tv In the Loop With Betty Liu Bloomberg October 30, 2014 8:00am-10:01am EDT
ceo tim cook has said "i realize how much i realize how much i've benefited from the sacrifice of others. if i can bring comfort to anyone who feels alone or inspire people to insist on the quality, it is worth the trade-off with my own privacy." you can read all of tim cook's remarks in the new issue of "bloomberg businessweek," on stands now. we have got much more. the dollar against most major currencies a day after the fed closes its door on easy money. the bond buying program is designed to boost the economy. janet yellen and crew decided the economy did not need as much help. still, they've committed to keeping interest rates low for a considerable time. president obama says that quarantines and travel bans. this part of ebola.
-- won't stop the spread of ebola. >> until we stop this outbreak in west africa, we may continue to see individual cases in america in the weeks and months ahead, because that is the nature of today's world. we cannot hermetically seal ourselves off. >> showdown in maine between the state's governor and a nurse who was quarantine. kaci hickox was 14 briefly in new jersey. dallas quarantine briefly in new jersey. quarantinedtening-- really in new jersey. efy is threatening to div the governor. barclays says it is sitting site $800 million in legal costs. the bank is being investigated for alleged rigging of currency markets.
all the drama that a world series game seven should have . with madison bumgarner on the mound for san francisco on salvador perez pops up and it is all over. the giants win their third world series in five seasons. named, of course, the series m.v.p. oh, boy, were the celebrations out in san francisco. i want to get straight to scarlet fu, who has a look at the numbers. >> when you knock out the dilutive effects of one-time items, mastercard, $.89 per share, compared with the consensus of $.78.
this is slightly more than what analysts had anticipated. purchase points of 11% as well. good news all around. shares of moving higher by 2.6%. of -- visalows these 's estimated earnings as well. story, theour top fed. we are all digesting what this means not just for the market for the economy at large. julie hyman joins us now with the market reaction. >> the fed really emphasized the increases in -- and improvements we've seen in the job market in the united. interpreted byas investors as more hawkish than it had been previously.
we're seeing expectations dolphins the fed funds futures market that we might see -- built into the fed funds futures market that we might see. let's see how this is playing out around the world. some 600, we are seeing the kleins and concerns about what the higher rates are going to mean not just the u.s. economy but the ripple effect on economies that are a little more uncertain footing. this comes as a measure of sentiment in october showed improvement. fell 1.5%, this after joblessness actually fell in germany last month. despite that improvement we are seeing declines across the board. in the u.s. market, seeing some declines even though we know that higher rates are coming but investors are rejiggering expectations. also rejiggering their expectations in the treasury market. the 2-year note in particular, we saw the biggest increase in yield yesterday.
interesting that this morning we are seeing how much change in the 10- and 30-year yields. a check on the dollar. the dollar is continuing to move higher. this is the best-performing major currencies you today around the globe. >> we will talk more about this throughout the next two hours will stop let's turn back to corporate news. streaming services like hulu and netflix are making it easier and cheaper for consumers to move beyond the cable bundles good as traditional networks are learning, if you can't beat them, then you joined them. rupert murdoch is rallying the television industry in a bid to win over the court cutters -- cord cutters and shavers. i want to bring in paul sweeney, who covers things all media and tech.
rupert murdoch made some of his most detailed comments yet on what he thinks about à la carte pricing and ordering -- cord cutting. >> pretty strong, saying that the big media companies have to embrace this he waited the tumors are consuming content. they are not just relying on their cable tv package or satellite package. they are getting it direct from the internet. hbos cbs announced it will streaming services over the internet much like a netflix-type service. rupert murdoch is saying that the industry has to do more of this. >> it reminds me of jeff bewkes years ago calling netflix the albanian army and dismissing them as any kind of challenger. murdoch at this conference said many things but one thing he mentioned that he believes his colleagues are all finally toing together good and want
-- i want to read you quotation from this event. on the same page and we will fight as hard and as fast as we can." that sounds good but come on, these are big egos running big companies. can they come together? >> one of the big challenges for the media companies is existing system is working for everybody. my cable tv package, the satellite packages, they are big , including 20 center dot and no one makes more money denver murdochs company -- including 20th century fox, and no wonder makes more money than rupert murdoch's company. they have to recognize that consumer behavior is changing and people are moving away from their pay-tv packages, they are cutting the cord, shaving the court, and the companies have to be there. tablee warner
results show they were losing hundreds of thousands of video since records. paul, thank you for that losing--they were losing hundreds of thousands of video subscribers. paul, thank you for joining us. and shaking this hour, new jersey governor chris christie. he marked the second anniversary of hurricane sandy in new jersey by getting into it with a heckler. the heckler was protesting what he called the slow pace of rebuilding new jersey. >> we're going to get into a debate and will get very interesting and very fun to somebody like you doesn't know damn thing about what you are talking about. i have been here with the cameras are running and you want to have a conversation, i'm happy to have it, but until that time, sit down and shut up! >> the heckler tried to make
amends, asking christie "why don't you come to my house for dinner?" christie's response was "there are about 1000 things i can do tonight and going to dinner with you is 1001." ouch. peter cook, i've got to get your take on this. it will look at that exchange in think that -- people that exchange i think that he might be good running new jersey but can he run the country? >> vintage chris christie. highlights the risk and reward of chris christie, the street -- straight talk and one thing which that is appealing to a lot of the public and other. but that tone strikes some as a bully and that is a turnoff to others. the leadership, the straight talk, and yet at the same time the risk factor as well. >> christie said in the last few
weeks that by the way, he's is very confident about the gop, especially confident about winning the midterm election, .aking control of the senate what does that mean for the next two years of the obama administration? you have been looking into this. lock that they will win the senate but the odds favor publicans. either we are looking at gridlock on steroids for the changing power in the senate could potentially bring about compromise on some issues. the democrats and republicans i'm talking to in bc much more convinced of the former. we are looking was likely to rely on steroids the two parties are so split. republicans are so opposed to do that they will perspectives any hint of compromise or mitch mcconnell and john boehner. rank-and-file republicans are pushing for votes to repeal
obamacare. i could poison the well early. republicans see little indicate -- that could poison the well early. republicans see little indication that the president wants to play ball. >> you will see the president breakup of each of them on republican priorities. i'm sure on some major energy issues is not going to change anything. i think you will the trench warfare for the next couple of years. >> trench warfare. mitch mcconnell said in an interview this week that if he is majority leader, a full repeal of obamacare is it on his immediate to do this, given the likelihood of a veto. he would target the medical device tack. that sparked immediate consistent from conservative -- immediate criticism of conservatives -- from conservatives. >> there are people who see some areas of compromise.
