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tv   Bloomberg Technology  Bloomberg  March 14, 2017 1:00am-2:01am EDT

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>> toshiba says it will have a second earnings report deadline, given approval to delay until april 11. it says it needs more time to assess losses for its nuclear unit. toshiba slumped on news of the delay, shares now recovering down 1.5%. china's economy continues to hold momentum, where the old growth engine is still firing. investor production fell more than expected in january and february. meanwhile, sales rose 9.5%, missing estimates, driven down by lower car sales. the uk's expected to launch
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brexit after parliament gave the prime minister the approval to invoke article 50 of the treaty. to becomeoyal assent law. the uk will then begin the process of leaving the european union. global news, 24 hours a day, powered by over 2600 journalists and analysts in more than 120 countries. this is bloomberg. >> let's take a look at the markets, afternoon trading getting underway. the hang seng index is up .1%, and the hang seng composite unchanged. alisa: i am alisa parenti and
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you are watching "bloomberg technology." intel hits the ignition switch, the $15 billion acquisition. details on how the by went down. drive that almost didn't close. the inside track on how it got derailed. an offensivees on as the ceo teases an ipo, ahead. first, to our lead. intel is spending $15 billion for a foothold in the self driving car market. it's buying mobileye, which makes chips for cameras and driver assistance features. in the second largest acquisition ever for intel and the largest ever for an israeli company, shares in mobileye surged on the news.
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large caught up with the intel ceo earlier and asked him why he is shelling out so much money for self driving car technology. >> we think combining intel in mobileye allows us to have a singular unit, but if you take a look at where driverless driving 2021ing, we're working on models. you have to make a model and build your platform today in order to be there in 2021 in the model start hitting the road. cory: what has intel's approach been, and how might it change with mobileye? >> we're already in a large number of autonomous vehicles out there today. what this does is brings the best of both ends of the computing spectrum for driving together. think about it this way. the car will have two brains.
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one is a vision brain that will take sensor fusion, the cameras, and combine it, and then there's another brain that intel plays in, which will take that information and drive the car. this puts those two brains together into one company and provides an integrated platform. cory: do you expect intel's other businesses to benefit from this autonomous car? you were talking about data, data, data. >> you bet. there's going to be several flows of data in and out of the car. the first is simply the car seeing the world and adapting how it drives, learning data. that will be a data center will be driving that. there's another set of data that will come out that's the mapping data.
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you saw investment here earlier this year that is augmented toward, building these precision maps, that have a lot more information. these cars will be able to see the world as they drive around. there is going to be visual data that will be gathered, all of that visual information will be gathered and used to build information models of what is going on. cory: i'm curious about the timing, not just because of the in thise, but for intel stage in its growth and where we are in a global, macro sense. do you feel like you have to get ahead of competitors to mobilize essential targets? >> you bet. we knew this was a hot space, that gathering of these technologies and building this platform is important. and also, this deal is
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immediately accretive to our earnings share and free cash flow. it was a good deal from that perspective as well. caroline: that was cory johnson, speaking with intel's ceo. cory joins us now for more, along with navigation expert who has worked in location technology for over 20 years. you're quite the man to have. cory, let's kick off with you. they admitted they can grow this internally. cory: it sounds like they felt the product cycle would take them too long. he is really remaking intel into a different company and he recognizes pcs aren't at the center of everything anymore. it's all got to go back to the data center anyway, and they significantly left room for qualcomm. i think they really don't want that to happen in the car
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market. the question is are the margins going to be there? right now, for mobileye, they have small sales with good margins and free cash flow, but can that business be as profitable as it was for intel and the pc data center? caroline: mark, the premium is pretty hefty. the -- does it indicate premium when you are looking at what mobileye is building? the roadside experience management centers -- is this where it is at? >> that's a big part of it. you heard him talk about data, data, data. is gathering things on lane guidance, but one of the things they announced starting last year was the idea of connecting and capturing data by the roadside. that is going to plug into maps for semiautonomous driving, and i think that's one of the reasons. caroline: we heard intel had
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bought the map experts. >> intel made a moderate investment here a while back. it needs to work with a mapping system. what it does is it tells you on that map, where precisely are you? that becomes really important, because you need to know things like not just what lane you are in but went to move over to make turns, what your trajectory should be through an intersection. the map needs to be there but this other layer on top of it is where mobileye will be good. caroline: cory, qualcomm. are they going to be worrying about this intel purchase? cory: to some degree, yes. to some degree, no. we see this evolution of these devices from where they exist right now, but the notion of what these things will be doing is dramatically different than what we see on the road today. to the extent that qualcomm is already in some cars, and they
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have some acquisitions, i think it's a lot less important. they are low-margin shifts, and they are not these supersmart processing unit equivalents that intel is going after, the stuff that mobileye is doing is very cutting-edge. caroline: do you agree, marc? >> yes, it is huge. as you are driving, all those computations -- if you think about what we haven't cars now and how we navigate, but what happens is you are moving over into lanes, making a trajectory, setting your speed. the car needs to sense those things, and one of the key things is that the maps can't be static. that ability to capture that new data, everything that is new and feed it back in real-time, is part of what they are buying it's a bet on the future. caroline: this is what investors
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have to digest. morgan stanley put out a note saying it could have used money better if they bought back their own stock. how much does intel need to educate the investors? cory: intel is taking a lot of money right now, for a very small business. is not how to manage the stock price today, and he wants to put his stamp on the company. shares --k of absolutely, it would have been more creative in the short-term. the question is how much more can this business be in the assistant driving space, that mobileye is so focused on? and how big will that business be, and how big will the profit margins the? to this point, the margins on most things in cars are quite small, are almost always single digits.
