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tv   Street Smart  Bloomberg  December 19, 2013 3:00pm-5:01pm EST

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♪ >> ok. we've got the market taking a bit of a breather after yesterday's sharp rally. the s&p on track for its best week since october. welcome to the most important hour of the segment. we have 59 minutes until the closing bell and we are scouring the market with your first trade for tomorrow and last trade today. investors liked the news yesterday. >> they loved the news. >> they seemed to be ok with
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it. >> the dow just went positive and is up all of about 17 points. so far so good. >> we'll take it. >> let's look at the big picture. the three charts you need to see now. i'll sew you the s&p. look at that. take a little profit after that monster day yesterday. we're practically back to the flat line. the s&p up 27% year to date and is the best year since 1997. it's hard to argue with the trend on this one. >> back to the 1990's. >> hello? looking at the 10-year, up three ticks. it's close to the three-year high we saw in september when it got up to 3% for one particular day so keep your eye on 3%. it's not just psychological but is in effect a three-year high. moving on to gold, the polar opposite. there's no bid for gold. down $40, 11.95. we're close to a multiyear low in gold. 11.79 was the low you saw in july. you go through there and there's not a lot you can point to for support.
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>> let's move on to the big three, the stocks we're watching heading to the close. julie is keeping an eye on them. >> let's start with oracle. the shares are up strongly after the company came out with a forecast in line with analyst estimates but looked like it was reassuring to investors. oracle like many competitors, grappling with the shift to the cloud and selling these web-based software-like services and seems like the strategy for oracle is working at least for now as it's been making a lot of acquisitions in that space. let's also talk about right aid -- rite-aid going in the opposite direction and cut its forecast and is being hurt by higher cost generic drugs as well as medicare reimbursement and taking a hit at 10%. facebook is down less than 1% but the company says between mark zuckerberg and itself as well as the board member mark an dreessen, it should be selling 70 million shares and normally would dilute the value
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for existing shareholders. facebook tomorrow is going in the s&p so various funds with benchmarks against the index and means they'll have to add it to their holdings. >> thanks, julie. on to the big story, everyone. you can call it the nightmare with christmas at target. a massive security breach involving stolen credit and debit card information for 40 million customers. in its statement, target says cybercriminals gained access to its information ahead of black friday and maintained access throughout the weekend. now, it happened more than you'd actually think. 7-eleven, and wet seal are just some of the retailers that have all suffered similar attacks. what should companies be doing now to protect your data? we have matt townsend, bloomberg news. scott shober, berkeley electronic segments and dan kamisky, white ops co-founder and chief scientist. one of my first questions is,
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was this data that was stored locally or on the cloud? by that, is the information sort of up in the atmosphere or was it actually on target servers on the ground? >> so there are very strong rules against taking this sort of data, the mag strip data and putting it in a central location at, say, harget headquarters. we have a thing called p.c.i. that says it's absolutely not a thing you do. >> it would be at target headquarters or in the cloud? you can't allow it to be in the cloud? >> if you look at it from the perspective, the stores of target are its cloud. they have all these machines out there all over the country. the question is, do they send this data back up to target? probably not. which means that any attacker who got this information most likely broke into all of the target stores, all of the cash
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registers systematically nationwide. >> it was information being protected essentially by target, not, say, by another service. >> by a centralized location or outside source? >> is that right? >> that's right. that's what we're hearing is it was target's responsibility to protect its data, not the card issuers like visa and mastercard, stuff like that. potentially, like he's saying, it could have been one computer virus that was able to hack into their point of sale system and get into basically every point of sale device to see all the swipes for, you know, several -- for over two weeks. >> that is scary. scott, how does it even happen? >> it shouldn't happen but if they let the security down, someone technically can come in with a u.s.b. stick in a terminal and load mall wear in there and affect and get through several of their servers and cause a huge problem, a virus that could cause this problem to be spread out throughout the united states throughout all target locations. >> is this, by the way, every target cash register is linked
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to a central source so you have the u.s.b. in just one of them and it spreads is what happens? >> technically they are all linked and you wouldn't think it would be that easy and it's a windows x.p. system and could you put in the malware and spread like a virus. they want the mag strip on our credit card that has the golden information about us as a consumer and take that and sell it on the black market and is worth gold to them. >> if i'm someone that shopped at target last weekend, i'm feeling violated now. you don't want as a consumer or as a company this kind of thing to happen. do you think this is going to be a wake-up call for other retailers and other companies across the board to say, you know what, we can't afford to have something like this happen to us or to our customers. >> yeah, i think so. for sure. they have to spend more money on security, especially protecting the point of service at the registers, number one. that's critical. they also have to rebuild consumer trust. i have a credit card there for target as well to save the 5%.
