tv Real Money With Ali Velshi Al Jazeera April 23, 2014 5:00am-6:01am EDT
costs of the new energy boom? >> lots of men, and lots of money, your going to find prostitution >> people are just dropping like flies... >> we're paid with our lives... >> dirty power an america tonight special series only on al jazeera america >> multi million mega mergers involved some of the biggest drug companies in the world. we'll look at what it means if you're invested in one or if you count on the drugs that me make to stay healthy. lasers, fiberoptics and the need for speed at any cost. my week long look at high frequency trading focusing on the technology that can turn milliseconds into hundreds of millions of dollars. and shielding a company from an ignition recall lawsuits. forget right or wrong for a
second, i'm asking tonight, can they get away with it? i'm ali velshi, and this is "real money." >> this is real money. you are the most important part of the show. so tell me what's on your mind by tweeting me at ali velshi . major $25 billion deal in the pharmaceutical industry today. three of the biggest names in drugs and consumer products engaging in a multi prong deal that will affect not just the value of your investments in the companies, if you have any broad based investments pharmaceuticals probably form a part of them, but also the drugs they develop in the basic consumer product you buy. as part of the deal, a joint consumers goods company that
will sell some of the common brands that you buy, excedrin, bene fiber which keeps you regular. stocks were up, and more importantly this might be a signal of more to come in the industry. remember, the drug industry is partially this stuff, the consumer good stuff, but it's mostly the big blockbuster drugs that take years and often billions of dollars to develop. here are the details of the deal or i should say the deals. it will sell it's vaccine unit to glaxco, and then selling it's animal health business to eli lilly for $5.4 billion. after all this is said and done,
glaxco will be a bigger leader in sacks h vaccines, and eli lilly will be the second largest animal provider allowing each of these companies to build on their strengths while removing smaller non-corp or non-competitive businesses. now the backdrop to all of this is a potential deal that didn't happen and may not happen, but that got the investment community and the pharma industry all abuzz. both companies are seeing sales fall as some of their top selling drugs lose patent protection . li lipitor, and now the offer was rejected, and talks ended, but
the rumor aoh loan has sparked a merger frenzy in the healthcare industry. the last time this much money was spent on drug deals was in in 2009 when pfizer bought wyatt in a deal valued at $64 billion. merck acquired a corporation for $51 billion including some debt. what does it mean for you? investigative journalist and contributor to "fortune" magazine who follows the pharmaceutical industry closely. katherine, good to see you. >> thank you. >> is this a good deal between three major companies or is this a sign of more restructuring coming in the pharmaceutical industry. >> first of all, let's give this a new name. let's call it swapasaurus. this is a huge deal in the industry. this is the long fall down from
the pharma cliff. it is not business as usual in the pharm industry. the fancy helicopter rides and shrimp dinners are over and now the big pharma companies are trying to figure out how they're going to survive in these new environments. as joe jiménez was saying these companies are going to have to look ten years ahead to figure out how are they going to double down on their core strengths, get rid of stuff that is pulling down their bottom line and tighten the ship. they're looking at everything that they can do. a lot of branded companies are getting into generics, but it's a whole new game. it's a whole new landscape. >> generics make up 80% of the drug market. >> right. >> it used to be that they would make their drugs, spend a lot of money on them. a lot of them would fail.
but the big ones would be so big, and then generics will take that over, but now you're saying the big names are the generic drugs too. >> yes, we're seeing landscapes where patients can't afford to pay sky is the limit prices in drugs developed, and you see doctor revolts. there are doctor who is are saying we're not going to recommend certain cancer drugs at a crazy price unless they're game changers for their patients. you're seeing incredible push back on price, and these pharma companies, they try to beat the price worriers at their own game, they couldn't, so they're going to join them now. >> you mentioned the famous new york based cancer hospital. cancer is where--there has been a lot of development in cancer, advances, and that's where a lot of companies think the money is. >> sure. if you're going to spend
billions of dollars and years to invest in a drug, you either have got to have a high price tag for the drug or huge market or both. so these pharma companies have to identify what can they really bring with new molecules, new bubio logics, but i will say its a completely new landscape. these pharma companies are outsourcing their manufacturing. there are factories in india and china, and it's a global day in the pharma sector, and they are going to figure out how can they be global. >> the big pharma companies have maintained that it's us who does the research, and it costs billions, and it turns out not to be effective. without these bloc blockbusters at these prices, you'll stop getting drugs. >> right. they've been saying that for a long time, but you know what there are alternatives now.
