tv Bloomberg Markets Bloomberg August 22, 2016 2:00pm-3:01pm EDT
david: over the next hour, we will be covering stories from los angeles, san francisco and washington. here is a take on what we are watching -- the redstone's have taken back control of viacom. viacom shareholders --viacom shareholder, mario gabelli, is here with his take. oliver: stanley fischer says the central bank is closed to meeting its target. investors will look for more queues at jackson hole this week. turn to thee will 2016 presidential race, donald trump calling for the clinton foundation to shut down immediately. will this move help narrow the gap in the polls? markets close in about two hours. let's had to the markets where
ramy inocencio has the latest. ramy: we are in the dog days of summer and all my about 18% or 19% on the day. we do have a couple of wins pushing our way with the news from the stanley fischer and falling oil, which we will get to. pretty muchs&p are a flat line. down as well and not a lot of movement here. go into more specific information with the sectors and their help. basically 50/50. utilities right now are of the most and health care had been higher because of that pfizer deal but is paring gains.
most in terms of the sector. before we get to that, let's talk about asp. gas is on the rise seeing it best day in the past three weeks or so. dominion resources are up on the order of 1%. natural gas is up, deftly off its session highs, but there's a forecast that during the labor day weekend that there might be higher than expected temperatures on the order of three degrees or so across the united states. oil is on the downtrend. that's falling by 3% and near session lows with gold and silver futures down. this is in part because of the rising dollar.
let's also take a look at what is happening on the 10 year -- at session lows and we are still at session lows with the inter-day yield now at 1.54%. definitely a risk off trading day. a little volatility after a couple of calm weeks. the remake of 10 her stumbled to fifth place in its box office debut. to make and million only got $11 million in sales of its first weekend. it's just the latest setback for viacom pictures which has suffered several box office disappointments this year. deciding how to reboot paramount will be one of the first big tasks awaiting interim ceo, tom dooley. betty liu is here with mario second-largest's voting shareholder. betty: mario: good to see you.
it is been hurts given that anemic box office. only under cells why something needs to be done. on the night the news had come out and that they settled and he was going to step down, you tweeted out make viacom great again. what does that mean? mario: you have a company that when sumner ticket over in a proxy fight, he had a set of dynamics with mtv, nickelodeon and so on. boughtey brought -- they paramount in the early 90's. how do we get back to that engine of growth? as a baseline, you have a company with 400 million shares. of that amount, 50 million is
-- our clients own half of that. take a at and say if you $40 stock and multiply it by the do?er of shares, what do we how do we get paramount to earn what their comparables look like? likeve to look at things cbs. let's assume i want to prime the pump and then do a lot of things. add aard is going to board of directors and they will come to grips and listen to the presentation. people, if i think i
have an enterprise value of 10 billion, i would have a prenup. i would have the ability that if xyz company, i have the right to take you out at some level. to make a simple deal attractive and then take the debt and do something else. you really want to have distribution in china and have other things going on. betty: i need a clear-cut answer. do you think he is right to pursue the sale of paramount? mario: i do not want paramount sold. it's one of the seven darlings of the early 50's and only mgm has had a little problem since then. it is an engine that attracts the attention of a lot --
it's $300 million. in the scheme of $4 billion of assets and the scheme of an engine attracting the world minds, it is a fixable upper. make viacomaid great again -- that ok seems kind of underwhelming. mario: it is clearly my client to our shareholders paying both sides of the bill. in that regard, there is one minor element and let's say fox or bloomberg, somebody has the vote. sherry had the vote. betty: issue behind all of this? mario: she's really in. she started at the trust, got rid of abrams and move down to national news and went to delaware. you have to make a compromise and this is the way to do it. the compromise took place.
he is the person to permanent league replace will? mario: if i was sherry, the last thing you want to do is get rid of both of them. i like tom. he's done a great job. betty: even though he has been an architect? >> i have a general contractor and the architect is pulling the spring -- pulling the strings and there's always a fight. you cannot hire a ceo -- this is a perfect, logical thing. if he makes the right changes, that's one thing but if he can't, what do you do question mark in company with scale and that has a certain attraction and that needs to be fixed. betty: but you are willing to give him a chance? mario: i gave him six or eight months back in february or march and that's over.