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>> you have the target credit card. >> i have the card. >> are you getting rid of it? >> we checked frantically to make sure we had no fraudulent charges. fortunately we didn't. you can check online. they encourage it, if you check with target's press release and check online to make sure you don't have fraudulent charges. call if there's suspicious activity so they can stop it immediately. >> isn't part of the issue a lot of the companies don't want to -- this is seen as a cost center. you're a corporation and you have to spend a lot of money to basically make sure all that information is secure. the downside is huge because if something becomes a problem, we're talking about it right here on the news and everybody knows about it and it's a nightmare. but until that actually happens, what incentive do you really have to spend the kind of money you need to spend to secure yourself? >> i want to be clear. there's a war going on out there, ok. 500 of the fortune 500 are dealing with massive scale
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intrusions. it's not a rare thing. it's a fight that's been going on for more than the last decade. that being said, there is some encouraging realities here. the value of the stolen credit card on the open market is about a 1/4. it's not dollars or hundreds of dollars. it's 25 cents because as it happens, the credit card companies, for all the fees they take, have some of the best anti-fraud in the world. so i'm not expecting to see huge amounts of fraud and thousands of dollars on 40 million machines. >> hang on a second. if it's a credette card, yes. if it's a debit card as a consumer you're in a different position. >> that's cash. >> you've got to go back and force the bank to reverse charges. >> it's harder to get your money back at that point. and in situations -- we've had that happen a number of years ago. it's difficult to get the money back. the credit card is much easier to get the money back but in this case it's harder for them to get the pin. possible but a lot more difficult. if they do get that, they'll go basically pull your cash out of your bank as quick as they can
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in small amounts so that way they won't be prosecuted and take off. >> i think the incentive is a p.r. nightmare. social media was growing up and one of my colleagues talked to a customer who was hacked and said they lost $500 that would go towards a christmas trip and they're postponing that. >> isn't there recourse? doesn't in theory target have insurance to make good on that $500? >> right. there's all the insurance whether the bank pays it or the card carrier or card issuers. so the consumer should be made whole. it's just confidence. why go through the hassle and you have to make the phone calls and cal cancel accounts and get a new card. >> what does target need to do? >> obviously they need to evaluate how the attackers got in, get a handle on the scope of the damage. and work to recover the faith of their customers. what i'm actually expecting in terms of the long term effects here, there's a thing called card present transactions that
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have lower rates, lower fees. i'm expecting those rates and fees to go up and affect small businesses. there's also been a lot of work towards improving the security of credit cards themselves, moving from mag strips to what are called chip in 10 or smart card systems as are used in europe. that was scheduled for 2020. at this point we have a greater than 10% impact on the american population. schedules may move up. >> thanks very much. we'll have to leave it there. coming up in insight for action. is the season for seasonality. find out what sectors are surging heading into the new year. from russian with love. we talk to a billionaire prisoner who has been in prison 10 years. find out why the russian stocks rallied in today's global outlook.
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>> 'tised season for seasonality. time for insight and action. let me show you what we're talking about. there's a seasonality to the way stocks perform. the team at stregis went to 1950 and found if you average the growth of all those years, you get a rise in december of 1.5% and another rise into january, call it about another 1.5%. we're right here and right on target. this is exactly where we're supposed to be and if history repeats itself, we have another 2.5% points by staying strong through january. it's not a perfectly straight line but pretty good. we can just stay long in the market or do a little better and figure out which sectors are leading the market and there are two so far in the month of december that are leading very clearly, materials and industrials, both up 1.4%.
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which, by the way, is double the next best. technology is up .7%. it's where you want to be. if we look at the charts they both look very good. here are the industrials. iyj the ticker, the i share for industrials. that's a steady, fine-looking chart. new all time highs along with the market. industrials, i.y.j. is the one sector to watch and the materials, i.y.m. is the ticker. a different chart and struggled and finally starting to break out and look where we are now as you look at the chart. you see that? we've had back and forth for about a year and potentially is setting for a breakout and is the one most exciting. enjoy the seasonality. a little happy holidays cheer thanks to our friends at strategis. >> let's get an outlook with 2014 with today's closer, the c.e.o. of greenhill and before that he was in the m & a unit
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at morgan stanley and a dealer at wachtell. what's the evaluation for companies as we move forward into next year? >> the companies, the strategic buyers will have more confidence in valuations and will be set by the fed and the market itself and means probably valuations come down over time and means interest rates go up over time and leads to more -- >> nerd, as rates go up you have to discount those future earnings to the future and will put pressure on multiples? >> exactly. bonds is a more attractive place to keep your money relative to stock and will be movement back and forth and valuations a bit down. >> as valuations come down, obviously equity investors don't like the sound of that. but in your business, in the m & a field does it mean we might see more acquisitions? are there people on the sidelines waiting for these
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valuations to come down? >> i think that's the case. not that the companies have a conscious view of waiting for the price to come down but is a subconscious thing, you're looking at a transition and looks too expense pitch. stocks you reported were up 30% and if you're an m & a buyer you have to pay the premium on top of that price. it will be better if values come down. >> will it be more fairly valued with the market potentially given all the q.e. we've had is nearing a high? >> yeah. look, i'm not one to predict where the stock market is going to go necessarily but do think there's a sense among companies and boards valuations are artificially high and have been driven to some degree by lower interest rates created by the goes away values will go to a federal reserve and as that more fundamentally driven level to drive more transactions. >> i'm curious, if i look at the multiples for a bunch of different sectors, energy, financials, technology, down around anywhere from 13.5 to
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15, actually 12.7 times for oil and gas, showing forward multiples, that looks pretty cheap. what do you make of those three sectors as possible m & a candidates? >> it's pretty cleep but you have to remember margins are at an all-time highs and interest rates at all-time lows and are driving valuations very high. i agree, p/e multiples are not that far out of line and health care and others will be active for m & a going forward. >> i'm curious to see if you agree with this. we've been talking about how there seems to be more clarity now. the budget issue is ficked for now in washington. people seem to be getting along a little better, at least we don't have the threat of a shutdown on the imminent horizon. and a lot of the economic data is looking increasingly better. does it mean, and you talk to c.e.o.'s all the time. are you getting a sense they feel like there's more clarity, enough out there that they can actually start doing some hiring?
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>> i think frankly m & a, full-time hiring and capital investment are all related. they're all about are you confident in your business and do you want to invest and grow your business? some of the facts as you mentioned are part of why the fed moved yesterday. we aren't going to have another government shutdown risk for a while. the growth numbers have been better and i think that will lead the companies being a little more aggressive about growing their company. >> how much has the government been a stumbling block in activity do you think within just the uncertainty created by the government? >> it's been a meaningful factor, not only the whole question, i think it's great they started to taper. who knows how it plays out or how quickly but it's great they started that. >> it's a positive sign, right? >> exactly. >> it shows the fed is more confident. >> it's a sign of confidence and the fact the budgetary thing wasn't the greatest, it was a baby step. >> it got done, right? >> ok. if we can assume the fed is more confident, why do you
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think it is, then, they're telling us they're going to leave interest rates at these incredibly record low levels for even longer than first was anticipated? is that sort of they want to give the market the best of the both worlds? >> i think there was concern what the impact of taper would be, even the most mild and gentle taper. if you think around late spring or early summer they hinted at taper. >> may 22. >> shut the market down very quickly. >> yields ran up 100 basis points. they were worried about that and did a baby step taper where they not only said we'll go well below 6.5% but look at inflation as well and if it stays low we might wait long tore raise rates and was kind of to downplay the negatives of tapering. >> scott bok, c.e.o. of green: hill -- green hill. coming up, russian president vladimir putin pardons one of his top foes who was formerly
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russia's richest man. plus nike's earnings coming up after the bell. "street smart" we'll be right back.