>> that is the alternative scenario. the minority view would have you believe that the two sides can bridge their differences and cut deals. why? they want some success to show going into the 2016 residential rates and they are not that divided on a range of issues. you have business tax reform, trade deals where republicans are more alive with this more in line with congressional democrats -- republicans are more in-line with congressional democrats, and also immigration. "takingre to tune in to stock" they because peter interviews afl-cio president richard trumka. we will be back. ♪
for weeks in the making. now we officially have our answer. investors are still digesting and dissecting every word of the fomc statement yesterday, including bloomberg view columnist mohamed el-erian, writes that "the fed, rather than singling will telegraph signal for going forward and keeping options open in an unusually fluid economic local and global environment." .hat is his interpretation joining us now is the former fed reserve governor during the depths of the financial crisis. chicago at the booth school of business at the university of chicago. great to see you again. >> yeah, great to be here. >> would you agree with mohamed el-erian? they have several options, or have they actually narrower than? clearly finished the
purchase program released this purchase program, but they said, well, we will have to see how the economy and inflation evolves over making any commitments about what time means. that is reasonable given the in the middleisks east or africa or the ukraine, to say that we're on a clear path to the economy's not quite right. but yellent right, did say that they continue to see improvement in the labor market. sunset after reading between the lines that they thought we saw a more hawkish fed. the inflation hawks on the fed did not dissent. >> a number of the people who wanted the program to wind down were very happy that it did, and i don't think they would decide on the end of the program itself.
the fed has to acknowledge that there had to be some reason why they were ending the program and so they had to knowledge that there has been some considerable and substantial improvement in the labor market could but that doesn't mean they aren't there and goal. -- that doesn't mean that they are at their end goal. that doesn't mean we will raise interest rates next week because the economy is booming. it ain't. >> it ain't, and has nouriel yesterday, ito us might be the only hope in the global economy. many playback for you what real were being -- let me playback to you what nouriel roubini said about economy. >> obviously it is fragile territory for the global economy. there are 4 engines of the global economic airplane -- united states, eurozone, japan, and china the only ones that are working is the u.s./united
kingdom. japan is slowing down sharply after the consumption tax increase. they want to do it again next. >> and china? >> china is in a structural slowdown. so we are essentially three engines of global growth that are sputtering or selltalling. engine --, randy, and an airplane flying on one engine. what does the fed do? >> the fed will be monitoring the domestic and international risks, and it will be monitoring inflation very closely. the motivation for the beginning of qe, when i was still at the fed, was to fight deflation. there were people concerned that
this would lead to higher inflation. inflation expectations are still quite well anchored. the fed wants to keep the option in case something goes wrong. i don't think they see that. they made it clear in a statement that they do not think that deflation was coming, but they wanted their options open. was interesting was alan greenspan yesterday saying that there was one very big failure of qe, that they do not create the credit that qe was intended. >> for my perspective the first wereecond rounds of qe laser focused on the threat of deflation.
