tv Taking Stock With Pimm Fox Bloomberg June 5, 2014 9:00pm-10:01pm EDT
>> this is "taking stock" for thursday, june 5. i am pimm fox. today's theme is tricked out. professional skateboarder bob burnquist will discuss the extreme sports business and what tricks he will unveil at this years's event. plus the lamborghini huracan. we'll take a special look at the $237,000 automobile that is tricked out with refinements. also building the ultimate fish tank. we will speak to an executive that is tricking out your home and office with thousand-dollar fish. all that and more over the next
hour. first let's get headlines from su keenan. >> ahead of the widely anticipated jobs report out tomorrow, fewer americans filed applications for unemployment benefits over the past month and that any time in the last seven years, a sign that the labor market is continuing to bounce back. officially reining in high-frequency trading and monitoring secret trading. prop traders who use computers for rapid-fire stock trading now have to register with the sec. in an agreement reached by senate negotiators, help is on the way to veterans hospitals. a new plan now allows the hiring of more doctors and nurses to reduce the long wait for veterans. one senator referred to the problem as a crisis. >> thanks very much, su keenan.
general motors out with details today about its internal investigation into why it took the automaker more than a decade to identify problems with defective ignition switches linked to 13 deaths. the report blames bureaucratic delays and a culture of incompetence. the gm chief executive spoke to employees in michigan about the findings. >> this report is extremely thorough, brutally tough, and deeply troubling. for those of us who have dedicated our lives to this company, it is enormously painful to see our shortcomings laid out so vividly. as i read the report, i was deeply saddened and disturbed. but this isn't about our feelings and it's not about our egos. this is about our responsibility to act with integrity, honor, and be committed to excellence.
>> next, she ousted 15 employees for their roles in mishandling the recalls. joining me to discuss the report is sean kane. he joins us on skype from massachusetts. also our auto guru matt miller. to round it out we have jason harper, our bloomberg automobile columnist. warren, michigan, why did she have that and what was the reaction? >> the mood was like going to the dentist. everybody knew it was going to be painful but at the end of the day you have to get your teeth cleaned and your fillings taken care of. she had to set the tone that gm is taking it seriously. she wants to use it for the company to change the culture and the way they do things and fix problems, and the way they build and design cars.
>> sean kane, comment on the topic of safety. does gm do something different, or have they been doing something different than the other major automobile makers? >> in reality, they haven't. we have seen these kinds of problems show up time and time again. this is the new gm and being transparent. they keep changing that line. back in february when they did the first recall, they said they were recalling 700,000 cars. when they were outed by a longer -- a lawyer at the end of that week, they recalled another 700,000 cars. the culture of transparency seems to be a bit opaque as they make their way toward being more transparent. >> i should start out by saying nobody would have ever considered a cobalt or a pontiac v6 or a saturn ion a particularly good car. they were poorly made and did not get top safety marks.
they are a lot different than the products gm is making now. i not sure if the culture has changed, but the product -- a chevy car, a silverado or impala of today is worlds apart from what it was 10 years ago. >> the cobalt was not a good car. they were working toward a price point. this is the happy meal of automobiles. >> it wasn't like you thought you were buying a volvo 240. >> when you're working to a very low price point, you will see corners cut. that is across all automakers.
>> jim higgins, was this all about price points or was it something about the and factoring process that has gone askew? >> she said the report rubes -- proves they did not trade for safety. the report does indicate there was a cost-cutting culture at that time. this was back in 2000 as gm was on the road to bankruptcy and every penny counted. the report talks about how there was inevitably going to be some pressure on costs, and points out that the engineer that was responsible for the switch, that position is given a lot more responsibility and overburdened in some ways, according to some of the people we talk to. -- he talked to. cost was definitely an issue, but it gets to the issue that within the gm they approved a switch that they knew did not meet requirements, and then future engineers tried to fix the problem could not put together what the problem was and what the actual ramifications were.