you've got 50 new direct errors on. -- he's gotsing until the end of the fiscal year. why would anyone want to change the cfo and chief operating officer? betty: i agree that's only a month away. thes say he doesn't make right moves. are we talking about a breakup of viacom's -- a viacom? $30 billion. is you take the notion of cbs back. let's assume you combine cbs with viacom. i don't want to put a ceiling on it. $20re going to talk about
billion and you have one owner and no takeover premium necessary. they control the vote on both and in the titian, you have $20 billion of debt. to the degree you can have less do it -- >> betty: why not just go ahead and do it? want sherry to vote for me. amazonse jeff bezos at is going to knock on the door and say what do you need this for? guys are numbers the vc and these are numbers the
digital world is used to paying. who else is going to be there? amazon or alphabetic? they all want content. andhave to go over the top go to the global marketplace. "finding dori" is for effect locally. betty: so you are leaning toward bigger, not smaller? mario: this is a wonderful engine. the wonderful engine that's going to keep going. with, there was a deal robert johnson and there's a lot going on in the ecosystem. betty: i know you like seeing all these deals. is in an areas
you like to play in. we spoke with john leisure from t-mobile. -- john leisure from t-mobile. who do you think should buy it? mario: if i was going to go out on a party and bid on the yankees, i would did on a team in milwaukee to say give me a license. t-mobile is an interesting asset, but i'm on the auction on spectrum side. not ask myher lawyers to tell me it's ok to talk. i'm passing on t-mobile. betty: someone tells you what to say? mario: absolutely. worth asts t-mobile is significant price over the current level, so is dish.
betty: we could go on and on about what charlie wants to do with all of that spectrum. in the round also. today, i think is up to $11 billion. betty: thank you so much. good to see you. back to you guys. david: betty liu there with mario gabelli. oliver: time now for the bloomberg is this flash, look at some of the biggest business stories in the news right now. are expanding their footprint in eastern texas and canada and will pay $53 a share in cash. representing a 42% premium over the trading price on march 3. that before the company's parks
strategic alternatives. david: the biggest banks in the to expandheresa may infrastructure, saying that could stave off a slump by vote cause by -- by a vote to leave the european union. oliver: bad news for beer drinkers in europe. beer just became more expensive in germany and france. heavy rains have shrunk the barley crop. france will between 1% less than one year ago. the companies use barley to make multiple a key ingredient in beer which will be passed on to an increase in price may -- in prices for beer makers. still ahead, janet yellen faces high expectations in jackson hole is weak. we have a perspective on the fed's next move. this is bloomberg.
oliver: this is bloomberg markets. david: commodity markets are closing in about 10 minutes. gold and other metals on the decline along with mining companies after stan fischer signaled an increase in u.s. interest rates is still possible this year. precious metals have risen as the fed feared tightening. the oil rally is also losing steam. the vti and brent starting with sharp losses on concerns of increased supplies from iraq and nigeria. informal opec talks may lead to stabilization. bank of america and merrill lynch head explained why he sees little downside through the rest of 2016. guest: the quarter is going to be soft because there's less
demand seasonally. we are going into the fourth quarter with a sizable deficit. with that kind of deficit, it's going to be hard for prices to come down in the fourth quarter under normal weather. if we get a normal winter, that will put a significant amount of thoughe on prices and one thing that could bring us back is a recession. maybe we get the saudi's to pump more oil into the market. i don't think that's likely but those are potentially to risks on the downside, so in general, we are buying tips and see prices ending at $55 a barrel by years end. -- i was surprised how
quickly the market rebounded. it's a good opportunity to buy the debt. i did not expect it to run that fast. tightening market is . you see it across the board and i think amand is very strong. alix: the brent dubai oil spread, i label at the most important in the world. brent equals light oil and dubai equals heavy oil. that's the way you were framing it. we have a ton of heavy supply coming online, so that spread is going to keep widening. talk us through the logistics of that. guest: that's a little bit of a nuance. , you are seeing the soprano -- the supplies because that is the oil that comes out of the ground in the u.s. and we
have had a major downturn. we are getting more saudi and iraqi and iranian barrels. to a wider will lead spread and as demand picks up the inventories which are pretty hike, the next move will be brent and wti of the world. >> you could pick any analyst and say why his crew back in a bull market and they say that it is intervention. from what i again from you in the last four minutes, you don't think that's the story. why? guest: opec can come in and talk and i wrote about this a couple of years ago following the opec meeting in 2014 where they assemble the cartel. i think it remains dysfunctional commentary bute
in the last six months, we have surplus toa massive a balanced market and now we're moving into deficit and it's not going to be a one quarter deficit. i think as soon as we start trying inventory, the pressure is going to build. is u.s. focused, as you mentioned. on the flip side, you have rigs building and u.s. reduction starting to pick up. the conviction we are going to be able to cap that mark -- cap that? guest: u.s. production will have to increase significantly to fill the gap. we have a deficit of 800,000 barrels a day but that's a significant improvement in u.s. production. year, fromd of the
