tv Money Moves With Deirdre Bolton Bloomberg January 31, 2014 2:00pm-3:01pm EST
from new jersey, good to have you on. thanks for your time. we are on the market again in 30 minutes. "money ," weoney moves welcome to focus on alternative assets. we show you what investors and entrepreneurs are doing, as well as hedge funds, private equity, real estate, and more. today private equities dry powder reaching an all-time high. how firms are gearing up to invest and where the money is likely to go. former and it felt quarterback -- nfl quarterback will be with us to talk about the super bowl and other topics, charity included. assets categories. super bowl championship rings that are going up for auction. we will show you the standouts
and how much they might fetch. we want to bring you an update on a key energy story. bloomberg news learn a u.s. state department report concluded that the keystone pipeline will not significantly worsen climate change. philark, -- more, mattingly standing by. what are the implications? congressionalm aides that this long-awaited technical analysis from the state department does not differ very much from their march report which concluded something similar. it has a couple recommendations, that there need to be new safety procedures, including sensors to detect any type of oil leaks. this is one step in a process that is continuing. once this report is officially released, there is another analysis, open comment period. the state department will have
to take into account diplomatic issues as well. the finale not the final step in this game that has been going on since the transatlantic bid for this five years ago. >> i know there's a lot of environmental groups that are very concerned about it. >> that is right. heavily by money and voice, by tom stier, who put millions of dollars into the effort to fight against the keystone xl proposal, targeted the president on this as well, told the obama administration they have to reject this. we are getting from environmental groups is, we feel like we are tied at this point going into it. they wanted a review that came out and said this would have a major impact on carbon emissions in a negative way in terms of climate change. they have got time, and i think they will seize on that going forward. >> the president will have to get involved, right? >> that is the assumption.
this is technically john kerry's decision. jay carney for the millionth time batted away questions and deferred them to the state department. the president can get involved. somethingation is on that is this important to the environmental community, many of them are huge supporters of the obama administration. we have got months before that actually occurs. >> phil mattingly joining me from d.c. from energy and pipelines to energy and sports. this weekend's super bowl more than just an athletic contest. some of the biggest names gathered in new york to roast a former quarterback. the event raised money for his foundation, and he is with us now. you were a friars club honoree. lots of jokes at your expense, but you handled it. a lot of money coming in for
charity. what was it like? it was great. we raised a ton of dough last night. the friars club foundation being led by jerry lewis has done such great work. the super bowl xlviii snowflake foundation, the boys and girls club in conjunction with this year's super bowl. i got a little bored there for a while because i thought it would be rougher than it was. roast,king of rough and official or unofficial, we are watching a playback. there was chris christie joining in. what was his best joke? back when i was a quarterback he said something about booing me back then and booing me now. >> i said something about the
bridge. it was all in good fun. chris and i have become good friends over the last six or seven years. for him to take a moment out of his day to come over and roast me on behalf of my foundation was a great honor, and i look forward to supporting him as he continues to do what he's doing. >> you got the bridge dig in there so proud of you there. >> whatever. i live in long island. it did not impact me. around here in new york, as long as it does not impact us, we do not get too upset. >> speaking of affected personally, what about these cold weather conditions? you have played in a few of these big contests in the cold. what do you think? >> from a quarterback's perspective, it's all about the wind, and it does not look like the wind will be that significant.
will have a much more comfortable day. for those of us who live around here, we were just hoping we did not have the weather system we had a few days ago. as far as the players are concerned, once the game starts, they are not even thinking about the weather. both teams will represent well in this game and hopefully we have a fourth-quarter comeback game like we have had in the last few super bowl's. rice saying he had to speak with you here. he's a diehard football fan. >> here's the real question. how do you think that seattle secondary will be able to handle all of the wide receiver sets, the bunch formations that denver likes to run against the man-to- man defense we will see on sunday? >> i love your range. you are not only dealing with
the dow and ben bernanke and secretary john kerry, the fact that market cap for under armour is way up these days. you will be focused on the competition we will all be focused on. this is where the rubber meets the road on the super bowl. it should be fascinating. here is the hidden gem. how is the official going to treat the secondary of the seattle seahawks? that is what is going to be worth looking for this weekend. quarterback,e the if you were playing quarterback for denver this sunday, you have to find some weak link. it's all about the matchups and pro football. there are no weak links in the seattle secondary. what is the weakest link? >> i don't know that there is a weak link. they are big and tall and strong and have long arms.
