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tv   Money Moves With Deirdre Bolton  Bloomberg  December 13, 2013 2:00pm-3:01pm EST

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," start right now. ♪ >> welcome to "money moves" where we focus on alternative assets. we show you what investors are doing as well as what is going on and hedge funds, private equity,. real estate, and more. a new wrinkle in the fund manager case. he decides not to testify at his trial for insider trading. the head of an angel investor network will join us on the early-stage investment landscape. using social media and mobile webaming, the ceo of the video startup is going to be here. we're going to take you downtown to the lower manhattan courthouse. a gametime decision.
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that is what the fund manager's lawyer told the judge about a potential witness speaking in the insider-trading case. steinberg is charged with conspiracy and four counts of securities fraud for allegedly 4 millionre than $1. trading on tips. where do things stand right now? >> the government is expecting to rest its case today. it is fair to say it has not gone as they would have hoped. they did present strong evidence linking steinberg to inside information obtained by his former analyst at sac. however, his lawyer did a good job of creating doubts about his reliability as a witness. as you mentioned, steinberg made it official today he is not going to be taking the stand. that is not a big surprise.
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it does give us this is the case will be winding down in the next few days. cohen was never in the ward house, but his name comes up every other sentence. >> he has been referred to by the judge as the white whale. we know he was the main target of the case. however, he was not charged with insider trading himself. he maintained his innocence throughout. after listening to the testimony in the steinberg trial, you get a strong sense of why the government was not able to make a case against him. went out and horvatz of their way to shield what they were doing. in the instant message exchange, steinberg said i did not tell steve where you're getting your information. i made it seem like you are doing legitimate research. cohen did not want to discuss sensitive information over the phone. he did not want to discuss it on
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.-mail or im he said to call me over the phone. that might have saved him. >> if steinberg is acquitted, what does that mean for steve cohen personally and for sac? >> as we have seen the last few days, cohen is in the midst of transforming sac into a different company. the firm was indicted in july and pleaded guilty to charges it fostered a culture of incit -- insider trading. he is planning to turn it into a family office. he still has a case. the securities and exchange commission has accused him of failing to supervise his employees. they would like to bar him from the industry for life. he has made some indication he is planning to fight those charges. all of this remains to be worked out. his future still up in the air. he is clearly planning to live
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another day and keep trading. >> thank you for joining us from down him out -- downtown manhattan with the latest on the sac capital case. >charter communications may be prepping an offer letter to buy time warner cable. the price is less than $140 a share. alec sherman broke the story and is with me now. why is this letter so significant? >> it takes speculation out of the media and makes it real. this is a story i've been reporting on for months. time warner cable's stock has run up quite a bit since the stories started in june. we are getting to the point where if there is an actual offer letter made, even if it is a bearhug letter, basically a proposal to time warner cable saying what do you want to do with this, charter has a couple of different options. charter can go hostile and take the bid to the shareholders and
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say you decide, or it can continue to negotiate with time warner cable and try to get a friendly bid. >> this is about charter gaining leverage. >> charter wants leverage against tb networks -- t.v. networks. all cable companies do. content providers have been charging 10% more every year for access to their programming. it gets more expensive. that is why your cable bill goes up. more people are canceling cable. cable companies want to get bigger to push back and say you cannot keep raising your prices on us because our customers cannot afford it. >> you have been reporting on this for months. what does this need for comcast? wasored --was rumored to be interested in time
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warner cable. they want to see the terms of the letter that may come as early as next week. then comcast will decide if we want to continue to negotiate or work with charter to come up with a joint bid to split up the assets of time warner cable between the two companies. >> thanks, great reporting as a ways --always. >> a bipartisan plan cleared the house and now faces its final test in the u.s. senate. chief washington correspondent peter cook with me now with more on this rare moment of bipartisanship. is this small bargain a done deal? >> it is not quite a done deal yet am a but it is close thanks to the overwhelming vote in the house of representatives on thursday. almost an equal number of republicans and democrats. it puts new pressure on the senate to pass a budget deal as well. we just had two straight all- night sessions in the senate.