>> you are watching "in the loop " live on bloomberg television. good morning. i am they view. mastercard out with profits that beat wall street estimates this one in -- this morning. net income was boosted by new deals with retailers including walmart and partnerships with tech companies including the new apple pay system. you must have been under a rock if you didn't know about that. sa hadad first -- vi first-quarter profit that topped analyst estimates.
weighed down by a one-time litigation fee. samsung is posting the smallest profit since 2011 as margins were squeezed by competition from apple and cheaper chinese rivals. the world's largest smartphone makers said that profits fell 49% from a year ago. the company is counting on its wraparound screen technology to stay ahead of the competition. it is 26 minutes past the hour, which means bloomer television is "on the markets." equity futures are lower, on the same path we saw as yesterday with the fed statement where they did what everybody had expected. they ended their tv program. options are of an ongoing interest rates are going to rise . they say that there will be a considerable amount of time before interest rates were going to gain. you can see equity futures slightly lower.
s&p futures down half percent and dow futures are all in 0.4%. nasdaq futures are down by 0.4%. we are "on the markets" again in 30 minutes. so to stream seems to have lost its -- soda stream seems to have lost its pop. the company was forced to cut its forecast by $500 million. in company is mired at home as it shutters a factory located in the west bank settlement. while sodastream claims it was purely commercial, palestinian and it is claim this as a victory. middle east editor elliott gotkine joins us now from tel aviv. most companies may be somewhat affected by the geopolitical risk so this is at the heart of it here for sodastream. due date out to a little pressure -- did they bowed to
political pressure? >> sodastream says not, that it makes sense. they say that it is an island of peace that brings most indians and -- it brings palestinians and jews together in harmony. dastream, which has been building this new factory in the southern israel, which increases the capacity to churn out those ers, many times they knew the factory was going to come on and if you step away from the controversy it doesn't make sense to have two or three factories in israel when you have one big one that can meet all of its demands. >> it makes a lot of sense but does it signify or -- what does it signify about doing business in the area? >> well, look, it is not without controversy. isthe stream -- sodastream
the only international company that works in the west bank. the company has maintained what would you rather do? certainly do all seem to work and harmonious conditions there. but i think the issue is so controversial -- earlier this year we are scarlett johansson splitting with oxfam over criticism of her fronting the campaign for sodastream, and a reammonths later sodast vehemently defending its right to have that factory. i think the company never really wanted of the workers in the factory to think, look, we're going to be out of a job in a few months time that might affect worker relations, whether they are as keen on working there if they are going to lose their jobs a few months down the line.
sodastream probably waited as long as it could make this announcement. >> they came online with such bravado and hired charlie joins in and bought that big super scarlettigher johansson and bought that big super bowl ad to avoid the political overhang over this company but as we see it as such them back in. elliott gotkine, middle east editor for bloomberg television. breaking news on the jobless claims. 287,000 for the week ending october 26, pretty much in line with what economists expected. scarlet fu seven breaking desk with more on the numbers. >> the number also came out of it: 30. this is a take on how fast the economy grew over the border. 3.5% and will growth for the third order -- third quarter.
last order, the second or, fastest its 2011. that itself was payback for the slowdown in the first quarter. the increase of 3.5%. core pce. index isconsumption with the federal reserve looks at. there we have 1.4% from the second order. -- second order. is any much in line with what economists were looking at . consistent with what we have seen the previous week. a lot of people were saying that 3.5% growth in gdp there is still room for rope in the economy -- room to grow in the economy. we are seeing futures pare their
losses. we are still down with s&p futures down by a quarter for percent. at thisll take that t point. with job losses, atlantic city has lost 7000 jobs this year asked to casinos that have gone -- thanks to casinos that have gone bust. with family, caesars is one of the worst performing casinos. tennant company turn its fortunes around -- candy company turn its fortunes around?
company that may file for bankruptcy, caesars entertainment. this is a story well known about caesars. >> the company is in talks with creditors and you has had issues with the debt ever since it was .ought in the late 2000s they loaded it up with debt. it has lost money every year since 2009. if you look at the free cash flow of the company has a negative everywhere is the third quarter -- every quarter since the third quarter of 2012. the company has had to pay debtest on all of that and expenses have been climbing and climbing. another way to look at the zombie prospects for companies is to look at the credit default swaps, a way for investors to
look at whether to default on debt. on caesars have been climbing and climbing. showing that perception of what could happen at caesars. not all of caesars is evidential bankruptcy candidate -- is a potential records in canada. the company is divided into a growth unit, as well as a real estate unit. if they were to go to file for bankruptcy, it would be the asrating company, op-co, analysts refer to it, that would be fine. >> sounds like that is the next step. >> they are in talks with creditors so it depends on what negotiations they come to. , juliek you so much hyman, senior markets responded. i want to bring in the man whose job it is to turn around the city who is dependent maybe too
much on gambling. atlantic city faces the closing of four casinos this year --, lhasa, ceases, by the way, --, plaza, caesars, by the way, and willll cost the city 7000 jobs. the mayor is with me this morning. you have no easy task here. i grew up in philadelphia, 60 miles away from atlantic city, and i used to go to a.c. all the time. i am upset personally to see the city fall into the mind-- into demise. what are you going to do that hasn't been attempted? >> we put our eggs into one basket today versus by what we're doing with the city and giving you and everyone else from philadelphia a reason to come back to my city. >> new jersey governor chris
christie about four years ago said he would try to revive atlantic city and gave a quarter of a billion dollars in tax breaks to operators and said he was going to create the state tourism unit. it hasn't worked. when you say tourism, respectfully, it has been tried before. have a new mayor. i love that our governor has committed to turning around atlantic city, a lot of the senate president passed a new bill in the senate that will provide up to $300 million for the new businesses to come in my city. when you talk about caesars, they spent $100 million in the last couple years. it is long-term sustained profitability. they have the coolest nightclub on the east coast, they have great spas.
a great resort, not just a casino. about one third of those on the strip right now in atlantic city. you are generating less right, from those companies. you have got to raise taxes -- not you personally, but your predecessor. and businesses here. we are working with the state and they help to balance the budget and we have got to cut the costs of doing government and business in atlantic city. and attracting investment will go beyond just gaming and bringing things in my city that you will want to see. $125 million investment will open up next year at this time.
