tv Lunch Money Bloomberg December 10, 2013 12:00pm-1:01pm EST
"> welcome to "lunch money where we tie together the best videos, stories in today's news. there will be someone new in the driver seat at gm, and it will be a first in the global automotive industry. will talk about it. on wall street, the volker rule is about to become the new reality on banks. we are about to go inside ups, the biggest shipper of packages in the world. in world -- celebration nelson mandela as the world says goodbye on a high note. in the wild card, 12 days of it going -- 12 days of bitcoin.
someone new in the driver seat at general motors. is succeeding dan ackerson. she started as a plant engineer on the factory floor when she was just 18, and the rest of her resume stands on its own. she was head of manufacturing, but religious given the second half, head of product of element in 2011. her real calling card is cutting management layers, cutting red tape costs, and trying to taper what gm does while still building cool cars to make money. >> barra's appointment would make her the first female ceo for an auto company on the entire planet. she was asked what it was like to be a woman in a traditionally male-dominated business. >> i worked at general motors for 33 years with wonderful people. i always have been evaluated on
what i contributed and what results i was able to obtain into your organization, but we come together as a team. putting a car or truck on the road is a team sport. i just view myself as part of a team. if by being a woman i can encourage young women who like math and science to not shy away from it and to pursue technical careers, i love doing that, but at general motors, i think i have the best job in the field, to be able to work on product all day long. >> reaction so far? very positive. >> mary has a lot of talent, and a lot of experience. she is very personal. she did a terrific job in the human resources function at general motors. >> what was it specifically about her and continues to be about her that makes her the kind of leader general motors needs right now? very experienced, very good with people. she has excellent experience working with people.
she knows general motors backwards and forwards. she has been there quite a while. she just had all the attributes necessary to be a great leader. >> what a great way for gm to celebrate its free at last from government ownership, but it is ofold move, regardless qualifications, and what a shattering of the glass ceiling in this industry. i think it's a great day for gm. >> were me, she is a surprise. i thought steve gursky might have been a candidate. bringing her into this role gives the company somebody who has had the exposure now to the international product lineup. you know, gm is going to be a global company, and it aspires to be a more rational global company. >> the promotion follows another big announcement yesterday -- five years and 4.5 billion
dollars later, the treasury department has sold the rest of its stake in gm. taxpayers actually lost about $10.5 billion on this bailout -- sorry to say that -- but the stock actually hit a record yesterday. $40.90. her workarra, she has cut out for her. >> the biggest race going on is in technology and who comes up with the best powertrains at the .owest fuel burn therefore, i think experience in r&d, engineering, which she has had some of, is really critical. the new challenge for safety and the new challenge for high-tech convenience all combine r&d, engineering, really .ritical for general motors, as is true of some other auto companies, others are trying to achieve what i call worldwide cars.
you buy the same car the same day, whether you are in europe or the u.s. or japan, and gm is a bit behind. those are the areas that i think mary will be challenged with, and i think she has had the background to do it. >> for separate brands actually comprise gm -- buick, sit -- four separate brands comprise gm .- buick, chevrolet, cadillac >> we are right here at the l a car show. is this like the prom for you? >> i would not consider at the palm. it is kind of like a traveling circus. i'm looking around on the floor, and this does not look like my old man's cadillac. the cadillac behind me looks more like the kind i would buy after my second or third divorce as a guy, right? >> we are having a lot of fun with cadillac.
