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tv   Market Makers  Bloomberg  December 12, 2013 10:00am-12:01pm EST

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year will be the meeting and the post meeting statement wednesday afternoon. >> thank you so much. fred reffy. we are back in 30 minutes. "market >> from bloomberg headquarters in new york, this is "market makers" with erik schatzker and stephanie ruhle. >> wall street watchdog -- senator elizabeth warren on the volcker rule, breaking up the big banks, and how she would pay for her plan to raise social security benefits. it is a bloomberg exclusive. theking into hilton -- chain goes public. we speak with the ceo. ronassy campaign -- burgundy reinvents the way movies are marketed. will another film ever be rolled 2"? like "anchorman
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i am stephanie ruhle. >> i am erik schatzker down the and why -- the new york stock ofhange, speaking to the ceo hilton hotels, once again public, and aramark, all coming up. into a "markett -- the alwaysive outspoken democratic senator, elizabeth warren of massachusetts. she sits on the banking committee and is a critic of the big banks. thank you for joining us. you were pushing for a strict volker rule. did the final version go far enough? so many bankers seem to be breathing a sigh of relief. ani think the volker rule is
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important step in the right direction and i am really delighted to see they have gotten something out, and a big part of this will be what happens in terms of reinforcement, and also what happens in terms of litigation over the next year. how strong will the volker rule be when it emerges on the other side? that means we have to be vigilant as we go forward with it. >> in terms of enforcement and leadership, do you believe you and others in washington, d.c., to do a better job running the banks right now and the current ceos in terms of capital allocation, managing liquidity, and making moves that would promote long-term growth in our economy? asked out, i think what -- >> wow, i think what matters is we need regulators that are truly focused on safety for the entire system. we want to get the economy up, we want to get the economy started, but an economy that is built on loading up on risk and too much concentration in the
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banking industry is not one that is strong and sustainable. -- it isay i see this really the wrong frame to talk about how these things are intentioned. it is better for everyone if we can make sure the financial system safe -- stays safe. it is the responsibility of the regulators, and on the banking committee to make sure the regulators are doing their job. >> when you say better for everyone, when i look at quantitative easing, during confirmation, you were enthusiastic, but when i look at quantitative easing, who have been the positive recipients -- wall street. it has not been mainstream at all. >> the problem is we are trying to get out of a really bad financial hole, and the number of tools that are available to the regulators, the number of
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tools available to the government right now when the republicans are saying no, there is not a lot of things they will do, is very limited. we ended up with quantitative easing in part because the regulators were not doing their jobs. if we were doing our jobs, we would not have the crisis in 2008, and we would not be trying to use quantitative easing to shovel back out of it. that is why the questions i asked janet yellen about were focused more on whether or not janet yellen is committed to using the powers of the fed to make sure that the rules are enforced and that the risks are wound out of the largest financial institutions. that is why i continue to worry about too big to fail. you know, we sat here in 2008 talking about what brought on the crisis. it was brought on by the lousy mortgages, and also too much
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concentration in the banking industry. where are we today? the five largest financial institutions today are 38% bigger than they were in 2008 when we said there was too much concentration. they are continuing to take on risks. so, we still have serious problems in this economy, and regulation is part of what we have to see, a serious enforcement of the law. warren, given what you have said about the institutions come and your previous comment that the volker rule is a good first step, what does that mean? does it mean you still see the need to push ahead with something like a glass-steagall 2.0, and a restoration of the divisions between investment and commercial banking? >> i do. i think glass-steagall 2.0, glass-steagall for the 21st
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century is something we still need because it addresses both too big, and the risk associated with to sell. -- to fail. as long as there's this much risk and concentration in the system, i am still pushing for glass-steagall. i think it is what we need. >> senator warren, i'm curious, does it matter to you, does it worry you at all, whether the not? are profitable or you have seen the effect on profitability in terms of return on equity and that is an issue because the banks will have trouble raising equity to extend more credit to americans. do those things worry you at all ? >> i want to see a banking industry that is profitable, but i want to see an economy that an economy that works for middle-class families, an economy that works for people that want to buy a home and do not want to get cheated, an
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economy that works for people who just want a job, get out there and work, get a little savings, and put something away for their retirement. we have to have some balance in this system, and a large part of that is we have to have financial service institutions that are really serving the economy, not that are out there rolling the dice, taking on more risk, and getting bigger, and bigger, and bigger, and getting comparative advantages in their business model solely because they are big and because the marketplace believes hey, if anything goes wrong, the taxpayers will have to bail them out again. >> senator warren, when you talk about balance, it makes me think about your recent comments on social security. when i think about in balance, i think about our children -- in the next 10 years, between medicare, medicaid and social security spending, it will grow to $780 billion. the money we're spending on
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children is $20 billion. are you not worried about our kids? why should senior citizens be getting more money? >> of course, i am worried about our children, and i want to see more investment in our children. this is what we should be doing in the budget, making the investment in preschools have education, college, and refinancing student loans so that students are not crushed. we also need to build an economy that will produce jobs, jobs for the parents, and jobs for them as they grow up, but we cannot ignore the fact that we have a retirement crisis in the united states right now. we have a crisis, in part, because middle-class families have been able to save much less now than they did a generation ago, and the 2008 crash put them in a worse whole. -- >> not means test let's finish, what is critical social security is not
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driving our deficit. social security is a system that pays for itself. if we did absolutely nothing with social security, we would make payments for more than 20 years exactly at this level, and then they would drop by roughly 25% and pay forever into the future. i do not say that because i do not think we should do something, but what it means is we could make modest adjustments now in social security, take sure it will be there to pay on into the future, and if we make some more adjustments, we could see an increase in social security benefits for those who count on it. what we have to remember is right now, when we are in the middle of a retirement crisis, the last thing -- the last thing we should be talking about -- is cutting social security. right now, two out of three seniors relies on social security to keep a roof over their head and put groceries on the table.
