tv Bloomberg Markets Bloomberg August 25, 2016 10:00am-11:01am EDT
vonnie: we go from chicago to moscow and cover stories out of washington and berlin. kansas city fed president ester says it is time to move again on rates. she says with the u.s. labor market nearing full employment and inflation on the rise, we should be on a path toward normalization. pimco gives a bloomberg a first look at it new global credit report. marc gasol will tell us how investors can still sick returns of 3% to 6% in the credit markets despite unconventional central-bank policy. find out where you should put your money. after touting profitability in the u.s. islier this year, uber it said to be looking at losses for
the first half of 2016 totaling $1.2 billion. while it may not be a public company yet, we have the details on how they are performing. 30 minutes into the trading day into the u.s.. let's go to the markets desk where ramy inocencio has a latest. ramy: a second down day in two days for the markets. it is an earnings, commodities, and fed story, as it was yesterday. commodities including oil and metals are down her second day in a row. investors on the sidelines because of jackson hole, wyoming. yellen to see what janet may say with regard to rate increases. take a look at the markets, fairly flat. downow, s&p, nasdaq, not by much at all. take a look at the biggest weight on the s&p.
that is in the tech severe, apple. done by 1.25%. yesterday, tim cook celebrated his fifth anniversary at the helm of the world's most valued company. his share price -- the company's share price doubled in that time. as we look ahead to the next iphone, questions about innovation and inspiration from the company. hp, weighing on the s&p, down on earnings as well as guidance, down by 5%. it reported after the bell yesterday, fourth-quarter eps guidance was lower than expected , although they did beat their eps forecast. printer revenues fell by 14%. theiret about 80% of profits from printers, so that
is definitely taking a hit. we also need to speak about mylan. shares are going the other way over the past four days, down 11% today, remounting 2%. theas high as earlier in session but up on the day for now. this is after the company said it will address the price fiasco over the epipen allergy shots. that means people can get up to $300 back that will have to pay more, as the retail price is around $600, so still trying to address that, but i wonder if this will address the concerns congress has been leveling at them. mark: every industry group is down today after the biggest three-day gain in weeks. we have not closed 1% lower since august 2. we are all down today ahead of
jackson hole tomorrow. cost productions improving, profitability in the netherlands. this is a company which comes on exceeding 60ales billion, mostly from the u.s. you know their brands, food lion, giant. homebuilder, building material supply, first half earnings and sales ahead of estimates, with continued positive momentum in the americas. modest impact of early economic recovery in europe. it expects further progress in the second half. the chief executive said the only real impact of brexit is some softening in nonresidential construction. shares are up by 2.3%.
.8%, ahead of by the original estimate of .7%, thanks to household consumption. the data comes after two inconclusive elections since december. vote prepares a confidence on august 24 for a second term in office. vonnie: we will be digging more numbers later on in the next hour, spanish and other european countries. let's check in on the first word news. in italy, rescue crews are using their bare hands some cases to search for survivors from that killer earthquake. was3 magnitude aftershock not a short time ago in the ravaged town of amatrice.
at least 200 41 people died and hundreds more were injured. the quake flattened three towns in central italy. many of the buildings in the region were built hundreds of years ago and have not been retrofitted to withstand earthquakes. kabul, 13 people were killed in an attack on the american university of afghanistan. three dozens were wounded. the assault began with a suicide car bombing. two attackers then opened fire. the siege lasted nine hours before police kill the two. no one has claimed responsibility for the talent that is expect did. brazil has started to deliberate whether to remove resident doma recep from office. she is accused of shifting money from budgets to address
deficits. there will be i final vote next week. a government owned nuclear power company in china for years ago pressed american consultants to hand over secret technologies and documents, according to fbi files. china general nuclear power has been charged in the u.s. with trying to steal nuclear technology. the company says it follows the law. last month, the u.k. delayed approval of a nuclear plant over concerns about china nuclear general's involvement. later today, hillary clinton will speak in reno, nevada and she plans to press her view that donald trump is taking a hate movement mainstream. she will also try to link his candidacy to the so-called alt -right wing of american politics. donald trump called hillary clinton a bigot, seeing people of color only as votes.