300 jobs, 90,000 square feet of retail, or the $35 million expansion of tropicana next summer, a health club, several stores and restaurants, the indoor market. that is where atlantic city needs to go. >> how do you cut costs when you're facing such a shortfall. --enue shortfall in revenue facing such a shortfall in revenue? >> we cut down the number of people working in atlantic city and we have done that by having a moratorium on new jobs and promotions within the city. we have cut about 100 jobs last week. >> creating jobs and cutting some jobs. >> cutting jobs for city workers but creating work in the public sector. i need to revive new jobs for my
residence and their children. that's my resident --my residents and their children and grand children. >> do you think governor christie has paid enough attention to your city? >> absolutely. never met him before he be -- before i became mayor. we have met many times since then. we will be coming together november 12 again and i think it will be very good news of new products -- new projects that will create jobs for residents. >> on an entirely different subject, look, i know you are atlantic city's first openly gay mayor and you have been on the forefront, a spokesperson for the lgbt immunity. newst this stunning about tim cook companion editorial for "bloomberg businessweek" saying "i am openly gay." i don't think there is another
ceo of the company of size was, and said that they are gay. >> good morning, tim. welcome to the club. dly city and a great place for apple to come and build a high-tech center. i have a business climate that is very positive on bringing new businesses here and i would love him to come down and kick the tires and see why atlantic city would be a good place for investment. >> has ever gotten in the way of your career? >> absolutely not. iam gay, i am an eagle scout, am a roman catholic it all of it made me the man i am today. >> thank you so much for joining us. by the way, i'm rooting for you. coming from philadelphia. we will tell you how cleveland welcomed were brought -- welcome lebron's returned to his
>> the king has returned to his throne. lebron james back on his home in northeast ohio for the return as a cleveland cavalier and the city has ever been so excited. shelby holliday traveled to ohio to see if lebron is cleveland's economic m.v.p. >> i love you. i am back. tolebron james' return cleveland is bringing hope to fans who haven't celebrated a sports title for half a century. it is attracting advertisers advance around the world, and it is revitalizing rivers economy that was once the empire of the industrial heartland. exciting timeost in the history of our overall city. -- thelass wit
cleveland cavaliers ceo to says that it is a whole new ballgame for the city. >> hotels and restaurants, rock 'n roll hall of fame, second-largest theater district in the country. they will take in cleveland as part of that. lebron'sists estimate returned could generate $200 million to $500 million annually for the area. newnesses are opening locations and adding jobs to capitalize on the so-called homecoming king. locals and people from outside of cleveland who are placing their bets in spending money on the future. it is really exciting to see. >> one of the companies bidding on cleveland is a massive multiuse complex that includes apartments, bars, restaurants, and hotel. steps away from the quicken loans arena, it opened its stores just in time for basketball season. >> business downtime will be double what it has been.
all the retailers and restaurants and bars. tovery nice for clevelanders have a place to stay and go and drink and walked to the stadium. >> developers say that the lebron effect goes well beyond basketball season. it has had an impact on the downtown housing market. leased out. are we anticipate that by the end of the year the units will be leased out and occupied. >> lebron's return means big bucks for the cavs. 30% rise in sponsorship revenue and millions more in merchandise sales. what did you buy at the store? >> oh, my goodness, what didn't we buy? jerseys, poses, basketball. we are doing what we can to be here and support. >> lebron is doing his part to
return the favor, looking to boost the city's confidence and economy for years to come. >> my number one goal is to win a check digi deaf-mute championship. i think it would be the greatest achievement in my life. >> shelby holliday, bloomberg, cleveland. i for more on lebron and me, want to bring in bloomberg's sports reporter, who has been ensconced in lebron the last few months. let's take on ticket prices. that is the most direct impact. has it been as you just some of -- has ittions were been as huge as some of the projections were? >> absolutely. 3000 ecstasies between last year's capacity and full capacity, which would be every single might. going back to the playoffs in which they have not done since he left.
up to $35 million of ticket revenue. the ticket prices are skyrocketing. tonight's game against the knicks is reselling at prices that are nba finals levels already. >> part of the novelty. >> the first game. but in general, they will sell out every single game. when a make it to the playoffs, that is when the real money starts to flow. >> if they continue to bring in this much revenue for the stadium and the team, what is the long-term impact for cleveland? >> the biggest long-term impact will be the media rights, which they can sell and two years. it is where all the money is, the tv money. if lebron james decides to stay, which he has given every indication he is going to, that could double or even triple.