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for 14 million seniors, social security is all there is between them and poverty. we cannot cut the social security system. >> senator warren, forgive me for jumping in. >> not at all. face asay seniors crisis, the people that have studied the budget recognized that we are facing an -- crisis. coverage be specific, what reforms would you use to address the entitlement crisis? >> social security is not creating a deficit in our budget right now or in the future, so let's pull that one out. that is not the conversation. if you want to talk about the crisis in medicare, and we do have a crisis there, the central crisis is a health care cost crisis, and the answer is not to say we are going to/benefits --
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cut benefits, because you can cut benefits, but people will still have heart attacks, strokes, diabetes, but the difference is they will go to the emergency room and get worse treatment at higher costs. this is where the pieces fit together -- the affordable care act will bring down the cost of health care. you asked me how to refine this, and the answer is that is part of it. >> why not means test -- 30- year-olds have less money than they did 10 years ago, and senior citizens wealth has gone up -- why not mean test? there are plenty of millionaire seniors out there. >> we built a social security system in which everyone paid in a certainurn -- for set of benefits, and we can talk about adjusting that, but that is with the court social security is about. what is key for me is we are not talking about cutting benefits. we are not talking about cutting
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benefits in social security at a time when little he millions and millions of americans rely on it. point.s to be the start >> but the tax hike will affect generation x. they will pay for it, correct? >> whenever we do with the social security system will help those that have social security now and if we did nothing, there is enough money that it could go for more than 20 years without making any adjustments in the benefits. if we make some adjustments, we make sure the social security system is there forever into the future, and when i say forever into the future, that means for 40, 30,oday who are 50, and people who are 20 -- that is the point, to build a long-term, sustainable system. we are not that far off of it. we make adjustments, get it to
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the right place, and frankly, that is what we should be doing. that is to be the center of the bull's-eye. that is where we need to aim. >> i will in member what you said, but you also said you would not run for president. in 2006, barack obama also said that. is there no circumstance in which you would run for president of the united states? >> i am not running for president of the united states. i am working my heart out every day trying to be the best senator that i can to fight for the people that are counting on us here. >> thank you for your time and commitment, senator elizabeth -- warren, join us exclusively on "market makers ." a look for jamie diamond will have to pay up again, facing a settlement. we'll have details next. an ipo as bigbeen as this one. hilton sets a record.
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this is "market makers," live on bloomberg television and streaming on your phone, tablet, and on ♪
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>> welcome back to "market makers." breaking news for you -- hilton is trading, the largest ipo ever , and it is already up 8%. erik schatzker will be speaking to hilton ceo chris nassetta, clearly a big day for him. i have more i want to cover here because it was five years ago this week that bernie made off's -- bernie made off's ponzi scheme was exposed. andrgan was the banker, there are claims they ignored the fraud. jamie dimon is ready to settle. dawn kopecki has covered jpmorgan four years. exactly what is jpmorgan accused
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of? what are they admitting to? >> we're not sure what the agreement will say exactly, but the bank is looking at conceding that it ignored signs and did not tell regulators what was going on -- they did not file suspicious activity reports, they knew internally, or highly suspected that this was a fraudulent ponzi scheme. the current chief operating officer actually said this in e- mails that have been releasein on bernietigation madoff. >> said what in the e-mail? >> that this was something the company needed to get out of, that they suspected was a ponzi scheme. he was not the chief operating officer at the time, he was the head of fixed income, and those concerns were never reported up to regulators.
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jamies settling mean dimon and j.p. morgan are admitting guilt, or could one fines, heave paid the wants to start 4014 without an overhang, and want to take all of the litigation off of the books? >> and he is willing to write a big check to do so. we are trying to confirm whether or not jpmorgan is going to admit the middle tilt. -- criminal guilt. we know they will definitely admit to a statement of fact of some sort. whether or not they will admit to criminal wrongdoing, trying to ascertain that, yes, because none of this is public yet. >> nobody inside jpmorgan has been named for being negligent, at the very least? >> i'd not think so, but we are awaiting details. we expect this before the end of the year. >> jamie dimon, one might say he is trying to clean house. dawn kopecki, always on top of
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jpmorgan, great story, covering five years since bernie madoff. when we come back, we will change the ways you watch movies and invest in ipos. amc theater chains wants to do both. we will have that next on "market makers." ♪\
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>> welcome back to "market makers." i am erik schatzker, here, as you can see, at the new york stock exchange, where two big companies are making their trading debut, and one of them foss, the ceoeric of aramark, which provides food to, among other things, stadiums. you must be thrilled.