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there's is not a lot of bipartisan love in the senate right now. this is not a slamdunk. the senate is scheduled to take up the bill on tuesday. at least five senate republicans will have to join with democrats for the deal to pass. despite the strong gop showing in the house, high-profile democrats are lining up in profileion -- high- republicans are lining up in opposition. they do not think it does enough to bring down the deficit over the next 10 years. senate majority leader harry reid does not seem nervous about the outcome. he sat down with al hunt today for "political capital." >> it would be suicide if republicans did not pass it. it is a landmark agreement. not because of the size but because of what it does to the congress or for the congress and the american people. senator murray telling us she
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is confident they will get the 60 votes they need in the senate. if they do, the threat of a government shutdown off the table for the next two years. another debt ceiling showdown still looms in the new year. >> you have been reporting speaker boehner went out of his way to criticize conservative groups who want to oppose the agreement. does that signal a new approach from the speaker on other issues? >> this was john boehner, his views had run out. he usually has patients and does not go off the handle. he was really angry. he was not pleased these outside groups have gone after the deal before they even read it in some instances. i am told privately this is not a new tone from the speaker or change in direction. it was a one-off instance. democrats were encouraged. harry reid calls it a breath of fresh air. they are not holding their breath on a new, more moderate john boehner that has emerged.
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>> thank you. we will be bringing you an interview with senator reid and congressman van hollen this evening. we have a break to take. back, theme bankruptcy is the biggest in u.s. history and has big indications for pensions. digitally a company connecting top physicians to patients online. he will telling us how the affordable care act is affecting the development of new technology. ♪
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$18 billion bank is the is the largest in history. the filing has big implications for pensions.
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su keenan is with me. the city cannot raise taxes so pensions have to perform better? >> absolutely. could spell trouble for other cities. bankruptcy decision allowed the city to effectively cut its pensions. the shot across the bow for the rest of the nation is the reality of saving a city, when that is at stake, it means constitutional clauses protecting pension funds may have to yield. the decision is being appealed. while not binding, it certainly raises concerns. >> funding levels taking on bigger importance. >> especially in cities where they are underfunded like los angeles and philadelphia. it also focuses on what works. some invest in hedge funds. >> it is not a dating relationship. it is a marriage. there's due diligence. when a fund is selected, you're in it for five years.
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>> he is saying pension money is sticky money, the best kind a hedge fund could want. >> thank you very much, su keenan with the effect on the pensions of the detroit encrypted filing. that was the pension angle. we're going to turn to an angle about hedge funds. partner joins me. if you are on a committee for a pension fund, what does this mean if you are an investor in hedge funds? >> i think this is a shot across the bow for anyone involved with investing in hedge funds. you have to do whatever you can to enhancer turns. pensions come up with different expectations. hedge funds are looking at up to 8%. i think you will see more money going into hedge funds to enhance returns to the pension funds. it will happen as long as the
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expected return for hedge funds is a bug fix income. >> what are the mechanics? is it through fund to fund? another way? >> it depends. there is an evolution when they invest in hedge funds. the first is investing in fund to fund or using a consultant to help you by the largest hedge funds which tend to underperform others long-term. the third is building out your staff and investing in smaller to midsize funds. last is to incorporate hedge funds and not look at them as a separate asset class. >> the evolution and steps are interesting. what i heard is the big will get bigger with the new landscape, whether they deserve it or not. but and medium-sized funds are performing better. the big ones are still the ones that will get more capital. >> i think you will see more money going to small and mid long-term, but not right away. >> what kind of staffing
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requirements does that have? we do not pay people running pension funds market rates. >> that is something pension funds need to adjust. -- address. they need to pay to retain people. some of the major pension funds were revolving doors with people going out the door. they need to get high quality people and generate strong returns. >> that probably affects the performance of the pension funds. >> no doubt about it. it is one of the major problems. set up asset management funds separate from the university. pension funds should consider doing the same thing. >> canada does pay public ratesn workers market with the private sector closer to market rates so they have less turnover. what about from the point of view of the hedge funds?
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takingnd more are meetings with public pension fund managers. how do you think the hedge fund communities see it? >> they see it as a way to generate significant capital for their funds, especially if you are a large hedge fund. the positive is you can get a lot of money. the negative is there is strong pressure on fees. up 25% expect to give off your normal fee. you have to show more transparency. they're focused on fund terms. four 2008, a lot of hedge funds had lockups. today if you are a liquid fund, you will not get away with a lock up with a pension fund. >> you think fees will come down in general? >> no. i think the average hedge fund he is coming down slightly. the large pension funds are able to negotiate. >> thanks for coming in.
