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tv   In the Loop With Betty Liu  Bloomberg  January 22, 2014 8:00am-10:01am EST

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>> here is what i am watching this morning. sheryl sandberg, becoming the ceo of facebook, the newest minted billionaire. shares of the social networking a record this at year, passed the $1 billion mark. she is now one of the youngest female billionaires in the world. >> good for her. blackberry, shares of the smart phone maker rising again this morning after committing to a cell on most of the canadian real estate. blackberry shares have been making a tiny, teensy-weensy, in eentsy-to come back -- weentsy come back. winter storm that -- that stranded thousands of commuters, traders have been caught up, natural gas prices are up.
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was when we have the last gas prices this high. lots of snow, but also lots of profits. talking about the weather channel and direct tv and what happens if you decide not to watch the weather channel when the weather is the super bowl. >> does this winter storm have a name? janis. >> janis? >> i heard that by watching the weather channel. >> i think we should let our guest host name it. >> we will do that, but first i want to get to the earnings, here. we have a fresh batch of earnings this morning from corporate america and julie hyman. a big movementg in the shares this morning after a disappointing earnings report.
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ofexpected to see a lot disappointments in retail. this is not a huge surprise here. coaches one of those retailers who gave fewer discounts. those were the big themes of the holiday season, so it did take a toll. dropping, people basically shopping other places where they could get better deals. seemed like that happened at north american comparable-store sales. a huge drop. we will dig more into this later. the other numbers as well, there are so very many this morning that we are watching. let's talk about u.s. bank, for a moment. they came out and beat analyst estimates last quarter. setting aside less money to account for bad loans, the income -- the income was up 2.5%.
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some of the regional lenders have been doing better here as the economy improves. also, as we start to see at the beginning, we have started to see a yield curve widening. the larger banks have more of a capital on the business as well. drugmaker,on to a out just a little while ago. analysts had been anticipating the earnings-per-share front, but in terms of sales it missed analysts estimates. the head of chilies, the restaurant company, coming in with comparable sales at 9/10 of one percent. they have not been faring well lately. i was surprised by those
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results, we will talk more about them in a moment. >> you are still focused on coach? >> are you implying something? the most interesting company that we heard about. >> joining us in the next hour, our guest host, also the .ofounder of oxygen network this is why we talked about you earlier, you were it instrumental in acquiring the weather channel. we will have a chance to talk about that in a moment. story that had everyone surprise yesterday. mohamed el-erian, moving abruptly out of his role. >> still surprised. >> yes, he is going to be leaving. he has had this great sort of platform to talk about ng policies and the economy, yet
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bill gross with record redemptions last year. >> $30 billion? team,is like a baseball right? good cycle, bad cycle, mediocre cycle. 2.5% is not exactly the best flavor. >> the general manager gets thrown out and he does not make the announcement himself? >> bill gross, conscious that exemptions,cord tweeting out one hour after the announcement saying that pimco is fully engaged, batteries 100% charged, ready to go for another 40 years. >> and by the way, the ceo resigned for no reason and no one knows why. did he have to say? >> 40 billion in redemptions, but if that is a 100% charge?
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>> the bottom line is people are wondering if he got pushed out and they are wondering what happened between he and bill gross. >> you think? you are going to be a more exceptional person if you complete that course. more exceptional than you already are. [laughter] there is a term for people who have mastered these. oks.onks -- mo they are one flavor, you have to take it that number -- take a look at that number pretty hard. at first it was about for- profit. then it was about the mooks. distribution with liquidity credibility depends on who is offering it. is offered when it for free -- i read this anecdotally -- even when offered
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for free it is hard to keep them engaged. >> because it is free? offeredkets investor and if someonee looked at the quality programs and translatesay them to where they work. that is a different side. version 1.0. >> we have kind of buried the lead. 91% of the people who signed up for those courses did not complete them. i am one of them. it turned out to be too complicated, above my head, and i am lazy and not committed. >> i think we are seeing online 1.0. this is going to be the future.
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even if you look at the students but if you think about it, this is my favorite do not, a lot of people want to buy four years. were talking about sheryl sandberg earlier. there is a lot of focus on these new up-and-coming women executives. buffett has -- i do not know if you know this, a 29- year-old protége. she might become the replacement for david vogel, if you remember , he was the right hand man for warren buffett, going around and doing all the deals for him. she has become that person for
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him. she is the chairman of several of his companies. she has made some tough decisions, fired people. but she has had some good outcomes from that. those companies have shaped up. >> 29 years old. a 29-year-old kid who is the chairman of four berkshire hathaway companies. she has fired three ceos. amazing. >> she is unusual, one because of her age, to because she is female, but obviously her parents knew something that we did not know. >> farmers. >> as opposed to harvard. >> two-putted in that context, -- to put it in that context, he has a generation of leaders he
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is grooming. they are there right now. >> those oriental painting catalogs? >> think about it for one second. look at who started some of the biggest companies in the country today. they were all started by 20- year-olds. bravo to warren buffett for picking a young person to lead his company and a time when are in charge. >> but this is not a new internet startup. she is thinking about compound interest. she is doing the most boring thing on the planet, which is why warren buffett loves her. he says that she thinks like him. poll onay, we did it bitcoin. 47% of those that we pulled would be sellers of bitcoin. only 11% would-be buyers.
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some 30% did not know what they would do with it. i also heard a lot of other people -- i think it is interesting that 60% of the people on the pole have heard of it. then they even know what it is. >> you show them the special, did you not? >> we did a lot about it here. >> it is an interesting phenomenon. i think a lot of people are aware, and they are not sure what to think. why you have people saying -- not so sure i would buy it. it.nd how do i buy and what do i do with it once i have it. but there is an obsession that i find fascinating. >> it has gone up so much. >> that is right. >> there has been so much coverage. >> the media has inflated the far beyondnd value efficacy in the market.
