tv Bloomberg Markets Bloomberg June 15, 2015 12:00pm-1:01pm EDT
of the government bailout but investors will not be cashing in. pimm: hillary clinton is officially in the race and jerry buss formally enters the race for the republican nomination. betty: carnival is betting big and green on europe, commissioning the largest cruiseship ever. ceo arnold donald will join us for an exclusive interview later this hour. pimm: good afternoon, i am pimm fox. betty: i am betty liu. let's have a look at how markets are trading, it it has been down across the day so far. the dow is off by 114 points,
the s&p lowered by one half a percent. some jitters in the greek stalemate. that is weighing, including a factory output also weighing on investor sentiment. over oil prices, we are seeing some declines. brent down almost 2%. and spears andts that continues to bring the oil prices down. pimm: let's talk about the selloff on the bond market -- actually steady. a little bit of a rally, people buying u.s. treasury's, perhaps on the news that greece and its creditors have not reached an agreement and are not even talking here it let's look at currencies, the dollar strengthens against the euro. the yen also strengthening against the dollar. the pound sterling posting a small gain.
let's take a look at some of the top stories crossing the bloomberg terminal. there was an unexpected drop in u.s. factory production last month. industrial output fell 2/10 of a percent. energy fell for her the third consecutive month and reports show the stronger u.s. dollar and decreases in fuel prices are holding back u.s. factories. the u.s. supreme court has forcingto back a law doctors to show women their ultrasound exam before undergoing an abortion. an appeals court said the measure violated the speech rights of doctors and the high court let that ruling stand. rescue workers in georgia are still searching for more than 20 people and a number of potentially dangerous animals missing after severe flooding ravaged the animal -- the area around the zoo. at least 12 people are dead, and 30 employees are among those who have drowned. but gas prices are up again
are rising at a slower price. the average price of a gallon of regular gasoline jumped three cents to $2.87. say it is the smallest increase in nine weeks. the highest race was in san diego, $3.62 a gallon. gallon in was $2.45 a tucson, arizona. jeb bush is officially entering the race for the republican nomination. the former florida governor hold a rally at miami-dade university, and he has probably raised a record amount of money already but conservatives have questioned some of his policies. we will have live coverage of the announcement set for 3:00 p.m. eastern. bloomberg politics will lifestream the event at bloomberg.com. betty: president obama as trying to persuade 100 fellow democrats to recap that are their votes.
it andrday, they ignored handed him an embarrassing defeat. house supporters will try to rescue the trade bill in another vote as soon as tomorrow. democrats opposed to the trade deal say he could hurt american jobs and wages. the head of the european central bank says the next move is up to greece. that theyit clear have to do something to break the stalemate. yesterday, talks down after only 45 minutes. >> such a strong, incredible agreement with greece is needed not only in the interest of greece but in the euro area as a whole. why all actors who need to go ball liesmile, the strictly in the court of the greek camp to take the necessary steps. betty: greek prime minister alexis burress says he will not give in to a european demand for
cuts. he will wait for lenders to become more realistic. watchdog wantss to see the creation of a global strategy to deal with a crisis which it says is the worst emergency of its kind its world war ii. they suggest world leaders have left millions of refugees in an unbearable state. in half has ever taken $1 million worldwide in its opening weekend until now. world"al's ""jurassic set the record over the weekend. this is the only second time that this has happened. pimm: a win in court for hank greenberg but no financial damages. the judge has ruled that the u.s. set illegal terms.
