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tv   Street Smart  Bloomberg  December 10, 2013 3:00pm-5:01pm EST

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like so much for a record here. stocks falling as the finer -- final rule for years. welcome to the most important hour of the session. 69 minutes to go until the closing -- 59 minutes until the close of trading. pretty significant. three years in the making and finally has happened. >> some clarity. about iting to talk certainly in the show. there are some aspects more stringent and somewhere they loosen up a little bit. >> going right to the big excerpt.
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trish making the comment we are off the highs on the s&p 500. not much off the highs. problem, still waiting on a deal out of washington. why it is upstand $1200. it is the last price on gold. also, a bit in crude oil. . that is a six-week high. onto the big three. julie hyman keeping an eye on them for us. the first of these is an etf. a spider etf. i wanted to check it because the volcker rule is being approved. expected tors approve it by the end of the day. talking with chris
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whalen about what it means for the bank. i have been preparing for this day for quite some time. gilead sciences one of the worst performers in the s&p 500. hepatitis c drug they are preparing to come to the market. an executive says it is going to spark a drug war among hepatitis c drug makers. finally, starbucks down after an analyst said that same-store sales may be slowing in the u.s. to around six percent from around eight percent the prior order. in.rra is ackerson is out. she has been groomed for this role, having spent over 30 years at the automaker. recently ahead of product development.
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i have worked for general motors for 33 years. i work with a ton of wonderful people. i always have been evaluated on what i contributed and what results i was able to obtain. we come together as a team. , oring a car, truck crossover on the road is a team sport. i view myself as part of a team. >> since yesterday, the treasury announced the full exit from gm, giving her a clean slate. she takes the position on january 15. to talk about the road ahead, we are joined by the deputy editor. jessica caldwell, chief analyst, and resident auto expert, matt miller. pretty significant in that they chose a woman tom and also someone who has been at the company for the whole career. said shey people have
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.s in, ackerson out he has been grooming her for this position. he has been a pretty clear favorite of his. he said just a couple of months ago that any car guys are running any of the big three but someday soon a car gals may run one of them. he was alluding to it. she has an absolutely pristine resume for someone who will run an automaker. that could either be a super engineer or super in finance. she is an electrical engineer by background and then did her mba at stanford. she was running manufacturing and then made her briefly the head of hr. in charge of production. >> is there a danger in having someone who benefits from this their whole career that has not
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seen the outside world? >> it is possible. i think she is the best choice for the role. the last two executives they had were communications executives. to bring someone in from the inside, i think that is a great move. she knows how to streamline the product. >> her calling card. >> right. trying to reduce overhead to get the profit margins up. to 2.6 tm off rate tropic margin. profit margin.e volkswagen five percent. hyundai almost eight percent. she needs to get them. legacymuch is this health care costs as opposed to just operating the business? >> a lot of it is the business platforms mainly. they want to reduce the platforms. under 10 by 2020.
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that form sharing is a bit way to get rid of the overhead cost. onthey build costs -- cars over 30 platforms. not nearly as many different models of volkswagen uses only 15. what about the international expansion efforts? how important will that be for her? >> i think that will be a huge focus. such a big brand in china. always a big focus for general motors. then dealing with do we keep you wake in the united states? 7 -- some people say there are too many brands. dealing with the global picture and how this will work in different areas will be a challenge that she will have to address. in some months gm sells more cars in china banned the u.s. -- than the u.s. it was a argue
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surprise there was not someone with more of an international background? >> married in charge of global product development. she sees what is going on. she has her hand and pretty much everything going on around the globe. i think there is not too much risk there. >> you make a good point. pointne keller made the that she was surprised. >> along with jessica. she thought it was going to be steve gursky. a lot of people expected mark reuss. >> i did expect him kind of. it was between royce and mary. woman?he said a >> he did, but some people do not believe him. >> he also said it was like seeing his daughter promoted to the role.
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>> he just got promoted to mary's job. she is moving up. keeping the main team in tact i think is a great way to keep going. >> tim higgins who broke the and has a lot of sources on the board said that mark is very happy with this job. he is a hands on guy. he likes to drive cars around the track. he wants to work on the engine, figuring out the differential. this is the perfect spot for him. i know he likes mary a lot. they work together closely.
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not a lot of women have the engineering background yet. more and more are getting it. mary is still a super car gals. >> let's be honest, i think that the automotive industry and cars in general, that his male dominated. boys are given hot wheels as children. our is ingrained in culture. things are changing around. i think it is good we are focusing on her credentials summit because i do feel that is why she got the job. i think if she was not a female, we would not be talking about this as much. as time evolves and see females are in the role, it will be different story. gm is such a huge company and so closely scrutinized. >> i am glad to point that out.