i have to tell you, we have more cadillacs under the belt today than at any other time in the 110-year history of the brand. it is that busy. >> when i look at the brand, bankrupt company, bankrupt city, does not beat of luxury brand anymore. what are the challenges for you? >> the challenges are many. one is time. the customers and markets are not going to wait for us to do the right thing. they are not going to a three years, four years -- >> how many years do you have? >> we need to move fast. or are certain gaps we have in our portfolio that we need to fill. >> is this one of the gaps? the big muscle car? >> that is one of the gaps. i would love to see that car in production. this is a very different proportion, and we will kenyan shilling -- we will continue to move and eve all the brand. >> what was it that made you
be oury that we cannot dad cadillac? >> we had to look in the mirror and see what the challenges were and get out of detroit and take a look at the whole industry. i think during the darkest days -- >> which were when the? >> during bankruptcy. every day, you would hear this terrible headlines, and i the entire design team together, and i talked about how we were going to get this -- through this bankruptcy. >> how do you measure at the end for a design team success? >> it is a lot more than a pretty picture or a pretty car. we are not designing this to hang in the museum of modern art. we want people to purchase it. it has to be the kind of compelling design that connects with people on an emotional level that they have got to have this vehicle. >> you can watch "c-suite"
tonight right here and only on bloomberg television. from cadillacs to delivery trucks, we take you inside ups and the massive louisville processing center during the busiest time of the year. first, big day for the banks. even though they may not like it. we will break down the final version of the volcker rule coming up. and that's the end of the road .or the volkswagen minibus they are going to stop making it altogether because of new safety and environmental regulations. there is a beautiful old one. it has been on the road since 1950. ♪
relatis meant to ban proprietary trading at big banks. that means they cannot trade money that does not help the clients. bernanke says the volcker rule will limit risk- taking. it has been many years in the making. >> i don't think they should make it all that complicated. why are we sitting here three years later? >> where do we stand now, and what exactly is this? >> it does ban proprietary trading for banks on wall street, trading off their own accounts, trying to profit off their own accounts. it also bans them from participating with some limitations and hedge funds and private equity funds. the language is very important. it is tougher on the hedging side of things, things like the
london whale trading that jpmorgan went through. we might know exactly -- we might not know exactly how the rule will impact banks. one analyst is not expect all that much. >> traditional market-making activities will be perfectly allowable. what the fed will ultimately be looking at is defining this as a gray area. they probably will not define market-making specifically. they probably will take a "we know it when we see it" approach and if they see too much beatility, that will punishable, so it will end up reducing liquidity. you will end up seeing more of the shadow banking system stepped in -- step in. >> one bloomberg contributor who is usually a harsh critic of banks is fighting this time with camp.ti-volcker
>> they're trying to fix something that was not broken. a supporter paul volcker, but i think he is really off that balance of this one. they will figure out a way to get around it. there's too much money to be made. two, the problem was not proprietary trading. this was not about her prior terry trading. we are honest, the fact of the matter is goldman sachs saved itself as a firm by putting on a $4 billion proprietary trade. forget the hedge part. it was a proprietary trade against the mortgage market in december 2006. the firm made $4 billion on one trait alone, made $17 billion pretax profit in 2007 when everyone else was going down the tubes. they save themselves. >> we are going to live with the volcker rule. how should we amend it to make
it a value? it, tom, move it to the wastebasket, and drop it in. >> the first thing that regulators need to do is rename the volcker rule the diamond rule because that is the only part of the statute, this regulation, that has any teeth, the hedging part. the idea of tying every risk to every trade will surely throw compliance offices around the country in these banking divisions in a tailspin. how did you do that? how do you tie specific risks to specific trades? that comes directly from the debacle,whale trade and that will be the real teeth of this legislation. >> as this rule becomes a reality, what actually matters most? >> what really matters is how aggressively these regulators actually implement it. >> how will be volker rule