that does not mean shareholders deserve compensation. star international sought at least $25 billion for shareholders. the eight-week trial included testimony by former federal reserve chairman ben bernanke. betty: i want to go straight to washington for a quick update from bloomberg's peter cook. as i mentioned a few months ago, hank greenberg's office got the word about this decision through us and he is at this moment i believe assessing exactly what this teen. -- what this means. no damages, that is kind of a blow. peter: this was all about the money so this is a blow to hank greenberg and the other shareholders who are a part of this lawsuit. it is probably not the final word here it i would not be surprised to hear from david boys and hank greenberg that
they plan to take this to the supreme court, partly because the court had found the government overstepped boundaries when the bailout first took place. when they took the shares as collateral, the judge found the government did not have the authority to take shares in particular. the second part of this was damages and i will read directly from the decision. "in the end, the achilles heel was if not for the government's intervention they would have filed for bankruptcy and the stockholders would have lost 100% of their value." the bottom line, if the government had not stepped in the shares would be worth nothing so even though they went to bank far, hank greenberg and others could not prove they were damaged financially as a result because the alternative was they would have lost everything. betty: the stock would have gone
to zero and everybody would have lost out. when hank and i have talked about this case and i have talked about it with others, very likely whoever lost was going to appeal but i knew -- i do not think anyone game out this idea that hank would win and not get the damages. thender what this means u.s. government will do, if they even need to appeal. peter: i can tell you in the courtroom, this was a viable scenario. , theovernment attorneys justice department attorneys representing the treasury department and federal government talked about it openly and they sent to the judge, even if you think we made a mistake back in that crisis moment, they made the argument, you cannot find that the shareholders were hurt because the only other alternative here was again, their shares would be worth nothing. at least in terms of the bailout they got something for the
government stepping in. they get $.20 on the dollar or whatever it was back at that time. they made the argument that hank greenberg and aig shareholders should have been thinking the federal government for stepping in and offering this bailout because the alternative is even worse. betty: we are just showing aig shares popped on the back of this news. thank you so much peter cook. those are your top stories at noon. turning to politics -- look out for low-flying hat. hillary tossed hers into the presidential rank. later today, jeb bush is expected to do the same. clinton, in her speech, she channeled president obama in her wall street pay. >> you see ceos making record day but your paychecks have barely budged. while many of you are working multiple jobs to make ends meet,
you see the top 25 hedge fund managers making more than all of america's kindergarten teachers combined, and often paying a lower tax rate. pimm: with us now to look at what hillary clinton has to prove, out of the gate is a frequent guest, former congressman martin frost of texas. i am wondering if you could describe, based on your hearing of hillary clinton's speech, who is she running against? martin: she is running against the republicans. she has to hold as much of the base as possible. she cannot just rerun obama's campaign in 2008 and 2012
because it is not realistic she would get as large a turnout in the black community as obama did turnout fore a young people. she makes up for that by going after women. the republican candidate one the white female vote five of the last six elections. the only time the democratic candidate won the white female vote was in 1996, bill clinton's second term. there was a gender gap but minority women vote overwhelmingly to my craddick. -- democratic. votee could hold obama's and carry the white female vote, it will be very tough for the republicans. she has set the right tone. she is not going to be taken out by somebody on the left in the primary, and she will be ready for the general election. i think she is off to a good start. betty: i think that is a huge
point that you just made. , ison the republican side it jeb bush, who can fight her tooth and nail for the white female vote? martin: i do not know the answer to that what i will tell you this. my friends who are republicans think that bush is not necessarily going to sail through to the nomination, that the conservative element in the republican party will fight him. i think you will have a tough time against one of several midwestern governors. i'm not sure who on the republican side will be able to do that well on women. we will have to wait and see what they say. republicans have not spoken to women very clearly isn't though up until this point, women have gone in and by a small margin, voted republican. i harken back to my own family. my father was a very conservative texan and i have a feeling that my mother quietly went in and canceled his vote out her.
pimm: you are also co-author of "the partisan divide." what is deal inclinton's revising? martin: she is smart and she has closed out the prop -- the prospect that she can work across party lines. president obama has had a difficult time. has not necessarily been in his comfort zone. hillary will be able to talk to republicans and i hope if she is president, i am supporting her, that she will be able to bring republicans along on some issues. not on all issues. the situation we all know is the house is against the democrats so the house will continue. that senate is up for grabs. republicanwo as many
-- democratic senators compared to republicans. she will have to demonstrate early on that she can successfully reach out to people in the other party, and i believe she can. she's a tough, smart lady. betty: martin frost, the former texas governor and the co-author of "the partisan divide." pimm: in the next half hour he will bring you our exclusive interview with the ukrainian president. cash aabeling the bright. betty: ceo of the world's largest travel company is taking us for an exclusive look on the next generation of cruiseship he is commissioning for the european market, and social impact travel. pimm: we will also talk about alibaba going were netflix has not. it has bring that it is bringing its own streaming service to the
the s&p was down almost 14% and now it is down 4/10 of 1%. it is really m&a action that is bringing us back a little bit today and along those lines, we have a breaking story. over the last 20 minutes or so, cigna was interrupted in trading with a volatility interruption. it started trading again and you can see it now soaring, up 13%, and it has been up 20% today. there is a volatility trading cause. now it has released it for more training. anthem has come in with an offer. according to the wall street journal, and the has come in with an offer for cigna at $175 a share. 45 -- the $45
billion or $50 billion offer for cigna. a lot of m&a action today. we have had cbs, cox automotive. a number of other stories going on in automotive. on. story is going a chip maker story, but it really narrows down to dram. if you take a look at micron, it is down today. sandisk, it is down today. intel is up. morgan stanley downgraded these two because of bad channels. dram, famous for inventing does not really make it anymore. it is mostly cpus for computer chips ever since andy grove took over so they do not get hit by that downgrade. downgrading micron's price target to $21 a share so a complete about-face for joseph moore. doing the same thing for
united technologies says it is shedding the helicopter maker sikorsky, turning its attention to high-tech products for the aerospace and building industries. they said several months ago it was launching a strategic review of options for sikorsky with if concluded -- which it concluded was no longer a good fit for its art folio. -- for its portfolio. target is selling its pharmacy and clinic is mrs. to the drugstore chain cbs. they will run it as a store within a store format. the deal includes more than 1600 pharmacies. another shakeup at american apparel. a former cochairman has resigned from the board and that clears the way for american apparel chief executive paul or schnider
to take his place. they will seek another called ist -- jeffrey believed to be an outline of ousted chief executive doug harney. those look at our top stories. betty: the ongoing conflict in the ukraine is contributing to the crumbling ukraine banking system. spoke withchilcote the ukrainian president about the $3 billion russian loan to ukraine. my personal exception, that was not right her. -- aftered after the they decided -- you do not repay bribes, if you consider it a bribe? petro: no.