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hopefully 10 years we will not care if it is a man or woman. we're not quite there yet. question, as we focus on her role of ceo, what is think single most important thing she needs to do right now? what we talked about. continue to produce good cars that are profitable. that is something everyone will be watching. she still has a long way to go on that. to your point about being a woman, women i've more than half of all new cars. be said something to for having a woman in that seat. perhaps she will be more >> all three of us have heard the story about mindy grossman sitting at the board room.
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they were like what do women think of this product? the only woman among 30 or 40 people. women,d to have more especially if you're going to be something to more women. if 55% of the people by a cars, someone who is a woman should be representing. >> good stuff. thank you. inc. you to the rest of the team. be sure to check out bloomberg tv. yzlett coming up tonight "c-suite." only company with the shakeup. just named a new guy, and it is this guy. women's frankly, some bodies do not work for it.
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rather they are saying goodbye to that guy in his role as chairman. chip wilson has left the building. we will talk about that. plus,'tis the season to be jolly. there is one investment that even warms the grinch's heart. adam will tell you about that next. ♪
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>> we got an early christmas present from our friends in europe. time for insight and action. it is that time of year. europe's by signal. signal.
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percentageu get the of stocks to drop below 20% tom you tend to have snap back rally. that is what we are showing. the percent of stocks above the 200 day moving average for the euro stoxx 600 index. there it is, about 20 right now. i will overlay the index atop the same chart so you can see how the signals line up. there have been five of them. under 20. look what happens. look what happens when you got another, another. there have been five of these times. when stocks. oversold in europe, you had a snapback rally. the sheer.days left the question becomes, how much you think we could make in the next 21 days?
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average is very real returns. you know you are getting 20% of every dollar you make. you look for the trades that were. you get a lot of guys trying to play the averages. a very good track record. it has worked five times consistently. europe am a stocks getting oversold. in theory, 7.5%. lex very nice. says they are cheaper than equities at home. the head of u.s. equity over at barclays. over that -- before that, got his start at lehman brothers. said we will end out the year at 1800. welcome back. well, the firm call is the ..s. will outperform
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the earnings story is not turning around as quickly in europe as it has been in the u.s. we had great third-quarter earnings result in europe has not. europe is cheap but generally trades cheap to the u.s.. there is also the question about when the fed will start normalizing policy. how does the rest of the world trade relative to the u.s.? suspect were you to get euro going down more than the u.s., you should buy on that. >> we were talking about this earlier. is it really out of the woods? intermediaten
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cycle. then there is the longer-term questions about relative labor costs, government debt, those sorts of questions. investors looked at the 2020 outlook on 2015- relative to europe and said i like the u.s. from a cyclical perspective, the next year should be better. relative monetary policy should be favorable as well. they should be starting the tightening process not so much in europe. intermediary calling. >> and maybe a short-term one if history repeats. coming up, uruguay's pot restrictions up in smoke. the effects of legalizing marijuana. from green to brown. we will go inside ups. the man behind the global shipments. an exclusive interview with the
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ceo, scott davis right here. we will be right back. ♪
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>> any minute now uruguay expected to be the first country to legalize marijuana on a national level. is going on here? >> pretty remarkable. this is the first country in the world to legalize the sale, distribution and consumption of marijuana for recreational purposes. basically registered users will be able to buy 40 grams of marijuana per month from a limited number of pharmacies. they will be looking at a situation where registered growers can grow up to six plants.
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you will not be able to sell any of them marijuana to anyone under the age of 18. you will not be able to sell to foreigners. governmentove by the the industry.late they know it is an unregulated crime. they said maybe we can get a better handle on it if we have a role in the regulation of it. a pretty progressive guy overall . he has done a number of things. legalized gay marriage. this step legalizing marijuana, pretty revolutionary. all of this happening in the capital country. how is what he is doing different from portugal on the netherlands, even in colorado where they are still figuring it out? you have the
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decriminalization of all drugs. that happened roughly 11 years ago. >> in other words, if you have the stuff, if you are in possession, it is not breaking law. if you deal it, that is. >> correct. you can be caught with care when on the streets. for may recommend a program you to get treatment. they used to spend on incarceration now goes to treatment programs. is young have found people are less likely to use abusive substantive steps -- substances. back here at home, washington and colorado now have legalized their water for recreational purposes. you will be able to
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buy marijuana in colorado without any kind of medical certification. very interesting. is ae are looking at this huge opportunity. i will share with you and at certain urman interview with the pot entrepreneur. interviewepreneur with the pot entrepreneur. >> our ultimate go is diego be synonymous with premium cannabis worldwide. i am planning to go to uruguay to meet with the president where they are opening up legalization in their country. one of our partners is working on establishing relationships in the czech republic. a sickly whatever markets where we are welcomed. we can establish the gold standard model. >> that is his idea.