>> the pressure is on him to perform. the contract is two years, right? >> it is a two-year deal. he did that because the salary cap would be increasing and he could profit more by keeping the deal short. it will take him a lot to sign longer-term in cleveland. can you imagine after what they did worry is ago what they would have it if he left after -- >> can you imagine the price on his head? what impact has yet on other nba teams? >> kind of like what michael jordan did when he came into the league, lebron james will benefit every team in the league. that'su place at utah when he plays at utah they will sell out. hottesthrough ticke -- routine in the nba, the cavaliers. signed up $24 billion tv package and one of the best players ever
thet is 56 minutes past hour, which means bloomberg television is "on the markets." equity futures just off the lows of the session. up numbers out, third order, 3.5%, better than what economists had estimated. personal consumption rising by 1.8%. on the markets again in 30 minutes. be sure to pick up the newest edition of "bloomberg businessweek." our coverboy this week is economic giant john maynard
>> futures indicate stocks will open lower. economy grew to than forecast in the third quarter. gdp rose at an -- average rate of 3.5%, the strongest and more than a decade. the dollar is now the best performing currency. the dollar rose after the fed wanted to improve labor market in the u.s. policy makers may does marx as they ended their round of quantitative easing, deciding they did not need to provide as much help as before.
they decided to keep interest rates low for a considerable amount of time. >> i think the fed has to knowledge that while there have to be some reason why they were ending the program, so they had to acknowledge there have been some considerable and substantial improvement in labor market. that does not mean that they are at their end goal. of thed to big knowledge economy is robust enough for we can we can stop the program but that does not mean that we will raise interest rates next week because the economy is booming. it ain't. >> mastercard posted third-quarter profits that beat estimates. they give credit to more consumer spending. mastercard has signed new deals with retailers including walmart and has increased prices for some prospecting services. the fall classic ended with a classic game seven. madison bumgarner had already won two games in a world series as a starter and was brilliant in relief last night, beating
the royals 32. 3-2.ting the royals -- bumgarner was named m.v.p.. the expectations were kind of stacked up against them, but what do i know? countdown. the scarlet fu is with us. pimm fox is also with me this morning. this story has been hitting my radar because it is all about property. who ishearing about making deals, what buildings are being developed, and who is moving where. >> the key to your heart? >> not a fancy dinner. jpmorgan is staying put on park avenue. they will keep their headquarters in manhattan on park avenue. we had been hearing reports that they were to go sheeting to move to hudson yards.
that is kind of a big hit for those that would love to have an anchor tenant like jpmorgan. them staying on park avenue is not necessarily permanent either. maybe they are committed to midtown for now but they are also looking around. peopleve been moving from manhattan to new jersey, brooklyn, delaware. casting them all the way out to brooklyn and delaware, my goodness. what is the world coming to? they are saving money. >> a lot of the back-office operations, they are looking at places where it is cheaper to house their employees. foxer nine, 21st century has signaled the television industry needs to respond of her handsomely to the rise of streaming giant netflix. rupert murdoch says that we are now on the same page and that we
will be driving that as hard and fast as we can. netflix has been doing well in the u.s., expanding in europe, and now they are looking at australia, which is his home turf. >> if you read this from murdoch, you would think that he was a big union champion. he is employing the same kinds of attitudes and tactics that he fought against what he broke the create thatder to first nonunion paper in the u.k., move across the river to a less physical location, and that it sounds like he is defending his turf. it is the reality. we saw that in some of these results coming out from the cable operators, including, number eight, time warner cable. reporting this morning that their earnings trailed estimates on more losses of video subscribers. time warner cable has been on
hold with their merger with comcast. >> another reason why the earnings assessment has been focusing on programming costs and sports. rupert murdoch moving more into live sport because that is the way you keep people watching fox, not through netflix. that is the same thing with time warner cable. it paid $8.4 billion to broadcast l.a. dodger games. >> that sounds small compared to what they are paying now. >> they just paid up for the nfl football and nba, which i believe begins now. it begins the 28th, the season. look at how much i know about sports. this is ridiculous. >> and then the msg story.
apple tooft beating the wearables market. andosoft unveiled its band will go on sale today. it will analyze health, fitness, and weak data, jumping into the crowded wearable device market. >> i am sure that it will work with your service and windows phone as well, which you do not have. i find it so interesting. apple unveils apple pay, and to some extent, huge coverage over that. >> in other words, free publicity. >> a microsoft one is sort of riding in here. i did not see any press release today that was exciting about this -- excited about this new device. >> neither of you are wearing one. >> i like they watch.
thathave an old ipod doubles as my watch. we will see what happens with microsoft. what is it called? the band. that is catchy. cookeaking of apple, tim writing in "bloomberg businessweek" that he is proud to be gay. he said -- several months ago, the buzz about whether he was gay or not started to build. perhaps tim cook felt, rather than having this as an overhang and people whisper about it, why
not just be upfront. "out" magazine had named him the most are lucky person for the last three years running. advocating onen behalf of lgbt writes in alabama. he had gone out there and said the laws in place of and their are not there. he was invited out to california to talk about this. flows -- i'md of not trying to trivialize this -- but this idea that in corporate america, being more authentic, real, having your story be real, it is all part of the new trend in this environment of sharing on social media and all of these platforms. anyways, coming up -- that was my little diatribe. the countdown to the opening bell continues.