global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. i'm alisa parenti. this is bloomberg. vonnie: global markets continue to simmer as investors wait to see if janet yellen drops any clues at jackson hole about the federal reserve's next move. george, shester will say the time is right for a rate hike. here is what she told mike mckee. >> the most recent meeting i did express my view that i thought it was time to continue the process of normalization of interest rates. when i look at where we are with the job market, when i look at inflation, our forecast for that, i think it is time to move. should you play the uncertainty around fed policy? joining us now from chicago is andrew slimmon.
andrew, does it matter to the stocks that you hold in your fund whether there is a 25 basis point increase or no? >> absolutely not. ofesther one. if you look at this chart, you will see volatility will rise in the next three to six months. at least traders are betting on that. would that be helpful to inestors, particularly places other than large cap? >> to me, the market is sending a strong message. in comparison to last at this
time, small caps were woefully underperforming the s&p, which was underperforming a few of the large-cap stocks. are year, small caps outperforming the s&p, which are outperforming the mega-caps. generally, when small cap are outperforming, that means the market is anticipating a better economy. to me, it is a much more powerful statement about the market and what it is predicting for the economy, then last year at this time. mark: last year, we were worried about china's devaluation, a possible imminent federate kite. -- fed rate hike. what happens if we get some sort of spike in volatility? can the market cope? go back to june 24, and you put in any search function brexit crash, the
number of folks have predicted it was unbelievable, but the markets have had a very strong rally, let especially by emerging markets. i think the market is due for a cause. if the fed were to raise rates, that could cause the vicks to spike and that would cause a pullback. but i don't think it will be substantial. the economy is going to show better strength in the second half of the year. remember, a lot of the weakness came because of the weaker oil, stronger dollar, and year-over-year comparisons in those areas will look a lot better later this year, which is why value stocks anticipating that have already started to move. vix, summerrm, low doldrums, you could get a pullback. i just don't think it will be substantial because we will see better economic data, going into
the end of the year. mark: your premise is based on a solid economy in the u.s. apply, if it logic does, to what is happening in europe, and countries like japan? you would have to say, their economies, especially post brexit, may not be on solid footing. iswhat brexit taught us shoot first, ask questions later is a bad investment philosophy. everyone who sold right after, it was a mistake. the reason, as we are now understanding it, people are realizing brexit will take quite a while to work itself through. stocks in europe got extremely cheap relative to interest rates and so forth. dividend yields got very high relative to bonds. i think you have had a .orrection back to the upside as reality has leaked in.
strategies,obal when i think about where the safer play is right now, to me, it is the u.s.. i think we will see better growth here, and brexit will continue to weigh on the markets in europe. but i think the mistake was initially to assume it was an instant disaster, and that has not been the case. with the recovery in europe, it is better to be in the u.s. vonnie: sounds good but i want to continue with mark's theme. mark mobius spoke earlier about japan. engage inll helicopter money with great care .nd reluctance of course, if they do it to carefully, it will not have the desired effect. that is the dilemma they are facing. happens, would
you be more positive on japan stocks? >> no, because i still think it will be -- true of europe also -- a search for yield. the yield plays in europe and japan continue to work because of this continued economic malaise. quantitative easing, all of , continue to push for this bubble to continue in dividend yield plays. int will be in the story those markets versus in the u.s., where as the fed begins to normalize rates, this yield serge ibaka will diminish and the opportunities will be more in companies participating in bit -- better economic data. vonnie: morgan stanley says to look at small caps and perhaps look at those safe place, thank you. much more coverage of jackson hole to run today and tomorrow.
thei arabia may finalize pricing of its first dollar bond sale. according to people familiar with the matter, the saudi's may hold a roadshow for investors at the end of september. saudi arabia looking to plug in budget deficit caused by the drop in oil prices. month forhe biggest hedge fund redemptions in seven years. investors withdrew $25 million from hedge funds last month after $24 billion with with drawn in june. investors have been critical of their fees but performance has been lackluster since the financial crisis. let's get to the markets desk. ramy inocencio has the latest. retail'm looking at stocks right now. a lot of earnings coming out with the end of the season.
