturing towards services and consumption. datastralia, trade
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expected to show a narrowing trade deficit for january come a $3.2 billion, following on from a gdp print yesterday, household construction, tourism, and education expecting to boost that number in australia. that's what were looking at over here today. shale pioneer and former chesapeake ceo aubrey mcclendon died in oklahoma city when his car crashed and burst into flames. he was 46 -- 56 years old. i read your book like the bible. tell us about how important he was to the energy industry.
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>> he was crucial. , ourally around 2000 nation and the biggest oil companies, everyone had given up on producing oil and gas in this country. going offshore, asia, africa, and there was some view in texas a guide george mitchell had discovered shale scoffed and said no were ousted this country are you going to find too much gas. then came along aubrey mcclendon and his partner tom ward, and they said we believe there can be a lot of gas found in this country. they win and least all over the country from oklahoma, texas, ohio, pennsylvania. , the likesnd rush with we have never seen in this country. to we have aubrey mcclendon thank for the pressure that's on iran, russia, lower gas prices.
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fast and loose and was aggressive, but we have a lot to alix: thank him for. follow himose will to this day. he was charged with rigging bids for oil and natural gas leases, colluding with another company to do so while he was the ceo of chesapeake. >> people do make deals. argued that he was doing a version of what people have always done. that he is the first person to be accused of this and 110 years, these antitrust accusations. evolved ine how it the courts, but one can argue that he was doing a version of what other people were doing, but maybe more aggressively. it's that point i would like to
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ask more about. you also profile others in your book. how does aubrey mcclendon compared to them when it comes to his willingness to take risk? of the biggeste risk takers we have had as entrepreneurs in this country. aubrey mcclendon believed in his ability to find gas, he had money, borrowed shares, margin call in 2008, he was worth $3 billion and instead of diversifying, he was barring more to buy more shares of his own company. you could argue that was reckless, but he did believe in chesapeake and the ability to find gas. in some ways he was proved to correct, he and others found so much gas that they created a gallant and it crashed. that hurt him. playing fasttioned
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and loose, what were some of the other missteps he made in his career? he did a lot of great things, but there were missteps. he didn't do so well personally in 2008 and got into problems, margin calls, went to his board and got a special even $75 million bonus, though his company almost went under and had all kinds of .roblems and convince the board he had art he sold back to the company when it did not have money to buy the stuff. they bought his art. he was an aggressive guy and did some dealings that put a lot of debt on the company. they are suffering right now. that is partly the result of what aubrey mcclendon did. scarlet: it is the shale industry that has given saudi arabia posited what does saudi arabia think of aubrey mcclendon
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? >> i don't know about aubrey tolendon, but they're scared death of the fractures. they used to dismiss and scoff, everybody made fun of aubrey mcclendon and those kinds of people, and it turns out they should not have been laughing. they should have been following what they were doing. gas for have natural the next number of generations, ample amounts of it, who knows what will happen in saudi arabia and russia as a result. laugh in thatt regard, as did the other fractures. so problem is they found much oil and gas that it crushed prices. scarlet: thank you very much. great perspective on the industry. ceo chesapeakend aubrey mcclendon dead after a car accident in oklahoma city.
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to thanke jumped more $35 billion in 2008. his death comes a day after he was charged for rigging oil and gas leases. he was 56 years old. ♪
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scarlet: i am scarlet fu. it is time for the bloomberg business flash. road dutch shale lining up for defensemen program. that's according to people with knowledge of the matter. the move follows the record takeover of the bg group. u.s. are alsohe on the list. scarlet: a new round of funding by 4 value the company
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billion dollars, according to people familiar with the matter. the company runs a messaging service and is raising $150 million to 300 million dollars, a leading investor has not been selected. scarlet: goldman sachs is doubt can to retire. bkin retiring. in a guest, have these assets turn the corner? >> i am a fundamental analyst. i also look at what the markets are telling you. year, we identified
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this double bottom in crude oil, then it broke through resistance trendline to the downside in place since last september. my technical friends would say and that is telling you a market wants to go up, and that resistance has now become support. we have seen oil stabilizing in the low to mid 30's. as younghai composite, indicated another big concern for markets this year, just reached a double bottom last friday. byhad the policy rate cut the pboc and a big rebound in trendline, just above resistance today, so we will see. the shanghai composite is a much more volatile market, but if it is putting in the same technical pattern as crude oil, then that would suggest we has seen a durable bottom in the shanghai composite, and suddenly these negatives plaguing risk assets one by one seem to be going away, and that would open up the potential for a much better
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environment for risk assets. scarlet: something weird happened over the last couple of days, bad data with china pmi, oil prices come off, and yet stocks to rally, is there a decoupling here between the asset classes? when markets go up one bad news, that's indication that markets want to go up. we had this year when relatively good news, markets were going down, and down, and down, and it were concerns about the unknown of where the bottom would be in oil prices, how slow the chinese economy would get, how far the market there would go down. those were uncertainties driving things lower, even though the data had not yet gotten that bad, and that might be what the markets are telling us, the fundamentals are not that bad. these big negatives are being moderated one by one. ecb foldhow does the
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this into their decision-making? >> they say they are data dependent. they ought to be data dependent, and not market reactive. that's what were learning from the fed. fed officials were straightforward in saying that we are concerned that markets are volatile, but we will look at what actually happens to the data, so we don't know whether the forecast is going to be accurate or not, but it looks like the employment data is good , consumer spending holding up ,ell, auto sales pretty robust so maybe things aren't that bad. market volatility is just market volatility. scarlet: what about the ecb? >> they underwhelmed markets with their easing back in december. i think we face another risk next week, because the inflation numbers were weaker than expected. the economy is slowing down a little bit. expectations are that the ecb will do something.