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>> thank you for having us. we are very excited. timeis is aramark's third as a public company. it will be different this time around? sponsorsvestors and are looking to pay down some debt, the most important thing about going public is this will now allow us to be far more competitive in the marketplace, giving us more resources to compete and win new business, and for our employees, 270,000 associates, it creates great growth opportunities. five let's talk about the opportunities. you have heard the question, any kind, this is a fragmented industry. -- wille a consolidator you be a consolidator? look to the future, we feel comfortable with organic growth opportunities, but with that, we will be strategic with mergers and acquisitions as well.
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>> you are choosing your words carefully. everyone wants to know what that means. are you planning acquisitions, as you identified targets, or are you not at that point yet? >> we are always looking at what the target looks like, but for us it is important to focus on the core business, and as we laid out the algorithm, we feel comfortable with the mid-single- digit growth. mergers anded positions, but we will be strategic to opportunities that are presented. >> will scale help improve your margins? anyone looking at your statements recognizes the margins in your business are very thin, and operating income, net income, have gone down even the revenue has gone up. what can you do to bolster those margins question mark >> actually, -- margins? >> actually, we have come off of two record years.
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it has helped us triangulate and position ourselves to go public today. as we look to the future, our margins are a key focal point, as is accelerating the revenue growth, and as we look at the margin opportunity, we see continued opportunity across our $10 billion in addressable costs and we have specific plans to address and expand margins going forward. >> in your securities filing to go public, you identified cisco, a large food provider, as one of your biggest suppliers. is there not a risk in the lack of diversification in that you would be so dependent on getting so much of your food from one supplier? >> to be honest with you, we use cisco solely as a district gender, so all of our deals are negotiated by us. as a cisco fits in is
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distributor, which allows us to run a more asset-like business. it makes sense here and they are a good partner and will continue to be, but they really are a district or only pet -- distributor only. >> you are in anything from education, sports, corrections -- the vertical line you can draw makes a lot of sense, but you do gardening, laundering -- is there any point where you could see aramark focusing on just one of your businesses and turning other parts into a separate company? business.ocus on one at the end of the day we are in the customer service and people 270 thousand associates serving tens and thousands of -- tens of thousands of clients every day. we are in the customer service people business, and the core competence is all about creating
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a great customer experience. that is what we do across all lines of business. >> that is what every company tries to do. what is similar between food services and laundry, for example? >> at the end of the day, what wins business is the moment of truth excellence you create -- when you come in contact with the ultimate consumer, and you meet and exceed their expectations, you will have a great, viable business model. that is what we do regardless of what we do, food, uniforms, or medical technology equipment. >> you are a big provider of food service to schools. >> that is correct. xd you share the concern that summit -- >> do you share the concern that some have raised about the quality of food american students are getting? >> we are obsessed with quality. it is important to offer choice across all lines of business, certainly in education, making
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sure there is an emphasis on health and wellness. there is an initiative we are deploying across our sector right now. should kids in grade school, for example, beginning burgers, fries, pizza, and chocolate milk? >> our offerings meet nutritional requirements, and i think our products are of top quality with top nutritional value. >> eric foss, thank you. the ceo of aramark. i'll be back in a couple of minutes with the ceo of hilton, the other company celebrating its trading debut. >> i hope you have a chance to find out what is actually in the lunch school lunch meat. with you in a few, but for now, we need to talk about another potential ipo. investors will soon be able to buy shares in one of the country's largest movie theater
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chains with amc offering shares not just to bankers, but two members of its loyalty club. julie hyman has details. how rare is this? >> it is pretty rare. when is the last time you heard that you're customer loyalty card will let you buy shares question that this is not something that happens often or -- shares? that is not something that happens often or ever. 1.25%ill be setting aside of overall shares, so it is not a big chunk, but a chunk nonetheless. there are 2.5 million people in the loyalty club. >> how do we know that just because you go to the movies you are an equity investor? >> well, you are not, but you have the opportunity to be. they are just saying you can do it if you want. it is a well-known consumer brand. year to be a$12 a
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member of the movie club, and now you have access to the ipo as well. "despicable me 2" was a better deal than i recognized. talk about their competitors. trying to spend money on their theaters to set themselves apart from competitors. they laid out all of the different ways they are going to spend the money. seats,get big, lush coca-cola flavor machines. you will have bars in some cases anfull-service dining. >> theater upgrades. >> what is the difference between sitting on your couch with home theater that is high- tech? they are trying to offer this upgraded experience, the latest innovations in terms of digital theater, sound, and all of his other perks that make it very
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comfortable -- these other perks that make it very comfortable. >> every time i go to the movies, i cannot believe it is a $60 experience. >> i was speaking to paul sweeney, and he said attendance 1%, but overall revenue is up one percent -- 1%. prices are up, and enough people are still going. >> what is the timing of the deal? >> next week, and $18 to $20 is what we are looking for in the range. >> a lot of ipos have been going higher than the range. we will find out. amc. when we come back, we'll find out if investors have any reservations about this hotel chain -- hilton. they just went public in a big way. my partner, erik schatzker will be speaking to look and ceo
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chris nassetta. stay with us. ♪
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>> first. bloomberg. choice tont obama's be the next vice chairman of the fed, the former bank of israel governor, stanley fischer, according to people familiar with the matter. it is the only thing tom keene can talk about today, and you are not alone. everyone i have spoken to on the street says this is the man who knows what he is talking about. he was an advisor to bernanke and draghi. >> that is part of the team. stanley fischer was the academic at m.i.t.. mentora professor, the for governor druggie of the ecb
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of thernor mario draghi ecb and chairman ben bernanke of the fed. for your world, this is stanley fischer of citibank. this is someone that can move economicscademics of over to the tactics of finance and banking. i am asking you, many were worried if we face a crisis, can janet yellen handle it. the fact that we have stanley fischer in the seat, does it give more credibility? >> it gives credibility and confidence to chairman janet yellen. she has a team of people and a qualified stanley fischer around her. what is interesting is experience. intoben bernanke, going 2006, was a student of depression, but just that.