then on, it has to improve sequentially. from january onwards, production will have to go up. >> when we sit down on friday waiting for the data point and that is9, 10, 11, 12, what needs to happen? guest: that is what needs to happen, otherwise the market is going to be tight. we are running in a market that does not have a lot of spare capacity. millionabia maybe has a and change in spare capacity and that is about it. we are have the ability to accommodate many supply disruptions. we are about 90 minutes until he end of the trading day. the u.s. averages trading in a very narrow range with the dow down about .1% in the s&p 500
down. slightly at 5240. oliver: it may not be much, but that's the story with stocks -- not moving a lot and the one thing that stays in the green, moving into the haven assets, the dollar is doing well, largely everything is flat but a little strength in the u.s. dollar and yields down across all the maturities here, not just in the u.s. but around the world. the j.p. morgan chief economist joins us with his perspective on the fed. this is bloomberg. ♪ [ clock ticking ]
we should fit into your life. not the other way around. ♪ everything is cool when you're watching a screen ♪ ♪ everything is awesome, ♪ when you're sharing a meme ♪ ♪ a voice remote, "show me angry kings" ♪ ♪ you know what's awesome? everything! ♪ ♪ apps that please, more selfies, ♪ ♪ endless hours of the best tvs ♪ ♪ brand new apps, shows to go, ♪ ♪ awesome internet that's super whoa... ♪ ♪ everything is awesome xfinity. the future of awesome. oliver: this is bloomberg markets. david: let's get a check on the first word news this hour with mark mark: trumped and in the newsroom. mark:former president will clinton says the work at the
clinton foundation should continue if hillary clinton wins the presidency. earlier today, donald trump called on the clintons to shut down their charitable foundation immediately. the foundation announced it would not accept donations from foreign contribute or's if mrs. clinton wins the presidency. trump himself donated to the foundation in the past. mrs. clinton is leading mr. trump in the latest poll out of ohio. she has a four point lead in the latest survey, just within the margin of error but consistent with recent surveys showing her head by the mid-single digits. 10% plan to vote for the libertarian nominee, gary johnson. trump is campaigning in akron today. citizens are recommended to put aside food and water in case of a terror attack. stockpile five
days of water and 10 days of food. recent terror attacks put germany on edge. insia will quit using bases iran to launch airstrikes on syrian rebels at least for now and according to the foreign ministry. the russians began the attacks last week. they criticize russia for announcing it was using iranian bases, calling it show off and ungentlemanly. dayal news 24 hours a howard by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. oliver: earlier today on bloomberg radio, mohamed el-erian said it is time for the fed to pivot to a more comprehensive policy response. >> the fed has to worry that it may be fueling financial instability down the road and that's the strongest argument for trying to slowly normalize otherwise you have
excessive risk-taking. investors will get fresh clues when investors speak at jackson hole and wyoming. my guest sees a rate hike happening in december. the comments about financial instability, are we at a point where fed members, and particular janet yellen, need to address the sake of risk-taking in the market? concerns have been with us since we instituted the rate in 2008. those advocating for a rate hike are more concerned about inflation, not wanting to get behind the ball on inflation. it's kind of an ambient risk and they view financial regulations having at least cap that risk. that would motivate the center of the committee to push for a
rate hike sometime. david: yesterday, the vice chair was speaking a few hundred miles south of where he will be this weekend and said we are close to our target and the behavior of employment has been remarkably resilient. how did you read that speech? stan fischer is probably a little more hawkish than janet yellen and his comments showed where he said unemployment come we are there, inflation, we are not there but we are pretty close. that sounds like a guy that when he submits his thoughts in september will probably have a hike later this year. he sounded little more hawkish than perhaps what we will hear from yellen but that's consistent with how he has been speaking. oliver: i feel like we can have this inflation without ringing comments whichms' reverberated through the markets
. when he talked about rethinking inflation targets, how does that anifest itself or does it in meaningful shift for policy and dialogue in the coming weeks or months? say these are things that are very long-running and i would expect a pivot in the inflation target soon. this is a dialogue that's going to happen among policymakers for many months or perhaps years. i would not think of this as is it going to be a december hike, this is very long-running in nature. david: is there an openness to reevaluating these targets? inst: as you mentioned, 2010, bernanke said there's no one who supports revisiting the inflation target. now you are starting to see that unity crack a little bit. i suspect we are moving in that