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that goes top to bottom, stem to stern, to use a salient metaphor. the margins are weak. they are hoping they can get double-digit high margins. the company has been used to 50%, 60% growth margins. whether i'm not the automotive industry can provide that is another question. caroline: we will come back to marc in the future. uber competitor halo is coming to a. in london. customers are being encouraged to switch to mytaxi. it announced plans to merge the company with mytaxi, which has already moved more than 17,000 drivers who previously used halo to be mytaxi app. halo users in london have until the end of may to switch. coming up, the airbnb ceo speaks
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on globalization, jobs, and the company's ipo process. the highlights, next. this is bloomberg. >> we don't have anything to announce. we are working on making sure the company is ready to go public, and we have always said it was a two-year project. ♪
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caroline: a story we are watching -- in relation to the ongoing negotiations between verizon and yahoo!, turns out much of the details of yahoo!'s security breach, verizon suggested a price cut. also considered tabling it entirely before they agreed on a price cut of $350 million.
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now we are going to dig into all the details with the talks and what is next for marissa mayer later this hour. as we heard, ceo brian chesky of airbnb says the company is halfway through its two-year ipo process and as the company inches closer to going public is trying to improve the economic aimed at toairbnb create more opportunities for those who use the service. ceo spoke about that as well as the global job market. >> the changes only beginning. -- the change is only beginning. the processors double in speed every two years -- what it means is that the next two years it will change a lot more than the last 25.
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the way we live in cities is going to completely change. i'll give you one example of the change we need to prepare for. we have a new president of the united states, and i would say the root of donald trump becoming president, one route was global- one root economic uncertainty. people feel they aren't better off than they used to be, they are angry. there are different perceived causes, and maybe there was a real tactical invasion of people's jobs. the thing is -- and this is a reality -- globalization is nothing compared to automation. will jobs come back -- will manufacturing come back? of course, a huge amount of it. that doesn't mean jobs will come back. meanin america may as well made by robots in america. that is what technology is going to do. if you look at all these technology companies, they are
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automating in automating, because robots will be cheaper in china. automation is a huge thing. that showed study half of u.s. jobs should be automated in 20 years. this study was done two years ago. many of us in tech believe that was a vast understatement on the amount of jobs that will be automated. i think it's important to take a step back and realize that is the reality. am i just causing fear? will that not happen? isl, there is so much that -- i think it's not an overstatement. many people think it will happen sooner. caroline: that was the airbnb ceo brian chesky. let's bring in a professor at new york university and of the sharing economy. perfect to have you. this is a fascinating speech being given by brian chesky. he reinforced the jobs being created by airbnb, 1.3 million worldwide, from seniors to women
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to urban areas. is this trying to charm offensively ahead of an ipo? is this trying to woo regulators? >> i think it's a reflection of the reality with what work in the future is going to look like. i think you put it well. the jobs that are lost to automation aren't coming back. jobs we losteight in manufacturing over the last 15 years were lost to automation, 81 loss to china. it is a pretty significant force to contend with. the bottle of making a living in the future is going to be capital ownership. you own your own tiny business that you used to generate revenue. airbnb astioning being on the forefront of what job creation in the future is going to look like. caroline: they call it the
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economic empowerment agenda, so he is talking about the jobs they can support and also the cleaning of the local economy they support by creating tourism where there wasn't. will be ank airbnb disruptor, a force for job reduction?r a job >> i think they will be a source for work creation, for income generation creation. not all of this will come in the form of jobs that we are used to seeing. a lot of it will come in the forms of millions of people running a tiny business on airbnb. millions of others will be supporting them. -- wes where the chaos are at the fork where we have to make a choice about whether we are going to support an economic system that really empowers people to take control and to create these tiny businesses rather than focusing on the 20th