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he is the chairman and managing partner at age kraft partners -- theroft partners on detroit bankruptcy, the largest in the u.s. we are shifting gears to a renewed commitment to design that is help the big three come back from the brink. here are some overhauls contributing to detroit's bottom line. >> ♪ ♪
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investing come back, in mutual funds that mimic hedge fund strategies. the field is growing. the number one ranked manager is with us next. ♪
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mutual funds that mimic hedge fund strategies are becoming more common. hedged each will funds offer greater transparency and can be traded daily. ofh me now is the founder leader capital who has created assets that do that. they are the number one ranked short and intermediate term bond
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funds year to date. great to see you. good results this year. what have you done right? risks onided extension government debt. we feel corporations are a better bet than investing in governments. we hedged for rising rates using 10 year flows rather than libor flows. we made 50% on that alone with minimum risk. that is what made our year. in the past you have said s are asset classes to own even though they are expensive. why is that? >> they have done tremendous refinancing in the last five years. it puts them in a great position. labor is cheap. government just cannot seem to get it together. whether it is detroit or ukraine or italy or even the u.s.
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isi was going to say this the worst congress on record if you judge by pieces of legislation passed, with the most ineffective i should say. >> fiscal policy is a disaster to say the least. >> speaking of fiscal policy, let's go to the fed. you say they are not going to taper. there have been a lot of economists saying it could happen sooner rather than later. you are saying the opposite. >> you look at retail sales, target and walmart do not even report anymore. not sure what the numbers mean. what concerns me now is obamacare. it will hit people for $500 extra a month. that is a huge amount coming up right now. i think that will stifle the christmas season. europe,ned ukraine and
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economically and politically, it is a powder keg. confidencel affect as far as average spenders go. people will be spooked. >> no tapering. i do not think the fed cares about employment. i think they want a lower dollar to pay off the large amount of debt we have and give a boost to assets in general, whether it is housing, retirement plans, and so forth. i think they're looking for a low dollar. to do that, they do not raise rates. >> as some people call it, the race to the bottom. it is 26 minutes past the hour. it is time for "on the markets." olivia sterns has everything you need to know. >> we have seen sentiment turnaround in the past half- hour. stocks were higher. now they are lower. the dow is little changed the down by about eight points.
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the nasdaq is down by about five points. for the week, the s&p is on track to post the biggest weekly drop since august as investors weigh the odds of a possible fed tapering. more "money moves" after the break. ♪
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wheres is "money moves" we focus on innovative alternative investments. i am deirdre bolton. here are your bloomberg top headlines. qualcomm is making management changes. the current coo will become the ceo march 4. it was reported he was a candidate to replace steve ballmer as ceo of microsoft. the u.s. insurance company has partnered with norway's fund to invest in u.s. office
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properties. the venture's first investment is one financial center in boston. raise funds from taxes on oil and gas can petroleum field. qualify as real money. norway says it failed to reach the definition of currency and will be treated as an asset class subject to capital gains taxes. it is down this year but 500 million up to $1 billion in corporate invention -- venture capital is invested annually. for more on the early landscape, we bring in the founder of the life sciences angel network. very glad you are with us. you are focused on the early stage of investing. what are you seeing now? the life sciences angel
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network has been funded as a result of financing drying up for early stage companies. it was three years ago. >> since that time, you have invested about $3.5 million and seven companies -- in seven companies. >> correct. the breakdown is 60% in health care and 40% in medical devices. we do not invest in biotech. we like to say we do not do drugs. >> what kinds of companies do you invest in? it is more equipment. anythingequipment, that helps the health care system to cut costs. there are quite a few companies we talked about endlessly. >> one medical device caught my eye. >> it is an interesting story.
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it is a company, it was our first investment. two and a half years ago, we quartzy in courts -- because we saw the opportunity there. it was a new york company. they moved to westbrook and stayed there. >> it helps science organize their labs. perey have grown 200% month in terms of users. companies we invested in from 2011 and 2012 received full funding by sequoia. we have medical direct companies funded. >> those are some portfolio
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companies. vigor picture, you just alluded to the funders out west. i know you are functioning in new york. how do you see the biotech or equipment life sciences equipment space in new york versus philadelphia or boston or the west coast? it creates believe an opportunity. i think it is opportunities that make geography attractive for investments and growing companies. , it has beenuartzy a new york company that moved west. we will continue to fund it. another came up with technology to reduce costs on performing clinical trials in a safe, cost efficient way.