direction, but this is a slow process. you've also heard them say not so fast. williams'icking with comments and pushing inflation goal posts higher to stimulate that heart of the economy, are there risks associated with that ? is it a simple shifting of targets or does it come about in different methods of potentially having some feedback in the markets? isst: the biggest risk having a moving inflation target. to say whygoing won't it be 4% or 5%? i think the risk is not a higher inflation target but when you start shifting it, you may cause people to question it and they may be opportunistic. david: something struck me about the stem fisher remarks. whether it's what's happening in
china or europe, are we at a point where global risks writ large are no longer as much of a concern for policymakers as it has been? guest: you never know what the chinese are going to do overnight the u.s. economy has shown itself resilient to an external hit. it does look like the exit shock may not be as bad as we feared for the u.s. or even mainland continental europe. global risks seem to be a big little bit and you saw that in the july policy statement as well. perhaps that's not going to be the biggest things on their mind for jackson hole. this is a chart looking for pmi services and it shows manufacturing, which i think a lot of people were looking at some weakness here earlier on as that number dipped low the 50 economy is now
services in a larger part that he's to be but that has to provide some encouragement now that we are getting back toward a more positive number. 20 15, the 2014 and dollar rose and that had a big of that on manufacturing. the dollar has been down this year and you are starting to see the fruits of that in manufacturing. bad inventory cycle that we are getting through probably related to that dollar strength, so it looks like that is getting a little better and we will get some numbers on that this week. david: always great to talk to you. the chief economist at jpmorgan. coming up, howard marks gives a frank opinion about the tway 16 presidential race, saying the stakes are too high not to share his opinion. and it is being touted as one of the biggest ad deals ever -- chinese investors
oliver: this is bloomberg markets. david: time now for the bloomberg business flash -- a look at some of the biggest business story -- stories in the news right now. michael coors has been hit by a discounting binge. that's according to a company that crunches data for the fashion industry, finding department store price cuts have been running as high as 80%. oliver: citigroup is facing yet another fumble and its
relationship with cosco. the latest snafu -- the company mistakenly sent an e-mail to customers thing their membership had lapsed and their cards would be canceled. the e-mails were intended for cost go customers who had not renewed their memberships. they say all accounts have been restored. david: one of the biggest investors reducing his stock in glencore. he said he had to reposition his bat after the rally. they told bloomberg radio that .hey own a 6% stake that is your business flash update. donald trump is calling for the clinton foundation to shut down immediately has questions about philanthropy plague hillary clinton and her run for the white house. the clintonssays
have spent decades lining their own pockets instead of taking care of the american people. he says the clinton foundation is the most corrupt enterprise in political history. letter that sent a outline the changes that would weren if hillary clinton elected, saying he would step down from the board. what have we learned in last few days about the shape of this foundation and what it might look like if hillary clinton were to win in november? guest: the foundation would look very different if what we heard from former president bill clinton -- he said he would step down and would no longer raise money for the foundation, which has brought in millions of dollars, so if clinton won, they're would no longer be foreign government donations and that has raise a lot of questions about conflict of the countries
clinton has received money from, including countries like saudi arabia. they are trying to tempt down some of these conflict of interest concerns by saying if foreignwins that those donations would not be coming in. oliver: clinton has been scrutinized for his business dealings with regard to how he built his company. is this a tit-for-tat given that this is the clinton foundation ?heels a lot of power is this a response to those chrysostom's? guest: there are a good deal of politics involved in this. -- is this a response to those concerns? guest: this is a way for the
trump campaign to go on attack against the clinton campaign and calling them corrupt, questioning their ties to other governments. that is something the trump campaign has had to face with the recent resignation of their campaign chairman. there were questions about his ties to russia and trump's support for putin in russia. it's one way to question the clinton campaign about links to corruption. do you think we can attribute this change of whoction to stephen bannon has taken over running the trump campaign? is there a sense this is a real vulnerability for hillary clinton, that she has huge ties to the clinton foundation? guest: that is part of it and we have seen recent e-mail release is that show closer links between what clinton was doing at the state department, showing that those two were not completely separate as many
thought they had in. there have been new opportunities for the trump campaign to attack hillary clinton over this issue and donald trump recently bringing an the former breitbart ceo is one way to turn up the heat on hillary clinton. we know he's a no holds barred type of guy and is definitely going to be coaching donald trump to attack hillary clinton as often as possible. campr: what is the trump targeting? are there specific relationships they find to be particularly egregious or harmful? a couple of are things -- a few transactions by foreign governments -- at the same time, they were donating to the clinton foundation, so they tried to highlight some of that and there are countries lobbying the federal government at the same time they are donating to