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when the early days, company was trying to do internet currency, there was not that much attention, but this is getting a lot of attention. of dollars from big investors, right? the list is long. >> you could do a lot of theirve things for all of businesses, individually. >> practically, for all of us. >> retailers, even victoria's secret, are they not accepting it? >> you could go over and buy lingerie. [laughter] look at the huge benefits. target would not have lost 17 billion customers credit data if they had not been using it. >> well, they have computers powerful enough to do so. >> all right. >> it would be easy. go, buy it, spend it at target.
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>> there is a lot more to come. more than the united states, it is being used overseas. >> he knows where they are taking it, now. >> coming out in ships. [laughter] >>. those? matt damon is there. that is right, hans nichols got a chance to speak with him about a lot of things, but most importantly about his blogging initiative. we will speak with him in a moment.
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>> headlines this week are about the future of online television and about what we watch, indicating that perhaps the revolution will not be televised, but it will be streamed. yesterday verizon spent $200 billion to obtain a struggling
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internet company that was built by intel. they will be reporting results. investors waiting this year on competition from other streaming outlets. amazon came out and denied a report of recent talks to acquire online pay-tv services. no matter who wins, it is clear the future of television will be based on that. lisa gershom knows a few things about this business. a former executive at nbc universal, cofounder of oxygen media. you have been reading these headlines, what is your impression so far? >> it is its own story, in a lot of ways. the bottom line is always going to be content. if you look at these others platform -- these other platforms and how they developed, that was the story. cable in the early days was just a bunch of acquired programming. people got cable because they got better reception. it did not really take off until
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hbo started the program and create original content. original content is what has driven cable and driven the success of every new network. look at amc. muchnyone really care that about them before they started "madmen"? no. >> is it going to matter if -- for example, apple tv, xbox, playstation, hulu, i do not watch cable tv that much. >> amazon prime? >> no. >> just checking. is, i gravitate towards the best operating system, the ev -- the easiest to use. does that draw content? >> i think so. i also think it is a matter of convenience. when i am home, i am more likely to turn on television. if i am traveling, i watch
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everything that i just -- i never watched "24." >> so lucky. >> right. now i can watch it, but i do it through i count -- itunes and i did not want to rely on wireless . if i could rely on wireless, i would watch it on netflix. >> does the price matter? think that i am more price sensitive if you look at my kids, who are very price sensitive. they have a budget. but they absolutely don't care. up, we grew up, when i grew there were networks. there was network television. we used to talk about cable versus broadcast. my kids have no idea that there was any difference. >> right now, as we talk about all the time with the younger generation, who are cord cutting , i would say that i watch a lot
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of tv, but my kids, who are nine years old, never turn on the television. >> they watch the internet. >> they watch everything on the computer or on my ipad, by the way. their that is where all content comes from. all of the shows originated on television, however. it is the content that matters. >> i think that netflix took a big jump when they launched "orange is the new black," "house of cards," that was the only way to get them. >> great shows, they are not 24. >> i have to say, i watched "orange is the new black" in today's. >> let me give you these numbers. this is all about business. the online pay-tv service business, eight billion dollars, up 30% from last year. television is about
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$150 billion. it only grew five percent. >> that is not surprising to me. i think you have to really look at what is happening with cord cutting and cable homes. is cable growing? is the platform growing? netflix has taken subscribers away? i do not think that is true. you have to look at what is happening with cable. >> the only reason you have cable is so that you can have broadband internet. the only reason i still have cable is because i want high- speed internet and a landline. as well, but you can watch that on the internet. we watch bloomberg television on apple tv, by the way. of note, by the way, broadcast networks, yes, we see them as old school, but they are the ones that can still produce that really high-end programming. that is where the advertisers
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are going, thinking about reality programming. american idol, the voice, dancing with the stars -- i am sure none of us watch it. at the same time, those are high-end, highly produced. >> and to a certain extent they are event tv. i think that all the platforms do serve different services. you will see high-end programming on a services and uncertain cable networks. of $3pranos was in excess million, that is high-end, expensive television. >> we are going to continue this conversation. we are. you are not going anywhere? >> going shopping. [laughter] the cost of, another winter storm? we will co-you what it is doing to sit -- cities, the country, and your programming. ♪
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loopu are watching "in the ," live on bloomberg television. we have matt miller, pimm fox, and our guest host for the hour, lisa gershom. equity futures are being dragged down just a little bit. as you know, we mentioned earnings that had disappointed expectations, including coach. how did you know i would say that? >> massive drop, 14%. eye-popping. >> it is, which we will talk about in a moment. we are on the markets again in 30 minutes. >> we know about the cold weather, the snow in january.
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yes, if you need to get to work, school, maybe even stay home? >> we were chopping up the desk for firewood to stay warm. what is going on in the rest of the country? what is the cost of these storms to the economy? for that, we turn to michael mckee. >> as long as it is the weather, i will start with the bad fun -- it is a matter of degrees. [groaning] >> technical term. >> there is a cost of the economy. the folks who analyze the weather -- the weather and economics think that the earlier storms cost us about $5 billion. we might see even more this time, not only do we have a record cold, but we have snow shutting down commerce, really closing down much of new york, boston, and philadelphia for a day or so.
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maybe $10 billion to $12 billion in damage, but we are talking about a $15 billion economy. the biggest losses are in things like closing down the government. that work will never be recaptured. flex can this money be re-spent? people are not actually flying. are they not buying everything they can to stay warm? >> the airlines still lose. a lot of people do not read book. go ahead, do your retail shopping, or they will do it next week. of course, you see stores like grocery stores, hardware stores, doing extra business during a storm as people stock up. >> i guess that means tough luck for the airline business, but everyone else? >> you have to watch those economic statistics. there was a theory that we lost jobs and the reason the report was so bad was 273,000 people could not get to work. normally the people who cannot get to work because of the
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weather is 73,000. the good news is that the early storm and late storm bracketed the jobs survey, so maybe this month we will not have the same kind of weather. >> i feel like we lost jobs, snowplow jobs, there were not any on the streets of manhattan. it is so weird that all the sidewalks -- westchester was clear this morning, all the highways were clear, but as soon as i get into manhattan? there is still snow on lexington avenue. >> i was surprised about the i met the street. >> wire the sidewalks clearer than the streets? >> they say it is hard to melt that snow because the temperatures are so cold. what will really get you is when you have your utility bill. the cost of natural gas coming into new york city right now, hundreds of thousands per cubic feet.
