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tv   In the Loop With Betty Liu  Bloomberg  January 12, 2015 8:00am-10:01am EST

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opening bell. it is the start of earnings season. copper is falling to a new five-year low. a lot on the agenda. is it a rerun for mitt romney? he is thinking about a third run for the white house. will three be the charm? we will talk to jon huntsman who is on a mission to annihilate the partisan divide in washington. alibaba rocked wall street when it went public. how do we topped that this year? we will talk with liz myers who spearheaded jpmorgan's babe licks -- biggest public offering. we will talk with one space expert who says spacex is a game changer in the space race.
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record crowds march throughout france. they were joined by leaders of the u.k., germany, israel, and the palestinian authority. francois hollande told his cabinet that paris is the capital of the world today. france is still hunting for more accomplices in the terror attacks. the wife of the gunman in the kosher grocery store attack is believed to be in syria. it may be the only thing that could unravel the mystery about the airasia plane that crashed. divers have uncovered a key piece of evidence. it may tell what happened in the final moments before the plane crashed two weeks ago. >> the black box is composed of
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two hearts the flight data recorder and the cockpit voice recorder. -- parts, the flight data recorder and the cockpit voice recorder. we found the flight data recorder. >> the wreckage is 105 feet below the surface of the java sea. the crash killed all people on board. oil prices took another dive today. goldman sachs said oil prices need to trade near $40 per barrel to curb investment in shale. it is the time of year when hollywood likes to congratulate itself. the golden globes last night. "golden globes -- "boyhood"d" won best picture, best erector, and
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best supporting actress -- director, and best supporting actress. more than one million people took to the streets of france yesterday to show solidarity in the face of terrorism. it was the biggest event in paris. the rally was attended by 56 world leaders. bloomberg was at the march. tell us a bit about the march and how it unfolded and what the atmosphere was like. >> the march started at 3:00. the world leaders were there. there was lots of security. people gathered. they streamed toward where the march was held.
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it didn't really seem to be a march because the streets were so full. that felt sort of like a catharsis about the events of the past days. there was a sense of coming together and community and despite the horrible events people felt that it was something positive something that would allow to bridge the divide. we will see how long that sentiment holds. >> clearly, it heartwarming to see this kind of unity. the danger still lurks out there. what are the next steps that the europeans and the french are taking to capture these accomplices and to move on? >> there were quite a few european leaders there yesterday. they met in paris to discuss how to counter the threat. they agreed that the must be
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more intelligence sharing. the french interior ministry said there must be more coordination. he wants to talk to internet companies to see how extremist propaganda can be reined in. 10,000 troops will be deployed to various sites to help control the interior. that is comparable to the troops deployed outside of france. continued increased police presence in paris, as well. >> there was one notable senior official missing and that was from the united states. there was much a do and articles. -- ado in articles. did you here that grumbling during the march? >> people in the march asked
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whether obama was there and he was not. some people had hoped for the u.s. president or a u.s. official to be there. >> thank you so much. for more on the criticism facing the white house for not sending a senior official to the unity rally i want to bring in the former u.s. ambassador to china don huntsman. -- jon huntsman. i know you have been working really hard to bridge the partisan divide. it got nowhere closer even yesterday. republicans criticize the president and said only the french ambassador was at the rally. what do you think? >> it is a pleasure to be with you. france is a divided country.
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the fact that they had this unity rally is a very positive thing. we had three options. the president, vice president, or secretary of state. i think it was a big mistake. underlying diplomacy is the coordination aspect. the kind of work being done in the counterterror agenda and making sure that we are all on the same page, as it relates to people who seek to do us harm in the west. much of that will never be known to the public, that work. >> it rightly has to stay private. in your view, has the president made the right step not just in relation to this, but the right steps on intelligence gathering foreign policy, on relations with foreign leaders? i know you have noted that his
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lack of relations in china. >> this is monday morning quarterbacking. the president does the best that he can. i think his ability to work primarily with congress which is what no labels has been focused on, is the heart and soul of what we project to the rest of the world. the rest of the world sees we are in a divided state and that affects our ability to act and interrelate with major powers of the world. our ability at home to get some big, important things done that has a huge multiplier effect as it relates to our position on the world stage. i think that is what is lacking right now. you can say the words, but the work is not getting done. we don't have a national strategic agenda, a big picture agenda. we are not moving to goals.