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he had to learn what to do. stanley fischer was the managing director of the imf, and he pulled the imf out of the asian crisis. he has done the crisis, so he will be there to do it again if he has to. >> do you think with stanley fischer we will get the taper sooner? >> that will be the salacious gossip. >> i love salacious gossip, you know it. >> i am not going to go there. he will clearly not be visited -- visible in the debate, talking about the dynamics. that is not the job of the vice chairman. he will be there to advise her. >> couldn't he help her have the confidence to take more definitive action? not publicly. he would do that in private meetings, abn an airplane, but he will not be given a speech to the economic club of new york
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telling janet yellen what to do next. that is not his style. >> he has said before with regard to forward guidance, do not give it. it locks you into not having flexibility. do you see a change in the communication we got of the fed? owns that high ground. that was stanley fischer of 24 hours ago. from that moment forward, you will not hear him talk about forward guidance. forward guidance, just to understand this -- how shiny as the crystal ball, how clear is the crystal ball? inis clearly contrary to academics, and that is for jackson hole. even at jackson hole, you will not see stanley fischer. >> people were mad about forward guidance. in bernanke said if we get to 7% unemployment, tapering would be done. here we are, and it has not started.
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will notnley fischer come -- >> stanley fischer will not comment on that as a vice chairman. he might have commented three days are over. >> he might not be commenting, but do you think the street loves and in a position to be a bit of a puppet master -- loves him in a position to be a bit of a puppet master? love him. this is truly an academic, and also a tactical economist, and when you fold on that his tenure at citibank where he had to work with bankers worrying about day- to-day affairs, it is a wonderful selection. >> real deal. i would say that, but anyone not let me interview him at the most. >> real deal, sorry michael mckee. we'll take you back to the new york stock exchange.
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my partner erik schatzker is standing by with the ceo of the day, hilton's chris nassetta. the company went public and shares are searching. >> i am here with chris nassetta. he turned hilton around and make the company a home run for blackstone and other investors. you have a bunch of new investors that want to know many things about hilton in the new -- and a big plans you have for the company. let's begin with the balance sheet and hilton owns 150 hotels. you have more fixed assets than other big competitors, starwood and marriott. your investors want to know will asset-sue a similarly light strategy? >> at the moment, 37% of the business is in the ownership that youthe 156 assets
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talk about. we have some iconic assets, dominated by the top 8, like the waldorf astoria. we love where we are in the cycle overall in lodging, and particularly in lodging ownership. while we are not growing that business from a new unit point assets, not buying new but we think there is a huge opportunity to continue to grow those assets of and to optimize value enhancement opportunities in some of the biggest assets. for the moment, we are very committed, because we think they're is huge growth in those acid -- there is huge growth in those assets. >> when you say value enhancement, what do you mean? >> there is an opportunity to think about the assets differently. that means potential for -- utilizings
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heart for timeshare opportunities, residential opportunities, and other things. >> timeshare at the waldorf? >> not necessarily. [laughter] you never know. you never know. >> you mentioned where we are in the cycle is important -- where are we? how long do they have to run before another downturn? >> we think we are in the sweet spot of the cycle. everyone likes to talk in baseball terms, what inning are you in, and we would say we are in the beginning or the middle, the fourth inning. why i say it is the sweet spot of the cycle is you are just getting to the point where you build your occupancy levels back in the growth going forward is dominated by rate increases, and rate increases drop at a high percentage to the bottom line, which gives you greater growth, greater margins. that is why we think those owned
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assets will do exceptionally well. a result ofel as what you just said you will have more pricing power in the years ahead? >> we do. absolutely. we do. >> where will he be two years from now -- relative from where we are now, how much higher could you be? industry talk to analysts, they are somewhere in the next couple of years of 4% 2-7%, and we would say that is a reasonable expectation. >> luxury and boutique hotels have done well. hilton is not as big in those sections as other competitors. >> we actually are pretty big. size.ative to your >> relative to our size -- well, the demand for luxury overall is smaller than upper scale or midscale.