affect competition among banks themselves? there are two different views on this one. >> i don't think it will stop banks from being competitive. i think it will safeguard our financial system. >> i think that it will hurt the competitiveness of american banks -- how can it not? when you have other banks that are not subject to restrictions on hedging, are not subject to restrictions on trading, can provide capital cheaper to their clients because they can be more effectively hedge, how can that not marginally hurt a competitive edge? >> bottom line, they do agree on one thing. >> the language is not very specific at all. how you determine the reasonable , that's a fake. saying hedging against a specific identifiable risk -- what on earth does that mean? >> the rules are necessarily a
bit vague. it will depend how they are enforced, and culture matters. that's why i really hope we see ceo's taking the spirit of the rule on board. >> the commissioner of the cftc even push for a tougher volker ruler. volcker >> it does a lot of good things, which i think are the full intent of the law. >> banks will have until july 2015 to comply. we are off to ups next. it's the busiest time of the year for the world's largest package moving company, and it takes a lot of muscle to do it. we are going inside ups next. ♪
>> this year is different for ups. holiday shopping season is shorter, which means workers have your days to get the job done. with thesar sat down cfo. >> this shopping season between thanksgiving and christmas has six less shopping days. what typically happens when the calendar is suppressed like that as we see much more on a daily basis. we expect average volume between thanksgiving and christmas will be up about eight percent on a
per-day basis. >> last year, you had your busiest day, i think, of 4 million packages either december 20 or december 20 one. do you think you guys might break that mark? >> there's a good chance of it. we will process over three point 5 million packages just in this building a loan, so that will be a critical day -- we will process over 3.5 million packages just in this building alone. you guys are also working with brick and mortar retail as well to help them compete against all that online activity, are you not? >> we have seen a lot of activity over the last decade as e-commerce becomes a bigger part of every retailer's business, so we have helped very hard to help brick and mortar stores figure out how they can compete. one of the things we've seen
recently is that a lot of good retailers are using individual local stores as shipping locations, so we may have ups drivers making pickups at 400 or 500 different stores around the country, and then delivering those goods next day and that local area. >> we love talking to ups because you guys really are an economic bellwether. what do you see in terms of volume -- what does it tell you about the consumer, the holiday shopping season, and the economy overall? >> in general, we have seen the u.s. economy improving steadily that not as fast as anyone would like. that has been the story all year. during this holiday season, you know, you see different numbers. i think if you look at the surveys that are primarily brick-and-mortar retail stores, they show slightly disappointing results. at the same time, we have seen e-commerce sales up several digits.
>> i know sustainability is an important area for you. i see it in the company, you want to be fast, but you are also thinking about the impact on the environment. >> right. doing more with less has always cultural at ups. we realize we do have a huge impact on the environment, so we spent a lot of time researching new technologies. one of the biggest things -- we just committed to purchasing over 1000 tractors run on natural gas, so we are very excited about that. efficient wayore to power vehicles, and we are a big supporter of that. >> ups, by the way, also working on a system of algorithms to shave fractions of a mile off every driver's route. added up, this thing could save millions. we will have more on this technology they call or ryan as we go inside ups all day on bloomberg television, + -- more.com, and btv
on this tall -- more on this technology they call orion. next, world leaders join to celebrate nelson mandela. ♪ thet is 26 minutes after hour, which means bloomberg tv is on the markets. let's get you caught up or stocks are trading right now. a new record yesterday for the s&p 500, but we are coming down from that today, with the s&p, the dow, and the nasdaq all lower -- not by much, but lower nonetheless. in terms of individual stocks, let's look at area pharmaceuticals. stifel nicholas ray's chairs of the global pharmaceutical company.