you can say that all you want all day long, but the market is just not going to bear that logic all that much more. you look at obamacare. if obamacare works out all its kinks you're going to get 30 million more patients who will have prescription drug coverage, but the government doesn't want to pay top dollar for all kinds of new fangled medicine. they want affordable generics. all of these companies have to recalibrate their inventory and their pipelines to look at what is the market really going to bear for these drugs. >> great to talk to you. katherine, a contributor at "fortune" magazine and author of "dangerous doses." the true story of cops, count fetters and contamination of america's drug supply. the success in today's stock market, speed and location. i went for a first-hand look at wall street, and by wall street
i mean new jersey. >> this high security building behind me is the new york stock exchange data center. it's here. not on the floor of the new york stock exchange where almost all the trades take place. >> and here is one key part of the haling involved. fiberoptic cable. i'll have more of my week long trading coming up. plus on this earth day i'm taking to you the greenest city in america where we'll talk to the man in charge. that story and more as real money continues. keep it right here. [ grunting ]
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xfinity...the future of awesome. >> on the next talk to al jazeera >> oscar winner sean penn shares his views on privacy rights, press freedom and his controversial relationship with hugo chavez >> talk to al jazeera only on al jazeera america >> there's an arms race going on in the financial world right now. and this fiberoptic cable is weapons of choice. you will not believe the amount of money that they're willing to spend on cables like this and
other technology to shave just a few milliseconds off their trading times. the stakes are huge, and high frequency traders know the key to profits is speed, and they're waiting to pay big bucks for the privilege of being first in line. back in the 1920's you would have to wait 20 minutes at a ticker tape to see the latest information about a stock. now trading information is almost instantaneous. traveling at nearly the speed of light. in fact, it's so fast that only the fastest computers can keep up with the pace. this is the trading floor of the new york stock exchange, and it's almost completely, humans aren't needed at all any more. the vast majority of stocks aren't traded here. to begin to understand how the stock market really works, you need to go across the hudson river to new jersey. now the markets are almost completely computerized. data networks and server farms
at five key sites in new jersey are where most trades actually happen. >> i'm in new jersey about 30 miles from manhattan. this high security building behind me is the new york stock exchange's data center. it's here. not on the floor of the new york stock exchange where almost all the trades take place. if you're a high speed trader, and you're looking for a fraction of a second advantage you have to be as physically close to this server farm as you can. that's called collocation. you pay to have your server in that building, and only the biggest players can do that. that shorter distance matters even if it's only a few feet. having a connection that is just one millisecond faster than your competition could mean an extra $100 million a year for high frequency trader. critics charge that this special collocation access offered by the ex changes is a form of front running, buy a stock before you and then selling it to you at a higher price, and
it's drawing the scrutiny of state and federal regulators who are concerned it might provide advantages unavailable to regular investors. >> high frequency trading depends on speed over everything else to be successful. in order to participate in that environment, you have to get direct feeds from all the exchanges. one of these exchanges will cost you $60,000 a month. that's one. to participate at that level there are very few that can. >> reporter: but the need for speed does not end with co--location. high frequency traders are willing to pay for any micro second advantage they can get, even one between two different exchanges. right now, for example, there is a fiber optic table linking the new york stock exchange servers in new jersey, and nasdaq servers in new jersey. but in the next few weeks a new higher speed laser network will begin to link the exchanges.