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we have been the fastest growing luxury brands on earth. it is an important sector for us, but if you look at the nature of the business in terms of where you will see rooms growth and the number of hotels being built, for us and everyone else, it will not be dominated by luxury, but we will grow luxury as a percentage matter very quickly. meeting, the doubletree by hilton, and then we will focus on brands in lots of parts of the world. >> what are some of your other growth plans -- regionally, by segment? >> our growth plan is really simple. we talked a lot about this with investors -- when everywhere. we have the best brands in the business. we have a dominant marketshare. average market share of 115%. our view is if we are
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intelligent about how we deliver those brands and later those brands around the world, and adapt them to the different opportunities around the world, we can grow at an accelerating pace in good times and bad times. in terms of rooms under construction, we have 100,000, and 100% of that is with third- party capital. we are number one in the world in rooms under construction, number one in every region of the world, a very close second in the u.s.. in terms of the future and the opportunity for the company, it is very focused in new unit andth and the management franchise segment. if we are intelligent, and so far we have been, and we plan to continue to do that, we could have accelerating growth. eyebrows raised a few when one of its marquee new york city hotels discontinued room service. will that become the standard for hilton? listen,ecessarily, but
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the reason we did that was part of a reinvention for food and beverage at the new york hilton, and it was what the customer was asking for. customers in the urban markets want something different, much more casual dining, sophisticated grab and go, and a different approach to room service. we did not get rid of room service, it is the dirty little secret. if you go to the new york hilton tonight, you can order from the urban kitchen, and you will get a fantastic meal, well done, well delivered, at a better price, and, in fact, what we have seen is not only is it a more efficient model in terms of delivery, but this -- the customer satisfaction scores are going up the charts because it is giving them more of what they want. in the developed parts of the world, this forms a model for how we can adapt food and beverage. >> before we go, what is the
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annual budget for bed bug control? [laughter] >> i do not know the number, but we do not have a big problem with the bugs. >> i am assuming that you do not because you spend so much. >> we have not had any issues with bedbugs. chris nassetta, the ceo of hilton, a big day for his company, public on the new york stock exchange. we'll be back in a few moments on "market makers." do stay with us. ♪
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ronou may have noticed burgundy has been everywhere lately. paramount pictures launched a pr "anchorman 2"ore
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was released. sam grobart looks at whether we will see copycats. >> a movie that earned a nine -- $95 million is about to spawn a sequel that could be the head of the holiday season? >> that is the dumbest thing i ever heard. >> let's look at how it happened -- they came he called classic -- cult classic. >> we did. we all did. >> already, it is a marketing juggernaut. that's the new team is bad. sincethe year and a half, it has been announced, there has been a museum exhibit, dodge commercials, and even renamed a college. "anchorman" is taking things to another level.
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>> this is ron burgundy reporting for espn. and the director are no strangers to digital media. the comedy website, funny or die, makes more than $30 million ayear, and ron burgundy is character that comes along once a decade, and will ferrell is designed to play him. we can put them in the real world, and you love it at we and he is selling dodge, is -- has an ice cream named after him. you can see this marketing attached to other movies, but the strategy does not work unless you have the goods, and i do not know how to put this, but -- >> i am kind of a big deal. >> ron burgundy is kind of a big deal. >> that was sam grobart.
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first of all, how did you feel about this movie and the impact it has had? >> i do not remember that it came out. it was not an event at the time, but in the intervening years, it has become a huge cult classic that everyone knows the dialogue from, and here we are, days away from the sequel. >> the fact that it has been huge in the last nine years, but after the movie came out, nobody got paid for it. >> i do not know the deal that will ferrell had on dvd rights, but it has a long tail, and it has left us with this big moment. >> the preamble, i feel like i have been looking at ron burgundy four months. is there any chance we have fatigue? like some corners of the world have been talking about this,
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feeling it is too much, overkill, taking away the alternative appeal that "nchorman -- that "anchorman once had, but most are fine with it. >> the concern we have, will we see other movies do this -- is a unique two will ferrell and ron burgundy? he is a special character. >> you have this particular character, a particular actor that has given life to that character in a genius way. this, be aapply studio executive and say do the "anchorman" thing. >> not everyone can wear sex panther. you can. thisrobart, i might see with you. my husband will be the first in line. it is approaching 56 past the
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hour, and u.s. markets are a little mixed. the s&p is down slightly. the nasdaq is up just a share. we have to talk about lulu lemon. trish ryan had aligned -- trish regan had the line of the day, the story has long legs. the cfo said the fourth quarter is experiencing a soft start. lemoned a new ceo -- lulu named a new ceo this week. "market makers" will be back in a moment. we know you have been salivating like we have. we are talking about the -- celebrating just like we have. we are talking about the 12 days of bitcoin and matt miller has the name in silicon valley that has been betting on the digital currency. ♪
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live from bloomberg headquarters in new york, this is "market makers." votes vote whether to lift the ban on airline passengers cell phone calls. i hope not. buying into the bitcoin boom. what will it take to cash in? in theames are clearly fast lane. more gamers are playing on their mobile devices. we will ask the man before grand
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theft auto -- behind grand theft auto. way schatzker is making his back to the new york stock exchange. he just spoke with the ceo of hilton. hilton were up as much as 80% on the first morning of trading. the company's ipo was the biggest ever for a hotel chain. big bang say the global economy is poised for its fastest growth in four years -- big banks say the global economy is poised for its fastest growth in four years. they say the u.s. and u.k. economies will be stronger, while japan's might actually slow down. -- bytors are facing
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2017, farmers would not be able to buy the drugs without approval. the fda is concerned that antibiotics might be losing their effectiveness because of overuse. facebook's instagram is rolling out a new message service and will let people send photos and videos to specific friends. let's bring in cory johnson. what a treat for me that you are here. when mark zuckerberg bought instagram, people said, are you kidding me? a billion dollars for this? stock settled down, much of the deal was the stock. instagram announcing a new
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feature that i think is really interesting. it does not seem like a lot. the ability to send a picture to someone. the ability within instagram to keep ride at pictures, send them to just one person or just a view people. >> why is this so valuable? >> what is the hottest startup in all of technology? it is called snap chat. >> i argue that it is for sex stiting. >> i argue that it might be. you can send these pictures as well as have some more permanent pictures. they are responding to what is happening at snap chat and responding to twitter's success
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with direct chat. facebook is letting them develop this thing. you can have justin instagram experience and now a more just anexperience -- instagram experience and now a more private experience. facebook recognizes that instagram has a different usage than facebook itself. younger people are using snap chat and not using facebook. maybe instagram is their answer by keeping it separate. >> today, i read, the founder may be the best tech investor out there. he put $50 million. revenuecompany with no
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and no plan to generate revenue, it is amazing. it shows that in this market, people are looking for the next big thing. -- someone might buy it out. i do not get it, i do not like it, but certain people have been able to make money this way. >> people do not bet against him. runs -- see a guy who does it give him a lot more credibility? investors, they numbermoney, it is a big . you probably know the number. >> he runs five or $7 billion. >> it is an interesting investment.