>> we continue to countdown to the opening bell. it is time for our deep dive. gopro, the camera manufacturer turned condo developer reports earnings today. the market has been somewhat cruel to their shares lately. they have lost a third or their value since a record high of $94 earlier this month. is the ceo of rapid ratings, which rates the company very high. 82 out of 100 on their financial health scale. good to see you.
first describe what you mean by financial health. >> this is a measurement of a wide variety of elements within a company, not just looking at the debt elements or the probability of default. we are looking at how efficiently a company is run, for 60 measures, weightings different companies, we rate close to 30,000 companies this way. >> is it unusual to be in the 80's? >> it is a high rating. this reflects that they have done a good job generating revenue on a very low asset base. they have been able to do this generating returns. when you look at it relative to the other ipos that are tech-oriented in the last 18 months, they have profits, they are doing a lot of things that are powerful and they are efficient. >> so why has this... so much? -- has the stop gone down so much? out of theout strong
gates. the post-ipo period they treated really well, $98. it got a lot of momentum underneath it. we have to remember, momentum players are looking not for how well a company will do over the long term but how much of a higher price someone will pay in six months or a year. the market pullback have been a little hard. some talking about whether or not gopro is actually a niche product rather than a mass market product. competitorsave nipping at its heels. sony and polaroid. i am told the cube has been sold out at some stores. what is gopro doing, how do they keep their lead? >> what they did in their filing for the ipo, they are moving from an electronics manufacturer to being a media company. i don't think since imacs there
has been a visual image as immediately identifiable with a product or technology. gopro is capturing that. even though polaroid may come out and sony will compete, that sort of extreme sport image that goes viral so quickly and has so many people globally pushing it as their own content with this device, will, for some time, been associated with gopro. kind of like kleenex. sureget that, but i'm not when they say content, what they mean by that. do you have a clear vision of what they mean by being a content company? >> we were just talking about this wedding where somebody put a gopro on a whiskey bottle and pass that around. i wouldn't consider that high quality content, but an example of how anyone can create something and have it distributed. they are in the process of
creating content that they have so many extreme athletes and athletes around the world who are creating their own content and distributing it through the gopro youtube channel. they have cut deals recently with virgin, youtube, microsoft, for distribution on the xbox. they are getting opportunities for distribution. >> there are a lot smarter people out there than me, but from what i know, monetizing content is way harder. if you have this great technology, wouldn't you want to be branching out on the basis of the technology coming into various extensions? >> i'm not sure how different this is, but they are continuing to innovate with the product. different price point electronics. they just came out with a lower price point camera. they will be able to the people who are perhaps not putting the thousands of dollars into their skied quitman and higher and gopro, but those going out on
the weekend that want to shoot. the diversification is a logical one for them. it is aggressive to come up with your ipo and say that we are not actually that anymore. >> those numbers that we filed, throw them out. >> this is an interesting extension. certainly are capturing a lot of different elements that are important in the markets. from a financial health writing perspective, being so highly rated gives them the flexibility to take to gigi frisk's and to be able to survive any shocks along the way that may come from that. us, the you for joining ceo of rapid ratings. much more ahead as we continue our countdown to the opening bell. ♪
>> welcome back. let's get back to bringing you the most important stories you need to know before the opening bell. scarlet fu and pimm fox are with me again. soda stream closing a factory in a west bank settlement that had prompted calls by pro-palestinian activist for consumers to boycott the israeli company. soda stream has been interesting. they were fighting the political side of their business but also they came out -- we are going to be coke and pepsi at their own game. they found it is a lot tougher on that end as well. >> what i find interesting is that the ceo had said, after all , that thisversy whole factory was just a pain in the but and in hindsight, would never have opened it. about howan article
all the controversy had dominated the online conversation about soda stream. >> is there any indication they will move the production somewhere else? >> 60 miles away and they said that they would secure work permits at the new site. said that they would stop focusing so much on soda and will begin focusing more on water. >> carbonated water? >> there you go. back to the old days. >> number three, a bloomberg loses. told me yesterday that his fund is boosting their stake in chemical company dupont to 2%. over $1.6 billion.
this is a situation where if they are going to put in that much money, it means that nelson peltz means it when he says he wants to be in this company long-term and wants the company to split up, which has been a common theme among activist investors. is taking af dupont page out of the book of interviewee -- indra nooyi. that there are competitive advantages to having a diverse portfolio and will cut costs instead. >> of course, having the snacks makes you thirsty. >> falling oil prices have been helping. >> they have initiated an buyback program, have spun off their template unit. the postal service expects a 14% surge in holiday deliveries this year fueled by online shopping. ups and fedex said the same thing. >> falling oil prices will
definitely help these guys. >> the postal service needs all the help they can get. >> what are they, on the brink of bankruptcy now? >> i have seen the postal trucks in my neighborhood on a sunday on occasion delivering packages. >> the postal service, to their credit, did not grew up last holiday season the way ups did. in case you were wondering. the pressure is on, for all of these delivery companies and agencies to say, we are going to get it right this time. more and more people are going online and buying. in theou buy it at 11:59 evening, you must have it tomorrow morning or, my goodness, the whole holiday experience. how everyone was saying that you could order on the 23rd and still have it by christmas. >> the same date every year. >> playing with fire.