first, let's talk about tiffany and company. they are seeing their highest share price since the january, up 6.7%. its earnings beat estimates, coming in at $.84 versus an estimate of $.71. some bad news, same-store sales dropped about 9%, not including currency. on the flip side of things, take a look at some other jewelry stocks. signet moving the other way. a 1.5-monthwn at low. movado cut their estimates for the quarter. moving on to fashion, tilly's
guess, soaring on their earnings report. is raising the low end of their fiscal guidance. second-quarter estimate is up $.14 versus an estimate of six cents. also, it's cops sales were better. sales were better. mark: thank you. still ahead, russian bankers headingtoward -- banks toward their levels in 2014. we are in moscow with the latest results. this is bloomberg. ♪
the countries biggest lender almost tripled its profit in the second quarter as the russian emerginghows signs of from its longest recession in two decades. jakeore, let's get to rudnitsky. what is behind the profits at the bank? a couple of things. the share price has gone up by 100% in the last year. is probably russia's best lender, the lowest borrowing cost, and one of the few big lenders that has not had to get a russian bailout from the government. now that the russian economy is turning around, sber is doing pretty well. return on equity rose, net interest gains. any areas of concern for the lender? >> there is one area that raised
a few eyebrows. they moved a lot of nonperforming loans, renegotiated them. they don't have to provision them the same way they would .ave to a nonperforming loan that would be a way to cook the books of it and hide some of the bad debt they have on your books. overall, it is a good picture. vonnie: that reminds me of the chinese banks. is that why they have stabilized recently, at least state owned ones, because levels were going down. it is a little shady, isn't it? >> if you want to look for shady banks, sber is probably the least out of russian banks, but there is definitely a few questions about these provisions they have left for renegotiated loans.
the real question in russian banks, a lot of these loans, we don't know what they are worth, and they may not be worth much. vonnie: it surprises me that they were able to beat analyst expectations, because certainly they foresaw this. >> the way they beat expectations, there were a couple of one offs. they sold a ski resort that they owned in sochi. the analysts have no way of knowing when they will unload projects like that, so i think that is why they beat analyst expectations. on the other hand, even the analysts were projecting sber would have record earnings this quarter, and they did. offs that these one- boosted profit by about 15% versus the analyst estimates, they still would have done pretty well. mark: record earnings, is this
sustainable? >> if you look at their share price, they are priced 25% less than other em bank stocks. i think there is a lot of upside, if you want to take a punt on russia. of course, a lot depends on the price of oil. the jake rudnitsky, thank you. still ahead, the case for credit. --co's chief reddit officer credit officer mark easel joins us next to explain what he is bullish on. this is bloomberg. ♪
news. alisa parenti has more from the newsroom. turkey's incursion into syria may prove to be a game changer in the country's civil war. the operation is seen as a sign that turkey has changed from its insistence that bashar al-assad step down. the military operation is aimed at islamic state forces in syria near the turkish border. it also want to stop the advance of kurdish rebels in the region. the obama administration is nominating current world bank president jim young came to a second term. he has led the organization since 2012. he is the former president of dartmouth college. donald trump is welcoming the support of a backer who cannot even vote in the presidential election. the former head of the uk independence party nigel farage, joined him on stage in mississippi, saying he is right on immigration and said that he
would not vote for hillary clinton, if you paid me. the arizona coyotes are breaking ground in the nhl. they have hired what is believed to be the first full-time female coach. she worked part-time for the team last year. ae hiring is the latest in series of breakthroughs for women in men's sports. last year, the buffalo bills made catherine smith the nfl's first full-time assistant coach. the nba has two female assistant coaches. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. i'm alisa parenti. this is bloomberg. pimco says negative rates are making credit arc it's very attractive, adding investors could get potential returns of 3% to 6% by favoring u.s. investment grade credit select high-yield corporate bonds, emerging markets, and more.
mark kiesel offered the latest note. he joins us from california. thanks for joining us. in this search for high quality income generating return, are the spreads good enough? >> we think they are. basically, the economy in the u.s. is actually doing quite well. we are seeing wages pickup, financial conditions ease, and basically the consumer is about as healthy as they have been in 10 years. technically, what is driving the credit markets is the fact that we have $12 trillion in negative yield government bonds. goodsis a huge demand for in the world and not enough income generating assets to provide that return for investors. foreign investors are increasingly moving into the credit market. most importantly -- and this is a development over the last three years.