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corporaterosoft strategy executive. interesting. coming up, heading to ups. it's got will join us with carol massar. -- scott davis. ♪
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>> all day today going inside ups. the biggest -- busiest season of the year. nowhere is that more evident that at the massive world have. they go to more than 200 countries. check this out. >♪
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>> there is one man behind the millions of packages, scott davis. carol massar standing by with him at the companies have in
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louisville. thank you so much. i am here with scott davis, chairman and ceo of ups. great to have you with us. place over they next few weeks. >> it is loud and busy. with kurt earlier about this tease. you are definitely seeing volume and activity pick up this year. peak season is three different peaks. we have the first one. next week will be the second peak that ok rewrite through business. the biggest they will be monday 34 million hiccups and packages. after christmas is just about as big. with a lot of strength after christmas. only one third of the way through the peak. fed.u were on the atlanta
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i am curious what you see in terms of business activity. what it tells you about the economy. and what it could mean for monetary policy going forward. the think we came out of 2009 recession with good monetary policy. i applaud what chairman bernanke did through the process. a lot of stimulus out there right now. the economy is getting better, but still a slow pace. running 2.5%. all of us would like to see a two percent-four percent economy. really, it is like teaching a child to ride a bicycle, how long do you hold them before you let them go? they may crash or do you hold themselves to -- hold them to long? i think they are doing a good job. i think the outlook for next
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year is a little bit better. still risks out there. >> one risk is washington. we have another deadline, december 13 coming up. can it be fixed? .> i am hopeful very disappointing the past couple of years. i think the budget discussions going on right now are encouraging. i do think they will come up with an agreement and not wait until the last minute. it is better than nothing. it does not take on the serious medium-term debt in -- best issues. we talked earlier today, not much compromise and washington. we need compromise and
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bipartisan solutions. i am hoping we will see something come out this week of congress. >> trade is something near and dear to you. is this the first step forward in terms of helping out small businesses? what they did last week was a very good first step. 159 countries agreed on trade facilitation. making trade easier around the world. faster, simpler, and more transparent. att is critical when i look the u.s. and small businesses that do not export. 95% of the consumers are outside of the u.s. and we have to make trade easier. this is a big first step. >> this has been a topic since .ust bezos talked about drones
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there is so much out there. misinformation about what ups is doing. is ups actively seeking drones for delivery? >> i think we will pay attention to the drone technology. i think the tech allergy is not that far away. i think regulation is years and years away. i think for the faa to regulate drone technology is an extraordinary challenge. i think this is further out in the future than we would like. i would say more like 10 years. years, like to say five but knowing the way the
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regulatory process works, it is very complex. if you are going to do it in populated areas, i think it will be a challenge that will take time. will be other technologies that are a game changer. three deep renting is something not that are away. most hearing aids are ready are being made with 3-d printing machines. companies like general electric are making jet engine parts with 3-d printing. that will affect our business in the next five years. probably bringing manufacturing closer to home. -- 3-d impact will have impact on your business. >> three b is a little bit closer. is a little bit closer. our job is to look out but also
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be realistic for when it will be applied. >>. you guys have built big-time into. you are the supply chain for merck, for example. >> we are excited about health care. 13, 14 years we have been involved in health care. you have ramped up investments in recent times. the reality is they need to spend efforts and time on research and development and turn the supply chain over to you ups. we have wonderful technology. that goesetwork absolutely everywhere and experts of compliance. parts of thetical industry. it is a fast-growing industry with democrat vix what they are. >> in terms of health care, a bigger and bigger parts of the business.
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a lot of work you guys are doing. >> we do lots of things in health care. areave pharmacies that dispensing insulin pumps to get to diabetic -- diabetics the next day. it is a big area. home health care will be a big area in the future. much.nk you so >> scott davis. thank you. chairman and ceo of ups. >> coming up, we are talking about the major ruling that could yank 30% of goldman sachs revenue right off the books. vokerocal role -- lker rule next. ♪
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>> the day wall street has been dreading has finally come.