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that is an all-time record, there. >> a real tradable price. >> you may not be able to trade on it, but you do have to pay it. frome earlier spike january, we will all be paying more to keep warm. >> sounds expensive and cold. thanks a lot. matt damon is in. lous, switzerland, talking about water, not ice. we have more, next. ♪
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>> all right, today at 10 a.m. the eastern, james gorman joins bloomberg, live from davos, switzerland. >> looking forward to that interview. we are back with our guest and cohost for the hour. look, all of us had a hard time coming into work this morning, given the weather. last night's snowstorm, the weather channel named it
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snowstorm janet. at any rate, when you were at nbc, you helped to acquire the weather channel. i watched a little bit of it last night. it got me thinking, how many people do tune in to the weather channel? this?ou a part of did you tune into the weather channel during the snowstorm? >> i did, just to have it on. we talk about it endlessly. when there is a storm like that, you just want to hear about what is going on with the weather. i want to hear about it, i want to know where it is coming from, i want to hear words like polar vortex, arctic jill. >> you want a name? >> i am warming up to the names. i think it is appropriate, at this point. they are as significant as hurricanes, why not name them? >> people running to the weather channel?
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it, did were running people call you for the weather report? >> friends would call me to find out if they had to tend to their backyard or not. i would always say -- we do not have a secret forecast. we really don't, turn on the wood network. >> people do tune in for the forecast, and we bring this story up -- the channel, rather, there is this huge issue with directv, which is knocked off the weather channel, saying that they do not deserve higher programming fees. the response from the weather channel has been -- look, people turn to us from the weather. it is not just about getting an online. where do you stand on this? >> i think that the weather channel, in addition to being great if you are really into the weather, which most people are -- i think it really is one of the big conversations of our time, but another thing i would say is that they do -- this is part of their mission -- they
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save lives. if there is a major tornado coming -- >> dave says that the met -- the weather channel is a matter of public security. do you agree with him? >> i think there is validity in saying that it is important for people to be able to see it. some of us may get our weather on at or mobile, but not everybody does. >> more people probably see it online than on television. >> it is very popular. it has a great url. weather.com, does not get better than that. for directv to take the position that you could get your weather online or other places -- i think it is not really fair. before it was online, you would get it in a newspaper. thisat is what i thought, is about money. >> what else would it be about? >> explain the money angle.
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>> all operators pay licensing fees. when they do the calculation on the licensing and say -- is someone going to pick this over cable or another form of delivery? is it going to impact my decision? that is a really hard thing to come out and approach. there is a lot of pressure on the cable operators and satellite providers in terms of costs. verys networks command high fees. people will drop if they cannot get sports. >> that is clear. >> that is the only reason to have direct tv. >> but other than sports networks, really, if you do not have them, someone switches providers. the 2000's, lifetime. >> hang on a second, i want to play for you, lisa, one comment that we got from dave kenney, the ceo of the weather company that owns the weather channel.
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>> all of the other contributors have long-term contracts with us. this is an arbitrary move, not based on market preference or the value to subscribers. squeezeust trying to pennies out of the small, independent channel because they thought they could. bully tactics will not work. fans will not stand for this, neither will we. >> do you know him? >> i do know david. the debate is from $.13 to $.14? regional sports networks and others? >> you just said it, people cannot live without them. ofit is immaterial in terms a cable operators and $.13, $.14. this is the pressure and the battle between cable operators and satellite providers. it has been in place since
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murdoch paid $.25 to get on for fox news. this has gone on for 15 years. >> do you not think that some of these operators are playing hardball right now with the independents? it may seem unfair, but it is to send a message that they are not going to pay those kinds of fees to the big ones? >> i am always going to stick up for the independents. i think the weather channel deserves to be on the deal, immaterial programming costs. to see newgoing networks, new content providers, as they bleed to support the independent. it helps to balance the big guys. if you get rid of the independent, you're just fighting with big cable programmers. cable providers and satellite providers will lose that fight, because ultimately you cannot -- vh12 if you
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want to have nickelodeon. they will lose that battle, at the end of the day. >> at the end of the day no one is going to use cable, anyway. so. moving to another cold place, top leaders from around the world and multimillionaires, concern about income inequality. they are in davos, switzerland this week. among the rich and powerful are those trying to promote charitable causes, like mad name and. hans nichols -- matt damon. hans nichols caught up with the actor. he is not playing jason bourne anymore. he is usually talking politics and raising money for water? >> good morning, guys. he has an ngo. it is above zero centigrade here. we will interpret that into fahrenheit for everyone. that theren water is are so many people, globally, who do not have access to it
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erie it let's have him explain his goals. 780 million still people on planet earth that do not have access to water. >> who are your partners? >> we have a number of corporate arbiters. , a bunch of them have stepped up for us. taking ait, they are proactive role, which is wonderful, but it will require a lot more than that, obviously. like this is a mixture between seriousness and celebrity that you have an event -- that you have at an event like this. i will throw this question to you -- how do you pronounce it? when i go to buy bobbled -- bottled water. that all ofird these superrich people get
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together to talk about the problems of the world. do they solve them there? >> i do not know if they get closer to solving them. charity is fundamentally what matt damon is doing here. he is looking for an injection of private sector forces into this work. that is why they partnered with these corporations. that is his goal. if you are looking for money, for corporate foundations, this is what they say is a target rich environment. >> hans nichols, thank you very much. i understand, being a german speaker, that it is pronounced differently, but it is like ee, saying da- talking about paris. >> we will be right back. ♪
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>> the largest u.s. luxury handbag maker reported earnings trailing estimates on wall street. julie hyman digging into what happened here with coach. particularly over the holiday season. >> matt keeps talking about the key number, which is 14%. that was the drop in comparable sales in north america, which was just about double what analysts had anticipated. this is a much worse result. no one was expecting sparkling things from retail from the holiday season, but this goes even deeper than what people were looking for here. i should mention that earnings missed analysts estimates, shares were down sharply this morning. they had been underperforming, up only one percent last year, and they have been struggling. the ceo of the company is making comments right now, saying that women's handbag accessories fell in particular and of the company is now giving sector growth rates for the most recent
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quarter. so, we will be getting more information about what exactly went wrong. the company is trying, though, under his direction, to try and sort of do a transformation of coach into more of a lifestyle brand with more fashion forward products. design director is there, he is expected to come out with some designs for the fall at fashion week, in february. they are in the middle of making .his transition >> they have a lot of great stuff. i have shopped them on a number of different occasions. finding a lot of cool handbags, they have gone down market with their products, doing a lot of that super branded where they have one million different things all over it. i guess i thought they were duty -- gucci.