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this is what no labels is seeking to do for our problem solvers caucus. i know you -- >> i know you have been gathering members steadily. we are just kicking off the 114th congress. how are things going? >> well, the new members of congress are circling in. the 2-014014 election cycle pointed to problem-solving. they are saying we want to be problem solvers, we want to get things done for those we represent. now we have to make sure that the most 100 members of our problem solvers caucus, when we get beyond the 2016 election cycle, are able to work with a new president.
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jobs, a balanced budget, and energy policy that maximizes their capability and dealing with entitlements. those are the big ones. the american people know those are the big ones. you are going to have to have a president who is able to work in conjunction with congress around those issues. every candidate, every president wants to tell us how to take us to the promised land. [laughter] but nobody tells us how they are going to get it done. this is the how, with our strategic agenda. >> everyone wants to be the problem solver and yet we continue to have the problem. stay with me. we are going to dig deeper into the agenda for washington. former utah governor and republican presidential candidate jon huntsman. the new year was a strong start to the pharmaceutical industry.
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a major deal by shire and its largest acquisitions so far. it offered to buy nps pharmaceuticalsf for $5.2 billion. >> it is certainly starting out strong. this was a target that shire was looking at before the abbvie deal. shire is going back to its shopping list. >> $5 billion. what is the appeal of nps? >> it is the focus on rare diseases. this treatments fetch a higher price and that is one of the reasons shyer was a takeover target -- shire was a takeover target. >> what about the timing?
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>> it is interesting. pharma takeovers usually like to wait until after a provable -- and approval process is over with. you have to think shire is confident in the process. >> nps is developing a hypo parathyroid is him -- parathyroidism drug. >> $5 billion. what about the price tag? shire has money loaded up. >> it is a rich price, but that is reasonable for a rare disease drug maker. that is typical for what we have seen in this industry. they do certainly have money on hand. >> thank you so much.
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still ahead, speaking about m&a we will speak exclusively with liz myers the woman who managed the largest ipos, including the big kahuna alibaba. much more ahead with jon huntsman on "in the loop." we may not seen -- have seen the last of mitt romney on the campaign trail, according to mitt romney. the college football playoff kicks off tonight. espn is the big winner. ♪
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>> the 2016 race to the white house intensifies. mitt romney announced that he could make his third run to the president -- for the presidency. still with us from washington is former utah governor jon huntsman, now serving as cochairman of no labels that wants to help set the agenda for 2016. you ran against mitt romney. what do you make of a third run? >> this stuff is catnip for the media and political analysts and it will change 1000 times before the iowa caucus. there is an invisible primary going on. folks who are trying to find the big donors in the party, win them over to their side find the policy talent, organizing
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talent for the primary caucus states. there is going to be a lot of dust kicked up and then we will see real numbers in the months ahead. the kind of talent, the namebrand talent that the talents -- candidates to be our winning over to their side. there is very little clarity and a lot of big names in the mix. governor romney is a big name. he doesn't want to fall into irrelevancy. wait until the numbers begin to come out. in terms of fundraising goals and moneys raised toward those goals. that will tell the story. >> you should wait for the numbers. that is absolutely true. even though there have been a lot of candidates, more than a dozen that have come out in the press as potential candidates it really has not strayed that far from a romney, bush
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christie. they seem to be the biggest names. >> namebrand matters in early stages. as soon as namebrand goes up for the other folks once you begin to approach the early caucus and primary phases, then you have a whole number -- other slate of names that will be talked about. i don't think it is surprising that we are seeing big names being talked about right now. they're well-known, relevant, well respected. we are looking at a fairly unprecedented environment for this campaign. there is no incumbent and there is no on some for the republican nomination. tell me the last time -- no odds -on favorite for the republican nomination.
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democrats are working to fall in line behind hillary clinton and republicans are trying to fall in love with someone. >> who could you follow in love with john? >> i think a former governor would probably hit the mark because you can't be a governor without working with all sides. that is why i am excited about this campaign cycle. i think we are going to produce really good talent. i think we will produce great debates about the issues. i think we will have discussions about america's role in the world. we have not done that since 9/11. we have lost our sense of our place in the world, our values internationally what it means to friends and allies alike. i think that will be a different aspect to this election cycle. the candidates are going to have
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to talk about america's role in the world. >> i know you are quite turned off by the process, especially after your own run in 2012. you are also not happy with how the republican party was presenting itself. do you feel anybody -- any better about the gop? >> i'm not going to talk about the political stuff, but what i will say is that parties go through cycles. we have our values, our fundamental beliefs. the republican party will find its sweet spot. that is big, inclusive optimistic with an approach to problem-solving. we have done it historically. we have been tone deaf the last few years, but nothing says we are not getting back in the game. i since we are moving in that direction. >> -- sense we are moving in that direction.