the laser itself looks like wally, and uses technology originally developed for the department of defense. >> wheit will have the time it takes to move price information between the two locations. putting it in empirical terms, it will take 780 micro second round trip time to bring that about 360 micro seconds . >> reporter: to put that in perspective. that's .00036 of a savings. i am per acceptable to you and me but worth millions to a high frequency trader. this quest extends from the time it takes stock information to travel from london to new york stock exchanges. there are 12 fiber optic tables crossing the atlantic. the last one engineered a decade ago. but a new fiber on tick route is
being plotted that will follow a straighter line. >> we'll shave off by building the new cable straighter from the existing cables 500 kilometers. it makes it 5 milliseconds faster. >> reporter: but building a new trans-atlantic fiberoptic cable is not cheap. the cost for the 5 millisecond advantage for high frequency traders? $500 million. >> it will going through this little fiber here. so all this cable, the relevant part are the fiber hairs that you're looking at. everything else is to protect these fiber hairs and to power the signal. it's fascinating to think that the 5,000 kilometers of this cable linking the two continents. >> reporter: and it doesn't end there. there is even talk of constructing a laser network across the atlantic using air
ships. >> we've loosely coined it as an air bridge. it is a succession of 30 blimps or high altitude forms that will be geostationary at 70,000 feet talking to one another over this same laser technology and that will connect new york to london. it would do it in 30 milliseconds versus oh 60 in. the price tag for this trans-atlantic air bridge for the millisecond? $500 million. >> it looks like wall-e and what they call the race to zero and an ever increasing competition to limit the time it takes to make a trade. the players in this world are not afraid to spend big money. last year they spend $1.5 billion on technology to increase trading speeds. one thing is certain. in this quest for speed wall
street is willing to pay a lot to make a lot. the senior policy adviser, he previously worked in various roles as a banker, trader, he understands market structures better than most people and says regulators need to address one important question. when does public information reach the public domain? john, good to see you. thank you for being with us. >> thank you, ali. >> i know you have to give our viewers a disclaimer because you work with the feds. >> yethe chicago feds. >> yes, i have to say that my opinions are my own and do not reflect the chicago or federal regulators. >> they understand how they get an advantage over other traders. how does this--does this some how trickle down and have a
negative impact on regular investors? >> well, i think it had a diminished affect on the public confidence in the way that markets that markets are used indirectly by most investors today invest in funds and people have 401k plans. you know, those are net outflow of funds in the stock market, and whenever there is adversity when people think they're not getting a fair shake they tend to get out of stocks and into other financial instruments. there is a detrimental effect when consumer confidence is diminish ed. >> someone said that the same thing when the telegraphs came in and when newspapers and telephone and computers. this is just technology. it's making the system more efficient, and generally speaking reducing the price of trades.
that's what people are sour grapes about. >> well, yes, there is always going to be an advantage to being fast. i think the public policy questions that need to be addressed, and you touched upon it in your opening is when does public information actually reach the public domain? so if you did a trade, and your server is collocated in the data center, i think that you deserve to find out as soon as possible if the markets traded at ten because you did the trade, then the real question that needs to be answered is when does it--it's public information that the markets are traded. when does that information reach the public domain? and i think a reasonable person after --there is a public debate about the issue. i think a reasonable person would say that that information reaches the public domain when that information reaches the
al jazeera gateway or the lawyer's gateway or the bloomberg gateway in a form that can be read by a human being. so if you wanted to equalize speed, the people who collocate in the server--sorry, the people who collocate their servers in the data center, shouldn't that warrant part of the trade, they shouldn't get that information before you or i. >> when you say co-locate, you're talking about when i was out there in new jersey showing the data center, collocating means these exchanges make money renting space adjacent to their own servers because it shortens the travel time between them. they could trade stocks faster than i can blink. faster than i can recognize a written word. that's where this becomes implicated. on one hand you admire the people who are able to come up with the algorithms to do this, but on the other hand if you think the system is stacked against you, this goes up that
much further to say it is. >> well, yes, there is the reality part and the public perception part. for the last two or three weeks the public perception part may be a little out of whack, but it's good that the issues are being brought to the forefront , and people are being informed by programs like yourself. >> every regulator in the country is now looking at this, and they're saying they don't have the resources, they don't have the money to handle this. what would you suggest? >> well, a couple of things. regulators need to have a public policy debate on when does policy information reach the public domain? i think that there needs to be a review of three things in the u.s. equity market, but it has to be a package. it's got to be payment for overthrow, regulation, and pools.