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>> i was really surprised. but it is always its own product. they have gone down market, that will be challenging. i think that retailers today face two challenges. the first is always about profits. the other thing that really makes this important, the product has always been the issue, but they have to figure out how technology plays into their consumer. every consumer is going to be online before they walk in. they know what they want, they know what they're looking for. >> exclusivity? >> right. >> the idea that you cannot get it anywhere else. >> i think that is true. but in general we do want that product if only they have it, but product offerings are becoming ubiquitous, with amazon and other online offerings.
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you have to have that, but i also think you have to understand the really educated consumer, when they walk in the door. >> i do not buy the whole -- you need the best app to win the consumer into your store. i think it is more about price and exclusivity, because of amazon. that you needow to have the best app, but what are you doing, when your customer is getting educated about your product? if you go to the ralph lorenz website, it is about the world of ralph lauren. but he is offering you that world, he did a great job of integrating technology. >> apple? >> it will be interesting to see. the apple shopping experience is revolutionary. people go to those stores just to hang out. >> it does not always work when
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you go back to retail. an absolute disaster. motorcycles and the future of electric power. your favorite topic? >> more like scooters. stay with us, kind of cool. ♪
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has cemented itself as a lifestyle brand. al i te motors is hoping to do the same with electric motorcycles. emily chang has more. >> from the front, it looks like a normal electric scooter. from the side, it is anything but. in the middle of the frame here, this scooter has as much trunk space as a small car. is a vehicle for carrying everyday things. >> he is the visionary behind
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this three-year-old electric vehicle startup. they have three prototypes in the work. looks like vehicle something out of a sci-fi movie. part car, part motorcycle. it has high-tech safety features that keep it up right, even in a collision. >> it has the safety and convenience of a car married to the efficiency of a motorcycle. electric, but it can force thet price. >> it steers like that. it takes big money and many years to get a new vehicle on the road, but after years in development they hope to get both vehicles into production this year. >> we are a part of this thing. for me,eloping a car
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for us. >> he has teamed up with a design guru, the chief creative officer and designer for big brands like herman miller and bmw. looke exciting thing is to at the complete package. how does this new type of vehicle the come really attractive to people who know and ride motorcycles? also, people who never have? >> back in the office he and one of his engineers are working on the prototype. making a hot lunch desirable, but they are ready for the fast lane. >> we were looking at a new class of vehicle for any kind of a short commute. >> bloomberg, san francisco. >> all right, i would personally say that if you want an electric motorcycle, there are some much cooler, real motorcycles that
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looked less like a milk bottle. but that is how emily chang roles. >> this whole thing, everything is going electric now. of electric motorcycles are beating gasoline motorcycles and races. electric cars are soon to surely be cars. it has been a long ride, but it is finally here. a pleasure being with us. wish we had another hour with you. is there another one you would like to try? >> yes. >> right now. >> maybe we will get you one. >> thank you so much. >> 56 minutes past the hour. bloomberg, looking at futures by one point, the s&p is down, the nasdaq is up seven. earnings from ebay.
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>> 30 minutes to the opening bell -- this is "in the loop with betty lou." the countdown begins right now. >> welcome back and you are in the loop. in our latest lumber global poll, the majority of international investors say government should act now to reduce the income inequality gap because it hampers economic growth. that is a big topic at the world economic forum in doubles where the facebook ceo sheryl sandberg is. she became a newly minted billionaire at the facebook record close yesterday. we will also talk to thegamco investor mariano gambell a.
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i. the federal communications commission is opening up the bidding for the first time in five years. is anybody but dish going to be standing there with more spectrum? peter cook is much more on the satellite dividers strategy. -- providers strategy. how much will it go for? >> it is called the h block. that is a 10 megahertz chunk of airwaves that congress ordered sold back in 25th -- sold by 2015. it can be used for wireless services. no major wireless layer is actually bidding. verizon wireless and sprint decided to take a pass. that leaves dish as the biggest of the 23 players registered in this auction and the odds on favorite to lead with most of all of the licenses. it has committed to bid the reserve price of at least $1.56
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billion. a win would give the dish chairman the opportunity to challenge at&t and verizon and sprint/t mobile. the providers could lease these airways to somebody else like start hisamazon or own wireless service. the company will not say what his plans are. in auld mark the latest series of airwaves acquisitions by the company since 2oo7. >> how long until we know the outcome? >> the bidding starts today over the internet and will last until the bits start -- stop rolling in which could be days or weeks until we know the winners. there will be no publicly announced winners until that point on the last one took 38 days but there were more than 200 bidders then and it was more valuable real estate. it brought in nearly $20 billion for taxpayers that this one will
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not raise as much money. tigress has committed his money to fund a new national wireless network for emergency responders and there will be more auctions coming up. there is at least one other familiar name in the bidding war which is mario gabelli. >> you will talk with them in little bit and that will be interesting. he owns one of the smaller bidders here. he's got a checkered history when it comes to airwave bidding. in 2006, he paid 130 million dollars to settle charges he used sham companies and earlier auctions. he did not admit any wrongdoing. itsh is not announcing strategy so it will be interesting to see what his strategy is. >> thank you.