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>> thank you so much for joining me. we will be back in two minutes. ♪
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>> you are watching "in the loop." good morning. here is a look at top company news. a majority stake in an american company. the swiss firm will control foundation medicine that makes genomic tests for screening tumors. world bank of scotland may put its banking business -- royal bank of scotland may put its banking business up for sale, i ts asian corporate unit.
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the third installment of the "taken" movies reigned at the top of the box office this weekend. it took in $40 million. "selma" was in second place. that is one movie i do want to see. bloomberg television is on the markets. scarlet fu has more on a day when oil prices are falling yet again. >> when you look at what is going on with futures, you might not have an indication that we have an off day. futures are pointing to a higher open right now. this is after the s&p 500 posted its first back-to-back weekly declines since october. all of her, i want to start with you. we are seeing a better -- oliver i want to start with you. we are seeing a better opening.
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we also have big m&a moves. >> we had two back to back down weeks for the first time since october. this is not terribly surprising. the big catalyst seems like some of the m&a deals this morning. that seems to be giving the market a boost. with earnings coming out, that is pretty important. if those, positive -- those come out positive, that will be good. >> how would you be trading s&p futures right now? >> i think you take a look at the big picture and we had a nice rally until the end of last week. a not so good jobs number, as well. we are in a swinging area between 19.80 and 20.80.
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sell them wherever they are trading right now. i think there is a 65 point move to the downside. and only a 20 point move to the upside. there is a risk-reward you have an opportunity to make $3200 in this trade. if you have the spy, the etf, that is like trading shares without the same margin requirement. >> in terms of volatility, we hear about how this year is going to be a lot more volatile than last year. do you see that dissipating with the beginnings of earnings season? >> earnings are a big part of investors' mindset. however, oil has been a contributor. there are days when oil plunges
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more than you would expect. i think it is clearly tied to the big move days. >> to what extent are you factoring in oil prices? >> i think oil is going to find a base level around here at the $45 level. the vix is lower than october. i think however, we will see tremendous swings and volatility going forward. -- in volatility going forward. >> when we talk about trading futures, we talk about basis. >> basis is the difference between the futures price and the price of the underlying asset. with oil, it is an interesting example.
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if you look at prices for soil i'll -- the basis for shale oil in montana, it is coming down. you can see the difference between different markets if you look at the basis for different prices. >> thank you so much. more "in the loop" is coming up. >> thank you so much. the banker behind some of the biggest ipos of the year. we will talk exclusively with liz myers coming up. elon musk's spacex missed the landing. what went wrong exactly? ♪
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>> behind every deal, there is a banker. behind the biggest ipos of the year, there was one woman -- liz myers i jpmorgan. she brought -- at jpmorgan. she brought big shares to alibaba. but she was not done there. while the ipos raised nearly $88 billion -- how tough is it going to be in 2015? with me in an exclusive interview is liz myers from jpmorgan. leslie picker is also with us. liz what was the big lesson that you learned in 2014?
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>> there were a couple themes out of last year. it was the year of the jumbo ipo. that was really interesting. we usually don't get to play the calendar with large-cap companies. aftermarket performance was very strong. ipos outperformed the market by about 16% on average in the u.s. that attracted an interesting group of investors. >> i know there were rumblings. is the going to be enough money out there to sop up all of the shares? is it going to be the same in 2015? there is no aluiibaba. >> you are right, there will not be as many jumbo ipos. there will be smaller ipos.
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the backdrop is very constructive. we are projecting a 10% increase in all overall expected indices. that is a great backdrop. >> tell me what the pipeline looks like? >> we are hearing that a lot of the big deals did take place in 2014. 2015 will be made up of many deals, but they will be smaller in size. a lot of companies getting some traction for the end of last year, will pick up next year. shake shack is one that people are talking about. smaller deals, definitely exciting, but smaller in size. that is one of the key things we are seeing for next year. >> we have the interest rates possibly going to be rising from the fed. the ecb likely doing quantitative easing.