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>> this is "street smart" on bloomberg television. we're also streaming on your tablet, your phone and we're everywhere you were. time for today's global outlook. russian president vladimir putin going on a pmple r. pardonning binge saying he'll release some of the best known opponents of his regime. joined by our own matt miller to talk about it. >> it is a pardonning binge. >> easier to a cruel man to be kind than a kind man to be cruel. >> i had to think about it for a minute but i like that. he's pardonning a number of
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people. p.r., i don't know you said that because he's partonning the band known as pussy riot. i don't know if i can say that on air but just did. he is also more interestingly, khodorkovsky, the russian billionaire who usedo yukos oil and was jailed over 10 years ago. you're looking at pictures of him now. the last time i reported on this, i had more hair than you do. that's how long ago. and i didn't have to worry at all about what i ate. -- i think kodikian ski khodorkovsky looks better. he had been funding opposition parties and putin said no and proclaimed yukos proclaimed he had $20 billion in back taxes and caught khodorkovsky at a siberian landing strip and put him in jail.
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he has eight months left in his sentence. not that putin is being superkind but siting humanitarian reasons, saying his mother is ill and am guessing he got an agreement from khodorkovsky saying he wouldn't fund opposition to putin's rule. one of the other problems is russia has seen $400 billion since 2008 and freaked out international investors. >> not like venezuela seizing the assets of the oil companies 10 years ago. >> very much like that. >> you wonder what's next. >> you say to yourself there's no rule of law. you have basically a dictator in power who is willing to do whatever he likes to his enemies and doesn't matter about, you know -- doesn't care at all about justice. and this had really symbolized that and maybe now that it's over, we can see -- you did see the russian stocks. >> happening ahead of the olympics. way to go, matt. >> we'll talk about nike next,
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near a 62-week high ahead of earnings coming out after the bell. what's it mean? do you buy into this hype? triple threat next.
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>> we have a nike reporting after the bell today. it has become one of the most distinctive rents thanks to innovative marketing campaigns and associations with the biggest athletes. here is a look at the biggest milestones in its 50 year history. >> what made you the best player in the universe? it has to be the shoes. shoes. you cannot do this. can. can't.
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>> well, nike had a blowout quarter in the month of september and has unveiled its latest dividend and was added to the dow. 24 hours left to make a trade so is it time for you to get in? we will go to our panel. julie, we are starting with you. nike has unveiled christmas themed shoes for three very important basketball stars.
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sneaker --night he are any of them actually really special? >> that is the concern. manage this process well, it introduces a new shoe, the ghana have shoe and they'd -- the gotta have shoe. they do not have enough to keep out with the demand. these are the three shoes that james,ing out, lebron actually one of them should be kevin durant. and kobe bryant. all of them are going to be wearing them on christmas day and then they will go on sale the day after christmas. there are actually six issues altogether that are going to go on sale in december. they are supposed to be minted edition special types of sneakers. the industry in have been questioning, you know, if you have all of these shoes
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that are limited-edition, at some point do people catch on and say, well, they do this so often. said a six limited- edition. how many are they actually putting out and what are they charging? is very premium? >> they are not that expensive. it is just the cachet affect of selling the zen the resale value is quite high in many cases, -- of selling the shoe and the resale value is quite high in many cases. >> sam, seems a little gimmicky to me. does it work? >> one, the data we have heard of holiday sales in the athletic space is very high. the basketball businesses running up over the last few weeks. we understand in the high double digits, over 20%. the running business is very strong.
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what some of my contact said was that what nike is doing is offering more limited-edition shoes with less quantities. they are keeping people hungry all the time. so they are doing more but they are not putting as many in the marketplace. some of them are always bigger than others. the michael jordan shoes are on fire. are launching this christmas, they did a similar thing last christmas, are a way to spend gift cards the day after christmas. it is all very clean business. so we like what this is doing. >> forgive me. what was your thought? >> based on what the retailers spring 2014,r we're hearing the flow of it is a good product. >> there is always a danger, i mean, sneakers can be very much a fan. nike has listed the test of
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time, -- has withstood the test of time, as we have seen. you have upstarts. how do they maintain their supremacy right now when there is all of this technology? i know they are doing it as well but there is a sense that people want what is cool, what is new. how does nike stay on top? >> nike has managed that pretty well over the past couple of decades. art of it has to do with technology and innovation, -- part of it has to do with technology and innovation. the next phase of growth is going to come from apparel, converse, so not necessarily the nike brand. the goal is to get to $36 billion in sales by the end of 2017. again, a lot of the growth is going to come from apparel, women's apparel as well as the converse brand. >> i used to have a pair of hot
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pink converse sneakers. let's go over to adam for a minute and take a look at what the stock is doing. >> i bet they were hot. talk about hot, trish, we have to check out the chart. because look at this thing. it is very clearly an uptrend going back to 2009. look at the breakout we got. up 55%. tough to argue with that. the tricky thing, it is always scary when you get charts that look at this. you feel like there is no support. that is the home market. we are at a new all-time high. >> we will leave it there. thanks so much. coming up, from the streets to the bars of london, the bitcoin legal battle. stay tuned. ♪
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>> it is day nine, day nine of our 12 days of bitcoin. matt miller and his dog hit the streets of new york city. we were -- are we going to get steve? i hope so. to find out which local businesses except virtual cash. now matt and steve want to go global. where can matt miller and his dog -- wasallas steve's -- that
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day in new york city and he never wants to come back. he was like, where is the grass? where can i poop? i finally looked up and said am sorry, i am going to do it on the sidewalk. >> where can you go? >> you can go anywhere to spend bitcoin but i wanted to know where i could open my new business that accepts bitcoin. exchanging it for goods or services is probably the best way to get it, better than buying it or mining it. >> become a broker. example i offer massages. i will give you one for a bitcoin. >>q. >> you are a cheap date. >> there are regulations all over the world that are driving down the price, or up,