you have to have all three in there. you know, you need to look at what are the motivations of all the people that serve the overflow, and why can't you or i find out where our order was actually filled? we have 13 security exchanges and 94, count them, 94 was dark pools. 93 was not enough. >> this is good conversation. we'll have to pick it up again. thank you for joining us. >> thank you. >> chief financial policy adviser in chicago. we'll take to you two schools who offer graduate decrease in financial engineering. they're turning out the next level of traders who know how to write the algorithms. we'll bring you the next part of our series. how speed beats strategy. wednesday on real money. publicly it's general motors is
taking responsibility for thing i initial switch defects but in court they're trying to get it tossed on a technicality. plus, if you're looking to buy a home, i'll tell i couldn't it might be a bit easier to be approved for a mortgage. >> our current system has gone very far awry... >> there's huge pressure on the police to arrest and find somebody guilty >> i think the system is going to fail a lot of other people. >> you convicted the wrong person >> i find that extraordinarily disappointing... >> to keep me from going to jail, i needed to cooperate. >> the evidence was inaccurate >> they still refuse the dna >> somebody can push you in a death chamber >> it's not a joke >> award winning producer and director joe berlinger exposes the truth. from the inside... >> a justice system rum by human beings, can run off the rails.
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>> the motions are flying in the lawsuits over general motors ignition defects. we told you last week that general motors asked a bankruptcy judge to tell plaintiffs that the company is protected from claims related to anything it did before july 2009 when it filed for bankruptcy. the company said those claims involved the old gm, which no longer exists even though the new gm has the same building, officers, employees, and things like that. now the company wants the judge to throw out lawsuit from buyers who were not injured by
engine defects. defects. g.m. sent out a statement, by the way: g.m. has acknowledged that it has sievic and legal obligations relating to injuries that may relate to late folks, and i vehicles. at the same time plaintiffs lawyers have argued that gm should not be able to use it's bankruptcy reorganization as a shield against liability. adam leavitt is one of the lawyers. his group has filed two complaints, one on behalf of 25 claimant plaintiffs, and we regularly ask gm motors to come on and talk to us about this, but they decline. let's talk about the concept
from the old gm and the new gm. legally it does mean something. >> yes, it does. what they're trying to do going into a company reorganization like they did in 2008, the idea is to reorganize and have a successor company continue as the ongoing concern. the problem here however, the problem in any sort of bankruptcy proceeding is if you want a fresh start under the bankruptcy laws here in the united states you have to be straightforward and honest with the bankruptcy court. the fact is we don't believe, we think that the record and the facts will ultimately show that when the g.m. bankcy was going on, they failed to advise and they actually actively concealed
the problems involving the key system, the ignition switch system and the related aspects from the bankruptcy court . i think it's disappointing when you hear on capitol hill how they're talking about this is a new start, we're going to step up and take responsibilities while at the same time at the first point they had to go beyond mere talk and actually act, the first thing they're trying to do is absolve themselves of any responsibilities. >> adam, when i googled can you sue a bankrupt company, it was all advice from firms who say, you form a company a certain way, and if you claim bankruptcy you're protected. so the general view it seems on the internet and amongst
americans, they can't sue. the issue lice at the time general motors filed for bankruptcy, they knew they had something that would rear it's ugly head. >> it's a couple of things, ali. number one, while they're trying to shirk responsibility here, people should understand the cars in questioned were manufactured and sold after the bankruptcy. so that's number one. a substantial portion of the cars in question are not in any way affected by anything that happened in the bankruptcy court. number two, is that the successor entity, the new g.m. entity, as they're calling it, was aware of these problems after the bankruptcy, and continued to actively conceal these issues.
the third thing as i was saying here, in the bankruptcy itself while general motors wants to get out of its responsibilities and obligations here, they word their motion papers very carefully. they say to the court in the papers they filed yesterday, they say that claims like these, of this type were released. but they can't say that there was ever a word said about these claims. it's hard to say that you want a fresh start when you're not up front with either the bankruptcy court or the american public that had just spent billions and billions of taxpayer dollars. their hard-earned money to help this company. >> it will be interesting to follow this and see how it continues. adam leavitt is director and one of the lawyers leading the
consumer class action against general motors. joining us from chicago. pilots for jetblue are going to be unionized. they voted to join the pilots association and become the first employee group at the airline to join an union. the pilots had twice before voted down union representation. shares of jetblue lost 2% on this news. now anyone who has tried to get a mortgages after the financial crisis knows it's not as easy as it used to be. but there are signs that it's getting easier. plus i'll take you to a city in america about what they're doing that we can all learn on this >> we pray for the children in the womb >> a divisive issue >> god is life , so it's his to take >> see a 10 year old girl who's pregnant, and you tell me
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ray suarez hosts inside story weekdays at 5 eastern only on al jazeera america >> more evidence that winter took a bite out of the housing market recovery. sales of previously owned homes called existing homes, by the way, fell .2 of 1% in march compared to february. they fell to the lowest annual rate in a year and a half, and they're down 7.5% compared to a year earlier, march of 2013. march sails reflect contracts signed in january and february, and if you were in this country in january and february, you'll know that much of it was gripped by brutal winter weather. used homes account for 90% of total sales. sales appear to have hit a peak in last july and have fallen in the last eight months.