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three years in the making but government agencies have unanimously's open. will limit the ability to invest in hedge funds. financial market association president ken benson joins us with more on this. welcome to the show. are we going to now look at a very different kind of banking industry. >> we really do not know yet. theave a 900 page document regulators have put out that's what -- at least one thing we know is very complex. we will have to go closely to see what the new requirements are that this will replace. are very concerned about, have always been concerned about is a rule that when unnecessarily restrict the ability for firms to make circuits and hedge the risk and what the effect would be for
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places like ups. >> you bring up a very good point. i've wanted to the airlines as an example. you want to be able to fuel -- hedge the fuel cost. how will this affect the airline ability to do something as simple as hedge out what the fuel cost may be? >> not clear yet. we know from the original postal -- proposal that it could negatively affect the ability of airlines to use the banks that were subject. >> what they have to then go to a hedge fund or more private institution? question wea real raised. potentially taking a lot of liquidity out of the market. when you think about 19 of -- 17 of the 21 primary dealers were covered by the rule, a
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tremendous amount of the quiddity could be taken out of the market. we have been concerned about. that is what we will see within the rule. >> this is unchartered territory. that if made very clear you are serving customer business, you can still go ahead and do it. some firms may be concerned about the other side of the business. are you concerned about that? >> number one, what are the rules around that? we will have to look closely at what the conditionality is around that, the guidance. also, how you can hedge their risk and if you can put on a hedge for clients. also, what the rules say you can and cannot do. the original rule proposal, the stiff, manyere so sought enforcement liability that cause them to pull back. we will see whether regulators
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address that or not. i think there is a follow-on that will be critically important. that is, how will this be enforced and interpreted? >> we know the lawyers will make a lot of money. you will need a lot of attorneys checking everything you do. their enough onset with us. with us on set. will this change what happened in 2008? >> the situation could have been worse if firms were not hedging macro may -- macro risk. but it is the systemic risk of the system. >> if you think about this in the simplest form, consider a convertible bond. interest rate risk. equity market risk. credit risk. might the
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interpreted, you cannot necessarily hedge out all of the macro risks. if you have a portfolio, you cannot hedge those. same thing from an equity derivative. it has all sorts of specific. an inherent risk and many of these products. if you say we do not want these, are you running the risk that you will try to transform a vital industry, something that is so important to this country into more of a utility type play? that is the concern we raised throughout the process. here in the united states you have the most deep in the liquid markets that are to the benefit of municipalities. if you unnecessarily restrict it, you run the risk of negatively affect things in the markets to the detriment of the economy.
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you need safety and soundness in the system, but have to be careful in how you do it. we do not know that they have done this. the other point just raised, it is not clear from what we can see as to who will decide how the role is interpreted across the five different regulators. that could be automatic. >> we will watch all of it. thank you. our closer is making a big bet on industrials. he has a chart to prove the case. we will be right back. ♪
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>> time for chart attack where we show you a chart that will make you smarter. there have been very few signs of inflation in this economy, but very not -- but very knapp says that will change. what you see is cpi services determined by domestic factors have been rocksolid at 2.4%,
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above the fed target. disinflationn -- from durable goods prices. currency deflating the massively such that it put pressure on other capital goods producers. that's puts rusher on industrial capital are jens, but the fact is, if you just get the prices to stabilize that europe is out of recession and things are doing better in china, those prices start taking back toward zero or above, the aggregation aggregates are higher. sure, it is good for profits and will makeut surely it things tighter for the fed. >> barry knapp of barclays, thank you for being here. >> from twitter's record high two luxury homes. the closes next.
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close" is next. ♪
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>> ok, if you missed everything that happened during today's session, we are getting you caught up right now. only stocks you need to know about today. lemon. 10, lulu the chairman steps down. willrmer ceo of tom's replace the ceo. this comes after the comments were made right here on "street smart." hard to forget that one. more on this story. >> talking about rambus.
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part of the deal, micron get the right to use any patent for the manufacturing of certain integrated circuits. >> they have been suing each other literally like samsung and apple. >> number eight, teva pharmaceuticals. they said earnings will miss analysts estimates next year if regulators allow generic copies of the multiple sclerosis drug. it brings in more than half of the annual profit. brought calm.en, the chipmaker raised fourth- quarter revenue. getting better than expected revenue and revenue in all of its business. about texas instruments. shares are down a fraction as boehner wrote the outlook for the fourth quarter. expects to earn between 44-40 eight cents per share versus 42- 50. they may wrote it. >> number five, twitter.
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-- they narrowed it. becoming more bullish on the potential to raise ad revenue. rolling out a new advertisement revenue program that will allow them to focus on specific people and target them on twitter. >> make sense. >> it is weird. all of us are ontwitter-,-and i never >> in fact, i am on it right now. >> i have never gotten an ad. >> you did not notice it. >> it is that good. promoted, and a lot of times it is something i am interested in. twitterific, which is slightly different. not about starbucks?
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starbucks down nearly three percent, falling the most in any year on cautious analyst comments. the company may be slowing growth in the fiscal first quarter. no better economic barometer than starbucks, i think. greenspan usedt to use. toll brothers down about half a percent, despite boosting fourth-quarter earnings that beat the estimates on higher luxury home prices. the income gap go down 77% from a year ago. posted fewer tax related adjustments. autozone shares topping estimates. the performance boosted by the addition of new stores in the >> u.s. and mexico. >> -- in the u.s. and mexico. >> coming up on the number one stock of the day, general motors. the government sells its stake in automaker and names the next leader. the first female ceo
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wille global succeed -- barra willmary succeed as the next ceo. [closing bell] the volcker rule comes into play. we are done about five points there. lost 3/10 of one percent on the s&p. consumer discretionary doing a little bit better. >> stocks are a little bit lower today, but off a fresh record high. the s&p is off by about five. nothing really happened today to change sentiment. are in alike investors .ait-and-see mode
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washington is trying to come out of the budget talks and negotiations. and we are waiting to see what the fed does next week. nearly one third of economists we have surveyed now think the fed will start to taper. everyone thought it was going to being next -- the end of december. >> he made this point to me recently, that he thinks the fed should be tapering in december. >> richard fisher of the dallas fed has been adamant that we have been pumping way too much liquidity into this market for a long time. >> and if you look at treasuries, the yield on the 10 year, it is where we were in september. >> there you have it. ahead of tomorrow, we have a special guest. retailer fifth and pacific is shedding another one of its
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labels. lucky brands will be sell for $225 million to leonard green. they will focus instead on the kate spade label. formally known as liz claiborne. they sold the property rights to juicy couture. >> why would you give that up check out -- give that up? i have every keller. -- every color. they are really comfy. >> i have never been into one. >> you have never been into a juicy couture? tax -- >> never. kate spade has been a sales juggernaut. more than 20% for the past 12
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straight quarters. ofarly, the strategy whittling down their brands is worth it for them. >> these guys focus on what they do best. get rid of the things that are fickle, more trendy, and stay back with the tried and true. >> are you saying that judicature is fickle and trendy? >> i am saying that. they make a lot of addresses that i wear on this show. i like juicy a lot. not going away. is campaign to persuade actually working. those nelson, heart -- are names you might not have heard in a while. >> i had to ask julie who they were. >> get out of here. >> geez louise.