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strategy, helio can get into this deal, why not? had the best social media experience of my life yesterday. yesterday, i took a ride in an $, five blocks, and i said, five blocks, $30. maybe, it is cold outside. happened? elliott tweeted back at me. moment for me. what does this say about social media? >> what does it say about how busy missy elliott is right now?
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>> never in history could you say, i will call up missy and see what she thinks. media is being consumed in a very personal way. twitter who started started blogger and sold that to google. it is interesting to see this personal expression the wide and small all the same time. i think it is kind of wonderful. >> missy, if you are watching, i would like to flip it and reverse it. >> mc hammer watches "bloomberg west" all the time. >> ok.
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thank you so much. such a pleasure. the story everyone who travels is talking about. the fcc is meeting this afternoon to vote on whether to allow passengers to talk on their cell phones while flying. there is a lot of opposition from travelers who want to keep the skies quiet. is the person sitting next to me going to be chatting on the phone on my next flight? it is the one place where no one can talk to me and i love it. >> this is not going to happen tomorrow. it is a process. today's meeting is a preliminary vote. you can bet they will get an air full. earful.
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a hearing on that issue is going on right now. before a congressional communications panel. tumblr is testifying and saying this is all about getting wheeler isut -- tom testifying in saying this is all about getting serious. >> i am the last person in the world he wants to hear someone talking when i fly about -- fly across the country, but we are a technical agency. >> the calls we are talking about would go through onboard specialized equipment, not through cell towers. it would be up to the airlines. it is interesting to see how many republicans that are pushing for regulation. lamarr alexander saying he is
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planning a bill to add this regulation. higher would have to three times as many air marshals to deal with the fistfights. he is anticipating some tension in the friendly skies. >> what can we expect in the public comment. ? >> a lot of members in the public feel the same way you do, stephanie. 69% saying no to voice communication. petition.white house if you take a look at the parties, they will be weighing in. unions are asking lawmakers to vote against this. toy say passengers are going miss safety announcements. one group we have not heard a lot from, the wireless
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community. bet and verizon, it will interesting to see if they way in. -- weigh in. >> we will be speaking with the congressman, bill shuster. he is introducing a bill to stop airlines from letting these people chat away. if you are bullish on bitcoin, you will want to listen. makers" onrket bloomberg tv. ♪
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>> biting big into the bitcoin through. d.c. firms have been eager to
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find opportunities into the realm. payments round -- he has invested in companies like alibaba. i want to bring in our own matt miller. $800 in cash of my own money. it >> a lot of venture capitalists are getting into this. fred wilson of union square is involved. adam draper is a big investor. >> a lot of legitimate backers.
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alex, what is your take? made anve not investment in a bitcoin company at. we think it has a lot of for transactions, commerce. however, i do not think bitcoin in its current format is a great tool for commerce. the volatility, it has been up and down dramatically over the last several months. it is very difficult to quantify the intrinsic value. currency,ason is as a it is a deflationary currency. there will never be more than 21 million bitcoins created. the value of the currency will increase over time. the dollar decreases over time.
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people are more likely to spend a currency like the dollar. >> it seems like there are so many opportunities. marc andreessen's investment just highlights that. >> i have seen those numbers as well. a sampling of the transactions. all of this is public information and we were able to look at the transactions. there are not very many commercial uses for bit point. we believe there will be over time. i believe there will be something built on bitcoin. concerned about the lack of regulatory clarity?
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if we cannot understand it, the government does not seem to understand that. >> there are concerns that it will be regulated at the state level, the federal level. are unwilling to work with bitcoin companies as a result. until we get to a point where the banks are comfortable working with these companies, it will be difficult to imagine this ecosystem flourishing. >> there is not a central bank. it is a decentralized system, an open source system. if you want to shut it down, you have to shut down the whole internet. >> it is one of the challenges and one of the great opportunities as well. have seen this before. we were one of the early investors in skype. it is one of the things that attracts us to bitcoin.