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let's move abroad -- world leaders are meeting in doubles, switzerland to this gusto so, economic and business issues around the world. tom keene is there with the aetna ceo. >> thank you so much. it is a beautiful day", switzerland. we want to bring you a discussion and health care with somebody who's got it, i don't mean the management of it and he's here with a fancy suit and tie. he comes out of detroit and is working on the assembly line for ford motor company and has a distinguished business career. you are one of the few people who donated your kidney to your son. you used a fabulous medical system. >> i have and it's amazing. it's amazing that anybody can get their way through it on any given day. it has been more of an experiment for me. i know more than most people know about how the system works. >> what should be our focal
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point of analysis in the next 36 months? should we focus on the hospitals or our insurance carriers? are they fair to us or could we actually focused on the doctors and nurses? >> i think we need to look at how care is delivered and how we pay for it. today we pay for each piece of work done. there are a lot of pieces of work to get done. we pay to make sure that we are healthy. >> with them the battle, peter is a noted --zsag expert -- is a positive sum game? he says we are getting your help clear costs under control but is that coming at the expense of somebody? >> our health care costs are not under control right now. they are low in large part because the economy is so bad.
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income is down so it depends on how quickly that ends back and individuals are pulling more out of their own pocket. the real behavioral signs of this would say that for three years if i did not use the health care system because i could not afford it, do i feel like i need to go back once i have more money? i'm not quite sure people will. i think people will be smarter about how they buy health care but the delivery of health care, the system itself, is not conducive for you or i to go shopping and find the right care. thinkre are people who they have kids and they will never get sick or get older. i live that personally. we were just perfect. you need those kids to be part of this new insurance scheme. how do you get them to sign up? one of my producers as never been a second day in his life. how do you get him to ensure? >> we have watched this
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evolution over the past five or six years. right now, 41% of the health individuals for an come out of their pocket. we are headed toward a consumer market where they want choice and i want to be simple and they want it to be about them. right now, we don't have a system that does that. >> you are here at this international community where we better anddoes it maybe the united kingdom does it better. you get sick and i get sick and we want the best doctor and we want to put them in sloane or cedars sinai or the mayo clinic. that's the american attitude? >> it is but it is unsustainable. we have this magic bullet mentality. if i do whatever i want to do then i want it all fixed. quite frankly, the system is structured that way but it's too expensive to be structured that way any longer. >> how will it be in five years? >> i think it will be different
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because we will have that her safety and you will think about whether or not you are safe or not. i don't do it. i also think the system will be structured in a way where they will be cognizant of the whole individual. right now, the system says you are a broken vertebrae and here's how we fix that. aey don't say how do we get person back to a productive member of society. the recovery will be quicker and the individual is a better person for it. >> when you look at the industry and the consultants that go with the, does anybody ever talk about the doctors? >> all the time. >> in the media, there is little discussion of what the pediatricians do and the gp's do or the academic abilities it takes to be a front-line specialist. >> nobody wants to talk about their doctor. they will talk about doctors.
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they don't want to talk about their doctors. doctors have been given a bad rap because they have been socialized to practice as independent practitioners. office support me in taking care of you. what it should be is we need to take care of tom and here's what we do to ring the whole team together to make sure you get the right services. >> how do you and the other insurance companies reengage with america? how do you reverse the stigma? >> we have to become relevant to what matters to them which is navigating the system in a simpler way and making it affordable. given the investments at matt hazmat, we can make the delivery system more efficient and affordable. >> this is a critical moment. idea of moments where somebody says something and i heard this from brian moynihan earlier, when i come into dollars, the theme is
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different and it will not be disrupted. here's is what it is in 2014 -- it isdavos simple because that's what the people are talking about. get rid of complex and the and get back to simple. mark bertolini, thank you. >> thank you. coming up, property lawyer ff will discuss the real estate market as some real estate holdings are being sold off. ♪
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>> blackberry is putting its real estate up for sale in the latest move by the new ceo to win back investors confidence. hugo miller has details from our toronto euro. why now? morning, there is a
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small matter of about 10,000 jobs that have been cut in recent years. they are setting a lot of empty real estate. secondly, like barry needs cash. they've got a lot out it only helps to reassure investors to say we did not burn through 500 million dollars, we added it to our cash reserves. it's a combination of those things. that itmply the fact makes the company -- it gives them more flexibility because even though it is selling its assets, it is leasing them back which allows them to do deals to add leases to revisit -- to reduce cost more efficiently. >> given some flexibility and the new -- john chen, ceo, is making some believers out of people who have been
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critical of the company? >> he is charming with skeptics. the short-sellers are perhaps in retreat. the shortselling by dems the lowest in over one year. sellere prominent short came out saying if you are a short seller and are willing to try to short a well-financed company focused on enterprise software, you are nuts. that is essentially what john chen is hoping investors will see in blackberry, no longer this ailing company that is doing these marketing deals that don't quite work and is trying to sell to people that don't want them but instead, it's a smaller business focus software play. i think that is what investors are cheering her it >> thank you so much. we have been discussing bank earnings reports for the past two weeks. they face many challenges. where do bank fears hit the
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road? they are not landing as much now and they are feeling the cash crunch in real estate. i want to bring in stephen owner of the park lane hotel and will were building in new york where he is actively building new projects and building in miami and l.a. as well. before we get to some of your holdings, you were just listening in to hugo miller about blackberry. it is not unusual when a company and realg the rocks estate becomes a burden for these companies and they sell them off? >> i agree. i'm a blackberry user. it is good to hear the company is using well. up in aate prices are big way. it does not surprise me that a company that is getting -- that has some criticism from the