hedged yields on treasuries are now basically zero, so they are no longer competitive with foreign markets. we think investors who traditionally favored government bonds will now increasingly shift to the u.s. credit market and emerging markets for the income they need. portfolio managers basically ask a number of questions, and i know this, because i have read the report, deciding where to put the money. alert the viewers to the kinds of questions they are asking themselves when they try to pick the best credit opportunities? have 240 portfolio managers around the world, 55 analyst. we are looking for companies where the companies are most healthy. specifically, we have a bias to favor high barrier to entry businesses. these are businesses that had patents, intellectual property. secondly, companies that can
raise your prices. if a company can raise your prices, that is a good thing. third, we had a bias for growth. cyclical with superior and secular growth. fourth, companies where bondholders are prioritizing the capital structure. that is what we are looking for across our companies. vonnie: are you concerned about issuance? 6%,are talking about 3% to but issuance has been at an all-time high. we continueday, do to see companies issue more? >> we have seen record issuance in the investment grade market, a lot driven by m&a. importantly, there has not been a lot of long bond issuance. yet, that is where the demand has been. the 30 year corporate bonds have seen significant demand. what is important is the
high-yield market issuance is less than it was last year. we are seeing the issuance and bank loans and emerging-market issuance is relatively benign. the global credit markets are not providing enough supply relative to the demand for income. basicallyal banks taking out a lot of income by buying up these government wants, the demand is simply overwhelming the available supply of income producing assets. vonnie: so what is your conclusion, at some point, do those bonds get too expensive, or asked ester george was saying, are there and balances we need to worry about? >> i would say we are more cautiously constructive on the markets. we are being more disciplined in our approach, favoring areas where the fundamentals are still help the. we are tying a lot of our investments to industries which are still midcycle. airlines and auto are more later cycle.
the one area where we think we have more room to run is housing. we are under building versus long-term demand. a lot of these homes need to be remodeled. building materials look very attractive still. we are favoring nonagency mortgages. within the consumer sector, we think health care is attractive, gaming, cable, telecom, all of those areas tied to the consumer continued to show strong fundamentals. mark: you say returns of 3% to 7% ifthe next year, 5% to you are feeling more partial to risk in emerging markets. the little more specific within the emerging markets face. >> what is driving the demand is partially technical, a huge demand for income. but also it is fundamentals. brazil and russia have also
and now they are improving at the margin. another development is the currency. inflation dynamics have turned more favorable. and now they are improving at the margin. you are seeing currency appreciation. the current account surpluses are still pretty robust, as is the fx reserves. if you look at the credit fundamentals, they are set to improve in many of the emerging markets. importantly, you have seen a rebound in energy. china, which was at the beginning of the year, view to have a hard landing, continues stable.relatively all of those factors are contributing to this demand for emerging-market debt. mark: we are all aware next month the bank of stable. england start its corporate bond buying program, an 18-month program, a 10 billion pound program. the most issuance this month in two years.
are really taking advantage of the potential for the bank of england buying corporate debt. how low can yields go here for investment grade sterling bonds when they are roughly close to record low levels of 2%? we do not think there is much more upside there in sterling corporate bonds, or in the ecb europe corporate bonds. we think the valuation advantages in the u.s. that program is set to go over 18 months. it is more then dwarfed by the 60 billion government bonds they are purchasing over the next six months. they are still disproportionately by much more government bonds. the ecb increased its purchase program from 60 billion euro to 80 billion euro per month, and they are now buying 7 billion of corporate. europe overall is by much more corporate bonds than the bank of
england. but the point you are making is a good one, do not buy assets were central banks are subsidizing those bonds or prices. but that is not by corporate bonds. that is why he was corporate markets continue to look the most attractive. vonnie: you would not by any european corporates? we actually like financials and banks, particularly in the u.k.. brexit has put the economy in the u.k. at risk, the risk that it could enter recession, but the banking center has actually almost doubled its capital in six years. with the bank of england support , liquidity support, likely lower interest rates, that banking sector is very attractive in the global credit market. europe and the u.k., we are less positive on non-financials, because of the low yield, but we do see good value in u.k. banks right now.
vonnie: i would have thought there would have been more of a credit risk. let's change gears. if you look at my bloomberg chart, various measures of .nflation, atlanta gdp you have a baseline scenario of inflation near 2%, 4% nominal gdp growth. conviction come from, that inflation will get up toward 2%? even ester george was saying, we don't know what is holding it down in the u.s. look at the cpi data in the u.s., 60% is services. services inflation is now over 3%. if you look at wages and the atlanta fed measure, wages are 3.4%. with the rebound in commodity prices, we feel slack in the labor market has come down.