i think that will demonstrate the responsible behavior in this condition. pimm: talk about between a rock and a hard place. betty: indeed. he is dealing with currency turmoil. pimm: separatists. betty: a shrinking economy. pimm: the russian takeover of crimea, and the u.s. stationing various types of weapons and various military personnel in eastern europe as a result of russian aggression. isty: he is saying, putin living in a fantasy world when it comes to ukraine and what affect his involvement, his intervention, his interference in ukraine will need for the world. certainly, we have seen the side effects of this. pimm: the g-7 meeting used to be the g-8 because russia used to be invited. also, ukraine has to renegotiate those transit and national gas
the tolls coming from russia. it is not only, as you say, he has an ailing economy by a crisis on his eastern border and he has european leaders looking at something else a little bit to the south of ukraine as a crisis. note, i waslighter asking if you crews at all. pimm: cruise ships, no. i am going to wait for the report. goodbye, weu say will bring on the carnival ceo, arnold donald. he is introducing a new line call fathom that is social income -- social impact traveling. we will have that in a moment. ♪
bloomberg market -- market day. i'm betty liu. a win in court for hank greenberg, but no damages. a federal court has ruled the u.s. set in legal terms in demanding aig stock in exchange for an 85 billion dollar bailout during the financial crisis, but that does not mean shareholders deserve compensation. greenberg star international had thought at least $25 billion for shareholders. the united auto workers will begin formal negotiations with ford motor . the union's vice president says it is eking to close the pay gap -- it is seeking to close the pay gap for u.s. autoworkers. and in geneva, the un's secretary-general is pressing for a halt in the fighting in yemen when ramadan begins later this week. ban ki-moon calls for a
of at leastn pause" two weeks and he also said they have a special obligation to yemen. >> halting to the fighting in order to repair the schools and [indiscernible] a previous five-day pause was violated repeatedly and workers that it was hardly sufficient to get millions of aid to the world for his country. -- to the arab world's poorest country. during a brief appearance, joyce mitchell said she agreed to be the getaway driver, but backed out because she felt guilty about it. that is a look at your top stories this hour.
much more ahead on the program. the bull market is under pressure from an ongoing regulator crackdown. airbus ceo's says the maker of the fleet can keep up with demand. we will bring you that interview. and and i kind of gun maker, cold defense, is filing for chapter 11 bankruptcy because sales have not been with a used to be. colts has been in crisis after crisis. what is dogging this gun maker. and carnival just announcing a multibillion-dollar order for for next generation shift -- four next generation ships that could carry 16,000 passengers on one ship alone. it will be powered by liquefied natural gas, lng, the first ever
to do so at sea. with me to talk about this deal as well as the impact on social travel is the president and ceo, arnold donald. great to see you again. arnold: great to see you. let's start with the announcement about these four news ships. they are huge. it is a drive for a greener kind of ship. ,ow are you incorporating lng here? arnold: he will be full propulsion from lng, which is the first ever in the cruise industry. they are very large ships in terms of guest capacity. and they will be able to go to most of the ports in the world. we are very excited about the partnership with the german-based shipbuilder.