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analyst is looking to unlock the value. i don't know where the real estate is but it is up in a big way. >> you have a lot of retailers now -- we heard about macy's for instance and sears and jcpenney, they are closing down some stores. what happens to that real estate when that happens? >> i think it gets put out to people who have a better thought process about how to use it in a more innovative way. that is a good situation. >> your own properties, you say it is hard to expand beyond their banks to lend? >> yes. it's a tale of two cities out there. in new york, there is plenty of capital on the distribution systems are there. if you go to miami where there is tremendous velocity, you cannot really conventionally borrow. there are secondary lenders and smart able who have set up debt platforms and mortgage reits who are getting higher rates but it is hard to borrow conventionally there. >> i hear that real estate
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investors say that miami is a hot new market. >> it is but that does not mean that the senior lending community is willing to underwrite that. >> you are going to stay in new york? >> we are active in miami. where we finde markets where lenders don't want to go because we think there are more inefficiencies. >> you're not willing to go to other markets like philadelphia or others? >> we are a boutique company. it feels sometimes as if we don't want to spread too thin. alternatively, we are looking at los angeles. we believe in philadelphia. i have a son who goes to wharton . >> my mama motter. alma halma motter -- my mater. are there areas you will not go into now? >> no, we believe in the real estate marketplace. and then we hunters
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believe in the execution side of the deal and that's what we do. dynamicscan find those , we are buying. we don't have a specific view. we entered miami because it was at a bottom and new york city we just believe in. it is because of the former mayor bloomberg. >> the current mayor, and bill de blasio, there was another article on him saying he is adamant to raise taxes on the rich to pay for pre-k. the one percent here are up in arms over this determination despite the fact that the state government has said we will actually fill that funding gap and pay for that. he is still adamant on hiking taxes on the rich. how much of a detriment will that be for properties like yours? >> i don't think it is that big of a detriment. i think some of the messaging is off. messaging with regard to
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the tax -- if you listen intently to what he is saying -- i believe he surprises on the upside -- what he really wants is to know that the program is funded for five years. if he gets taxes for five years, he gets that funding for five years. i personally feel that new york city has given me so many blessings that i don't have a problem with that. >> with paying the higher tax? >> for that particular use. i believe we need to get kids into the school system early. i am supportive of it. >> you personally are supportive but are your customers? are your tenants going to be supportive because you are building luxury high-rise condos ? you want to stay in the city and you want them to buy and lease from you. are you expecting any kind of outflow they some these tax policies? >> you are right, there is an inflection point.
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people at the margin may decide to move. me, never. i have said loud and clear i will always be a new york city taxpayer. that's how good the city has been to me. i started with nothing and he gave me quite a bit. at some point in time, if people feel the burden is too onerous, i don't it is now. there is so much opportunity in this town beyond any other city i have ever seen that people will pay to stay here. has it changed at all, your to make suregy - that you do differentiate from other projects coming on board? >> absolutely, we just sold to condos close to $2 billion in sales. we think a lot about how we would buy new land today and how we are going up -- the cost is going up. we think a lot about that.
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the market is so strong in this town, people want to live here, they really do, for all the right reasons. >> you don't see it taking? >> i don't see bubble conditions, personally. not because i am in that side of the business. i am doing and affordable rental job in this town as well but i feel that people want to live here. when i compare it to a city like london, i like it more. you can walk this down. there is more accouterments year. i feel pretty good about it. >> but we have a major snowstorm. >> i had to walk through it this morning. >> thank you and great to see you. i may up, mario gabell get into the spectrum wars and he will join us in a few minutes. ♪
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>> welcome back. it is 26 and is pass the hours which means bloomberg television is "on the markets." day.'s very calm the s&p futures are relatively flat and the dow jones is slightly negative. ibm sought seven consecutive quarter of revenue decline. mark nugent says overall, you see a very neutral market, very range bound, not a lot of conviction. we see low volatility but traders are starting to talk about the january effect.
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it makes the next week and a half pretty important. >> thank you so much. as markets opened this morning, i want to bring in one of my favorite guests, our guest host who marioalf hour, gabelli manages mario gabelli $47 billion,. >> terrific to be here on a wonderful day. >> were your ears burning this morning? we were talking about you all morning long. >> i was trying to get to the train. >> we are talking about you because of this bidding that is taking place today. it is this auction being held by the fcc for spectrum. it is the h block spectrum. you will be bidding for this. why do you want this? >> we own 10 telephone companies. we cannot talk about the bidding ross us but there is a shortage of spectrum. how do you play it? it's on a global basis.
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what companies will buy each other? michael white and charlie ergot will try to figure out a way and this is the right time for those two companies to come together and we like them both. we think directv stock will be over $100 in three or five years. we like a company in africa and south america. $200 over going to the next few years of spectrum and giving mobility and data and cloud, all of that comes together and that net neutrality. >> what kind of return are you expecting? >> i cannot comment on that. we will probably lose money but such is life. >> the margins are very thin, rght? wars over this have gotten more and more competitive. you got at&t and verizon who will not even bid for this block. >> the quality spectrum will
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come up with the broadcasters where we have done quite well. they will give up some of their spectrum and a reverse auction or some other process. the notion of spectrum is like beachfront property. we are short any to allocate and use it right. that is on a global asus and 4g and the next generation of will tell us the story. i want to talk about couple of companies you are involved in. twitterooked on your feed the last time, you had given some complements to bill ackman and what he did at fortune brands. and that off jim beam was acquired by suntory. >> we like it and we drink it. we invested in it so that was a double hit. >> you said thanks to bill
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ackman, what is next? >> the other managers of companies split up the pot and it has worked out quite well for the owners. >> what do you think of these activist investors. ? >> it's nothing different. in 1960s, you had conglomerates and gulf and western and in the 1980s, you had michael milken greasing the system and 10 years ago, there was private equity. you'll always have somebody who tries to surface online values. they don't throw the values. that is the fundamental difference. the management grows the values. >> they are there to shake the tree? >> they say this is a good way to do financial engineering. in 2013, we started seeing some of that but we started off 2014 with john malone putting his arms around tom rutledge. somewhere in there will be a market made.