then you go forward with the bureaucracy, the legal aspect, there were a lot of delays and a lot of opportunities to fix it but they did not, according to the report. >> you are referring to the report by the lawyer that gm brought in to investigate the recall situation. sean kane, can you discuss what steps would need to be put in place to make sure this does not happen again? >> i think if you start at the baseline, what is troubling about the report is this identification of the problem, the seriousness does not get identified because it is focusing on the airbag issue. we need to take a step back, the engineers did not find that when the switch turns off when you're driving it, that was a safety problem. they seem to be complicit with the idea that suddenly when the car shuts off on you, that is ok, that is not a safety problem, and they did not take that seriously enough. they clearly did not listen closely enough to their
customers and did not test and a -- evaluate the scenario to see how significant that problem really is. >> matt, what are the applications for gm currently? these are ongoing investigations. lawsuits have been filed. this is going to continue. >> gm said today in a conference call that they expect the recall charges to continue and even climb in the second half. that's not the legal charges that they face. they said that ken feinberg is going to start unveiling his plan to compensate victims in the next few weeks. congressmen have already said they want to see gm back in front of congress to testify. you're going to see a lot more. what i'm unclear about is, and i think sean got at this as well, the report seems so focused -- narrowly focused on just the
airbag issue and just the ignition switch problem. what i don't get is, how can none of these executives really have known? how did mary barra or dan ackerson not know? how did the government not know? by the way, the government that had the car czar steve rattner -- it was great timing that they got out completely of their shares right before this came to light. does anyone buy that, that the government does happen to have such incredible timing that they didn't own any of it when this 11-year-old recall problem finally came to light? i don't understand why the report doesn't focus more on that. if some lawyers were warning them about liability from these cases in 2011, how did they not
know about it? how do you not tell the ceo? the head of their legal team is not gone. a lot of questions. >> thank you very much, matt miller and sean cain, and i want to thank tim higgins join us from our detroit office. he took a lamborghini for a ride. the latest exotic ports car, the huracan. $237,000. that is next. later, we will take a look at a tropical fish trade. why some fish are selling for as much thousand dollars.
>> from gm to lamborghini. the huracan is the latest exotic sports car from the italian automaker. it starts at a price of $237,000. what do you get for all that? jason harper took it for a test drive. you have a big grin on your face. i assume you had a good time. >> this is a really exciting car. the supercar world is blowing up these days. when ferrari started out years ago, then lamborghini came along, these were the only exotic car makers. now there is so much competition. these are the cars that are blowing up around the world. >> i have the feeling the people there are not going to stand for a car that doesn't work.
>> this car does share a lot of things with its audi brother. some of the technologies are back-and-forth. this is a very grown-up car. it looks very cool, it's very fast. you can drive around town and not worry about backing into things. >> that's because it has a camera, right? >> the point of it is, the old-school lamborghini, you got a lot of attention, but you might look pretty silly. this car, you can pretty much drive it around every day. >> i note in your column, jason, that people can read on bloomberg.com, that it comes in colors that have nothing to do with nature.
let's go through some of the specs if we can. four-wheel-drive, v-10, not turbocharged, so this is a pure sports car. >> it is. the engine runs really high and is situated behind. it just screams in your ear behind you. ferrari just released its convertible in california which is its first turbo in a long time. were going to see a lot more of these. lamborghini is going to stay with this engine for a while, which is very cool. >> you mentioned also in your report that you made a little mistake driving this on the track, but it corrected for you. tell us about that. >> i was driving it hard.
>> give me numbers. >> if you're looking at the speedometer, you're looking at the wrong place. it corners. 120 miles an hour into big corner, breaking hard, at 1.i just got it wrong. things can happen. you're probably not going to get killed, but you can hurt the car. all the modern electronics are so good that it breaks the inside wheel so that it pulls you back, it knows where you want to be going. the electronics are better than you are as a driver. i came up on a very slow driver and the passenger said i should pass him. i said i hope he can see me. if an orange lamborghini pulls up behind you and you don't notice it, you're probably not the most attuned driver in the world.
>> do you want one? >> i don't know if i want one, i respect one. its predecessor wasn't a great car. you took it out and it didn't do a great job. >> in auto industry lingo, it is a lambo, it's not a lamborghini. well done. i will go for a ride with you, jason harper. coming up, i will take a closer look at why polar diamonds are growing in popularity. -- color diamonds are growing in popularity. we have a third-generation jeweler to tell us more, that is next. ♪
>> this is "taking stock" on bloomberg. i am pimm fox. we look at a small company that is making it big. we look at arrow site. its chief executive tells us how he went from -- to expanding into numerous industries. >> i realize that businesses might benefit from putting cameras into the work place in the same way that professional sports teams use video to prepare for a sporting event. we built up a lot of credibility in the meat industry.