>> this is "lunch money" on bloomberg television, streaming on your tablet and on bloomberg.com. and ukraine, protesters gathering in the key of after police moved them away from government buildings overnight. -- protesters gathering in kiev. the economyeighs on and the cost to insure ukrainian debt hitting a four year high and bond prices falling sharply. thailand heading toward its third national election in just six years. they're scheduled to go to the
polls february 2 after the prime minister dissolved parliament and parliaments are in -- protests are in the second month. an operation to reunite baby seals with their mothers. they were separated during powerful storms that hit the british east coast and they're attempting to reunite pups with their mothers. some of the older seals have been returning in search of their pups. worlds from around the offering words of praise for nelson mandela. africans that we his time as aing cause for a great celebration and enormous pride. countryfore has our as that wethe life are doing with mandeba t
oday. it is that the sun, of this of the symbol that i feel today. rainbows will see the soon. >> there is a word and south african -- ubuntu. [applause] a word that captures mandela's greatest gift, his recognition that we are all bound together in ways that are invisible to the eye. oneness to humanity. what we achieve ourselves by sharing ourselves with others in caring for those around us. we accept the consequences of inaction knowing that standing
up to powerful influences of injustice carries the price. i have fought against white and black domination. [applause] the ideal of ad democratic and free society in which all persons live together in harmony and equal opportunity. it is an idea which i hope and live for and achieve. but if need be, it is an ideal for which i am prepared to die. true to the message of tolerance and goodwill, president obama shaking hands with the cube in president raul castro. the last time a seated president shook hands with a castro was 60 years ago and it was dwight eisenhower. also today, the nobel laureates were honored in stockholm. sharing the physics on her, and
sharing the nobel for sciences and the organization for the prohibition of chemical weapons won the peace prize and here's the director commenting on nelson mandela's prize. >> years ago, nelson mandela stood on this podium receiving the nobel peace prize together with the president. , hisictory over apartheid refusal to give in for bitterness and the desire for revenge represents one of the against victories of mankind. after the ceremony, the nobel laureates have selected guests will travel for the traditional nobel banquet. they are always held on december 10, the anniversary of alfred nobel's death. bitcoin is not just for buying bitcoin. matt miller takes us on a little
money" on "lunch bloomberg television, streaming on your ipad, and on bloomberg.com. i'm adam johnson. the powers that be in washington are moving closer to a short- term budget deal. paul ryan and patty murray hammering out a plan to keep the government funded through the new year and they have until this friday to come up with a plan. the trick is to convince diehard republicans to scale back. >> the government does not harm to our economy. listen. his continuing resolutions and
increasing the debt ceiling, these four suction to start dealing with our long-term debt and deficit. -- do not what i would say is we have the budget control act and if congressman ryan and senator murray cannot come up with some kind of good deal, i hope they at least has a clean continuing resolution. democratic senators voted for it and they should at least free that. i don't want to shut down the government. i don't think any republican does. >> bank of england governor mark carney spoke with charlie rose last night. i it's fair to say and hesitate to comment on other people's politics, but it is widely acknowledged here as well as in central banking circles that a series of decisions on the fiscal side, a series of steps and incentives, kicking the can down the road,
but in the worst sense of the word because we have just gone through 2013, another disappointing year as i said in my speech today, with huge fiscal drag, almost two percentage points of gdp. that does not do anything to fix the longer-term fiscal problems, entitlement and others. you have a lot of the pain without any of the long-term gain. >> bitcoin cannot get the u.s. out of its debt problem's. can it buy a pizza? matt miller's second day of the 12 days of bitcoin is next. a special delivery on the slopes in maine. ♪
>> this is "lunch money" on bloomberg television, streaming on your ipad, and on bloomberg.com. adam johnson. bitcoin has been on a ride of its own. with all of this attention, we decided to get into the spirit of the season celebrating with 12 days of bitcoin right ear on bloomberg. first up, bitcoins and two lips. >> this is from special request. comparing bitcoin with another bubble in the past, here it is from early july to december hitting its peak late november and it had gone up 1600 or send in about five months.
what about dutch tulips in the 17th-century? they rose fifth teen hundred percent in a much shorter time. what happened after that? they climbed slightly higher and at the peak, some told that 10 times the annual income of a skill and then the crash. >> what would happen if we put gold on that chart? >> gold in 1980's as well. about, goldou think and commodities. >> that's so not true. sometimes i think about oil. guardian,"g to "the they told students at the university of amsterdam is worse than to live
mania because he said at least then you actually got a to look at the end. tulip youf you buy a get one. i think matt is in the market for something else. yesterday he bought a bit going $800.out
>> it's almost limitless because of some intermediaries. there are tools you can use. is one company. another called foodler that barry silver started. >> the guy behind second market. is one iorcoins.com used yesterday and then there is merchantshelp the with the transaction. i bought three pizzas and fed the whole office. in any case, the whole office except for me. >> i looked on
gyft today. i could buy stuff at cabela's, may favorite story. foods, the favorite food on the upper east side, stuff from nike. >> it is like an intermediary,
like a broker. >> you buy these gyft cards from them to theyou take vendor. >> i have a question about the speculative nature of this thing . everyone is so excited they are literally handing out this fake money. business arner sent a picture out to all of his subscribers about a car that he saw. you are a car guy. he put a custom plate on a yellow lotus that says it coin? -- bitcoin? >> i have massive respect for someone who drives that car. it's a fantastic handling car. it doesn't have a huge engine or mountains of power. car who doesuy's not have a million dollars. >> how much is it worth? >> $30,000?