going to be one guy that will be difficult to cover. one of the reasons i believe peyton manning wanted him in denver because he wanted a security blanket on third down. he catches pretty much everything thrown to him. if i were going to be peyton manning, he's got to be my go-to guy, especially in tough situations. >> boomer, you were talking about peyton manning. you're having two quarterbacks here, one who has a lot of experience and one with a lot less experience. we know richard sherman in the news for controversial comments. what is your take on the role of experience versus enthusiasm? >> i'm not going to try to impress you here. i played in the super bowl. does that work? >> all right.
you are a superstar. sometimes it just works like that. i lost my super bowl. when i played in super bowl 23, i was the other quarterback. i was russell wilson because montana was on the other side. my advice to wilson is just play your game. my advice to peyton manning is just be who you are, one of the greatest quarterbacks this league has ever seen. you are leading the and a fellow -- nfl's offense against the greatest defense. on the other side of the ball, how do you see the beast mode versus pork chop matchup this sunday? >> not workshop, pot roast.
the defensive tackle for the denver broncos, one of the best run defenders in the last five weeks in the nfl. he shut down new england. first and foremost if you are john fox, you want to tell jack lynch atstop marshawn all costs. force russell wilson to beat you. there is a secret weapon coming into this game, percy harvin. now 100% healthy. he's a difference maker in this game. if he touches the ball 5, 6, seven times on offense he could have a major impact in this game. the seahawks offense will go as far as percy harvin takes them. >> prediction, who's going to win? i have bets to place. i like the defense of the seahawks. i think they're going to win 24- 20. it will be a hard-fought
football game and hopefully peyton manning has a chance to win the game at the end. as a former quarterback, my heart goes out to him if he loses the game, but i think the seattle defense will come up big. >> thank you very much. wonderful to have you with us, boomer esaison. we have a quick break to take. when we come back, private equity more than a trillion dollars. where the money is likely to go. ♪
a trillion dollars, that's a lot of dried powder. >> that is real money. >> where will it go? >> it will have to go a lot of places. europe is one area where private equity firms are looking given the stability there. we're hearing more and more about deals. of problem is that is a lot money that has to go into big deals and we have not seen a lot of big deals. we have not seen a lot of big deals in five or six years. >> kkr over the last 12 to 15 months has been the most active. >> the most active. you're talking about deals that are $5 billion, $6 billion. 2007, when we were talking about $15 billion, $20 billion deals. but we have here is a math problem for private equity. they have a record amount of dry
powder in a deal environment that went down a couple percentage points last year. there is something of an imbalance. who is a good for? a ceo looking to sell his or her company. when a company goes up for auction or is entertaining any offer, they're usually entertaining that offer for multiple parties who are bidding companies up and up. >> i heard you say europe. is that really the place where the most money will be spent? we talked about blackstone earnings yesterday, 40% of their deals last year were done outside of the u.s. >> that's right. when you talk to investors and the private equity managers themselves, the place they have the easiest time rising -- rais ing money for is asia. kkr raised a big asia fund overnight. it took longer to raise their .ig u.s. focus funds
that seems to be an indicator of where the deals are in where the appetite is. >> i know the blackstone is opening or least raising money in asia. they're asia seems to be getting a lot of attention. >> that's right. part of what is driving at is the competition we talked about earlier, if a known u.s. property is going up for sale there will be a lot of money going towards that. emerging markets, frontier markets we are hearing about a lot, even laces like africa. -- places like africa. >> i was talking to a friend of mine last night who is building up this e-commerce platform for african goods, for people who are traveling from africa, often to europe or year or asia. a lot of new money is there. >> absolutely. and technology has changed everything about how money gets
dispersed as well as the types of companies that private equity money is attracted to. >> jason kelly, thank you. lovely to see you. "the new tycoons, inside the trillion dollar private equity industry that owns everything." when the comeback, from private equity to hedge fund strategies, which ones are attracting the most new money? ♪
bob rice from tangent capital partners back with me. it is difficult to look at an average hedge fund performance, right? in one making more than 20% a year, you are satisfied with your results. if not, you are unsatisfied. >> it depends what your investment is attempting to do. a lot of instant -- institutional investors are buying into specific strategies. they do not know what the market is going to do and they want to be prepared for any kind of environment. these results show you, contrary to what a lot of people in the media keeps saying, is that the institutional investors are quite happy with their hedge fund investments, which is no doubt why we keep hitting new highs. implicated, implicated. most stories written do compare a basket of hedge funds, all different sizes and strategies,