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however, the ecb officials are saying they are concerned about the impact of negative interest rates on the banking system, having difficulty buying as many securities as we said we would, because so many securities have gotten so low in yield that they don't meet the requirement of a so suddenly you sit there and say the ecb should do something. what exactly can they do? can they find in a securities to purchase further asset -- purchase for their asset purchase program? i think the ecb might be underwhelming again. alix: way below that of the boj if they canbut execute is the problem. scarlet: you mentioned negative interest rates. effects itout the would have on a baking sector. negative rates are complementary to the asset purchasing program
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and intermediation volumes, but our has a direct cost to measures of net interest margins, the ecb seems to be more mindful than other central banks given the issues. arehe eurozone economies much more dependent on bank financing than the u.s. economy, which is based on capital market financing. capitaln't as much market activity in the eurozone. the banking sector is more important to the euro. concerns about different banks and stability, and when you start putting negative interest rates into the equation, it creates more risk, so i do think the ecb does have a acre issue with the banking sector, but it they would negative interest rates, kind of hemming in what they can do next week. disappoint,b may but we have chinese stocks and oil that looks like they put in a double bottom and stabilize. how do you marry the two? underwhelm'she ecb
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and markets remain stable in the rebound a little bit, that would be another sign that markets are rebounding on bad news, so that could be a very interesting test , this improvement in risk appetite if you have unquote bad news -- "bad news" and markets continue to stabilize. so much fornk you your insight today. sales, nextave hurt week big into the company's numbers to see how they might recover. ♪
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scarlet: i am scarlet fu. "what'd you miss?" the falling price of gas is
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putting more money in consumers wallets, but not all retailers are benefiting. cosco, one who is $60 billion in annual revenue, but the strength of the dollar and falling gas prices are hurting same stores sales growth. the orange line tracks sales without fuel. the white line shows all sales, including fuel, in the red. posco is expanding despite headwinds and has more than 700 stores. executives targeting new expansion at the primary source of revenue growth. where is it happening? room to grow in the south and midwest, and in particular the northeast. money, andosts costco's plan is to add 20 newest stores a year. forecast of almost $3 billion for this year is more than double the $1.3 billion
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five years ago. warehouse clubs like costco can count on a recurring revenue stream. quarter,d of the first 16.4 million memberships. executive members pay the highest fees and make up more than a third of the member base and account for two thirds of total sales. we will be watching these numbers when costco reports this evening. detroit tong us from discuss costco, what can costco tell us about the broader consumer? i think costco is a great metric for where consumers are at. don't realizee that they are the second largest retailer in the u.s. and cater to a higher income customer because you have those membership fees starting at 55 dollars, so not everyone will
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spend $55 to shop at a wholesale store. it is a higher income demographic. in january, we saw same-store sales come down. it look like there was less traffic going into their stores. it gave a lot of analysts some consumerhat maybe this is pulling back. i will be interested to see what we learn from the armenians -- the earnings tomorrow. scarlet: one thing about cosco -- costco. about cosco is fairly high coming yet people love it because it is such a great deal. does it have any room to expand margins? it is so devoted to keeping prices as close to cost as possible. go in there and think how
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are they making a profit, but they are a bare-bones company. there's not a lot of frills in a cosco. infrastructure cost base. one thing you did mention is gas when it comes to margins. downrices have been coming and will affect sales. what has that done to? those margins -- to those margins? detroit.you are in the ceo of target is laying out a strategy. what can customers expect differently from target? their company laid out strategy for 2016, more of the same.
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he laid out a big overhaul to the company last year. signs thatt he sees it is on the right track and is pushing in the direction of food and groceries. they would not give a lot of details, more organic, better fresh, better private brands, more prepared food, and more localization, rolling out to more stores to give those stores a unique feel. everything from sporting merchandise two types of food more popular with some demographics. scarlet: thank you. weighing in onn the death of aubrey mcclendon, " aubrey mcclendon was one of the brightest men i ever dealt with. i always found him to be a gentleman. i am saddened to hear the news. it was one of the reasons that he was forced out of chesapeake. you need to know
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to gear up for tomorrow's trading day. ♪
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scarlet: i am scarlet fu. "what'd you miss?" brazil central-bank comes out with his decision in minutes. it will probably keep its interest rate unchanged. alix: there you go. the next jobs read. initial jobless claims at 8:30 a.m. that's a great read into the economy. on manufacturing,
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orders and durable goods at 10:00 a.m. that is all for "what'd you miss?" thank you for watching. alix:
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donald trump: i have thousands of employees all over the world. you see so many other companies constantly. they used to move from new york to florida. but they've moved from new jersey to someplace else. a friend of mine is in the excavation business and he always orders caterpillar. it takes a lot of courage to run for president.

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