beef processing plants have significant concerns about sanitation to prevent e. coli. the next area we chose was. my dad is a physician up in boston. he said it is really important, we need to bring this into the health care industry, and nobody would even look at a pilot. privacy was a major concern. we need to identify not just patients but workers. -- de-identify not just patients but workers. fundamentally we take patient and employee privacy completely off the table. we thought about it, and if you just dial down the resolution of the entire image. low and behold, even with a lower resolution, where you cannot make out anybody's face are what they're doing, you can see extremely important safety protocols they have to follow to prevent surgical infections.
all the work we have been doing in health care has led to us now having about 12 companies that are multibillion-dollar clients. we have hopes that our services will be brought into retail, paper plants, schools, the opportunities are profound and we are really excited about where it's going to go. >> joining me now live here in new york is adam aronson. you mentioned expanding across numerous industries. let's talk about a recent deal you have done with deloitte. >> we are focused on risk and efficiency improvement. if you look at what deloitte does, they are the largest professional services company in the world, focused in many cases on risk and efficiencies. taking the work we have done
with auditing and partnering with them, they have 200,000 people in over 150 countries serving dozens of industries, so it's an enormous opportunity to expand our service. >> tell us a little bit about the installation of a service like this. there must be some minimums that are necessary to meet in terms of how many cameras, what kind of system and task you're going to be able to focus on. >> i will give you very concrete sample, something that is the most prolific use of our technology in the operating room. we partnered with a health system right here in new york, a large anesthesia provider. a few years ago they started pioneering technology in the operating room to improve safety and efficiency. so there were some challenges, privacy, you had to put cameras in on patients, so we lowered the resolution so we avoided any
privacy issues. then we had to figure out what to monitor for. working with our partners at the hospital in their anesthesia group, they defined things like avoiding leaving retained objects inside patients after surgery, avoiding surgical site infections. at the same time, can you use technology like this to provide staging alerts to reduce turnover times between patients. the results were profound. they have improved their turnover time by 20%. >> are you growing? what kind of hiring and future growth plans do you have? >> we have been growing quite rapidly. average growth rate over five years is about 40% a year. to get a company like d lloyd to -- deloitte to partner with us,
>> this is "taking stock" on bloomberg. i am pimm fox. thrills and spills are the chief requirement for a professional skateboarding career. bob burnquist knows it all too well. over the last two decades he has won a record 20 medals but he -- 26 x-games medals but he has also broken 32 bones. he is a competitor in this year's x-games which kick off today in austin, texas. i asked him about catching air. >> a lot of amazing things
happen. it brings out the best in the guys that are there, whatever sport you are in when you are competing. you have guys practicing certain moves just kind of, maybe if i can pull it off, and maybe it becomes a reality. when it all counts, you really got to put it down. it turns into a different mindset. >> what moves are you going to be looking for specifically? >> it's funny, because i just like skateboarding every day. most of the guys i compete with i skate with in my backyard. it's just something that i look forward to seeing people believing in something and then landing it. you just get inspiration from everyone. i'm going to focus on my event, obviously, but i enjoy watching everyone else. >> tell us about the 900. tell us about young skaters who might be creeping up behind you.
>> the 900 is just one trick. a lot of spins and then you land. in a way it's somewhat predictable, so i would rather be unpredictable and try something different and go a different route. obviously, if everyone is doing 900s -- >> like bradshaw, for example. >> he tried to be the first nine-year-old to do a nine, but he didn't do it, he did 810. -- it at 10. he was pretty amazing. >> talk about the ramp you put together in your backyard. if we were to go and take a picture, what would it look like? tell us about how you made it all happen. >> it was all just a dream. my backyard is called dreamland. it's a collection of dreams throughout the years. i've always wanted to have a backyard ramp.
i had a frustrated attempt in sao paulo when i tried to build a ramp. we had to tear it down. that was my frustrated attempt at starting a park in my house. when i became professional and moved to california, i started building this ramp. i built a loop and a corkscrew, brought in a full pipe, and i thought that was great. then the big ramp came into play. >> describe the mega ramp for people that have never seen it. >> it's like one of those big ski jumps. i remember seeing that when i was really young. the guys would just fly forever in that position. we have a landing and at the end, we have a big quarter pipe.
it is a ramp that you finish off your speed with big air. that is the mega ramp in a nutshell. at my house i have rails and a side hip. i have all these different obstacles. mega ramp basically is a lot of ramps that are really big. >> would you also have a videogame like tony hawk? >> obviously, it is fun. i was in up to the eighth game. it is just fun. i don't have much time for video games these days, but it's a blast. >> do you have time for business at all? >> i have people in place for that so i can go skate. i just make sure i handle it and make the right decisions and steer the boat in the right direction.