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the founders went to carnegie mellon and ended up in california. you should probably ask them why. >> new york has a venture fund for biotech? >> correct. it is a $100 million new york- based biotech fund. new york as a city has done a andto spur innovation create this ecosystem. investor, there are initiatives and investors. as a fund manager, you have a $100 million fund with a mandate to invest in your york companies. you have to do your job.
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you have to invest in companies based in new york. that means some of your choices are not good. i would try to stay away from restrictions because as an investor, you are all about returns. >> and freedom of choice. thank you for joining us. she is the life sciences angel network founder. we want to bring you breaking news on apple. we will get you out to the west coast. jon erlichman with me now with names,est on two big carl icahn and apple. what is going on? >> we know carl icahn has been pushing apple to make what you would see a better use of its with the billions of dollars in stock buybacks. we spoke with the head of corporate governance there yesterday. it is a large apple shareholder. carlaid were described
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icahn as a johnny-come-lately to the apple story. the context being that apple has its own plan in place to return cash to shareholders. carl icahn has responded to those comments from anne simpson i calpers telling trish regan am confused by why she is criticizing my actions. obviously, there are a lot of questions about where the large shareholders of apple will find themselves if we see this story continue to play out. we have not heard much from apple in terms of its view on carl icahn's position. we will continue to monitor for more details. that is the latest. jon erlichman,
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joining us with the latest on calpers, carl icahn, apple. it is a big story we will be following all afternoon. we will come back in two minutes with the founder of a startup dedicated to providing access to state-of-the-art medical information. the ceo of the health care startup will be joining us in a minute. ♪
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care focus now on health tech because the health care i.t. industry will be worth more than 56 billion -- $56 billion by 2017. tripp is the ceo and cofounder joining me from san francisco. state-of-the-art medical opinions from top physicians to the people who needed the most. our more people self-diagnosing? is that what is driving the business model. >> it is a great question and a big risk.
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people want access to information. they want to control their medical situation. the tools they use often tell them they have a cold or cancer. there is not a great personalized way to get access to health care until what we believe we are doing it grand rounds. get any kind of range, to your point. how are you making money? are physicians paying you, do people pay you a membership fee, how does it work? >> the majority of our customers are the largest companies who want to give their employees a great been a fit like grand rounds so they can get access to state-of-the-art care. they also want to control their costs. we have great doctors looking at your case, you get the right diagnosis with the right treatment at the right time. >> if you do go on as a patient with a question, is there necessity to build consensus
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from the experts on the platform? >> we go to the key opinion leaders. part of what we invested in was understanding the quality of the doctors we work with. % in thee the top .1 country. they are generally acknowledged by their peers to be the key opinion leaders. we do not find there is a lot of incenses building after the fact. >> i like what you said about 2014 be the year of little data. information, there is so much out there that it has to be targeted. i assume that is what you meant. >> i think in 2014 for the health-care industry there is a big data hangover. big data in health care let you predict things like epidemiological occurrences. that is great. if you want to solve the problem for one patient at a time, you
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need to look at their chest x- ray and medical history. you need to do that safely and security. we believe in an approach where every patient gets looked at individually by an expert so they get the best possible care. >> what has the affordable care act into your business? >> i think it is forcing a lot of doctors to think about what their practices going to look like in the coming years. servicesayment for will change from being a fee- for-service to value-based where outcomes really matter, we believe it has done a lot for business. the people who produce the best outcomes are our doctors. they're working to produce the best outcomes at these centers across the country. it has been a boon for us. >> thanks for the time. me, the ceooining and cofounder of grand rounds. we come back, the battle between
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broadcast and broadband. in two minutes. ♪
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>> first, bloomberg. to "money moves" on bloomberg television and streaming on your tablet, phone, and at digital is disrupting the world of broadcast. getseb video startup distributed across all platforms. it also sells analytics about how people watch video online. jay is with us, the ceo joining me from san francisco. thanks for being with us.