we will be building in the german yard and in finland. betty: does this add on other costs? these ships are far more efficient and they will contribute to sustaining the double-digit return on investor capital. we expect to see that in the next three or four years in our business. and these ships will certainly contribute a return on investor capital above the rate of the target we will be achieving shortly. very efficient, incredible cabins, wonderful public basis, lots of features for guests, and 6600 capacity, the largest ever in cruz history. betty: that is a lot of capacity. fit 6600ou going to people on one ship and not build a bigger ship? arnold: it is a bigger ship. it will be north of 180,000
gross tons, which is the largest with ever built. it will be able to get to most of the ports around the world, and that is the important thing. it will have plenty of public space. people will find it could be a great experience. will get to fathom, but with lng on board, will there be safety risks or further safety percussions? arnold: lng is common in many places. you have lots of buses and public transportation that uses lng, as well as private vehicles. obviously, there is some lng when it comes to port power. becoming a commonplace thing. obviously, we will follow all of the regulations we need to, but we would not be doing anything we did not think was perfectly safe. safe for yourly customers. arnold: and our crew as well.
betty: and your crew. i initially write you and because a few weeks ahead you announce this fathom,new line called which allows you to bring a new group of customers on board, people interested in doing good while traveling. you are repurposed in some of your older ships. they are smaller, about 700 people on board, to travel to the dominican republic and they can also do some good work. how did this come about? he came about from a broad concept of over 80 million passengers and crew per year on our existing nine brand. how could we take it vantage that human capital to do even more good than as a corporation we do through the multiplier effect and how charitable contributions, etc. we hired terra russell as a longltant, who has a history of being a social entrepreneur.
in the lastalysis 18 months to two years and now we have evolved that into fathom. fathom will go to the port of plataf -- the ports de region. and there we proven track records of impact. working in environmental areas, teaching english, helping in all kinds of ways. go to fathom.org to get the information. it's as important for the enrichment of the travel as it is the impact. the idea of systematic sustained, holistic impact working alongside those with a proven track record and transforming a community. betty: i'm looking at this ticket prices from about 1500 $40 per person, and this will be
a week long travel trip. $1540 per person, and this will be a week long travel trip. we you be able to make any money? arnold: absolutely. it has to be a win for the shareholders, so we do have to get a return. it has to be a win for the travelers, otherwise they will go. and it has to have impact, otherwise what is the point? we see this as an opportunity to do this good through a business model that is a win-win. remembere viewers may you and i did a titans at the c. we walked along -- titans at the sea. we walked along the veer ships and i know you are saying you moved your clo over to -- your clo over to shanghai because of the importance of this there. travelers, leisure
but only 700,000 actually cruise. and alsoagain over 30 a huge challenge. give me an update on china. -- it looks like an opportunity and a huge challenge. give me an update on china. arnold: china is going well. we will do over 4 million passenger cruise days -- on cruises next year. things are going very well. we are still at the tip of the iceberg in terms of meeting the demand. and i'll sue -- and as you know, we have memorandums of understanding with entities in china to help build method allanies and to look beyond of the other aspects of establishing a very successful cruise industry in china. betty: what is the next big thing we need to watch out for?
is it solidifying these joint venture packs with local operators? what can we expect? arnold: in terms of driving forward on those ventures and finishing those agreements, that is important to us. but also, developing for. all those chinese -- developing the ports. all those chinese guests need a place to go. even if they go to japan or korea or taiwan, those destinations have to be able to handle the number of guests and be able to deliver the guest experience that will resonate with the chinese and encourage them to continue to cruise. the next bigent is thing not only in china, but in the areas where the chinese would like to travel. betty: arnold, great to see you. thank you for joining me again this afternoon. arnold donald, the clo -- the ceo of carnival. families arehinese about to get a new source of
betty: welcome back to the bloomberg market day. i'm betty liu. now to some top stories crossing internal -- crossing the terminal this afternoon. warmer weather and a brighter economic outlook true perspective dryers -- buyers back to the market. gauge roseebuilders to 59 this month the strongest level since september. ibm says a play -- it plans to spend $300 million per year on data. it will help analyze data more .uickly
ibm hopes to attract more software engineers to use its big data tools. member of congress wants to spin off the air traffic control system into a nonprofit corporation. congressman bill shuster said that would insulate from medical interference and budget uncertainty. schuster is chairman of the house infrastructure committee and he would fund the air traffic controller feeds. and to the european market, a lot happening there and greece. here is word from london. aversion --rickets risk aversion in the market today. declined across the board, and of course, this is about greece. 40ks broke down after just five minutes yesterday. i've had phone conversations with friends that have been longer than that.