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it is not something that can easily be shut down. if it is shut down in the u.s. -- >> what if you come up with in terms with how to buy and sell this? i am on day four and i am looking at exchanges. the service often is disrupted. the customer service is horrible, they often ignore customers. >> that is a real challenge. wallet exchanges, merchant services, that is what we are evaluating foreign investment. it is difficult to buy and sell it going. -- bitcoin. they are working actively to
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address those issues. >> some of these big-time tech investors are not necessarily the leaving in bitcoin. what they believe in his disruption. they would like to see a big change in the way payments happen. maybe they are willing to take a loss on this just to move the needle? >> it is a great question. great point.t -- >> i think it is likely. >> likely! >> very little commercial activity going on. people are looking like this is a digital version of gold. i am not so sure it will have the disruptive impact. >> they want anything but the dollar basically. all you have to do is listen to financial news radio and every commercial is about how awful
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the fed is. people are willing to buy into anything like this. >> it is especially the case internationally. in the u.s., there is not a whole lot of reason to hold bitcoin. if you are living in certain developing markets where there is a lot of currency volatility, this becomes an attractive vision. >> we have to leave it there. is it a commodity or a currency? >> more of a commodity. >> currency. >> that is what makes the market. alex, thank you for joining us. when we come back, the future of the videogame industry. finally, something my kids want to watch.
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behind speak to the man the one and only grand theft otto. -- grand theft auto. ♪
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>> welcome back. it is the third rail of the venezuelan political scene. gasoline. now the president may raise the price. venezuelans pay six cents a gallon for gas. politicians raise the gas -- raise the price at their peril.
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price never raised the during his 14 years in power. but his successor is considering it. that is today's latin american report. it is time for me to take you on the markets. let's look at the u.s. markets, the nasdaq is up slightly. the s&p and dow are falling. airlines rising we have to talk about the two biggest gainers of the day. they both started trading today. raised 720 five million dollars. hilton raised $2.35 billion. both of them up 10% today.
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clearly, they have some mojo. it is a game changer. ♪
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>> live from bloomberg headquarters in new york, this is "market makers." i was down at the new york stock exchange speaking to the ceos of hilton and aramark. but i had to come back. >> without you here, i was messing everything up. to talk aboutg the future of visual media. he is the expert. the ceo of take two interactive
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software. you have seen it all, done it all. where is visual media going in the next five years? story isggest everything is moving to digital distribution and creation. interactive entertainment is the biggest growth area. with the release of new platforms and sony and microsoft, we have some clarity. there is a need for more collaboration? consumers decide what they want. >> everyone is becoming his or her own network promo after -- programmer. an appointed watch
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network or an appointed hour. a watch on netflix, hulu. >> interactive entertainment as it applies to gaming is pretty obvious. how will that change the shape of cable television or the film industry? >> the answer is maybe not so much. we like being entertained in different ways. i am not sure we need our music to match the motion picture to match the videogame we are playing. that can be a mistake. people want quality and excitement and something different. you want a variety of experiences.
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disney did great with lion king and some other titles, that they steve -- but they seem to have a unique feel. generally speaking, entertainment properties trust alone. propertiestainment stand alone. always surprise us, but after the fact, it always seems obvious. digitalyears from now, entertainment is not going to be the same as it is today. you have to make some decisions because you are defining the strategy for your own company. what do you think is going to change the shape of the industry and inspire the decisions? my -- i still
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think quality is what matters the most. the shape of an individual experience does not change. the hit song is still a three- minute song. i first spoke,n we talked about the power of the tablet. a lot of naysayers at that time. what do you see now that portends as much change as the tablet? are talking about content versus distribution. the form of entertainment content is pretty stable. what you are talking about is the underlying pipes are changing in a big way. the nature of our consumption is changing in a huge way. everything is digital, everything is mobile. >> is there any chance we are overdoing it on that front?
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are we forgetting that there are a lot of people that watch regular tv that go to regular movies? play "wordses not with friends". the truth is that interactive entertainment addresses all demographics. the biggest demographic for social gaming is female and a much older age than one might have expected. the median age of an avid video gamer is 37. >> nerd. >> what about visual technologies? rich, you feelso like you can put your hand into it. >> the holy grail is when it
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looks like a live-action. what will we do we have that ability? s look like that. within 10 years, the videogames will look like a motion picture. what we do with that remains to be seen. we came up with a title where the graphic approach is like a graphic novel. >> we will talk more about gaming we come back. we will return to this conversation. ♪
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>> we're back with our exclusive interview. we were talking about the future of visual entertainment. , the last time you were here, we talked about the fact that sony had just sold one million playstation 4. you cannot find them. the supply is limited. , these areal feel going to be successful platforms, which was my instinct and hope. --with future iterations guide, weory is any have a wonderful ramp up. we are developing more than 10
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titles for these new platforms. many of those titles will be released in our next fiscal year. >> will we see a record-breaking holiday season? >> they are managing their supply too tightly for that to be the case. leadant the excitement to and that is happening. i do not think the software array is broad enough. i think what you want to look to his next holiday season. that will be really exciting. these are not just holiday items . >> how long until the grand theft items -- the grand theft 8?o fanatics get to play unitshave sold 29 million . we sold the billion-dollar of product to consumers in three
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days. online has been launched. it is a standalone online persistent world videogame. >> walk us through how that works. >> you can upgrade. the game is free to play once you buy rent theft auto 5. once you are in the game, you can enhance the game. about the talking percentages. we are new to this. the key thing is the engagement levels are really high. we are not super focused on how much money we are making. we are already doing very well. we are focused on the customer experience. -- are youssible
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concerned about the fact that the momentum behind the new lap forms -- platforms makes the incremental opportunity smaller? >> to the contrary. >> there is a huge installed base? >> there is a wonderful confluence. people are consuming our catalog . we have a title up for next gen. it is poised for an explosive growth curve. inend not to engage hyperbole, but i could not think of a better aligning of the planets for us. the lay of the land, it is very exciting. >> people love the grand theft auto entities so much.