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how is it different from netflix? >> it is helping all kinds of media companies compete with netflix in many ways. netflix has its own original content and has been a streaming service for many years. as digital audiences are massing online, we are helping to arm all media companies to have the same kind of technology at their disposal. we are helping them to compete more effectively with netflix. your list ofg at customers. they include brands that we know , brands of content. yes p.m., comedy central. bloomberg. what do they want most from you? >> a think in general, the these businesses are beginning to acknowledge is data is power. they want to know as much as possible about their audiences. xbox one --ooyala provides the
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industry's most robust analytics when it comes to measuring consumption and audience. they are using those insights, that information to be able to make content decisions to better monetize and create advertising possibilities around that content and generally provide a personalization for every consumer out there. >> i heard you say data is key. do you see what is happening in visual media the same as what happened to music in the 1990's? >> i think in general there is a big difference. we may have a slightly different opinion than others. about thistalked combination or convergence between broadcast and broadband as being somewhat revolutionary. we see it more evolutionary. 10 years later, we're still
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watching primarily the same content we were 10 years ago. whether it is live sports, the biggest audience producer, or episodic television or feature- length films, the reality is people are watching the same things. the other reality is there is the same number of producers there always was. it is very expensive to produce original content. smaller,ides for a consistent group of content producers over the years. what is different is the living room experience is no longer the determining factor for television. people are consuming content where they want, how they want, on the devices they prefer. it is that proliferation of streams and the content available across those that is the difference today. >> basically you're saying content is king.
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the screen does not matter because we watch on all size screens. i heard you reference sports. for a live event, this is the category winner. it is clear numbers. t.v. dead? normal >> sports is the dominant factor whether you're talking about american football or european soccer or the upcoming world cup. those are seminal events. they are global in nature. they lend themselves to be provided across all the screens that matter, not just the experience in the living room, but your cell phone, mobile phones, tablets. there is a strong level of consumption across all of those screens. from last year to this year, tablet and mobile consumption is up more than 130%. >> we have to leave it there.
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thank you thank you, ceo of ooyala. ♪
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monday, an active-duty marine aviation officer turned entrepreneur will be our guest. he used google apps to turn his idea for a vitamin and energy shot into a thriving business that also gives 10% of profits to military charities. his company is called ruckpack. major dyer is our guest on monday. it is 56 minutes past the hour. it is time to get you to our newsroom. olivia sterns has everything you need to know on trade. >> returning to the auto sector, we want to focus on gm and chrysler.
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it was five years ago the company's combined for an $80 billion bailout. six months after that, the lights went out on the last auto plant in detroit. this is the story of how that plan came back from the brink to become a symbol of the u.s. auto industry resurgence. >> ♪ >> we are not in the nicest area of detroit. i want to take pictures on the on the way to -- work and reflect at the end of the year on the things i see. it was the only time in my 20- year career i got up in the morning and there was this incredible sense of uncertainty. i did not know if i would have a job the next day. >> it went down to one shift, down from three, so we knew things were getting pretty bad.
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enough to only be laid off a couple of weeks where others were laid off for months. pretty devastating. we did what it took to survive. we cut a lot of different areas. one thing you may not think about is somebody has to cut the grass. those of us who stayed behind, we had to do something. it is 283 acres in this facility. in some areas, it was above my knee. >> we were out there cutting the lawn. that was interesting. i do not do yard work. [laughter] i was with my union brothers and sisters. i was made management. we all worked as a team. >> ♪
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>> no one should be lower tiered. i learned to manage what we are id and complement it what -- learned to manage what we aren't and complement it from the outside. i rarely see my family. when i do, it is kind of in passing. there are sacrifices made. >> i got the e-mail right after christmas. thank you, jesus. that is all i remember saying. there are not many jobs paying what they are. it gets my kids through school. it pays the bills. >> ♪ >> we are manufacturing the jeep
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grand cherokee, the most awarded suv ever. we are doing it in the city of detroit with detroit employees. this is not a prime location to be we have a product that everybody wants. going through a old near- death extremes, there is a great sense of right. >> we are on the markets once again in 30 minutes. street smart begins right now. >> look at that beautiful shot from the top of the world cap -- headquarters, will the most important hour of the session. 60 minutes left until the closing bell, we're scouring every marker for you last rid of the day, and a first rate


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