usually to the s&p 500. >> it is ridiculous. the best thing to do is ask the investors in these funds, are they happy are not happy. the screen answer on there. the dark and medium green are happy or very happy. the light green is disappointed. last year, essentially three quarters in 2013 were happy with their hedge funds investment. >> which is a great point. these institutional investors, it is about preservation, protecting downside risk, and it's more important for them to protect against downside risk than hit it out of the park. >> that's right. if the market feels fully valued, and want to be in something like an event driven strategy which has an opportunity to make money even
if the overall market does not rise too much. that is why there are so many different styles. we have a chart that shows satisfaction by style last year, which is interesting because it helps you understand and break down where the various strategies are and how they did. over there on the left you have equity, long short. return something approximately 20% last year on average. the market was up approximately 30%. you aret a failure if saying, the rest of the differential was in insurance premium against the market dropping. i'm happy to pay that premium, especially if i'm getting a 20% upside. all the way at the other end -- >> we can big back -- bring it back. >> people were dissatisfied with their managed futures. that is not unexpected, that they would be dissatisfied. a lot of those programs promise "alpha" and have not been able
to deliver. you get unsatisfied investors. if you promise downside protection with upside participation like the long short guys and deliver that, they are happy. >> it's all about meeting expectations. as anything else stick out to you in these charts? are getting much more sophisticated understanding of what hedge funds are attempting to do. in the old days, everyone was alpha, alpha. people have become much more sophisticated. that is showing up in their satisfaction levels. >> bob rice, from tangent capital partners, thank you. it is almost 26 minutes past the hour. we're going to get you out to the newsroom. mark crumpton is there and he's ready to go. interesting day on wall street yesterday.
today, disappointing results from amazon.com. more trouble in the overseas markets pushing u.s. stocks lower this afternoon, the last day of jenny wright 2014. -- january 2014. the nasdaq falling as well. a couple of individual movers we are watching today, to tell. -- mattel. plunging the most in five years after posting fourth-quarter earnings that missed analysts estimates. mattel was hit by a 13% global slump, while revenue from hot wheels declined 8% over the same period. we are also watching wynn resorts. sales of its business surged. its biggest source of revenue. we will have more on the
>> this is "money moves." we focus on innovative alternative investments. i'm deirdre bolton. today is the final day of ben bernanke's term as fed chairman. he has held the job since 2006, when he was appointed by president bush. janet yellen takes over on february 11 and she will appear before the house financial services committee to deliver testimony. consumer spending rose more than forecast in december even as incomes stagnated. household purchases rose 4/10 of
a percent. pushing the savings rate to the lowest level in almost a year. bloomberg news learned that a u.s. government report on the keystone pipeline released today. not have ae would big effect on the environment, but it does call for additional safety measures, including sensors to warn of leaks. of theblematic rollouts federal health insurance marketplace has led more companies to turn to try the exchanges to offer employees benefits. based, on-demand technology provides benefits in administration, payroll, all kinds of solutions to employers through its insurance carrier and broker partners. the cofounder and president is here. glad to have you with us on "money moves." how is the affordable care act changed your business? omniahas created a soon
change across our entire industry and employers are starting to look at this concept of a marketplace with quite a bit of interest. you are starting to see marketplaces and that model start to transition into the private sector. that is right down the middle for us. >> even though the obama administration may not be quite so happy with all the negative publicity that was out there about the platform, it has done your business a little bit of a service in letting people know, these health care exchanges exist. whether you are dealing with a private or public one. >> of course. it has brought the conversation about how to deliver health care or employee benefits in a different way. that's a fundamental shift that they look to companies like ours to help transition. >> i know you have a business model that is different than your competitors. what are you doing differently to differentiate yourself? >> we are the nerve center of
the health care i.t. and benefits delivery ecosystem. that is made up of insurance carriers and brokers. our software connects everyone of those stakeholders and as a result, every one of those stakeholders could become customers of ours. they use our software to streamline processes or improve their overall business performance. >> what are you finding as far as running a tech company. we have a lot of ceo's and founders and they talk about the dearth of talent. how tough is it? >> it is tough out there. the thing we have in our advantage is we have a team of technologists that have been working together collectively in this phase for the last 15 years. brings a core competency that really allows us to bring in may be an experienced tech talent, and we can bring them up to speed quickly.