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barracuda, magic manned -- magic man? it is a fantastic band. >> all of these bands are pulling out of the seaworld due to positions of animal-rights groups. >> i cannot believe seaworld is still open. >> why? >> who would go there after watching -- >> it is a very good company. it is going to change. i do think it will make companies like this look at their model. by the way, this kind of stuff -- >> how can you keep a whale that size in a tank that small? this is theink beginning of a change or people will stop going? >> they will not stop going. they want to see the big whale. >> i think a lot of parents might say, you know, i have a
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moral stand against this. >> you cannot pen them up in one little area. >> there are stories about whether or not this kind of stuff works. whether or not these kind of entertainers say, hey, don't go to these things, works. benatard stopped pat from being on the macy's float because she is a vegetarian. if looks both ways. >> i love that benatar. >> but they hit her with the bat shot. -- the best shot. >> oh, good one. >> the ceo of goldman sachs is said to be among buyers in a $1 million development in florida. -- $1 billion development in florida. it features an 18 story tower.
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lloyd blankfein will be in good company. leon glass is said to also be one of the buyers. these type of residences rose 36% through october in the depth of the crisis. >> i am a coral gables guy. no, i'm not. [laughter] a woman called mirabelle -- >> a woman called merval runs the art collection down there. she was quoted as saying that the market in miami is on steroids. this vanity that they will be hanging out by the pool together is a joke. they are never down there at the same time. i don't think i was ever outside during sunlight hours when i was there. >> but you are aware of the mango club in south bay. .> señor frog is a favorite
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>> imagine what you could have bought the company for two or three years ago. it had to of been a lot cheaper. >> if you go five years ago, 2009, people were handing over the keys to the condos. and thanks for saying, show me a bit. stories of people getting one bedroom condos in brand-new developments for cheap. >> i literally counted 76 cranes in one afternoon of all the new buildings that were going up right before the big rust. -- the big bust. >> an online site is said to be prepping an ito -- an ipo. it has gained popularity by helping to make romantic links between facebook members. zoosk's market share is small. withow does that compare
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others? >> there are more than 4000 businesses competing in the dating circuit. that is insane. >> what about tender? it is owned by match. >> i don't even know what you are talking about. but it is a totally different business model. it is a nap. >> but you don't pay zoosk either until you send one or two messages. it is interesting. this is the first one that is actually doing an ipo that is inside what i would call the redwood kind of overhang. theseart to see enterprises like facebook and others that have this giant overhang. i think they play very well there. mingle our public and
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their cap -- their market share is worth about 130 million. smalls is a very business. the others are much bigger. >> if they find a date, they stopped paying. everyone -- >> i'm sad. i'm really sad for the repercussions of my actions. yeah, first he was really sad, but then he was out. the companies's pc suite shakeup. -- c-suite shakeup. are going to find out from a man on the inside, the global head of m&a at citigroup will join us next. ♪
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>> 2013 may go down in the books as the year of the activists. it is a trend that has swept companies of all shapes and sizes from dell to herbalife to jcpenney. that almost 1/5 of companies in the s&p have faced at least one shareholder activist and campaign. mark, thanks for being on the show today. always great to see you. as we look ahead to 2014, do you think we will see much activism from the likes of carl icahn and bill ackman? i think that is mainstream.