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depending, and in china it has become a problem. i looked at where we can use bitcoin for my new business. china is a problem. they have been on an ounce of the rampage as if they -- an absolute rampage as if they hate this freedom loving currency and they want to beat the light out of -- life out of it. >> sounds like if you are a believer. >> bitcoin is about freedom. china is not. >> he is a believer. >> they said banks can't accept it. any third-party software companies that want to help merchants can't use it and then they said the biggest exchange and the world can't use it. canada has been very accepting of it. >> of course. >> although only a few people live in canada, there is an atm in vancouver where you can get it done directly. i put the u.s. in yellow was kind of a maybe because you
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still have to -- there is a lot of regulation. we are at the very beginnings of bitcoin in trying to figure out how to regulate it. governments are trying to figure out how to get as much money as possible. that is what governments want. >> if it is currency, it suffers a tax. but as an asset -- >> exactly. that is happening all over the place right now. in norway if you want to buy bitcoin from you, and i give you my krone, you have to pay it back. >> if you recall, cyprus -- >> cyprus is such a small country. >> people were using bitcoin there. >> the university accepts it in exchange for tuition. southern europe has really grasped onto this. aside from the regulation, people in spain, a lot of them put all of their euros in bitcoin. in order to save them. the same is true with cyprus and
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greece. countries in the southern europe that have the most difficulty are the ones that who have embraced bitcoin. they did not like the old money. >> the problem is their banks are going to fail and those people do not like to pay taxes. >> the deposit accounts and cyprus were seized. >> i joked earlier but you are a bit of a believer. you think there are a lot of positive things. >> most people who delve into it and really study it, most people who read about it, most people that understand the movement and the people involved are believers. i have not met anyone who is not. >> you are about to. scott, do you think this thing has legs the accor >> i am like most of your viewers, which means i'm skeptical of where this goes. not to say it is going to go away. i just can't, frankly, imagine it becoming widely accepted. >> how can you have a currency
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that is not backed by any government in the world? >> happy new have a currency the central bank can't devalue -- how can you have a currency that a central bank can devalue? how can you? >> we have a few more days to go. >> we have a few more days of shopping for last-minute shoppers like me. i am guilty of this. it is easy to take overnight shipping for granted. you don't realize what happens behind the scenes to make it possible. check this out. this is the biggest challenge i have had in my career. toare looking at trying build the most efficient network we can. smith.going to see mike >> it will be about 40,000 additional packages. >> it is a challenge. you have so many variables you
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have to deal with. it is controlled chaos every day. controlled chaos. we move more than 2 million pieces in one night. weather is a big issue. we have a debriefing every morning and they tell us what they see the next one in four hours. our guys are better than the local weather folks. our mission is to said the plan to keep the packages delivered when they are supposed to be. to that we will react based on what is going on that day. last year, the wind shifted. runway operating. which was a tough operation. based on what is going on, we will be working with the region to come up with the right solution to the problem. every peak season is a little bit different.
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something will happen and we will react to it. we have to. we have no choice. everybody will come together. it may not be that big but it could be anything. we have to deal with it. that is basically it. we are good to go. >> all right, take a look at this, what qe really did in those markets. we will explain that in chart attack. we will be right back. ♪
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>> time for chart attack where we show you a chart that will make you smarter. we are not kidding today. scott is the head of deals making. there are a lot of ways to spend
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money. m&a is not necessarily one of them. >> that is right. the chart was created by a woman in my office who is from vancouver. on christmas i'm going to send her on a mission to find that atm. matt is a believer and maybe i will be, too. analyst onnding his christmas day. we know that banking is tough. to the bitcoin atm. >> ring in the camera here. talk us through this chart. m&a volume is way down. what is going on? >> here is what is happening. a lot of it is what is happening with qe. every dollar american and european companies spent in dividends and buybacks, they spend four dollars on acquisitions. right now, they are spending about $1.40 on acquisitions for every dollar on dividends. even though you would have expected in the economy companies would cut back, they
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have actually grown it while m&a has dropped. >> it is curious, you made the point in some of your work, your realizede shrewd cfo's they would be rewarded and investors would buy their stocks if they paid the dividends and buybacks. that is in part what was causing the move. >> exactly. when qe drove interest rates to low levels, there becomes a search for yield. they want stocks to pay dividends. cfo's figure that out quickly. stock and i pay dividend. and those who do not figured out get inactive a shareholder who shows up at their door. even if you are microsoft and apple. >> especially these days. scott, you are sticking with us. next, the closed. -- the close. we have the top 10 stocks you need to know about.
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>> ok, if you missed everything happen today, right now we are going to get you caught up. it is time for the top 10. number 10 is oracle. sales and profits were in line with estimates. the company is seeking to sell web delivered software. larry ellison has revamped his database and has acquired about 100 companies over the past decade. >> ride aid to dropping 10% today. it is lowering its guidance. it expects to earn $.23 a share at most, that is down from an earlier production --
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prediction. highly promotional selling environment in the front end of the stores. >> number eight is astrazeneca. it agreed to pay $4.3 billion to buy a stake of a company that makes diabetes drugs. the new ceo has been trying to revive business. nonetheless, the stock does not react. number seven, pier 1, jumping five percent after reporting income climbed 13% as customers spend more during their visit to the store. the company is also raving -- raising its quarterly dividend. six cents per share from five cents per share. a good place for [inaudible] >> hershey, shares are up .5%. who knew there was a chinese
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company named shanghai golden monkey? hershey did. hershey looking to gain a stronger hold in china, which is one of the fastest growing markets for sweets and everything else these days. tesla, fallingis almost five percent. it is being reviewed over batter related files --battery related fires. shares have plunged more than 25%. ago, with bitcoin around 1000-1200, somebody bought a tesla with bitcoin. >> that was a smart trade. 50% off. >> wow. benefit to bitcoin. >> another beneficiary. at 330 lastaded night? >> in china. an exchange or you can't get anything besides u.n.