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you also saw centauri -- suntory. growth andor 2014 is use your financial currency which is your high stock rise and do deals, make a transaction. palp has said he is fine with no longer a deal between mongolians and pepsico. he will get a board seat and >> cut costs. mondolese with a 60 billion market cap is not a small company. for an individual like nelson where we share a common ownership and legg mason and others, how will he do this? independent of whether he was there, he may do things faster. gets,lese has this chocolate and confectionery. it will grow double-digit in the developing world.
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years.l earn 50% in five >> you are happy with that? >> my clients are ecstatic. if i can make 13% compound annual growth over the next five years versus and s&p that will grow five-seven percent, twice the s&p, why shouldn't they be happy? wow. we will be dancing in the streets. >> many people listen to you and your comments on the stock market and on various companies like this. many people listen to mom but i'll arian at pimco -- mohammed el-erian. >> there was a company called shinovick, that's part of the free market system. isammed is terrific but he not an equity guy. he is a fixed income guy.
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i don't know what they need. i will not comment on pimco. this is a great business. >> where do you think he will go? >> hopefully, he does not go and take rex ryan's job at the jets. he is a big jets fan. many people want to give it to that next. --knicks. >> he has said given how hard it is to generate good returns for a bond fund like the bill gross fund, he says it is no surprise there was a rift and the need to know into equities. >> a friend of mine said it best -- buying bonds is like picking up nichols in front of a steamroller. you have tapering and it will change. i am in the camp that says we will go back to a more normal bond market area a.
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it is three percent on the short end -- >> do you think we will get to that this year? >>no, that's not on the works. in the >> meantime, stocks will do well. stay with me for a moment. will stay withi me because we will talk about the ceo of aol spilling the beans on the one skill every leader needs to thrive and you might want to listen closely to this one. the facebook coo sheryl sandberg becomes one of the youngest members of one of the world's most exclusive clubs. we are a few minutes into the session. stay "in the loop." ♪
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>> i have some of the stop that top leaders in business to wait in on their success in my new book. what is the one
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skill every leader needs. >> credibility. both in the way he deals with people and the way he deals with numbers and the way he deals with the realities that are around him. >> listening, your people, your team, people in the market, customers, suppliers -- they have a lot to say on the best ideas will not come from yourself. they >> will come from other people. >>great people skills, the ability to be intuitive about people and hire people who are jabber than you. >> i think we have to listen, learn before we can lead. >> you have to be personally responsible and recognized you are responsible for the lives of the people around you. they depend on you. you have chosen to be responsible and therefore you cannot forget those people and what you need to do for those people. >> listening i think is the most important skill, to be able to communicate and most important is the ability to verbally communicate.
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if you cannot do that, it is hard to work with people. >> understanding what the customer needs from their business, listening more and talking less. >> for more advice on how to get ahead, stay tuned to "in the loop" all week long. to talk about how he works smart, gamco investor and founder mario gabelli. also the former kodak cmo. you are both in my book. >> that was the one thing you needed to survive to make a great look is the both of us. >> that made it a bestseller. do you agree with what those guys say? >> there is a difference between a w-2 earner and someone who has skin in the game. what is the difference between steve jobs and michael dell, bill gates and the great leaders
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who founded their company's? we have to nurture that entrepreneurial spirit and praise individuals that go to work at five in the morning and stay up until 12 at night to create jobs and create a competitive advantage. we are not doing that in this country. >>? how do you do it framework, we love entrepreneurial spirits if someone leaves and wants to start their own firm. we invest in them. >> it's ok if they want to leave ? >> that's what we like. we want to lower the barriers. regulation is stifling our ability to come in and go to work and create the next generation of leaders. >> the biggest thing you find is it's not just one thing. it's a combination of many things. i will use a crude example but they say size does matter. in small businesses, they don't -- they take too many risks and many times, the big businesses don't take enough. it comes down to leadership and it's not just one thing. you heard those leaders talk
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about speaking and communicating and listening but when you start to look at it, it's about delivering on the promises they set out with and have an unbelievable focus. recently sold his company for $13 billion and he said they have to be irrational. i thought that was interesting. at first i was taken aback. far outwe have to be so here as a leader in order to drag people to this. you have to be a little bit crazy -- there is a prime example. >> you've got to be willing to make mistakes. if you are worried about your border shareholders at a meeting and they tell you you cannot do this -- jamie dimon took a lot of great flacco has turned out to be a terrific ceo. -- oneof the businesses of the biggest reasons we see businesses fail is they don't take risk. >> you are implying that outside
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of a few select ceo's, everybody else is giving lipservice? >> i'm not saying that. >> you say we are not creating that entrepreneurial leadership? >> new companies with venture capital are not being created because of other constraints. we want to create companies that have access to the capital markets. when a professionals who need -- need to know how to raise capital and lead. everybody should follow that and create a system that encourages risk-taking. >> there are many good examples. there are leaders doing great jobs. you look at tony shea and others. michael bloomberg -- you look around at great leaders and how they set up a top and he to do things, you start to see that. i have been impressed.