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century rhetoric of creating jobs. caroline: they spoke of potentially an ipo halfway through a two-year process. next year? >> i think they seem ready. i normally don't feel this way about tech ipos. i think snapchat went public to early. i think when facebook went public, it was too early. but airbnb is a robust business. they are profitable, generating billions of dollars in revenue. i think the business model is pretty well set. they're already the world's largest provider, by many measures, of short-term accommodation. 3 million hosts compared to various others. shape, an pretty good healthy business that is one of the leaders of their industry. i think that's the reason why an ipo is a possibility. caroline: we have more to come with you. stay with us, live from new york. coming up, uber is taking
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measures to prevent drivers from forming unions. we will discuss the ridesharing company's latest battle. that's next. this is bloomberg. ♪
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caroline: ube has alwaysr discouraged unions, and in seattle, it is taking extra measures. it is running advertisements against you musicians in its app, on television, and emails and phone calls to drivers. there is even a podcast. seattle voted for them to form unions. it took effect in january, followed by an immediate lawsuit from uber. a hearing is expected later this month. uber has been in pr crisis mode in recent days, dealing with sexual harassment claims by a former engineer, a lawsuit, and a leaked video showing the ceo criticizing a driver.
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still with us, nyu professor. arun, this move -- is it inevitable, that the drivers look for more rights, or can they continue to fight? has actually think uber pretty good chance at being successful in fighting this, because there is a history of lawsuits that prevent contractors from unionizing actually prevailing. given the current ministration and the current climate, i don 't -- it's certainly a good idea for contractors who are sitting between employees and independent contractors -- uber's drivers aren't really employees, aren't really contractors. i think it's a good idea to give them some collective bargaining rights, but the way the law is written today, it is going to be a tough battle for seattle to uphold this decision to allow
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them to unionize. caroline: at the end of the day, does uber long-term care about its drivers? it says it does, but their real force -- >> i think there's a pretty uncertain path toward when we are going to have fully autonomous vehicles on the road without drivers behind the wheel. a two minutes ago we heard about advances in the driverless technology. but it's not just the technological capabilities that are a factor here. there's got to be a regulatory path. people have to be comfortable with the idea of an unmanned car on the road. if i look at the next five years, maybe even longer, it is certainly a world in which they are going to be heavily dependent on their drivers. getting their drivers on their side is certainly an important part of their near-term strategy. caroline: only a minute left.
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do you think the pr crisis will be overcome by uber? >> i think they are doing what is needed. i think some aspects of the pr crisis perhaps require far more action htathan others. part of the news that poses the biggest long-term threat to uber's business is the lawsuit from alphabet. int could place a roadblock the rapid progress they have been making to put fully autonomous vehicles on the road. in terms of convincing investors that the business model scales, that they are worth the $70 billion they are worth, that is by far important in the near-term. have cost themy to have to slow down, even if they eventually prevail. caroline: we will keep a close eye on how that progresses. nyu professor and author of "the sharing economy," thank you for
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your time. $15l to come, intel's billion deal could be a boost for israeli tech. we will explain why. this is bloomberg. ♪ ways wins.
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deborah: toshiba will not -- will miss a second earnings deadline. it says it needs more deadlines to assess casas at the nuclear unit which could run into the millions. selling a majority stake in the organization. checking now it is up .7% in tokyo. unions strike hit coppermine in chile have rejected calls to resume talks. it said it wanted to layout and improved pay offer in the result of a new strike in its second month. escondido unions have dismissed the offer as inconsistent and untrue.
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-- only to judicial information. investigated for the alleged leaking of documents every to topple the administrative speaker. smarter by scandals including the death of a military conscripts. to topple the administrative speaker. posted on friday after her impeachment for offering undue influence is ruled illegal. discuss with national elections commissions and reported to the. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries, this is bloomberg. thes get a check on how markets have been trading the asian pacific. we are seeing the south korean continuing to run of .7%.
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in terms of the china 300, down by .1%. a little bit mixed today. retail sales were a mess. nikkei down by a 10th of 1%. all of the fed it today. holding at 75.62 here at the moment. confidence inss conditions coming through out of australia and they were quite weak in february. it look at some of these commodities, a look at the rally on iron or. you have seen goals a little prudent trying to come back just a little after being in the red six sessions in a row.