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could new cut a few corners? do you have to make it this extraordinary? people are going to buy it either way. >> i think we will just start mailing it in and see how it goes. good is the new bad. there are so many choices. the minute you start resting on your laurels, that is when you fail. you may not fail immediately, that you have broken a covenant with your consumer. all of our titles have the highest ratings in the business. >> great to see you.
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>> imagine a plane full of people yapping on their phones. i would rather they play video games. ♪
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>> the fcc could rule today to to talkane passengers on their cell phones while in the air. some lawmakers are saying no way. -- bill shuster has introduced a bill that would ban in-flight phone calls. he joins us from capitol hill. i hope this works out for you. if you allow people to talk on cell phones, i think it is unnecessary. we allow people to text and e- mail.
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confined space with many people, it will be annoying for the traveling public. it will be a huge blow to social discourse. >> a lot of people would argue that this could be a boon to productivity. give all those people to do some business. are you not worried about that? >> i believe people can text and e-mail and communicate quite well with those modes of communication. tap, don't talk. >> what is your biggest concern? discourse, to have 200 talking.d 50 people want a quiet, not chaotic
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situation. it adds to the chaos. flight attendants oppose this for that same reason. >> i do not understand what you are driving at. i take the train from new york to washington. phones.s of people on does not seem to bother anybody. different, apples to oranges. on the train, i can move seats. >> you can go back to the café car. the ability to get up and move. on an airplane, that is not the situation. >> why can't airlines make the decision? >> the faa has the final say.
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e public has spoken. it it wouldd it, come back as eight or 921 -- nine to one. >> i agree with you wholeheartedly. it would be massively annoying and inconvenient. when i think about what i'd need my lawmakers doing, i need them to care about entitlement reform, immigration, taxes. think that lawmakers time should be better spent on other things? thehis is another one of situations that occur that we have to deal with. number one priority in the congress should be on entitlement reform, spending reform. . absolutely agree with you
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when things come up that -- we have to deal with them. >> thank you so much for joining us. chairman of the house transportation and infrastructure committee. we will be back with more. ♪
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>> that is going to do it for "market make." we will talk with the chairman
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of aig tomorrow. >> it is 56 past the hour. we are taking you on the markets. >> thank you so much. with less than two weeks ago -- to go until christmas, we are looking at amazon. the company has launched a pr campaign to attract shoppers. the strategy will pay off. he joins me now with his slightly bullish strategy. this is not geared to holiday shopping, but more on where you think it is moving over the next few weeks. >> corrects. this trade would expire before the earnings report would come out. a good technical support levels, key support
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levels. what you need to know is this trade is that a base for amazon. of .52. beta i do not think it will see -- i do not think we will see paper next week. will at least stay above $350 by the third week of january. gets towards its earning report on january 29, but you expect some declines in the broader market because of capering concerns. that will not hurt your strategy. there.e are risks out the market does have a chance of moving lower. amazon is low correlated.
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commerce -- amazon's prime campaign is a big winner. the goal here is just for the stock to stay above that 350 mark. andhave $34 of wiggle move you could make 74%. >> what happens if the trade does go south. my wounds last week. when i run the numbers and i look at volatility and the support levels, there is an 85% statistical probability that this trade works. you can let this trade go. , iit does go against you would re-examine and i might
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exit. the biggest risks to this strategy? >> any sort of negative data coming from the retail space. the truth is, look around the country, there is still whether -- weather out there. this stock has had declining earnings expectation and the stock has continued to go up. jeff bezos is on a hot streak. >> as long as investors continue pass.e jeff bezos a recap his trade. joining us this afternoon with
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his options insight. we are on the markets once again in 30 minutes. we are looking at a stock market that is declining on this thursday afternoon. -- s&p 500 the yield on the 10-year is inching higher. ingot to that point back september. retail sales rose more than anticipated. lunch money is up next with adam johnson.
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"lunch money." menu --ke a look at the in politics, its war on the senate floor and it's not about solving our money problems. in motors, we have the new gm driver in chief as the profits accelerate. the new movie theater experience, amc reinvents the wheel with cozy and plush seats and service with a smile, there is a latest push to go public. how to turn bit coins into dollars. starting


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