we are seeing broader evidence of pricing power in labor. companies are starting to pay people more. what was very revealing was fisher's comments talking about the resilience of the u.s. labor market. you will start to see more hawkish fed speak. tomorrow will be fascinating with yellen. i think the market will be very attuned to what she says, particularly to how the economy is doing recently. vonnie: and a rate rise in september? will happenthink it in september but the market is only pricing in a 28% chance. as of this morning, the market is pricing in a 52% chance by the end of the year, but we think it is higher than that. we think the conditions domestically are robust enough for the fed to move. mark kiesel, thank you for joining us.
vonnie: you are watching bloomberg. i'm vonnie quinn. mark: i'm mark barton. this is your global business report. mark mobius says helicopter money is coming to japan and it could be as early as next month. he will tell us why the bank of japan cannot resist it any longer. mark: apple want to popularize -- capitalize on the popularity of social media. what changes it is making to the iphone. etf's were invented for
small investors, but over the years they have grown more sophisticated and complex, and that has regulators concerned. veteran investor mark mobius says helicopter money will be japan's next experiment, and could happen next month. combined with a stronger yen, he says this will force the bank of japan to compensate a policy it has repeatedly ruled out. they will engage in helicopter money with great care and reluctance. if they do it to carefully, it will not have the desired effect. that is the dilemma they are facing. cook marksweek, tim his fifth year as apple's chief executive and has done very well for himself. he hasthat time,
received in share value $300 million. apple stock has doubled under his leadership, placing it in the top performing third of the s&p 500 index. meanwhile, apple want to capitalize on the popularity of social networks with new iphone features. according to people familiar with the matter, they are developing a video sharing and editing application as part of a new focus to integrate social networking within its mobile products. new problems for the boeing 787. is canceling more than 300 flights on the dreamliner through the next because of engine problems. they say they need to change some of the turbine blades. all engines use rolls-royce engines. three years ago, all airlines were grounded for three months after lithium-ion batteries melted down.
vonnie: time for our bloomberg quick take, where we look at context and background on issues of interest. exchange traded funds were originally meant for small investors aiming to lure the attention of a broad group of securities, but along the way, etf's exploded in demand and diversity. these days, products come in thousands of laborers and are popular across all investing brackets. etf-related product is on the scene, exchange traded managed funds. they do not need to disclose their does hold their -- their holdings every day. managers are not trading the underlying security during the day to man -- to be an industry benchmark. meanwhile, eds continue to expand what they are buying. the inflows by corporate bonds, government debt, or loans estimate -- ballooned over the past years. regulators are concerned that during a market drop this may exacerbate a saw as many are
made up of high-yield securities that change hands in frequently. the original and one of the most popular etf's is the safe street spdr. traditional eds do not use managers who actively buy and sell stocksspdr. they replicate the performance of a basket of securities. who wantws investors to be in emerging markets are small-cap stocks to avoid the cost, hassle, or risk of picking individual companies. here is the argument. carl icahn and howard marks and raise concerns about trading high-yield debt etf. fink asked chairman of blackrock has criticized some etf's, saying they could blow the markets. now the sec has proposed limits on the etf's in a liquid assets and leverage caps.
you can read more in our quick take on the bloomberg. bloomberg.com for more stories. mark: global central-bank leaders gather in jackson hole, wyoming today, everyone looking forward to the main event, chair yellen speech on friday. mike mckee sat down with kansas city that president esther george, who made the case for raising interest rates. i did most recent meeting express my view that i thought it was time to continue the process of normalization of interest rates. when i look at where we are with the job market, when i look at inflation and our forecast for that, i think it is time to move. mark: kansas city fed president esther george with mike mckee, uncovering some jackson hole continuous today and tomorrow. we went to -- breakdown chair yellen's much-anticipated speech friday. 10:00 eastern, 3:00 london time.