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live from london at the top of the hour, this is bloomberg. this is "bloomberg technology" corey: intel's $50 billion acquisition of the year -- of the company. how tech giants are racing to get a foothold in the developers of self driving cars. intel moving the existing operations to israel and to mobilize business integration. about thatn asked decision and its associated cost savings earlier. million of75 synergies into this deal. it is right.
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they were going to move our thomas driving resources to israel. r&d in twoot of companies. that will bring those synergies into the hundred $75 million over time. >> a lot of options trading in the day before this deal was announced. stock will gohat higher is really soon. seems to be near record levels for mobile. i wonder how long you have been working on this field is says this concerns you. >> have been working on this for a wild but we take a lot of care with our bankers that we work with m.v.p. our teams to keep this quiet. if you take a look it has been pretty quiet from what we have seen. reluctant to other deals that are out there. comfortable with
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the level of secrecy we are able to keep. we took a look at what we are ofng in the market spread thing was pretty ok from that perspective. >> expectations of change in tax to m&a andlead technology. is that one of the reasons he wanted to get this done now?? m&a as ald never do result of something like that. we were always going to do targets around the technologies and doing the technologies at the right time relative to bringing that's tomorrow. that is surely what this is driven by. election, to give you some clarity of how long this has taken. had nothing to do with what the tax policies were. this is getting these two
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technologies together to provide these solutions. corey: that was cory johnson. intelligent in the announcement that most operations will stay where they are. netanyahu tweeted earlier, congratulations. israeli pride. while it is the biggest acquisition of an israeli tech from ever it is not the first. others include apple -- google buying ways. joining us now for more context on the tech scene or two venture capitalists in new york. partner at a quest labs. thank you very much for joining us both of you. i wanted to get you first because you're helping to manage israelis on the angeles. how big is the scene? >> i think this seminal book on israel was written in 2009. the story is not new but i
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fervently believe that the world still has no idea about the innovation and shareholder value creation that will come out of israel in the coming years. give us some stats. 4 i know you have some good ones. >> when the book was written in 2009, the book was written because based on any stats you looked at, the number of startups per capita, the number of exits, the number of ipos per capita. israel was crushing the rest of the world. nasdaq, israel leaves all the other countries in the world on a per capita basis. more than two times deeper capital number of ipos on the nasdaq. more than 100 times on the per capita basis number of ipos out of china. what is happening in israel is really quite amazing. keith out of the california-israeli chamber of commerce. intel this time
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lester got in on another israeli also gottenhey have one of the largest -- the largest hirers in israel. how much does silicon valley osborne -- already know israel? >> first of all, we are based in silicon valley here. invested in over 60 countries and israel. all eyes are on israel. it has been this way for more than 20 years. you look at some of the leading companies based out of israel, checkpoint or earlier sandisk. innovating in are -- hardware asll well as a software. it also the local fund and investors are looking to israel for innovation.
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waze has created a lot of way i think mobileye is not that big surprise. 2016 alone, almost $5 billion was invested into israel. in capital. there is a lot of infusion of capital and a lot of interest in the innovation that is going into israel today. where's it going for example? and yes is a tv software company. what are theng, key areas of growth for israel? tv set companye but the majority of the value, a $5 million acquisition, was in the cybersecurity encryption. areas look at the major where israel is amazing, obviously cybersecurity is one
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of the amazing areas. i think also there are a lot of areas that come out of imaging. some of the greatest auto companies. snapchat, br, ar, the same technology is in the autonomous car. the technology out of mobileye. the same technology. surely, it is interesting, we have been hearing about how i acted the ipo is, israel really killing it. menhey really need more ipos to decide the $15 billion? to put it largely on the map. most of it seems to be m&a.
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>> true. great technologies today are being acquired. you look at the israeli system, the biggest question among his rest -- investors, can israel produce massive companies? also scale globally in creating impact. has put aat mobileye lot of that to work. israel scaling out of and bait into areas that are really emerging as a thomas vehicles, artificial intelligence, and obviously some of the traditional companies such as cybersecurity and storage. what we've seen recently and a
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, drone ofies technology such as a robotics that we have invested in. areell as companies that doing amazing technology in iot. what we see in the next few years, a lot of technology that is going to solve problems in industrial iot. in manufacturing. technology, the dated companies that definitely need infusion of innovation in order to stay relevant and to stay agile. question, when will the really big ipo come? great to have your perspective. live from new york, thank you very much indeed. coming up, what happened during the talks between verizon and yahoo!?
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details of the security breach came to light. the details of a heated discussion. this is bloomberg.