>> welcome back. let's get back to bringing you the most important stories you need to know before the opening bell. scarlet fu and pimm fox are joining us. number one, visa and mastercard. i don't think pimm was doing his apple pay. >> i was trying to learn about it because we are talking about credit card companies. >> you are following. mastercard and visa topped their estimates. consumers are charging more but the big issue is -- the big topic for these companies is mobile payments. apple pay. >> visa and mastercard
definitely benefit from apple pay. they have worked out arrangements with them. they would certainly benefit, but to your point, pimm, how many people have been able to make successful purchases with apple they? -- apple pay? i know olivia sterns has gone around and tried it out. >> i was listening to erik schatzker speak to brian moynihan yesterday of bna -- bofa. they noted that they were rolling it out. a lot of companies said that it is their issues, not apples that is preventing them from doing it. >> forces everyone to get up to speed. 6?you need an iphone with the new operating system. >> this is what i was doing before i was told i was not doing anything. >> you were not told!
that swipe technology will be integrated obviously with the fingerprint technology. there is the opening bell. >> we could talk about this for much longer, but let's get back to the market. investors reacting, the fed moving to and qe. we surveyed some of the best economic minds here at bloomberg. we have some of the best minds here. our economists and editorials have said, look, they all agreed, with the fed ending qe, the jobs report is even more important than it ever was. pivotal, especially with janet yellen zynga going to keep rates low.
she had a hawkish tone. n michael bring i mullaney. would you agree the jobs report has gone 20 been higher level of importance for the investors? >> if you look at the two mandates of the fed, which are price stabilization and sustained growth of the economy, right now, inflation is not an issue. that's on the back burner. , theook at the economy centerpoint is going to be the job growth and situation going forward. --is an eight way to growth? isn't it wage growth? >> it will be key as well. consumption is still relatively disappointing. we like to see more conservation coming to gdp growth coming from consumption. for that to happen, we will have
to see wade growth going forward. >> i want to ask you about overseas markets. you have talked about russia, the ruble is surging by the most since 2003. it has lost 15% of its value over the past happier. -- past happier. -- past half a year. between the financial sanctions being imposed against russia coming out of europe and uruguay, coupled with the considerable pressure on the economy. an increase in interest rates will be nothing more than a short-term fix. >> what do you think gasoline prices are going to be like by christmas? will we be paying $2.50 a gallon? could see a bit of an
uptick because the travel season. the overall supply and demand situation still favors lower prices going into the next couple of quarters. does it make even wealthy investors feel good about their investments? >> it makes everyone feel good about their investments. the greatest impact is going to be on the non-wealthy, the lower income wage earners in the u.s. it's a bigger bang to their buck to have lower gas prices. it puts more spending money in their pockets. >> thank you so much. we have much more ahead. silicon valley empires open up about whether companies are ready to jump back. uber gets a green light in
has done anarket about-face since alibaba. their -- planning putting their public offerings on hold. leslie joins us now. you've been talking to people in silicon valley and here in new york about this whole a shutdown of the ipo market. >> i was in san francisco last week and talked with bankers and venture capitalists appeared on
one hand, they are confident -- their confidence has waned. now that the market has hold off a bit, they are thinking maybe we should hold back a bit and wait in till is less risky. bankers are saying this is a resilient market in the companies looking to go public will still be able to go public and there will be an opportunity for them to go public. atpoke with jay moriarty bank of america last week. here is what he had to say. i think that resiliency will play out. we are starting to see some of that after the volatility of the last couple of weeks. goingsue were continuing is looking at the framework of their comparables and they are considering how compelling their story is. and their need to go this year. moreme companies have a pressing need to go public depending on their cash burn rate and other factors.
other companies can afford to wait. >> who is waiting one of the companies waiting? >> cash burn is a big issue for these companies. a lot of companies are getting access to later stage rounds of funding. they are doing quasi-you is by comeg late stage investors in and pump in $150 million rounds. quasi-ipos. an ipo the same thing as without actually reaching the public market. >> that might be a nice compromise. are valued aties $1 billion or more. our people worried about that? >> the most ever we have ever seen valued in a private market. partly due to the trend we spoke about in terms of these later stage funding rounds we are seeing. some people say this is a little nerve-racking.
companies won't make it. this billion-dollar valuations will be the death knell for them. they want to get a higher round of funding after that. last week, i spoke with ted and he seems more optimistic. >> i think you can get super excited or super scared at the same time. it is exciting because there is so much growth going on any lot of these companies have really substantial business models and are warranting these high valuations. at the same time, there are some companies a bit over there skis on these valuations. , a trickierpanies market for this company's. >> what about the fourth quarter? >> the big company is lending club. the peer-to-peer lender.
the first in its space to come out that connects bar worse were looking for rates that are lower than they would get on their credit card with institutional investors were looking to make investments. lending club. we will keep our eye on that. the other topat tech stories. tim cook says he is proud to be gay. -- writes a victory for uber in nevada. defeating an attempt by regulators to keep them from doing business there. they have already asked for a permanent ban against uber. eet the they don't m requirements.