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we have volatility, emerging markets. brazil, russia are running into major problems. is that going to have a major impact on ipos? >> we think that the inevitable rise in interest rates in the u.s. is well anticipated by the markets. you mentioned emerging markets. we think about the monetary stimulus that is pretty prevalent everywhere else in the world. that is a very helpful backdrop for the ipo market. >> i know that right after this tv appearance, you are headed to san francisco for the jpmorgan health care conference. this is a big deal. what do you think will happen after the conference in terms of biotech ipos this year? >> it does kick off new issuance for the year. there are about 9000
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participants who come to the conference. we do tend to see a spike in new issuance six or eight weeks following the conference and we are planning that this year. >> i read how venture capitalist firms raised more than 62% more than they did the year prior. there is a lot of private money -- there is a lot of money after he where --- everywhere awash in the markets. does that compete with the ideal market? >> certain companies have been successful getting capital pre-ipo. typically, companies that are in the hypergrowth phase generally their growth is neither linear
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nor predictable. this is much more comfortable for them to operate outside of the public eye and update fewer investors as they go through that phase. >> it will be more mature companies going to the public market than? -- then? >> generally. >> what about m&a and these cross-border deals? we just walk up to shire and nps. >> acquisition finance will be a big part of the calendar. the companies making acquisitions will continue to use the equity markets as a source of financing. cross-border financing is important, as well. more foreign companies listed on the u.s. market. we think that trend will continue. >> we have seen a lot of companies swept up during the buyout room -- boom.
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do you expect to see a lot of activities in the ipo market this year? >> we will see a big wave of follow once from financial sponsors, venture capital government privatization. >> what will keep you up at night during 2015? >> we plan for the uncertain. we plan for the unexpected. that is what the global team i have does really well. >> alibab there was -- alibaba, there was so much attention on that deal -- are you happy that that is over? >> it was a highlight of my career. when there is an amazing story that has scale, growth, a strong
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culture that has appeal in mass scale for the investing market. >> it really does. thank you so much for joining us. we really appreciate it. liz myers, jpmorgan. she is headed to the health care conference. >> im. >> -- i am. >> leslie picker, thank you for joining us as well, are bloomberg reporter. -- our bloomberg reporter. we will also be speaking to the ceo of biogen. we are heading to the mall. retailers are vacating space. who will snap up all of the empty real estate? julie hyman is all the case. -- on the case.
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who took home the most golden statues? netflix or amazon? ♪
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>> many retailers are shrinking with hundreds of closures already planned. the vacant space could be filled quickly, but it depends on the state of your local mall. julie hyman has details. we see abandoned malls. which retailers are closing? which malls will survive? >> if you look at which stores are closing, it is mostly the teen retailers. aeropostale, wet seal, abercrombie & fitch, american eagle. they are all closing hundreds of
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stores over the next couple years. delias filed for bankruptcy. coach, express -- they are consolidating. for the mall, the most challenging closures come from anchor tenants. jcpenney is closing 40 stores. sears is in the process of closing stores. it is one thing when you have small specialty retailers and another thing when you have anchor tenants closing doors. >> how will this affect malls? >> it depends on the mall. you have different classes of malls, from a to c. higher grossing areas to the struggling malls that end up dying, like the ones you were referring to. in the higher-quality malls demand has come in and filled it up.
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if you are looking at sears, for example they have a decades long lease and they are paying a lower rent. the idea is that it is driving traffic, so it does not have to pay as much because the mall is getting something in exchange. with that closure, the mall says, great. we can fill this with someone who will pay more for rent. there are retailers who are expanding. nordstrom is expanding. apple stores, under armour. >> it is amazing. you put an apple in a mall and that section becomes vibrant. >> i want to shift over to scarlet fu, who has a look at two big retail movers. >> in terms of a decliner
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tiffany's dropped about 8% in the market. tiffany's says full-year earnings will rise to the low to mid single-digit's when analysts were predicting 16% increase. lululemon is higher in the premarket. that stock is getting a boost in the premarket. those are two retail names that are moving on the first earnings reporting day of the fourth quarter. we will continue to keep you posted on all of that. >> thank you so much. from the retail game to sports the football game. ohio state versus oregon. the first-ever college football championship game. we will a jimmy fallon -- let
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jimmy fallon tell you in his own way. >> i don't know. [applause] we have two puppies. we have a winner. oregon will win. [applause] ♪
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>> tonight marks the first-ever college football playoff championship. although kickoff is still hours away, a winner has emerged. it is espn. advertisers are forking over up to $1 million for 40 seconds of airtime during the game. the gap is closing fast. college football is getting to be a lot like the nfl. i'm joined by the senior vice president of acquisition programming at espn.