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7%.y: shares close of the company said to be working with goldman sachs on a potential sale. interest has been limited. large market valuation means by out has to team up to fund a bit. any possible deals. new details from negotiations between verizon and yahoo!. $525ce cut of as much as million to buy assets after the revelation of the massive data
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breach. suggested telling off the deal completely, totally price is produced by $300 million to 4.5 billion. joining us to dig into this and what is next, bryan womack. it surprised me, you seem to really put it on the line. >> remember, the highest level of the company personally involved in the office has been going on for months and months. he comes on with this call from the key person on the board. they said, what if we set as much -- they kind of left it there. the high level of some people's expectations. >> how they managed to whittle is down? >> if you read the language it is pretty wrought.
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i would suggest as much as this much. sounded like it was in the morning. theirame together, from came to an agreement. from there things started to move pretty quickly. it had been two weeks since we had he finalized deal after all these months and months of back and forth. >> i thought it fascinating that they play hardball and seem relatively low for what many felt. albert marissa mayer? -- how about marissa mayer? it seems she walked off with a bunch of change. changesllion down from in stocks and equities. it looks to be the out you will get. .ou have to remember
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she is not taking a bonus. holding back, because this act was really bad. happened on my watch. i will take some off the table. corey: to me about the future. what is left of yahoo!? the japanese unit and alibaba, that will be held by mckinney. a board member. helm, all be taking the really good name. huge asian assets. state senator alibaba, japan, very valuable multibillion-dollar states. the other major holdings. that is what he will be in
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charge of. as far as the day today, the website, all this stuff, that is all going to verizon. verizon's becomes. always grace. about to get your perspective. former cia director michael hayden says wikileaks has proven again to be an enemy of the united states. more on his insight next. this is bloomberg.
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corey: elon musk and a living crisis in australia in 100 days. it is a contracts, south australia had a recent problem with blackouts. the prime minister blamed it on the rapid take-up of renewable energy. teslas battery chief claims the company could easily install and of batteries to prevent the backup. -- blackouts. he asked how serious are you about this? elon musk says we will get the
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system stalled -- installed in 100 days or it is free. they agreed on a process of the price of $25 million in the hands of australian politicians. meeting with malcolm turnbull and discussing the priority of clean energy. replying with his excitement to discuss the future of electricity in australia. now to u.s. politics. president trump has tweeted out he may have been a wire trap -- wiretaps. asking the justice department for any evidence for next monday. to former ciaing director michael hayden and asking how confident he is that the finance will come to light. >> and confident we will not let monday of next week if there is evidence.
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instinct is powerful on this. i know how this works. i know how the u.s. government gets the authority. none of those things are suggested by what the president tweeted out 10 days ago. it just does not happen that way. the president has not had the authority to order such a thing for about 40 years. you have to go to a court and there is no evidence that last happens because the guys would have gone to the court. jim, and jim clapper have said directly and indirectly they did not do that. there is no evidence of that, what should the consequences be as you see it? the consequences of making it allegation on the intelligence community? >> we have already suffered a lot of damage. the intelligence community knows it is not true. this is what they do for a living.
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it is one more log on this fire. a confrontation between the new administration and the intelligence community. pro within on both sides here. i would just suggest that a member of the old community, as a concerned citizen that everybody take a deep breath and back away from this. the intelligence community knows their purpose in life is to help them succeed. of information that wikileaks say is packing information. what recourse does the ministration have against wikileaks? they are increasingly problematic position. i think wikileaks has proven himself to be an enemy of the united states of america and by that's my definition is they are doing things whose only purpose can be to harm america, america's friends, and the way america keeps itself and its friends say.
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we would have exercised those answers already. think we just keep plugging away. cannotught i have, i claim i've explored it. have we exacted any consequences on ecuador? forgetting julian assange sanctuary in the ecuadorian embassy in london? we are not required to make life as possible for the ecuadorian government. >> expecting an executive order on cybersecurity from the white house expected but delayed a little while back. if you were to talk to the white house what would you say would be a working one? think it is quite testing into the federal bureaucracy with short timelines to come back and tell me how you are going to do these things.
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for the secretng sauce, i think the key to this is that our successor in cybersecurity is going to be more dependent on the success of american private industry and in anythingsector the u.s. government is able to do on its own. i would counsel the government -- the president, deliberate and get out of the way of the things onlyor doing the private sector can do when it comes to cybersecurity. corey: speaking with michael hayden. that is it for this edition of "bloomberg technology" live streaminge on twitter. check us out weekdays at 5 p.m. in new york, to be them in san francisco. that is all for now. this is bloomberg.
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anna: lawmakers back the government brexit bill, triggering article 50 in the last of this month. manus: toshiba weighing the sales of its westinghouse unit after missing a second earnings a client. life to tokyo. anna: on she is said to i a bid for 19 billion dollar -- anna: a very warm welcome. this


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