the attention now turns to the finance ministers meeting in .uxembourg looking for resolution by the end of this month, which is when the current bailout for greece runs out. the absence exchange was the worst in the world, down 93. it is greek banks leaving the losses on bloomberg's -- i'm sorry, the european equity benchmark. if we look at the bond market, greek borrowing costs have been moving higher. greece is the worst performing sovereign debt market this year, according to bloomberg indexes. you can see a flight to safety and buying german debt. and the euro has not only been declining against the dollar today, but against most other major currencies. xit, of theof a gre contagion. amid a record run in
chinese shares, beijing securities regulator friday laid out new laws to dole out easy cash to individual investors. these rules impose a financial ceiling of four times in the capital. the latest attempt in beijing to crack down on market leverage and sidestep a market crash. joining the stock market is this year's darling of investors, mainland chinese investors. has nowform of leverage blue to a record $358 billion in debt. easy cash on the shanghai composite surged in the past year, and the value of a company that is primary listed in china is worth more than 10 lean dollars. what is worrisome to regulators pacenvestors is that the
of change is not supported by fundamentals. beijing is moving to temper the rally, to avoid a spectacular implosion. betty: from boom to bust. let's get to olivia stearns. we are still down, but not as much as before. olivia: we are not at session lows, but the dow has wiped out all of its gains and the s&p 500 is trading below its previous gains. industrial stocks are leading the selloff. the once again talks over potential bailout of greece. datad get some economic out this morning that was disappointing, showing industrial production weaker than forecast. treasuries are rising, sending .ields lower
the yield on the 10 year right now is off by about four basis points. last week it across the 2.5% threshold for the first time in about a year. treasuries are trading at about a one-week low. let's show you what is happening on the banks. volatility of 10 percentage points today. tom keene would kill me if i quoted the fix in percentage terms. it is up 1.4 points. that is historically a very mild reading for the fix. e what is happening to commodities. gold futures are up by about three quarters of 1%. 11.88 per ounce. gold has fallen three of the dollar isweeks as the in turmoil. betty: thank you so much from
olivia sterns. 600 million chinese families are about to get a new way of streaming entertainment. alibaba is building china's answer to netflix and hbo via a .ew service it is due to arrive in august and may even compete with netflix, who announced plans to take its content to china. more.s here with beat netflix at his own game by creating your own. mark: according to the shanghai-based internet , i research, the value of china's online market byimated at 90 billion yuan 2018. they are trying to get ahead of the curve. betty: they are.
online is booming, primarily because so many own smartphones and tablets. it also with the chinese appetite, you've seen it, for films out of hollywood. it is insatiable. mark: but now they are looking at the branding aspect, the e-commerce aspect as well. a film and you see the glasses of the necklace and you say, that he wore that in a film, so it is saturated. you build on that. this asnd we think of competition between alibaba and netflix or the alibaba and hbo, but it is really a competition between alibaba and 10 sent -- tencent and how those two companies are trying to be number one in user growth and grab as many people as they can on their online platform. mark: alibaba is on a buying
spree. they want to be like the hbo and netflix of china, but if they keep buying several, -- buying stuff up, they will cannibalize the market. betty: and by the wake of a hollywood is not asleep at all. i heard bruce will is going to be in a chinese film. i don't know if he is speaking chinese or not in this film, but he may as well. these stars know where their bread is buttered. mark: i'm guessing john maclean will not be speaking cantonese or mandarin. ppy kayay" iny "yi mandarin? betty: i don't know, but someone will figure it out. mark: mark halperin is going to covering conventions today. and the airbus show, was to the
sold, $4 billion in sales. the zipper on division develops that game here in florida. acquired tiburon development. of now they have a slew blockbusters, like football, tiger woods golf, and nba live. ea after 15 years, a sizable diaspora has created a second-generation orlando game companies. helpsl that growth, ea the university of central florida launch a graduate game program, the florida interactive fiea.tainment academy, or if these kinds of activities
that give them real world experience before they go out into the real world like this. the former is executive tom carbone helped launch the program. we help them in the experience of making games. cory: and that kind of low-cost housing and inspiration has created a vibrant gaming committee in orlando. >> they see what is happening here and it gives them a different perspective. cory: cory johnson, bloomberg, orlando. betty: much more ahead on the bloomberg market day, including the airbus ceo speaking from the paris auto show.
-- mark: hillary clinton is holding her first big rallies of the day and jeb bush will finally make his candidacy official. when the trial, but no money. we will tell you about hank hank berg's lawsuit -- greenberg's lawsuit over the aig bailout. a gun maker is in bankruptcy. cold says the government is not buying enough and 16th. says the government is m-16's.ing enough ♪ betty: good afternoon. i'm betty liu. crumpton.i'm mark we been hearing wealth of talk about what is going on in greece. it seems a stalemate come down -- may come down to a meeting in the next couple