you are right, it's difficult to find the talent out there. >> what is the biggest challenge that is not finding the tech talent? what if the next step for plansource? >> keeping up with the growth. there's an incredible demand for what we do. this changes been a catalyst for that. tojust did a series b round help us stay in front of that inwth, invest infrastructure. by doing that we feel we have the comfort level, the bandwidth to be able to handle that growth. >> basically you have to protect your first maneuver advantage. >> you bet. >> wonderful to see you, scott carver, president and cofounder of plansource. when we come back, one-stop shopping to buy some of the greatest pop-culture photographs out there. ♪
>> welcome back to "money moves." live on bloomberg television, streaming on your tablet, your phone, and at bloomberg.com. while the beatles' music made history, so did iconic images of that performance. rock paper photo is an online collection of pop culture photography. adding to his collection of more than 100,000 photographs for sale. how did you get this idea? how did you know that holding a collection of photos like this could be monetized? >> i came from the photo licensing business. i met hundreds of photographers who are really focused on what happened the night before.
frankly, i was decorating my office but they were not doing anything else with it. they were focused on, it is not news today so i will leave these negatives in a shoebox under my bed. there was all this buried treasure out there and i was enjoying it personally, and i knew others would enjoy it. my party, -- partner, guy os eary, is also a photographer and a collector. talking about it, and he saw the problem from the other end. he's like, why can't i buy all these photos? photos are taken every day of celebrities and musicians. it's hard to find them. he was having people who work for him going scour album covers, call these photographers. these people did not know how to print photographs. >> we have been referring and
showing the beatles, 1964 shots. you have a lot of rock 'n roll shots. it obviously space to your background and your partner's background. >> music is a strength of the company. so many of the photographers who shot the beatles in 1964, if you were a photojournalist at the time, you are also shooting mohamed aly and jfk. it was a natural extension from music into celebrity and sports and fashion. >> what differentiates you from other online wall art? >> i would sum it up by saying that we are selling a limited edition. . we have mass-market unique and rare photography. we spent a lot of time trying to find the photos that are not out there, that have never been seen. the other online wall art companies, they have some amazing photos. they have iconic photos.
generally if you go into your neighbor's home, you will see a lot of these photos. if you come to rock paper photo and buy a print, you will hang something on your wall that is unique and special. >> how important is mobile? are people looking on smart phones and buying from their? >> absolutely. mobile is very important, primarily for browsing. i do think people like to see it on a bigger screen. at least a tablet. but for browsing, it's incredibly important. we just relaunched our website and now it is an incredible browsing experience. you can go down a rabbit hole. that is what happens. people who visit our site spend an enormous amount of time on the site. it is actually shockingly high. you get lost. i know you have a huge
following and business in the u.s. you have a joint venture in japan. is there such a hunger for u.s. pop-culture and images from our pop-culture in other countries -- i assume japan is a lead. >> japan has an insatiable appetite for american pop- culture. i would say that is true globally, but if you have too on the second-biggest market, i rrow on thet is -- na second-biggest market, i would say it is japan. putting the u.k. aside for a moment, it is japan. >> what is next for your company? >> the world has changed. everyone is a photographer today and there is so much talent out there. it is to find those photos that have not yet been published, not yet been seen. put their work on rock paper photo and allow people to see this work and take it home with
>> advertisers and fans are spending millions in connection with the super bowl. bloomberg caught up with some of the brightest stars in the league and asked about their plans. >> save now and you can play later. i like that as a model. i'm only 23. i did not know how long i will be in the nfl. it will not last forever. we have the opportunity to save as much as we can now. >> estee lauder.
i don't go out too much -- i stay at home a lot. i don't go out too much. my money, my mom's not going to let me go over my budget. >> you have to start small and look at the growth. when you see the growth, you will start to understand the possibilities of investment. >> i believe saving is something that works every time. some people believe in investing, buying restaurants, homes. somethingaving is i've learned over time. i do not know nobody who has saved to has lost money. [laughter] some investment advice from some super bowl superstars. we will continue the theme. it is the friday before the big game. ken golden with me now, founder and president of golden auctions. he has sold more than $600
million of memorabilia. wait to see you. you brought some serious gear. you brought some rings. four different super bowl rings, going from 1971 to last year. this is the ultimate prize in all of sports. you want the super bowl ring. teams constantly try to outdo each other. this is the 1971 ring given to the winners of the super bowl kansas city, kansas city chiefs in 1971. this was any rice -- andy rice's ring. it's a very classic, elaborate ring back then. then you look at -- >> do you mind if i try -- >> absolutely. >> there's a huge size
difference and a huge wattage difference, right? >> this one is ridiculous. it is known as the glitzy as to -- glitziest ring ever produced for sports, 2012 ravens super bowl ring. the player was chastised for letting his super bowl ring go. they won the super bowl jenni january- superbowl in of 2012. this is total weight white gold. >> that is pretty hefty. >> this is well beyond. >> how much will that go for? >> this should go for about $70,000. is $37,000he bidding
and it ends a week from today for my february 7 -- today, february 7. a lot of people have san francisco 49ers. ring from the year that steve young set a super bowl record, throwing for six touchdowns this super bowl. you can see the lombardi trophies there, the five different super bowl's those teams won. you can of the ravens, see the difference in a couple of years. this is when they won their first super bowl. this ring belonged to jamie sharper, the great linebacker of the ravens. this is his super bowl ring for winning the super bowl. >> if a team wins, what does that do to the value? is it more important that the game was close? but the player is well known? in the green room.