the sales in march are broad based across america. the midwest is down 2.3%. the south down 3%. and the west is down 13.4%. in addition to bad winter there is another reason sales are being hurt by higher morgue rates. a 30 year fixed mortgage averaged 4.25% in april of this year. that's up 3.5% in april up of 2003. and there is a third factor depressing sales, and that is rising prices. nationally the median price, half of which half of all seems are sold above it, half of all homes are sold below it was $198,500. that's up from 2013. take a look at the map showing
the northeast median price. much higher than that, up 3.2%. midwest at 149,600 up 5.9%. the median in the south was $173,000, up 6.7%. and the west, $289,300. the question is whether the spring will bring a rebound in sales. the u.s. housing market has been dealing with lending standards. that made it harder for americans to take part of mortgages and homeownership. but there are signs that banks are loosening up. a hefty down payment. putting mortgages beyond the
means of many aspiring homeowners. there are signs that lenders may be easing up. the share of home loans with down payments of less than 10% hit a five-year high last year giving buyers who can't scrape together a 20% deposit more options. >> what most people have is a spare $25,000 to $30,000 laying around to make their down payment and closing costs. this will address that issue. >> reporter: credit standards are also relaxing. so far this year the average credit score of home buyers purchasing with conventional loans is four points lower than last year's average. while lenders are more eagle for ease credit standards because of the value of the underlying
collateral is not a collateral, and there has been lenders giving mortgages. >> not only is tough lending standards made it hard to get a mortgage. traditional buyers have been crowded out by big investors buying homes with cash at fire sale prices. now that home prices are stabilizing the analysts say the markets should become less attractive to wall street and more reliant on main street. while credit and down payment standards are less strict they are still far higher than they were during the housing bible. >> these days the rules of the road will continue to be good credit, proof of income and money for down payment. >> reporter: al jazeera, new york.
>> a recent report by goldman sacramentos stating if it remains tight it will cut their home sales from 800,000 to less than 600,000. if lending standards loosen up, does it mean it's better to buy a home than rent? like all good real estate dilemmas. it depends on your location. we created a heat map showing areas where it makes more sense to buy, those are the areas in yellow and green, versus those where it makes more sense to rent, which is are those areas in red and orange. baltimore is a great buyer's market because average rent there are higher. there's a lot more to it than that. an online real estate data company for foreclosed and defaulted properties. good to see you. thank you for being with us. i teased everybody. i said there is more to it than just that. what are some of the things that
determine where it's better to rent vers versus buy? >> the lending standards, because the equation is in favor of buying in most markets across the country. we looked at over 1500 counties nationwide, and in 92% of those counties it's less expensive to buy than to rent. but the big assumption is that you qualify for a mortgage, and you can foot the bill for the 20% down payment that it takes to get into that mortgage. but if you can do that, if that's the case, then you're going to be seeing in many cases like baltimore, it's extreme, but many places across the country where your monthly mortgage payment including property tax, interest and insurance is going to be less than what you would be paying at the fair market rent rates for that same county. >> you look at a place like baltimore. you know it was hit heavily in the housing crisis. you know, which means that there
are deals to be had. low mortgage rates and there are many hard hit places in the united states where that's going to make sense. in markets that we're not hit as hard. what is the trend, buy or rent? >> the trend is actually neither. some of the best markets across the country, neither renting or buy something affordable, unfortunately, and in some of these markets we look out at those 1500 counties there are 47 where it's actually costs more than 30% of the median income earner's monthly income to either rent or to buy. so those are places like of course new york, which isn't probably surprising to too many people. all five boroughs are in that category where it's unaffordable to rent or buy , and a lot of coastal california counties, southern california, northern california, denver, not the counties surrounding