>> how is the use of these drones and unmanned vehicles changing the liberal perspective that people have on watching -- literal perspective that people have on watching this stuff? >> it does. the perspective is good. i don't really like having drones close to me, but we do it at my house with helicopters. i have a guy that put the helicopter on their and flies around. the perspective that we get, even from the air or close by with the attached cameras, it's something we can bring people into what we do, which is something we haven't been able to do, so it's great. >> the attached cameras like the go-pro camera. tell us what you expect to accomplish this weekend. what events are you in, and when can we see you?
>> initially i was in vert and the mega ramp, which is big air. i will probably focus on the big air. i don't know, i expect to just come out alive, i just want to survive this one and try not to be as hurt and feel good this year. just a couple of things here and there. i will just try to breeze through this and land what i came here to do. >> world cup soccer kicks off on june 12. croatia against brazil. do you have any words of encouragement for the brazilian team? >> that is an amazing group of people. from what we saw at the confederations cup, if they keep that dance going, it should be a good thing. the world cup is a hold other
-- a whole other stage in brazil. i have skated several events, high pressure in brazil where everyone is expecting the brazilians to do good, so there is definitely pressure there. just to make sure brazil does their game, and i'm looking forward to the world cup, for sure. >> there is also a lot of protest having to do with the infrastructure, the stadium, the spending and disparity. what has been your reaction to seeing all this? >> it's great to have the world cup down there, but what happens is we have a culture of political money kind of going in these different directions. you go to build a stadium and all of a sudden it is $700 million. those kind of things get into brazilians. they love soccer and the world cup, but we need hospitals and infrastructure. that is a fair game in the protests. there is a pretty good economic
gap and socially you have people that don't have anything. most people won't be able to go and watch the soccer games. as a whole, brazil get behind their team, but most of the protests are all about, you can't just throw soccer at us and have us forget the problems we have around us. >> my thanks to professional skateboarder bob burnquist. from skateboards to soundboards, more than 100,000 people are expected to take in concerts at randall's island, the fourth annual governors ball. tom russell is running the event. tom russell, how did you get into this concert business? >> well, i was a tulane university student down in new orleans and ran out of money going to so many concerts. i went to the company that was putting on all these concerts and begged them for an internship.
i eventually convinced him to -- them to hire me and learn as much as i could. then i broke off and started my own thing. >> tom, describe the details of how many people, how many musical acts and all the things people can see at the governors ball. >> we have 40,000 people per day. we have 66 acts on four stages. the music goes from 12 p.m. until 11 p.m. and we have rock 'n roll, folk, indie, electronic, hip-hop, and many more. there is a disco where you can dance to djs. it is really a wild time. >> what about the infrastructure necessary to put on something like this?
>> as you mentioned, we bring in four massive stages for the 66 bands to perform on. we bring in hundreds of tents. we bring in over $100,000 in power equipment and we have a kind of fencing and barricades, a ton of police. flooring, matting, air-conditioning. it's kind of like building a small city in a park in new york. >> let's say you did very well on wall street for a week and you got $2000 to spend on a package for the governors ball. what would you get? >> we do a super vip program where you can have an artist pass that allows you to get on stage and get to the front of
the house sound board. it's really the best view and best sound you can get at the show. it also gets you backstage to areas where there is free food and beverage and lots of comfortable seating and shade. >> tom russell, what about the competition? are there enough members of the audience to go around, whether it is live nation or the other festivals around the country? >> the music industry is very cutthroat, especially the live music industry. we have been able to build our business gradually each year. we are pretty friendly with all of our competitors. we keep a friendly rapport with them but at the same time, were -- we're very aggressive at securing permits and booking bands to get ahead of everyone. >> thank you very much, tom russell, the founder of founders entertainment. coming up i will speak with an executive about fish and why
>> liveaquaria is the largest online place to purchase live fish. we are talking about exotic fish, rare fish such as sharks, stingrays and some fish that sell for as much as $5,000. i'm joined by director kevin kohen who said of his first aquarium at age 13. you have been doing this a long time, kevin. >> my parents were very supportive. i always had a fascination with aquariums and fish. it grew into an obsession. when i was 16, i had 21 tanks in my parents' basement. >> didn't anybody say kevin, you
need to think about this, this is leading someplace you don't know? did you know this was going to be your life? >> not at first, but i went on to work in a pet store, graduated from college and went on to become a wholesaler for marine and freshwater fish. then i started my website in the year 2000. >> you're based in wisconsin. you don't necessarily think wisconsin is a place where you would raise fish, but that is what you do. there is a revolution going on in the world of tropical fish. explain what is happening. >> our parent company has the largest catalog and e-commerce company for a full lineup that
-- of pet supplies. dr. foster and dr. marty smith are the owners of the company and they are very supportive. we grow and propagate live coral in a captive environment and offer them in the aquarium trade to consumers across the country. >> there is also captive breeding of the fish themselves. why do you do that? >> it is great in the marine aquarium trade because it reduces some of the pressures put on the wild stock out and coral reefs around the world. many aquaculture companies, one is the biggest aquaculture companies for clowns fish, nemo. -- clown fish, nemo. everybody loves a clown fish. great personality, the way they swim, they are very hardy fish and they don't grow very large. they make a great fish for any demographic. >> what about the cost of these things? some can cost as much as $5,000.