is making an about-face on its profitability in the u.s. after touting earlier in the year that it ain't money. the company has not posted a huge loss in the first six months. as much as $1.2 billion. here to explain is max chafkin. you can understand the company making a loss, but why would they would be profitable and then, with such a massive loss? weit is important to know
are reporting a loss of 1.2 billion for the first half of the year, but most of that money was lost overseas. has seeminglyess deteriorated, lost more money, but the vast majority of that is coming especially in china, where uber has been in a crazy price were with its biggest competitor, and just exited the market. we are expecting them to improve things for the second half of the year, but we are in uncharted territory. vonnie: we have to stop there because we have breaking news. muddy waters posting a report. carson block's research firm is voting against st. jude medical, even as they are in the midst of a takeover. with erikck speaking schatzker in an exclusive interview in san francisco. >> why do you believe the stock is poised to fall? >> we believe there is a good
chance it is about to lose close to half of its revenue for a period of two years or longer. this would be due to device recalls. >> ok. explain. are -- we have been made aware, these implantable devices -- >> defibrillators, pacemakers. >> yes, also a device called crt. --s is part of an ecosystem there are four parts for all intents and purposes for this ecosystem. the device implanted in the patient, the physician office programmer that sets the settings, the saint jude network servers that receive data and push updates to the programmers, as well as to be at home device. there are hundreds of thousands of these at home, home monitoring devices called merlin at home devices out there in the wild.
this is really the crux of the thesis. there should be a secure communication protocol between all of these devices. however, these communication protocols have been compromised -- or is greatly compromised -- particularly by these merlin at home units. with hundreds of thousands of them in the wild, basically, the keys to communicate with the implanted devices, make them do things that they should not be doing to cause them to malfunction, those keys are out there and are relatively low hanging fruit for attackers to exploit. correctly,understand you found a security flaw, and achilles heel. carson: we were made aware of it, we did not find it ourselves. we were approached by a group of cyber security researchers that have been doing a study on the four largest manufacturers of implantable cardiac devices and
the security. what they found with the saint jude's devices in the ecosystem stunned them. erik: they were doing this independent of anything you were up to. carson: completely independently. when they found this, they really were faced with a decision. ordinarily, in the cyber security industry, if a firm finds vulnerability, they will approach the manufacturer and let them know about it. if the manufacturer does not do anything about it, after a period of time, it is considered to be fair play for the researcher to go public with it. inthis case, what they saw this ecosystem, these devices are so poorly protected, they felt, and we agreed, that this is likely gross negligence on the part of saint jude over many years, so they were concerned
that if they went to saint jude, they would sweep it under the rug. very importants for users of these devices, for patients, to know about the risks. our assessment, as well as that c, is that for a number of years, in this area, saint jude has been put in -- putting profit before patients. erik: now we know how you came to understanding that this was an issue. working with this company, havec, expressively, what you established, what kind of devices are vulnerable, and what can you do? they demonstrated to us two attacks. their view is, if you have more time and the imagination, probably a number of other attacks that you could formulate. us,two attacks they showed the first one they called a crash attack. icd'save done this with
and pacemakers. broadcasting through and at home device or what is known as a software defined radio, within a roughly 50-foot radius, they can cause the device to malfunction. some of these devices -- malfunctioning pacemakers. what is the second kind of attack? carson: a battery drain attack. this is the second kind of attack but it is pretty easy to write. it just fails the devices and causes them to use power to respond repeatedly. erik: how easy is it to conduct this kind of attack, how easy is it to break into the at home device? ofson: probably on the level a bored teenager. to do some of these attacks requires some skill, but the amount of skill -- we are not talking about top-flight
hackers. what i described to you, these were done on a local basis, within a 50-foot radius. theoretically -- and there is no way that anybody could have tested this without breaking the law -- but one of the ways, i am not going to mention, but there are frameworks to do that. they take bearing levels of skill depending on how large s cale an attack you want to make it. the other way that is possible, it might be possible through st. s own network. they goes back to these credentials being left unprotected on the at-home devices. carson: why we talking about st. jude, and not the other businesses? >> nobody is close to being this
bad. >> what is the worst thing that could happen? carson: the nightmare scenario is somebody is able to launch a massive attack, and cause these devices to malfunction. it takes a sick person to do that. we live in a world where we read the headlines everyday. i can't understand what is going on in the world. this is not -- this is a world that has risks. for us to pretend that there are not people out there who want to take these malicious actions would be naive. >> can it be fixed? carson: yes, well, we are proposing a few things that st. jude should do. number one,