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if you look at the data campaigns over $1 billion, they are up over 50% in the last couple of years. >> why is that? >> part of it is that it has been a lot easier to go after companies. these guys have made money in the last several years. assets under management is way up and returns are quite good. you have situations where it is not just poorly performing companies, but these companies are actually performing in line with their peers, but they are getting taken out because there is a perception in their value. whether it is structurally related, selling company and breaking it up. its success has not gone away. >> you provided the data. to 2009, thek
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annual returns for the activist hedge fund, 19.9%. that is the white line. >> why does it work? they are able to make more noise? it is a variety of things. being totally all short-term artists. the facts are that they are unleashing pockets of value and you've got to give them credit in that regard. there are things that are going don'tt i find that i particularly agree with, like extra compensation for directors in a dissident context. leaving some of that aside, to the sameoes back thing. they are making money. they are finding pockets of value. >> if you are the ceo of a
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company, the last thing you want is carl icahn knocking on you yourr door -- knocking on door. >> you have to look at companies and their structure and figure out how to -- how someone could criticize you. businesses use, to do self-help rather than having someone knocking on their door. i think you will see more of that. this is very topical. at the board level, the ceo level, the cfo level -- and again, it's not going away. management inen your experience ever embrace activists? they find value and you could argue that is a good thing for a manager. >> embrace me be too strong a term. >> and cooked it have dinner at carl icahn's apartment. -- tim cook did have dinner with at carl icahn's apartment.
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>> typically, you see manning the barricades, shutting off engagement. here, you see working together. >> you think reed hastings and owenn simons -- simons, two men who came to the table with carl icahn and it went well. my grandmother used to tell me it is better to get flies with honey than vinegar. and tothan close doors take a position with a megaphone company, engage and a lot more goes on. >> fascinating.
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up, it was the interview that spurred an online firestorm. >> frankly, some women's bodies just don't work for it. >> now it has caused ac-suite shakeup. -- a see-suite shakeup. ♪
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>> breaking news on mastercard, the board has proposed a 10 to one stock split. that is a big deal. it will bring stock down to under $100. there is a buyback announcement of $3.5 billion worth of shares.
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that would be about four percent. and they will increase the orderly dividend by about 83%. i know that sounds a lot, but it will still yield less than one percent. bears the stock, up 1.4%. the reason -- there is the stock, up 1.4%. the reason it is not up more is perhaps because of the amount of buyback happening. >> ok. well, first, there was this. but frankly, some women's bodies -- >> frankly, some women's bodies don't work for this. they don't work for some women's bodies. >> and then there was this. >> i would like to talk to you today about the last few days around the bloomberg interview. i am sad for the repercussions of my actions. >> and now there is this.
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>> the team at lulu lemon has done an outstanding job building momentum. >> it has ended in a c-suite shakeup. the man you just saw laughing hysterically in his introduction ceoo will be replacing christine day as the company launches a new strategy. first, they've got a new team.
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correct he is a frenchman. he was at lvmh. then he was at burton, the snowboard company, and most recently at tom's. he has been hired because he brings a unique set of experiences from each of those jobs. at tom's, a background of especiallye brand, since it is such a philanthropic company, the one for one program. and burton, out of technical performance in terms of the products themselves, snowboarding and snowboarding gear. and then at lvmh, a global brand. they are hoping he will bring all of these things to bear in his new position. and christine day was viewed as the ceo. >> but she got caught up in the sheer pants scandal
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because of those comments. strike.is a preemptive this will not look good on thursday and the news will be bad. this is what you want to do when you want to give these guys at least a fair shake. i'm talking about their thursday earnings. about a week ago, most of us were sitting at the table talking about this. the fact that they went in and cap someone from the industry, i think that's a smart move. they brought somebody from starbucks before into it. also a former starbucks executive who is now the chairman of the company who was taking control. >> maybe earnings are going to look bad. that he really did damage with those comments? did women say that i don't want to buy these pants because this guy is blaming me for them not fitting? >> i think they went through a tough time. lorentz -- lamont is a great
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pick for these -- this company. quickk you will see a uptick in 2014. >> the damage is done and they needed repair. >> yes. >> most of the customers at lulu lemon are winning. why not find a woman to run the company e >> i think just verynt himself is charismatic and energetic. he is one of those guys that can really lift a company, no matter the customer, female or male. i think we will see a lot of the tom's influence into the new lulu lemon. question -- i mean, they alienated some people. this was in the paper in vancouver yesterday. i still don't think it was the comment that caused this. i think it was another comment
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in the interview where he said, we are just too rich. i really do. >> maybe he is too rich to be chairman now. thank you so much. we will be back ♪ talking hilton next. -- we will be back talking hilton next. ♪
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>> we are back with mark schaefer, the cohead of global m&a at citigroup. there is a lot happening right now. deal flow has been huge, up about 30% versus last year. what is driving it? >> we looked at it and it's about 13 globally on volume. larger deals, vodafone for example, it will be up to the high single digits by the end of