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i should point out the tesla dealer only some dollars on that. there is a company called bit pay that holds the foreign currency risk, and it has been a bad risk. >> do they get compensated? we know it is a very big risk. >> i will look into it. >> we have like four more days of bitcoin. number four. reporting second quarter revenue that surpassed estimates. conagra is reaffirming its >> target. carnival is up today. carnival beginning to win back passengers after a string of beenents that frankly have very disastrous. the only way to say it. >> general electric is number two. profite projecting growth as manufacturing units,
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earnings will grow at double- digits but it will have to rely more heavily non-manufacturing. -- more heavily on manufacturing. >> nike's shares are down ahead of second quarter results. its has been stepping up strategy. 11 new shoes coming out in 30 days, including three signature christmas edition and three other signature additions. here is the close right now. the s&p just off the barely. the dow jones industrial average ending up almost 10 points. taking the to be tape are very much in stride. this is on the heels of yesterday's rally. we want to get some context -- context. >> it's looks like a record close for the dow. definitely a record intraday. just enough to meet that level. what you had today was sort of
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the aftereffects, the digestion of the tape are being announced yesterday. one of the effects of that is that treasuries, yields about a three-month high. so the worst-performing group today was utilities because this tends to be an interest-rate sensitive group. it tends to carry a lot of debt and second of all has high dividend yields. you see some sort of yield competition. utilities is the worst. another index we notice trading some all caps, not performing very well today. in the wake of the fed yesterday. the index was up yesterday but then pulled back today. i also want to mention the gold effect. we have been talking about that. gold has taken a hit because of all of this paper talk and then the tape are actually being announced -- taper talk and the taper actually being announced. >> gold has been a disaster.
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>> because we have bitcoin now. >> exactly. is a lot easier to spend a million dollars worth of bitcoin, i was going to say china. >> is true that. >> to china, for basically no transaction fee and instantly. how much would it cost to send a million dollars worth of gold to china? how long would it take? >> god only knows. >> maybe it could be delivered with a drone. adam, what do you have? >> after a 100% rally in 2013, some insiders are selling. mark zuckerberg is selling more than 41 million shares. he is trying to pay taxes after stock options. mark andreessen also selling and facebook is selling about 27 million shares. it could bring in three point 9
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billion, based on yesterday's price. it was down about $.50 and this comes a day before facebook is joining the s&p 500. $3.9 billion sounds like a lot but that is less than three percent of the market cap of the stock. impressive it was only down $.50 today on the news. >> this is kind of smart timing because when it joins the s&p, the people who have mutual funds have to buy facebook stock. that could offset any of the effect you see from more shares coming to market. >> good thinking. you should see if they are hiring a treasurer. >> cfo. even though it is only three percent, it is a lot. zuckerberg, 41 million shares, that has to be just shy of $2 billion. i know he is going to pay taxes on a lot of it but --
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>> mario making the point earlier, the company is making a lot of money. >> you are watching surveillance this morning? so was i. he was guessing. roughly 1000 shares. i have a story about another big man, barry diller. match dating services into a separate business, setting the stage for a spinoff. the new venture will include as well as, which is a legislation of thing. it has -- which is an educational thing. it has done this before. as homefor mainly known shopping network -- formerly known as home shopping network here at >>, who has been on it? >mib only person?
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-- am i the only person? i think i still have a profile on it. i had a lot more hair. >> was this a sincere matchup? >> i recall them being semi- pleasant dinners. >> matches a hookup side. -- match is a hookup site. >> this was a long time ago. >> i forget. of these disparate properties. it makes sense he is trying to, i mean, first to put them all together and then you try to figure out what makes sense. >> yes, spin it out. >> you have, people get married and have kids and they use is that the idea? tofirst they use daily burn get in shape and then they have kids and then --
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>> and then they start to buy on hsn and qvc. atand then they go to eat red lobster. here we go. the casual dining industry has been shuttling and now it has claimed a casualty, red lobster. it plans to spin off or maybe sell. it has not decided. is to boostplan shareholder value. red lobster has 705 restaurants in the u.s. and canada. annual sales of 2.6 billion dollars. he also announced it is going to suspend openings of new all of gardens for the foreseeable future. people are sort of skeptical of the strategy. you look at the existing business, the business that remains, the specialty group which has crap the grill and you try to figure -- which has capital grille.
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you try to figure out how to evaluate this. been pushingave for this change. separating all of garden and a red lobster into 1 -- olive garden and red lobster into one. >> that would make sense. used for the specialty -- you put the specialty. >> and the fast growing. has the biggest portions i have seen never in my life. that is why i have to join downd wiring have been five quarters in a row. >> and you have shrimp inflation. people take advantage of that. >> and the user live lobsters. did you -- and they use live lobsters. did you know that? they kill them right there. >> that is what happens in a restaurant, my man.