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i work outside and inside his company and you see things -- those kind of things that other companies. >> if you go to silicon valley, it is rife with entrepreneurs. \ > it is rife with a lot of people who don't have a clue about running business or have a clue about getting to the next level. the care about funding but they don't know how to run businesses. it is a rare read that can make it happen. -- a rare breed. jcpenneynt to make successful, that ceo has to sleep in the back room. that is what it takes every single day. >> you have to drop out of harvard like zuckerberg and gates. mario is in the book with funny were stories about how you started off. as aalways known mario brilliant fund manager. but you are an entrepreneur at heart. you were literally licking your
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own envelopes. >> this is the first time we have met and i am watching offstage and he's got a mood about him that says i am interested and engaged, i am fine. that is a big thing. you can see that off the bat. when you meet with ceo's of companies you invest in, you know within seconds whether they've got it. >> sometimes i go past the personality. if a prince kisses a frog, it may stay a fraud. a good as ms. run by a ceo, that's the moon, the sun and the stars and america is blessed with great number of ceo's and also we need to encourage more of that by allowing companies to fail and individuals to fill by allowing them to come back in the game. small business should become big business. those are the mighty mites. no one is going to die. >> the most that will happen to us is a paper cut. ispart of the problem
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because we have this structure of the public shareholders and the ceo's are under the gun ,right? >> the media is a little bit to blame because we will go after somebody for being a penny off on their earnings. are we worried about that? we are worried about how to grow the business. >> it's the nature of the money flowing through consultants into the hedge funds that need short- term dynamics, not the long-term investor. warren buffett as a long-term investor and he can go through sup >> >> up on bumps on the road. thank you both so much. >> we are coming back. thank you so much. up, warren parties classing in switzerland as they try to negotiate a peaceful outcome to the cities civil war. and the billionaires club
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welcoming sheryl sandberg as it's know as member, find out how the woman who turned down the larry summers offered to be his chief of staff became one of the richest people in the world. ♪
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>> billionaires gathered in davos to welcome a new member. sheryl sandberg became a billionaire yesterday after shares of the world's largest social networking service closed at record highs. joining us now is matt g miller in davos. i'm assuming there's quite a few facebook folks who are happy with the share price. what happened here? >> what you saw was the company went public and they had their offering in the shares limited last year. they got real on mobile and the revenue started to generate. sheryl sandberg is a huge component of that and added a
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face in a back into the facebook business. the shares have surged this year and are well past where the offering price was and hit a record high yesterday and she is a billionaire. >> who else does she joined? zuckerberg whork is one of the 25 richest people in the world with sean parker and one of the cofounders of the company. he is in the top 200 of the world now. you have an eclectic group of billionaires. >> she is worth just over $1 billion. it makes for one of the youngest and also one of the youngest women billionaires. who else is on your list? when you think about female billionaires, the women at the top of the billion or index tend to have inherited fortunes. kristi walton and alice walton and lillian that in court who
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inherited funds from their family. there's only a handful of self- made female leaners everywhere in the world. soho china.created she was really poor and became one of the biggest property developers in all of china. it is a rare five group that sheryl sandberg is joining. >> do we know how much her lien in proceeds have added to her wealth? >> i don't think it is that much. when you look at her net worth, it's about -- a little more than $700 million in facebook shares and we have cash from share sales. that is the bulk of her net worth. >> thank you so much. in the u k,bout unemployment is on the cusp of falling to a key seven percent level.
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policymakers appear skittish about raising interest rates in the bank of england said it would consider increasing borrowing costs once unemployment fell below seven percent. in switzerland, and the divisions between those representing different sides. the syrian foreign minister and the syrian president would not step down. the debate threatened to derail talks between assad representatives and rebel forces scheduled for friday. that does it for "in the loop" on this wednesday. "on the markets" is next. ♪
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>> it is 56 past the hour which means we are "on the markets." we are 30 minutes into the trading day. it's a relatively mixed day so far with the s and p flatlined and the dow jones is down a tiny bit. 1/10 of ones up by
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percent. 1830 is the number for support and it looks like we have a little ways to go and volatility levels are low. it's time for futures in focus -- crude oil futures are rising for the third straight day. have greg why, we bender. me, the news headline this morning on transcanada announcing the start of its keystone southern leg which will bring oil from the midwest to the u.s. gold coast, 520,000 barrels per day and will ramp up after that. what kind of upside might we see? >> the market seemed like they liked that news. we are up the third straight day and even that with the backdrop of increasede estimates for production from the international energy agency
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plus people are looking for a drawdown on distal it us youories tomorrow pl have a technical picture and that is playing into a bullish reaction. >> you mentioned distal it rocks are low. it means that refineries have to work harder to make more products that the ia said we wall.hit acrude >> there will be increased supply but it is focusing on the united states. we seem to have the improving economic picture which increases the demand to use up that supply. in europe, it is different. they have more supply disruption but maybe the demand side is not as robust as the united states. >> that is the demand picture. talk to me about the technicals. chart which isy a longer-term picture, you have
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signals that usually last 6-8 weeks and things are starting to look a little bearish. you have the 50 day cross under the 200 day moving average but couple of weeks ago. when that happened, it shows the importance of drilling down and knowing what the shorter-term picture is for crude oil. it trades in the futures market and is very short-term oriented sometimes. atk in november,, we were $90. that's not the time he wanted to sell. you wanted to buy it then and we had a short-term rally. i am seeing a little bit of the same picture. at a 10%d the year off decline right off the bat. we are now starting to see some oversold reaction to oversold conditions. anyone that is possibly going to , wean increased supply could possibly look at a short- term bounce of up to $100.
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>> should we buy on the one dollar increase? >> you could if your outlook is intermediate term. in the longer term, you have a trendline connecting lows back to the mid-2012. depending how you draw that line with a crayon or pencil, you could draw that active 2009. that's an important illustrated line. the longer-term players are leaning to buy crude oil. >> thanks very much. we are "on the markets" again and 21 -- in 30 minutes. ♪
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>> live from the world economic forum in davos, switzerland, this is a special edition of "market makers," with erik schatzker and stephanie ruhle. >> i am erik schatzker. >> i am stephanie ruhle. two.we are, day it is beautiful out there, and it is about to get hot in here, speaking to the most influential people in the world. >> we will start with one of the most influential men in the banking world, james gorman. great to see you again. >> great to be here.

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