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the year. anecdotally, i've been saying for the last few weeks that i think it will be better in 2014. it is not necessarily showing up in the data. if you look at the number of billion-dollar transactions in the last three months, we have been running at 50 per month. the last time we did that was at the end of 2007, beginning of 2008. there does seem to be some velocity. >> you could argue that is not necessarily a good thing if we are going back to 2008. we did a bubble thing last week. >> i hear you. suggest think it does -- i also think there is a slightly better outlook globally. the jobs report. it seems to me that it feels like my comments with ceos and boards that there is more to receptivity -- there is more receptivity. >> is there perhaps a little
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2014?larity for >> it is either that, or the last five years is the new normal. waiting for major economic upturns. there is the ability to grow organically versus achieving shareholder return targets and earnings targets. there is a pretty compelling argument for doing a mende and shuffling. -- and mende and shuffling. airways closing its acquisition of american airlines , about a $17 billion deal. what do deals like this mean to you when they get done at that size, especially given the fact that the department of justice threw up a roadblock? >> i think it is positive. let's not kid ourselves. the justice department enforcement is going to be harder and more aggressive than it has been. but i think it is constructive
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that they were able to get through it. one side of the market, $5 million tree and actions -- five lillian dollar transactions this year, those are up 30%. i have been pretty pessimistic for the last five years. for me, this is a big change. >> the stock prices going up on these deals being announced. that is unusual. typically, you would see the opposite. why is that? basicallyrs are speaking with their money. they are saying, we would like you to do smart deals. do something with the money, right? >> it's got to make strategic sense. cannotther words, it just be the old-school private equity where you ran the numbers and the numbers look good because you thought you could borrow this amount and bring the cash flow and then make a return
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and flip it to someone else. this is a strategic deal. >> a little more center of the fairway and financially disciplined. i think the market pays less .ttention to revenue synergies it is this kind of deal that is getting rewarded. talked to hedge funds and investors and they say, we are rewarding people for doing deals. why aren't we seeing more of them? -- maybe we will start to see more in the market going into 2014. forou look at the landscape opportunity for people to make strategic acquisitions versus going out and raising money in an ipo, for example, which do you see more? >> the public equity market is
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very robust at this point. stock prices are high in situations like that. is that the best way to generate value over a longer time frame? look at the lodging industry. you have extended-stay, hilton. an extent, that is a play on the economy. if the ipo versus m&a situation, that adjust over time. prefer to be public e >> -- to be public? >> having someone at the helm thea long time is typically way to go. if the private market is better, they like to keep it in the private market. >> positive sentiment from mark schaefer. >> very much so. >> it could be a good year ahead. i hope so.
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>> thanks for joining us. coming up, meet the ringmaster of family entertainment. barnum & bailey circus. i went as a kid. you finally once get your hands on the virtual currency, what can you do with it? ♪
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>> time now for the scene, where we bring you the business behind pop culture. whether you live in st. louis,
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seattle, moscow, or a simple, -- or is dental, you have -- if istanbul, you have probably seen the ringling brothers circus. how did you get started? >> i got started as a student. my summer job was going all over hiring her circus talent. you have a new job, working for the old man running ringling brothers. >> i got a call saying, meet me at the airport, we are going to rome. we will propose a deal. that happened in november, 1957. i don't think i have ever worked again in my life because it is a blast. now it is not only ringling brothers barnum and bailey, but disney live, monster jam,
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monster energy's super frost. >> ringling brothers is such a big is this, and those others are so totally different. what was the motivation? with disney on ice. >> it is really all family oriented. that is what we do. it is what we've got -- we specialize in. we have over 5000 performances a year of all of these things. it is great family entertainment. great view of what is going on, of the economy. are people spending on these kinds of entertainment? >> they are. and our business is better than ever. will be the best year in the history of our entertainment. what we do, you cannot replicate.
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is live talent, hard-hitting. we come once a year, sometimes twice a year with each of the individual event. we try to have christmas five to seven times a year in every city around the world. >> what are the logistics like of trying to put on one of these shows and moving hundreds of performers simultaneously? >> ringling brothers barnum & bailey has the longest railroad train in america. each train is one mile long. people live there. all of the equipment goes there. and that is the way we travel. all of these other shows, they go typically in truck and trailers. monster jam is huge. we are playing all of these stadiums and we have over 25,000 truckloads of dirt stationed all over the world to do this. them rightooking at now, the monster jam. it's phenomenal. what about teaming up with nascar?
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carsry to leverage love of with love of trucks -- is that part of the plan at some point? >> the plan is to increase the portfolio of what we have. drewer jam this year, we 55,000 people in sydney, australia. it's the first time it has a ribbon there. we were in abu dhabi. it is extraordinary, the worldwide appeal. it just hits you. you see it and it's an adrenaline rush. there is nothing like it. >> look at that, trish. >> unbelievable. are 10,000 pound trucks with 15,000 horsepower that we build ourselves. this is not off the racks. >> when is the circus coming to new york? ringling brothers is coming february 20 to brooklyn.