somebody asked you, do you have a super bowl three ring? takesar the team tremendous importance. the other thing you have to look at is the glamour. somebody -- the winner of this ravens ring will be wearing it. a lot of the guys that are collectors and investors -- >> where do you wear that? >> i know somebody who owns a joe dimaggio world series ring. he is a doctor and wears it everyday to work. what other professions -- do you have groups where you are like, it is the wall street crowd, or the entrepreneurial crowd? who is buying these? >> the wall street crowd are big on the rings, the best supporters at my auction. we get phone calls all the time. you see different brokerage names coming up.
they are great collectors. they buy to collect and invest. you look at the history of rings. a babe ruth ring sold for $75,000 25 years ago and now would be worth $2 million. you are putting your money into diamonds and gold as well. >> not that i like to steer away too hard from diamonds and gold, but there is a football. you brought a jersey as well. what is special about this? from 1987, super bowl 21 football. this happens to be game used and it was signed -- it is faded over 26 years -- lawrence taylor. football upme used for auction at goldin auctions. this is going to be a key atom, the patent manning -- item, the peyton manning jersey.
>> it is 56 minutes past the hour. it is time for bloomberg on the markets. mark crumpton here with everything you need to know on trade. what do you see? >> we have breaking news to start. walt disney said to be close to an agreement to settle litigation with dish network over ad skipping technology, according to two people with knowledge of the situation. the technology at the center of the battle allows dish subscribers to automatically skip commercials on recorded shows. disney is also involved in litigation with at least three other companies over similar technology. we will continue to follow that story and bring you more information as soon as we get it. let's get you caught up on the
markets. stocks are paring losses today, admits that slump in emerging market currencies. the dow industrials down half a 5769.nt, 15,000 7069 -- 1 nasdaq is down fractionally. we have a big read on tech when disney, zynga and amazon reported earnings after the close thursday. ari leavy joins us from san francisco. what is this earnings picture telling us? >> when you look at google, you're looking at a company that is benefiting tremendously from online advertising across the board. we are coming out of the shopping period where all of the e-commerce taking place, those companies are advertising more and more. that's a very clear picture. a company puts an advertisement on google search, people click through that and go to buy their items. it is profitable revenue for
google, and google's numbers are up across the board. amazon, the revenue is up 20 plus percent from holiday sales. that is not profitable for amazon. while they are shipping a ton of product, they are paying for shipping. for google you are seeing a good holiday quarter. for amazon you are seeing a difficult holiday quarter. >> amazon did flex its muscle during a holiday shopping season. how else do you explain the massive orders that disrupted america's largest delivery companies? thesezon is striking all agreements with shippers, whether usps or the postal service, to offer incentives for users to be certain they will get products in two days or get products on sunday. just because amazon makes those guarantees does not mean that the shippers can deliver. amazon does have to at least respond to the fact that people were getting items delivered late. >> both amazon and google,
fourth-quarter results, they were tied to holiday spending. the companies did not follow the same path in their strategies. theyr google, any trends can play into with online commerce shopping is a positive. when you search for an item on google, you are expressing intent. if you search for a watch, you probably want to buy that watch. there are very few costs involved for google to deliver the results. is involved in the transaction from start to finish and are responsible for making sure you get that low-margin product on time. amazon has huge costs involved with every purchase. google has virtually none. >> last week amazon hitting that all-time high. our investors overlooking week profit numbers? >> a free ride for over a decade
now to increase revenue at the expense of profit. as long as that revenue number keeps going up, profitability numbers have not seem to matter. intime profitability comes below analysts' estimates, that is a problem and analysts wonder if that can continue. >> ari, thanks. we're on the markets again in 30 minutes. "street smart" is up next. ♪ >> i'm olivia sterns. welcome to "street smart" on friday, january 31. >> good afternoon. it has been a crazy week in the markets. let's pull up the boards and look at how the markets have traded today.