the clinton foundation. there's the whole issue of hillary clinton and hers up for women's issues and women's rights while some of the government's donating to the foundation are notoriously not strong on women's rights like saudi arabia. the trump campaign has tried to highlight some of these issues and paint hillary clinton as a hypocrite. stuff. great thank you for joining us. staying on politics, howard marks penned a recent memo, saying this year's election says the starkest choice in living memory. he spoke more about his views in an exclusive interview with bloomberg's erik schatzker today. howard: my family and i concluded this was the time to speak up. that the stakes are too high for me to remain the ivory tower professor and it is extremely important to speak up as to who
will be our next president. stakes soare the high? why is it important to say something? howard: as president obama said in a recent speech -- all the people who ran for president during my lifetime i believe were a sickly confident. while i had a preference, it would not have killed me to have the other guy. this time, i don't think both candidates are equally competent and up to the job. i think it is very important we make the right choice. erik: it sounds as if you have effectively cast your vote before november? howard: i like to think i'm subject to change but i don't think so. i don't want to put words in your mouth. who do you think would be the more confident -- more competent resident question mark howard: i
think hillary clinton has the experience and the wisdom and presidentsume to be a and make the country run right. she has faults, she has several pronounced false. erik: which one concerns the most? think -- i think she has skirted the rules and not to the standard i would like to see. despite -- more despite that, she's a preferable alternative than donald trump? howard: mike bloomberg said who islect a president sane and competent and who has international experience. on all she qualifies
three. erik: what is it that concerns you about trump? howard: let's say he has a credential to be president. what is it? most people would say it is his business success. he would say that. howard: and his supporters would say that. i don't think anybody who is serious in the business world thinks he's a great businessman. i don't think anyone who is serious in the new york real estate community thinks he's a pillar of that community. lawsuits.n in 3500 he's the subject of a class-action fraud complaint at the time he's running for the presidency. ofhas an unmatched string bankruptcies which he is proud of. he says that shows how strategic he is. believe me, nobody ever
seems. tell me about this company and what so interesting about this deal. what's interesting about the steel be on the price tag is a two-parter. cash iscash deal where going to media.net being bought by this consortium of chinese investors. is expected to close by the end of the year when they will sell to a telecommunications firm in china. because theyappen don't actually have a lot of cash on hand. they've had to raise outside investment, mostly from nintendo's chairman to make the first part of the transaction and close it later. reversehis is kind of a
order. is this something we are going to see more of what the chinese companies on a bigger stage? ellen: definitely. he said he expected other companies to do a similar strategy. this has been a u.s. focused add tech firm and will be going of ac under the name slightly smaller existing public chinese firm. oliver: let's start from the top. when they divide technology, what exactly is that technology? ellen: they run the contextual ad network which is based on the content on the page. in 2012.he first inked he's a sole owner, so it is a pretty big payday so he was
pretty excited about the deal. and ach m&a has been down deal, even if it is one in a format we are not as clear with, a deal with a $900 million price tag is something to take note of. david: you mentioned dealmaking is down in the ad tech space. what does it say about the market for ad tech in china? ellen: if you ask anyone in they willertising, tell you online ads are booming. i have heard people say it is the fastest growing market. it's definitely something to keep up an interest in. media.net has half of its revenue coming from noble and that is what needed and an attractive target. they were interested in growing into online advertising and media.net was interested in getting into china. to hear them talk about it, it's a great partnership.
any idea if the business relationship between media.net and yahoo! will be affected by part of sale of a big its business which is also online here? ellen: i asked both sides that question and they gave standard answers, saying they were media.net says it's not going to affect them. thank you very much. a little later, we will hear from the ceo of 80 a.net. west"uned to "bloomberg with ramy inocencio today. this is bloomberg. ♪
we are live from bloomberg world headquarters in new york for the next hour. we will be covering stories from san francisco, switzerland, and japan. stocks turning lower this afternoon, moving cautiously on comments from fed officials. we will tell you how one hedge fund robot outsmarted its human master. david bank m&a is heating up. mn is heating up. oliver:. after stimulus and central bankers around the globe, economists have made the case that government should spur growth by spending more money. and bank of america is the latest firm to ask that