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you've got to come. >> that is not that big a venue. you've got a basketball court. how do you get three rings on that? >> it seats about 15,000 people. >> that is a lot of people. >> it gets in there. it's an amazing place. also, we are launching this july something really special. marvel universe live. it's the largest aggregation lives of the marvel superheroes and villains ever assembled. something beyond extraordinary. and then we have a great show in production called nuclear cowboys. it is the top freestyle motocross riders in the world. is a theatrical production mixed with shao lin martial artist. >> i will definitely go. >> that will be at the izod center in new jersey.
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>> the supercross, which may be one of the greatest spectator sports ever, is coming to metlife stadium april 26, the first time ever in the new york area. it will be extraordinary. >> ken feld, ceo of feld entertainment. >> coming up, matt body bitcoin. -- boughts trying to a bitcoin. today, he's trying to send it. ♪
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>> we are celebrating the 12 days of bitcoin here on bloomberg. matt miller is here for the day to installment. just to recap, you bought one bitcoin yesterday. we will -- you will tell us how you spend it. >> i had well over $1600 in my account. >> how? >> the bitcoin that i bought and give the rose in value. now it is worth something like $930. and it is part of a community. the way bitcoin works. people just sort of send it to each other all the time. i'm not sure if everybody in the bitcoin community really thinks or cares as much about the fact that it is worth $900 or $1200 or $600. >> they are sending you bitcoin because they like you.
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onyes, they send you bitcoin reddit if they like the things you are saying or doing. that is just one fark -- one part. it is fascinating. there are also the wall street types that want to do regular stuff with it, like buy food, make transactions, watch their investment grow. in order to please those people, i decided to see what you can buy with bitcoin. yesterday was my first foray. i bought pizza online. a cool bitcoin unity thing. i ordered one pizza. and the guy had not adjusted his exchange rate for bitcoins yet. he e-mailed me himself. he said, i'm going to give you two pizzas and a two liter of soda. because i have an adjusted. and i said, that's cool, but we
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get free soda here, so he sent me three pizzas. one thing everyone has been is siegler, and then there is gift. food alert is obvious. it's a bunch of restaurants. you pay them in bitcoin, and they pay the restaurant guys in dollars. where pretty much every retailer under the sun. the bellows, whole foods, and -- nike,a -- cabelas, etc., i was able to a pretzel at whole foods and then use it over there. >> somebody is helping you to do
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this. >> it's the very beginning of this thing. that is what is so exciting about this. there have to be 21 billion bitcoins. i don't want to give too much into it because this is for tomorrow. i'mlast one will be when about 106 years old. this is the beginning of something that a lot of people consider a movement. there are others who have their criticisms. some think it is a ponzi scheme. i don't know how you connect those two things. is just aitcoin is, 30 digits into tea and people ascribe value to that 30 digit entity. more.is so much tomorrow, i will show you the basic mechanics of bitcoin. it is so fascinating. even if it was worth no money, i would still rather have a
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bitcoin than it to look. >> back here tomorrow. have a great night. ♪
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>> it is approaching 56 past the hour and that means bloomberg tv is on the market. i'm julie hyman. a pullback from the record highs closee saw in the prior after a two-day rally. down about 30% or the s&p 500 as well as the dow jones. and the nasdaq falling about 2/10 of one percent. rise aboutrting to budget talks in washington. is announcing a 10
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for one stock split. in day three lindo wing buyback program. beenmith & wesson has trading higher after the company reported earnings above estimates and said second- quarter handgun revenue was up by 27%. also, watching big news out of gm. it has named mary barranca -- ceo of gm.he next gm is looking to shake up more than just its cee-suite. it is looking to revive its cadillac brand. jeffrey hayzlett went to the auto show to talk with gm's vp of global design to find out how
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they are trying to shed the perception that cadillac is a luxury car for your grandparents. >> we are here at the l.a. car show. this like the prom for you? >> i would not say prom. it's kind of like the traveling circus. i look around on the floor and this is not like my old man's cadillac. the catalog you find me looks like something i would buy after my second or third divorce. we have more cadillacs underdevelopment today than at any other time in the 110 year history of the brand. when i look at the brand, bankrupt company, bankrupt city. it does not reek of luxury brand anymore. what are the challenges? >> the challenges are many. we do not have time.
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the customer or the market is not going to wait for us to do the right thing. we need to move fast. >> there are certain gaps in our portfolio that we need to fill with the right products. >> is this one of the gaps right here? >> it is. i would love to see that in production. evolved. it's got more shape to it. it is a very different proportion. we will continue to move and evolve the brand. we cannot stand still. >> what convinced you to say, we cannot do it like we used to? to look in the mirror and see what the challenges were and get out of detroit and take a look at the whole industry. -- ink the darkest days >> which were when? >> during bankruptcy. the entire team
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together. >> you can catch the entire interview tonight on bloomberg. ♪
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>> this is "taking stock" for tuesday, december 10, 2013. i'm pimm fox. i'm going to focus on people and businesses hitting the right note. general motors is hiring its a centuryle ceo after of global automaking. and helping artists hit the rightnow when it comes to music and sales. and strawberry fields forever, not only one of the greatest eagles

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