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year, people came to gamble. the big apple is the hottest tourist attraction, a casino in queens. it attracted more visitors than the empire state building, the statue of liberty, the metropolitan museum, this is according to wnyc. the 35,000 people trying their luck every day. -- resorts has been a moneymaker for a lot of people. >> trying their luck. guess what, they are going to be unlucky. >> i'm guessing it is not just taurus. -- tourists. >> in other words, not necessarily unique visits her day. you come back a couple of times. you're going to be double counted. rish, what do you think? i want to hear your opinion. personal opinion. >> i think that is what excites
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you, that is what fun, you should be able to go and gamble your money just as you would in bitcoin. >> libertarian side of me agrees with you but i see is as a tax on the poor and stupid. because it is. if you look at the numbers, it is. the poor go there to lose money. >> they're going there for entertainment. >> they interviewed some people him the casino and they spoke to a nurse who had lost $400. ambling and she is now a regular. so it does tend to -- gambling -- she is a regular. so it does tend to take their money. >> you might otherwise say i'm going to buy a lot of lottery tickets. underprivileged region of the united states and walk into any lottery. >> it is very sad. >> you will see lines.
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>> you are going to spend it one way or the other. people like the idea of promise. you put down a couple of bucks and you may walk away with $2 million. or you play a few hands of blackjack and you might walk off with a lot of money. >> it is a game of chance and it is entertaining in the process. >> the house always wins. >> not always. i have a documentary, you guys will meet a guy -- >> is it called the audacity of hope? >> who walked away with $15 million going back to. $50 million playing blackjack. how he did it.ut >> he did not cheat. >> it is a great story. he is a very intelligent guy. >> he figured out how to play the game. so every year thousands of redditors participate in a gift exchange. one lucky 24-year-old discovered
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her secret santa was none other than mr. bill gates. so what did he get her? a cow. a cow. a stuff cow, meant to represent the real cow he donated in her name. this is a charity that donates livestock to poor families. her response was that she wrote a blog post that said "sorry for the ipad on my wish list. that was really awkward." >> that is classic. if she had asked for a surface, i bet she would have gotten it. she did not know it was bill gates. >> i think it is great. best story i've heard in a long time. athletes, pop stars, supermodels. the newest members of ari emanuel's entourage. ♪
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>> time now for the scene where you -- where we bring you the business behind pop culture. consolidating his power adding justin timberlake, peyton manning to his entourage. his company shelled that $2.4 billion along with silverlight two by ning, with what -- buy ing. could this be the one talent agency to rule them all? here with the details is cristina alesci and dominic romano. 2.4 billion dollars. sounds too low. maybe.ou,
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it is actually a good price. there were other bidders in this auction. to be honest, a lot of them did not think the company was worth that much. on the seller side, they were adamant about getting north of 2.5, even two point $6 billion. this is an impressive price for the sellers. they got close to what they wanted. a lot of people will look at this on the face of it and say this is ari emanuel doing the same thing he has done before. he took his agency endeavor and combined it with william morris and took out a lot of overhead. and became a more efficient business but ing is a different company. >> one is hollywood and one is sports. >> not only that. ing is in the content business. it is not about selling people or getting a cut off of their salaries. it is about selling content. that is why ari likes this. >> you think back to the william
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morris endeavor merger, there were some conflicts of personality, just like you would have in any merger. and i just wonder if we are going to see a replete of this. >> i would be shocked if we did not. has huge implications. first of all it is international. we are talking about an agency , fiveas 1000 people offices, most lee -- mostly in beverly hills and new york. in contrast, the other company in 30 cities. we are talking about international -- >> the target is actually bigger. >> much bigger. in revenues. a huge international presence. i have college sponsorship, they are very big and college sports,
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hosting events, hockey, fashion. autoracing. >> it is content. this brings up a starker potential clash because it is not like two big hollywood agents duking it out, it is a guy that negotiates contracts for the university of auburn. clashing with a guy who negotiates for gisele. you do the math. that is not going to work out. would would think they complement each other. it is not hollywood and hollywood. think img. different kind of content. it is international, more predictable. movie stars, directors, and show runners, that is the william morris bread-and-butter. predictable., less as opposed to international corporate connections, sponsorships and selling the tv rights of the events. big is missed. is thisng william morris'
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less volatile will puts it in a better position to go public at the end of the day. remember, there is private them back to the -- there is private equity involved. to your question about why it should not be complementry, both of those guys think they can do the job of building the college's ports business better than the next one. they both have -- the college sports business better than the next one. they both have big egos. 2.4 billion dollars was not sitting around somewhere. they are borrowing the most of it. it, most of0% of it. so now they have to deal with this merger of culture and they have to manage the business even more carefully. >> scott, you are an m&a guru. this is a hard deal. what has to happen to pull it off? areeople transactions
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always harder. it is the reason deals never work in my industry. of theally work because people issues. not to say it can't work but it is more challenging than two companies buying in closing one of them to save money. >> it is the talent and you have to retain them to make it work. >> thank you for your expertise as always. we want to get a final word with scott, our closer. let's talk about what we might see in the way of deals in 2014. we know we saw a lot of media deals in 2013. what is going to be the hot sex your -- sector? >> there will be more activity. now that interest rates go back to a bit more normal. maybe stock prices moderate to a more normal level. i think we will see it in most sectors, probably not in banks. things like health care, energy,
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industrial, consumer products will be active in 2014. the comment you made earlier about rates going up, now there might be, they are not going up anytime soon. we are on a path that makes people get deals done because financing will be cheaper. >> that is right. it is still very cheaper by historic standards. companies are not dissuaded by the fact the 10-year is up 100 basis points. so i do not think that is an obstacle but it could become one overtime. >> does that mean better bonuses next year? >> in bitcoin or in dollars? [laughter] citi cannot yesterday and said the bonuses were not going to look some good. yesterday and said the bonuses were not going to look so good. what does that mean for the overall industry and for banks? >> clearly i think the news
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about citi was probably what most of banks will say. roughly the same as last year. morereally drives that is than fixed income trading. that is a huge moneymaker for wall street. thand it is so much bigger equity. >> exactly. >> god is in a different line of fork. lineott is in a different of work. coming up, at little bit of -- history's biggest mobilephone swap ahead of blackberry. ♪
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are out.arnings julie is going through them. >> the most important number is
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the so-called future orders. that is a number that looks at orders, it is up 13%. the estimate was about 9.5%. in western europe, i find this interesting, is where they saw a big boost in those future orders. in western europe, which is double what had been anticipated by analysts. in north america, the number is up 11%. >> light on revenue? >> overall revenue. >> if you take it to the second decimal, 6.44. >> i am looking for an explanation. the futures orders are great. we are not seeing a move to the upside for the stock. about company talked expenses going up to some degree although gross margins also increased. converse, revenues are up 11%.