>> we sell many types of fish. we bring in fish from all over the world and we will condition and quarantine them in our facility, take photographs of the actual fish and offer them for sale on our website. the $5,000 fish is the angel fish that was first discovered in 1993 by dr. richard pyle. we were fortunate enough to obtain one of these fish for sale in the marketplace and it sold immediately to a collector of exotic fish. >> also, sharks are finding popularity, three foot-long sharks. tell us about that. >> most sharks grow too long for a captive environment like an aquarium. we do offer a smaller species and they make an interesting fish, especially because they
are bottom dwelling fish and they can actually walk with their pectoral fins. >> how much does it cost to get started? >> for a small, all in one style aquarium, it's much more affordable than it was in years past. for $600 you can set up one of the smaller, saltwater tanks with lighting and filtration and everything else. >> thank you for sharing your story with us. kevin kohen is the director of liveaquaria. >> we will take a look at it -- a $30 million dollars colorful diamond. we'll find out why they are flying off the shelves, next. ♪
the scarselli family has spent over three generations in the diamond industry. it is moving to colorful, fancy diamonds and it's not the place where you buy a tiny one carat ring but rather a 90-carat rock. the price of such a ring might be around $18 million. thank you very much for being here. let's start off with a little bit of the history of the family and how you got into the jewelry trade. >> first of all, thank you for having me. we are a third-generation company here in the united states. my parents came in 1978, and the business started from my grandfather. we have been here for about 30 years. >> what makes something so special that it qualifies to be part of the scarselli experience? there are a lot of different kinds of diamonds and different cuts. what makes them special?
>> the gemstones are divided into segments. color diamonds and colorless diamonds. the colorless diamonds are a larger segment of the diamond industry. in the fancy colors, you have basically .01% that make it to the top end of the spectrum of investment-grade diamonds. >> you brought some of these specimens with you. start off by telling us about the yellow diamonds. >> what makes these diamonds special is obviously the size and color. this one is 90 carats. it's a little bit more than 90 carats. this diamond is very rare. it's the only diamond certified by the american gemological institute for this size and shape.
it makes it an extremely rare and collectible piece. a similar diamond was sold about a month ago for $16 million. >> you brought another yellow diamond as well. >> i brought a round diamond, a little bit more than 50 carats. basically in the fancy color realm you want to cut diamonds a fancy shape. you don't want to have a round diamond. the round shape is for colorless diamonds. that is the best shape to enhance the colorless diamond. whereas for fancy colors, you want to have fancy shapes. what makes it very rare is it is difficult to find such a large diamond as a round stone. it is an incredible diamond. i think it should be very
interesting for a collector. >> you also brought a necklace. explain a little bit about this. >> this necklace is very special. it has 12 carats worth of fancy blue diamonds, which is extremely rare. probably one of the most rare diamonds that there are. >> they come from generally africa or australia. what makes it very difficult again, most of them are round. they are matching, and the color is just difficult to find in the market. >> what makes this so special is that you have such an incredible amount of value in such a small piece. >> i want to thank you very much. a partner at scarselli diamonds. thanks for taking stock. i am pimm fox.
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