denver, but denver falls into that category. and in areas like mississippi, least expensive and most expensive, san francisco. this is for buying. now let's just talk about renting for a second. i want to pull up a chart that shows institutional buyers. we reported on that a lot on this show. these are major financial companies that are buying up residential properties and then renting them out. in 2012, 5% went of institution alibiers. in 2011, it was 5%. 2012, 6%. and 2013 the last year for which we have full figures, it was 16.4%. where do you think that's going. >> when you're talking about 7.4%, you're talking hundreds of thousands of homes that are
being purchased by these constitutional investors. and primarily used as rental property. the turn around and converted to rentals. oftentimes renting to people who lost homes. i think these investors are being smart. they're tapping into this trend. there is a strong demand for rents, and rents are rising, and they have you they're taking that inventory on to supply those renters. we're showing an additional 7.7 million homeowners , and institutional investors are taking advantage of it. home prices can only rise so far without incomes rising, and we're not seeing the incomes
rising. >> that's why we're seeing a drop in home affordability breeze, and then we've seen it drop. saying, to some degree they've put a bottom on this market as it's falling out. the question is whether you think it's going to be responsible getting out of this market. they're not going to stay in it forever. as prices continue to rise they'll start to sell, and hopefully it won't create another housing crater. >> i agree. >> i think they created a great bridge, but it is a little bit tricky. it's a little sensitive on how they're going to extract themselves from the market you it seems rational, and it's in their best interest not to behave irresponsebly and selling off their property in one point, but i don't see that as a likely income.
and markets we've already seen in phoenix constitutional investors pulling back on their purchasing of properties. as we have seen that fall down we have seen home appreciation fall back in phoenix, but home appreciation is up 13% year over year, that compares to 30% last year. but so far it's not creating another crater in the housing market. it's having a cooling effect on home prices. >> darren, always a pressure to talk with you, thank you for being with us. >> thank you. >> overseas, no let up in tensions of ukraine. vice president biden delivering an aid package in kiev meant to diffuse russian economic pressure. but they are undermined by worries of last week's geneva peace accord could be unraveli unraveling. u.s. and u.n. officials say they
will hold moscow responsible if the separatists do not back off. well, it is the greenest city in america, not just because of all the greenbay packers fans. i'm talking to the mayor about what they did to earn the title and how much it cost. plus, report card time for ronald mcdonald. coming up on real money. right here. >> on al jazeera america when science intersects with hope. >> i'm hoping to give someone a prosthetic arm for under $1000 >> inovation finds oppurtunity >> a large earthquake would be an inconvenience rather than a disaster... >> and hardware meets humanity >> this is some of the best driving i've ever done >> eventhough i can't see... >> techknow our experts take you beyond the lab >> we're here in the vortex... >> and explore the technology changing our world. only on al jazeera america
the country factor in air quality, alternative modes of travel, lakes, hiking trails and parks. paul joins us now from the newly crowned green of city, mayor, congratulations. good to see you. >> thank you. it's a pleasure to be with you. >> people have lots of reasons to love madison. i have never heard anyone who say they don't like it. you have a great mix of cultures, you have the university, state capitol and all sorts of things going on. why did you get the greenest city? >> i think it's in part because of a series of decisions that have been made over decades in terms of how relive, we work, we play. it comes down to how we design the city. the efficiency, the public transit system which is one of the heaviest traveled systems in the u.s. particularly for a city oh of our size.