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>> converse, yes. get intot going to sneakers with adam again. >> coming up, talking about excitement, goldman sachs. an employee turned congressman. ♪
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a rareknow, it was moment in washington yesterday. the first legit we have had in four years. what are you now? -- what do you know? president obama will sign it into law but critics say it did more to help repair congress's reputation than the nation's balance sheet rejoining now is jim himes from connecticut. nine senators voted for this. is this, republican senators should say. was this a missed opportunity in terms of a grand bargain?
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>> the bipartisanship, the fact we got a budget done after many years of not getting a budget beforeou have to crawl you can walk. the grand bargain, i have been a supporter of it a long time. that is a marathon. we are a long way from getting their. take what we can get. >> do you sense a change or a shift in washington? >> well, yes, i do but i would not overstate it. inc. about what happened politically. the republican party took a drubbing about -- as a result of the shutdown in the debt ceiling shenanigans and the president and the democrats took a hit with the initial failure of the obamacare website. i think everybody was walking around the last couple of weeks with a newfound sense of humility. >> everyone has been hurt over the last six months. >> yes. did,at what the speaker standing up to the more aggressive right week organizations. people are starting to understand that folks expect to
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get something done and to find a compromise. >> i think we are getting closer and closer to 2016. everybody's realizing they need to be on the campaign on having something done -- on having gotten something done. the stake a look at some of the highlights. 3d pizza printers for astronauts? brothels in nevada. 17 .5 million dollars for exemptions for breast implants and the f b i spends $1.5 million each year to educate hollywood producers on how to portray the agency. back to your point about getting something done, is there any hope? kenly get -- can we get rid of some of this pork? >> it was ever thus. qualify, people
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getting things done for their constituency. in the grand scheme of things those items, first of all, they can be framed in other ways, ways they are economically helpful. >> astronauts do need pizza. >> and on a 3-d printer. if you are working at a brothel, there is other things you might need. >> you can focus on that or you can look at the headline which is we're not shutting down the government. that is not a done deal. we have to have the committee do their work. compared to where we were, i was supportive of doing away with earmarks so don't give me ron, we are taking steps toward a weer -- don't get me wrong, are taking steps. i think that is an important step forward. they're all kinds of things the deal did not do. he did not deal with unemployment. did not touch entitlement. happen?at has to
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now that we have this small deal, and people were able to come together, what needs to happen to keep the conversation going so that we legitimately talk about entitlement? and tax loopholes? >> unfortunately i think the general environment needs to improve so that more people, and i hope i do not sound partisan, so the republican party, remember in the debate where every candidate was offered the chance to balance the budget with $10 in cuts and one dollar in revenue and they said no. we need to move away from that to a point where there is common ground. i was one of 38 people who voted for the simpsons bowl grand bargain so it makes me sad to say we are a ways away from the final push to get the country on a sustainable path. >> the budget agreement is good news for a lot of people. certainly small-business owners like the sound of this. the white house held a meeting
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today with local business leaders, including small furniture ceo who is joining us right now on the show. tell us about what happened in the meeting today. the president, and a few of the senior officials, were talking about what you were just discussing, the environment and thetisanship administration is very much trying to project sort of an environment of economic stability. coming out of the meeting, i was left with the impression that we have taken one small step toward bipartisanship. now there is this framework for the parties to work together again. puttinge we can look at the economy on the right track,
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reducing the deficit and moving forward. >> this is giving hope to business leaders, small and large business leaders overall that say, ok, maybe i do not have to worry as much about washington right now. think so. again, i am sorry it fall short of what it could be. if we had embraced the grand bargain, we would not be talking about this now and it would be a great force for business. as much as you might .2 little bit support here and there -- you might point to a little bit and there, it is a small step in the right direction. it gives people some certainty about the fiscal side of where they will be. that is a good thing. >> we do not have to go through this year from now. if the grand bargain is going to be difficult to try to move forward on, and hopefully people like you will try, fannie and freddie, seems like there is more common ground. what is the possibility of transitioning from the current
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ome hybrid? there are a lot of proposes right now. the chairman of financial services put something forward which was a very slimmed-down version of fannie mae and freddie mac, a restructuring. so the discussion is underway. i would not count on this being a next 3-6 months thing. 2014 elections coming up. i think that creates a certain amount of pressure where people are concerned about angering their base. i fear that in the coming months you will see people acting a little bit more politically and making it harder to get reform done. the nsa.switch topics, obviously in the news this week. we had the court ruling, a judge is in in fact the nsa violation of our fourth amendment and the president's
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reports coming out yesterday with the recommendations being made basically to curb some of the practices. the nsa we will see in two years from now, is it going to be different in du think privacy will be more protect the? -- more protected? >> yes and yes. the snow with -- snowden revelations started a discussion. a lot of people said i had no idea the government was doing this. the panel that just reported yesterday, and people like me have been concerned about the fact after 9/11, we threw a ton of money at national security, the patriot act, and we also stepped over the line of where most americans are comfortable in terms of surveillance. >> is this a good thing that edward snowden came forward? should he be given amnesty? >> that is not a good thing. not have a should
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discussion -- >> we would not have known about it. >> this is a larger discussion about how we can do better oversight has a congress. no country can run itself were discussions are catalyzed by disaffected 26-year-olds. click so if -- >> so if in a candidly positive way, what do we do now so there does not snowden?e another >> i do not know if he did what he did -- >> he thought there was something that was inappropriate and he wanted to bring it to light. >> may be. i would argue in the tradition of lawbreakers he might have done what he did and then turned himself over to the authorities to bear the consequences of what he did, which is what civil disobedience is all about. the larger point is clearly
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congress, the courts are going to begin a process of scaling back some of these authorities to a point where americans are more comfortable. it is going to be tough as we can't know everything the intelligence community is doing in the name of keeping us safe. if we know it, the bad guys know it. it is up to guys like me who are on the intelligence committee to be aggressive about the oversight. we are acting on behalf of the american people when we listen to what the nsa is doing. >> congressman jim himes, thank you. it is hard to make a good phone and no one knows that more than blackberry. there have been some other major flops. we have them all. the worst of them in today's ranks. ♪
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>> some breaking news on kobe bryant, another injury for the lakers star. matt miller. >> kobe bryant, one month after
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signing a 48 million dollars, two-year extension, making him the highest-paid nba player. >> one week after he made his debut. >> from rupturing his achilles' heel. the lakers took a guy who was out, he is 35, 36 years old. a 50 million dollar two-year extension. what does he do now? he breaks his knee. i did it in may. i am still limping around. although i am sure he has a better trainer and possibly better meds. they are saying right now he will be out six weeks. from then, i was on my back. me, it is just told almost certain they had that deal ensured. in case he never comes back to play, i am not saying that is the case.