intriguing. follow his 12 days of bitcoin, the journey for the next 10 's 12 days of bitcoin. >> perhaps you're looking for something more luxurious. betty liu gives us a sneak peek into the crystal makers plans for a luxury hotel right here in new york city. >> crystal, delicate, ornate, sparkling, synonymous with dr. baccarat. new are taking it to heights. the man who created the w hotel in now runs about 29 billion dollars at starwood capital, a private firm focusing on private real estate and hotel and baccarat is going big with luxury accommodation in the
middle of bustling midtown manhattan. >> we have a good mix of domestic and international buyers, about half and half. i think this is a great location if you are coming from offshore. your steps from fifth avenue, steps from moma. sternlight has already sold about half of the 60 residences which range from $3.6 million to $60 million. got me? >>d have you i'm very involved in places with where the outlets are. you don't have to move the and table to plug in your ipad. it's next your pillow. has spared no expense. pre-k's i don't think you could spend more money. it's not possible. don't think you could
spend more money. >> h resident has a signature baccarat piece. do something as unique as these residences, they will retain and depreciated value. >> betty liu, bloomberg, new york. , we haveng of a unique the today's mystery meat -- stork. an bird is protected as endangered species so companies are sending them up the towers to trendy nest away from the electric lines without disturbing the storks themselves. that's a big nest. be careful. storks, flyaway. just fly away. ♪
october. autozone, the nation's largest automobile parts retailer, topping estimates. performance boosted by the addition of new stores in the u.s. and mexico. let's get you caught up on the broader markets. after a record close for the s&p 500, stocks pulling back to some degree as they weigh a fed tapering and budget talks in washington. down a little more than three and the other two markets falling in similar fashion. let's look at the treasury market. little change as well. yields falling in little at the longer rent of the curve. they are attracted by the increase in yields we have seen near their highest in about three months time. fed tapering and the prospect factoring into the treasury trade as well. with just three weeks left in the air, lots could move the markets including next week's fed meeting. roubiniown with nouriel
asked how he would invest $1000. >> every day you have to wake up and make sense of this complicated world. i prefer to be called dr. realist and not a pessimist or an optimist. i predicted the financial meltdown that occurred in 2008 and 2009. during the global financial crisis, those who were too optimistic went to risky assets or too long. if they had followed my advice, they would have been underweight in global equity and would have missed the 6% correction that occurred when we had almost the two point drop in global equities. right now there is a global economic movement so you have to be realistic about what's on the horizon.
you don't want to listen to you.e who agree with more important, listen to people who disagree and see why. make a special effort to listen to people and i think it's going to be much better than i think. it pushes me harder about whether my views are correct. be --of all, you have to first of all you have to be diversified. europe, emerging markets. gradually, long-term interest will rise. you may want to be underweight in bonds. be marginallyo overweight inequities. you probably want to be underweight in emerging-market equities. the united kingdom, may be marginally overweight in global equities. more robust global economic recovery would be the right choice. not quite thehat?
>> live from pier three in san francisco, welcome to the the early edition of "bloomberg west" where we cover the global technology and media companies reshaping our world. let's get straight to the rundown. yahoo! reveals nearly one third of its revenue comes from its search deal with microsoft. expirationas an date. at that number is out only because the fcc asked for those brown trucks. now it has a mathematical secret weapon helping get packages delivered faster. we will show you how technology changes how ups operates. which technology-driven advertising agency is the most advertiul at turning