we try to put work, school, close together . >> rochester, new york, historically an industrial place, and greensboro, north carolina, you talked about decisions made some time ago. you've been on that counse council in years gone by and you've been an an advocate for some time what contributes to this? >> i think that in some way we've created a culture. long term residents, there is a commitment in each individual household to make some sort of contribution. it shows up when we get together to discuss the design of a building. it's a question of
sustainability. let me backtrack, it's one of the big things these days is mixed use. no one is going to be like new york city, and let's recognize it in many ways new york city is one of the greenest in the united states because on a per capita basis it's going off less car upon than anyone else. it's mixed use putting retailing in over the house above. it's the notion that we're going to try to utilize the infrastructure of the city as much as we can. we made decisions in the 60s and 1970s that as a capitol city we were not going to end up like washington, d.c. where at 6:00 and 7:00 at night downtown disappears and everybody goes home. >> you want them to go home in the city in which they are, and that's part of it. so many of us live here in apartments on top of each other
next to each other. what would you say as cities are attempting to green themselves, what of the infrastructure matters are the most important? you mentioned mixed use. and another is transportation that does not throw off a lot of carbon. >> okay, let's just use transportation and the comprehensive use of walking, bicycling, taxicabs and buses. if an individual finds that the bus system is unreliable, they're going to require an automobile. when they arequire the automobile, they're not going to utilize the ca cab systems, the bicycle. the idea in all of these alternatives that they feel they have a reliable system without owning an automobile. it's that kind of planning. the same is true in terms of
locating businesses, shopping, retail. create what's called walkable neighborhoods. >> mayor, congratulations once again. it's high time i pay another visit to the beautiful city of madison, wisconsin. but we look forward. >> we look forward to it. >> the mayor of madison, wisconsin. the supreme court considered aereo at a, the tech start up that allows you to watch broadcast television without the cable company. broadcast companies want it shut down. justices heard both sides, and their take away, they're not sure. many of the justices frankly thought aereo's business model was clever, but we're worried about how their ruling might affect cloud computing. it should be coming down in june. we'll be all over it. taking on netflix and hulu,
the company in the video on demand connections. online video is seen more as a threat to traditional television . with online video it also could attract customers who stop paying for traditional broadca broadcast, cable or satellite tv. it's rival verizon is planning similar services. when we return i'll school you on how to >> as america strives for energy independence... >> we can't do it on just solar panels or some wind turbines... >> we look to alternatives >> you are sitting on top of a time bomb >> and the familiar... >> it's amazing what oil can do for ya...black gold >> and what are the human costs of the new energy boom? >> lots of men, and lots of money, your going to find prostitution >> people are just dropping like flies... >> we're paid with our lives...
>> ...people ready then... >> mr. president >> who should answer for those people >> last night i gave you my approach to make sense of corporate earnings and why they matter. today we're going to chew on some mcdonald's earnings. if you're invested in mcdonald's, and it is one of the 30 stocks in the dow industrials you're going to want to know how to read mcdonald's quarterly earnings report. it could help you decide to buy some of the stokes, sell some or stay investigated. mickey d's has been struggling of lately. despite the slump mcdonald's is beefing up its international presence. it added a thousand stores last year and will continue to add this year.
profit also called net income, mcdonald's has dropped 5% in the first three months of the year to $1.2 billion. that's a big number but it's a decline, which is not good. that leads me to the second number that an i want you to look at in earnings report, revenue, a fancy word for sales. mcdonald's revenue was a hefty $6.7 billion. that's 1% increase from last year's first quarter. it's not great and one reason why the earnings fell. when you dig a little deeper, sales in its u.s. restaurant declined. mcdonald's likes to blame the harsh winter, but it's competitor chipotle reported a jump in sales. is it more expensive to bring in the same ref? this is worrisome for mcdonald's.
it has had to cut prices and offer freebies. it said for the rest of the year it will focus on the u.s. market to find out if it brings in more customers. we'll have to wait for the next earnings report. call it revenge of the nerds. schools where the cool guys are studying financial engineering. i'll bring you that series. and how speed beats strategy. i'm ali velshi. thanks for joining us. >> all this week, trades near the speed of light... >> if you're not trading at those speeds, you're toast! >> billions of dollars at stake, is our economy insecurity now at the mercy of these machines? >> humans aren't able to receive information in that timeframe. >> we're looking at the risks, rewards, and dangers of high frequency trading >> there are no rules or regulations
>> all this week on the new expanded real money with ali velshi helping you balance your finances and your life. now an hour, starting at 7 eastern / 4 pacific only on al jazeera america >> >> [ ♪ music ]>> announcer: this is al jazeera. . hello there. welcome to al jazeera newshour from doha. >> these are the main stories - president obama takes an asian tour to show commitment. he touched down in japan. ukraine's acting president will try to remove insurgent