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the lakers are saying it is a six week injury. indicates he never comes back, he gets paid and the lakers will be paid by the insurance and it is the reinsurer who is out. >> blackberry reporting third- quarter earnings, perhaps losses. >> no earnings these days. >> the company is not doing so well. the stock is down 48%. berry 10,t's black has not really paid off. it is not easy to make a great device. take a look at our ranking of mobile phone.
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ok, we have some breaking news out of washington right now. the treasury secretary has some recommendations for congress regarding the debt ceiling. >> it is a warning once again, you have this legit deal that was just crafted by congress in the last day or so and now you have the reality of what did not make it into the deal, that is the debt ceiling. jack lew sending a letter at this hour warning them we're going to hit the debt ceiling again, february 7. he can use of extraordinary measures but the latest he estimates we would hit the debt ceiling breach, late february, first part of march. that is the warning he is sending to members of congress and again right now that is not being enforced. let me read you his warning to members of congress, the president is not going to negotiate. he said the american public expects its leaders to put an end to governing by crisis.
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i urge congress to take action and raise the debt limit. ideally well before february 7, 2014. read part begins gearing up for a fight. which mcconnell -- republicans gearing up for a fight. mitch mcconnell thinks they will get something out of it. circle february 7 already. we have a fight on our hands. out ofave another word washington, a big number. $4 balance sheet topping trillion. i guess the taper can't happen soon enough. 4.0 trillion dollars, that is the word from the fed. it increased by 14 billion dollars in one week and we have quadrupled the balance sheet since 2000 and eight. even with -- 2008. the paceontinue with they set yesterday, 10 billion four .5ey will still be
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trillion dollars. this is a balance sheet that is still going up. up, dennis rodman can't get enough of north korea. why he is back in the country. ♪
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best-known athlete diplomat is back in north korea. dennis rodman is hooping it up once again with his so-called basketball diplomacy. train theing to national basketball daemon during his several days there. he is also due for a visit with kim jong un. think about his dress wearing daisy e is it cool? -- wearing days? is it cool? >> it is the strangest story.
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>> nothing wrong with that. ♪
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bloomberg television is on the market. let's take a look at where stocks closed out the session. not a lot of change today however the dow jones did close at a new record, a gain of 11 points. the s&p little changed. the nasdaq down 12 points on digestion day of post-fed taper. worse than claims estimated. we're also walk jing -- watching the vix. it is going to be buying $70 billion worth of bonds per month
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and the vix, as one might imagine, fell yesterday. it was up today. what happens next in terms of volatility? let's bring in an options trader . he says we are in and in usual volatility environment right now. why is that in the wake of the fed? right now, it is like you are just seeing the vix basically almost in correlation with the market on certain days. that is unusual. we saw the vix rising even though the market was going up and this morning, even though the market was down, we saw the vix reach its lows and then bubble up through the rest of the day. i think you are seeing some repositioning. you are seeing expectations wash out of the marketplace. the vix went over a waterfall this morning. volatility this morning and then we saw some buying later in the day. a little too extended on the
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downside. >> the trend in the past is that people have been buying protection through the vix, if you go into january. people are expecting an increase in volatility or are hedging against the possibility we will see an increase. has that been changing at all in the past 24 hours as we got the fed decision to taper when you look at the options? exactly, it has not shifted, the short-term expectations have come into medically. -- have come in dramatically. we saw heavy selling yesterday. big sellers involved in the vix options. that kind of bottomed out and we saw some stabilization but it's you look out into the first quarter of next year, things we have talked about, we continue to see buying of the march options and the april open
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interest is very high as well. and so i think the debt ceiling, we talked about it before, it is the next obstacle the market is going to have to contend with. that is why you're seeing that possibility. >> one of the things is realized volatility, the amount the s&p actually moves in a day. that has been creeping up a little bit. now that the fed is behind us, will we see that shrink once again and maybe pick up when we start to hear the debt ceiling debate? possibility. is a i find it interesting we did see belowx low this morning, 13 and then we saw some buying in the afternoon. that is partly because of the mindset. we have seen the s&p move better than one percent. that is more than what we saw the last month or so. you are seeing a pickup, i think that is playing into some traders's minds. a premium.'re seeing
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we do have some seasonality coming up that we can play into the early part of next year. >> we have to go. thank you so much. ♪ . .
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♪ >> this is "taking stock" for december 19, 2013. i'm pimm fox and we are going to focus on things that are sweet. since 1926, godiva has been one of the premier makers of earlier chocolates. its chief executive will tell us about the company's global expansion plan and the keys to long-term growth. plus, the sweet success of kabam , the company behind the game "the hobbit." he discusses his push


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