using big data to try to predict home sales. the new product will be based on google trend information and other data. latest in tech and media every weekend. yesterday, fedg officials dismissed the global -- stephanie ruhle is focusing on what the end of an easy money means for bank profits. >> we will be sitting down with jimmy dunn. the banker to the bankers. we will find out if the market volatility we have seen, the announcement from the fed, what it's going to mean for banks. until now, the bounty of ipos has helped banks play on the offense of. more capital today than in 2008.
are we returning to 2008? we will be talking about that and more with mr. dunne. >> you guys talk to bank of america's ceo yesterday. what did he say? >> they are saying they always have to be nimble. whether we see a rise or things stay low, it will be fine for them. is the big positive for banks. it might not be a positive for investors. if you are bank of america people need to come to a bank like you to act as an intermediate agent. >> thank you so much. stephanie ruhle of "market makers." still ahead, drama unfolding in the argentine debt saga. a new and unlikely player to step on the scene. ♪
five are fighting to compel the government to reach a settlement with them. a new player has emerged, potentially complicate the matter. attend art is his name. -- ken d'arc is his name. >> he is a very wealthy billionaire investor. an air to a company started by his father and grandfather that make styrofoam cups. he is most famous for actually relinquishing his u.s. citizenship in the 1990's and moving to belize to avoid paying taxes. he is also developing something of a reputation of a so-called ultra investor. -- walter investor. vulture investor.
he has a pretty significant holding of the defaulted argentine debt. he never participated in the negotiations that argentina did to exchange their bonds for new bonds in 2010. he now has the potential to throw a wrench in this whole settlement discussion. >> he owns more debt than singer? >> it turns out that he does. he is around $595 million in bonds and singer is close to 500. everybody knew that mr. dar t was out there. the so-called gang of five may have been leading the public battle in the u.s. to compel argentina to pay them in full. they are the ones that pushed the company into default over the summer.
it turns out there are other investors, mr. dart and others like him out there who were also holdouts who never participated in argentina's restructuring. even if argentina settled with there are this group, these other holdout investors that they still have to settle with. >> there a waiting in the wings. >> they will be entitled to anything paul singer gets. argentina settles with mr. singer and his group, they can get out of default and go right back in because these other investors could come rushing forward. >> how does argentina get out of this? gethey would like to themselves out of default and andtheir good bondholders they need to do so in a way that political leaders of argentina can save face and say we did not
pay those american capitalists what they wanted. we got this for a cheap price. are two mechanisms for this to happen. the argentine bondholders could get together and vote to replace the trustee and move the entire bond amon process outside of the u.s. coldwould be out in the toward or argentina to launch a whole new exchange offer and offer to swap everyone's bonds for new bonds. that could potentially work . they could turn to negotiating with singer without having diluted his leverage. >> there is a repayment deadline today. >> there is one set of bonds and those bondholders could trigger an acceleration. argentina would have to pay out bond in full. we will see if anything happens. >> pour argentina.
they lost the world cup. -- poor argentina. today on "infor the loop." tomorrow, the chairman and founder of gilt groupe. one of the companies over $1 billion in value. is it finally ready to tap the ipo market? the science behind political ads. the ceo of via media talking about digital political advertising. all tomorrow at 8:00 a.m. eastern time right here on "in the loop." ♪
>> it is 56 past the hour. that means bloomberg television is on the markets. we are 30 minutes into the start of the trading day. mixed session with the dow industrials up 87 points. the s&p 500 off by two points. gaining while energy stocks are falling. dollar and you are seeing oil futures come down. crude oil down to $80.98 a
barrel. for more on the financial market reaction to the fed moved to and quantitative easing, we bring in steve from russell investors. gdp came in this morning. at a 14 year low. can the fed hold off on raising interest rates? >> i think they can. i think the fed has been moving -- the have transitioned into a more normalized environment. they have seen these data before we have and had a good idea where they wanted to be. there's nothing we have seen in terms of inflation that suggests the fed is going to deviate from what they said they are going to do. be looking at currency markets and the short end of the old curve to see how the market digests this. mid next year is where they would like to be.
the data continue like this, they will be comfortable and fed fundsa positive rate. they moved to the ecb in terms of what they do and how investors take their cue for what's next. >> he was very clear -- all steam ahead. qe in japan. airedf the bank of japan the european central bank has come to the conclusion they do need to do this. it is very difficult in the european context because in the u.s., if the fed wants to implement a quantitative easing, -- there markets are not nearly as sophisticated. they can't buy sovereign debt. the limitation in europe is going to be more challenging. >> what happens when the ecb meets next week? >> they are already starting to
buy debt. numbers will be determined. they will look for implementation methods. one month ago, draghi said he did not need german and french government to underwrite or cosign on loans. the debt they are looking at does not necessarily need to be sovereign in nature. creative.needs to be good volatility or bad volatility for stocks? >> normalized. high single-digit's. it's about 6.7%. that looks to be reasonably healthy. the volatility we are getting right now is more normalized. i think we should expect more volatility. if we finish the year up a bit, that would be a reasonable expectation. >> a stock pickers market.
>> it will be an active environment going into 2015. active management and multi-asset. >> thank you so much. we will be back on the markets again in 30 minutes. ♪ >> live from bloomberg headquarters in new york, this "market makers."oop >> the luxury retail scene is en fuego. >> a fall classic. why didn't more people watch the amazing world series? you are watching "market makers