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i guess it is kind of a double-edged sword right? you are getting more ratings, more fans higher advertising rates, but the cost of broadcasting these college football games is going to start rising, right? >> we are really excited about the prospects of this new format. college football fans were clamoring for a change. they got a new playoff. it enhanced the regular season. now they are really voting with the remote controls about the championship format. 12 hours from the game, we are excited. >> what does it tell you about the way people are watching college football? >> college football has been just below the nfl in terms of the passion and size of its fan base.
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it is really just kind of ratcheted up and taken it more national -- ratcheted it up and taken it more national. the nfl is the unquestioned leader, but college foot wall especially with -- football especially with the new playoff format, is taking big strides. >> there were's the super bowl for the nfl. there is march madness for college basketball. college football is kind of a clean slate. how do you get to that big event moment and capitalize on that? >> i think we are there now. obviously, this is just the first year of this new format but the response we have seen across the landscape -- not just in the sports world, but general interest in the property -- it speaks to the fact that it could get to the level of the super
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bowl where it really becomes a cultural event that cuts across as to -- opposed to just a football game. >> are we compromising athletes and academics? >> i don't think so. the presidents and chancellors of the universities in the conference commissioners really were pertinent -- prudent in the way they put it together. it is one extra game for the teams. i think they were smart in that they did not overdo it and still created heightened interest in the sport. >> it means you have had some professional football coaches going back to college.
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is that going to be the start of a trend? >> if you are specifically talking about jim harbaugh, it was not that long ago that he was going -- coaching at stanford. >> jim moran. -- mora. >> yes. these guys, the ability to coach , these opportunities are great for coaches and having these guys be part of the college level it speaks well to the play on the field. >> thank you so much for joining us. are you going to watch the game? it is 56 minutes past the hour. bloomberg television is on the markets. equity futures are slightly higher as we head toward the opening. we are on the markets again in 30 minutes. we will be back in a few minutes on "in the loop." ♪
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>> welcome back to "in the loop." we are 30 minutes from the opening bell. in france, the largest crowd in french history marched to mark the country's worst terror attack in more than half a century. 3.7 million people. leaders of the u.k. germany and israel were among the marchers in paris. a breakthrough in the investigation in the airasia crash. they have recovered the flight data recorder. they also have found the talk
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pit voice recorder, but have not been able to bring it to the surface just yet -- cockpit voice recorder, but have not been able to bring it to the surface just yet. pfizer will find new targets to treat disease and turn to clinical trials. let's turn to the nfl playoffs. andrew luck passed for two touchdowns to beat the denver broncos. next up, the new england patriots. did he or didn't he? officials changed their minds and took away a big fourth-quarter catch from dez bryant of the cowboys. let me watch that for a minute. oh. dallas lost to the green bay packers. the pack takes on the seattle seahawks.
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i could keep watching that and watching that. >> he had it under control until he hit the ground. i assume the refs know more than we do. >> the decision was made and they are sticking with it. it is amazing. >> raise your hand if you have experience as an nfl receiver. >> ok. we want to cap you down -- county down with the top -- count you down with the top 10 headlines. let's start with another battle a battle brewing on twitter between j.k. rowling and rupert murdoch. the news corp. boss tweeted.
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j.k. rowling did not like that. >> can you excommunicate yourself? >> i don't believe so. >> i don't believe so. >> don't you think rupert murdoch is kind of trolling? he knows he plays the dark lord on tv. [laughter] >> do you think he is fake opining? >> doesn't to get a kick out of watching us all freak out? >> i would go back to the simple fact that one of the policeman that was guarding the offices was a muslim. >> one of the guys working at the grocery store was also muslim who protected everyone in the freezer. >> this crossed my mind when i read about the feud.
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maybe rupert murdoch is testing the free speech -- [laughter] i am serious. the free speech movement that has come out of this charlie hebdo thing. >> if someone issues a thought against rupert murdoch, they are going to have to get in line. [laughter] >> i have to agree. amazon was a big winner at the golden globes. i have not had a chance to get to "transparent" yet. it does sound intriguing. amazon for a while could not get it together with their original content. >> i thought "out house" was pretty mediocre -- "alpha house" was pretty mediocre. the real future in terms of ads spent is short-term programming
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being streamed on facebook. >> would you rather watch something on amazon? that said, i have not seen "transparent." and as you know, my heart is born in -- is in "orange is the new black." >> yes. >> i am just diving into "downton abbey." >> did you see that keira knightley was dressed like she was in "downton abbey"? >> venture-capital runny -- money rose for the highest total since 2007. investors are looking to take advantage of a hot market.
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>> banks are going west and opening up offices. it shows just how pathetic the returns are pretty much everywhere. >> we can talk about whether or not it is bubble weather. back in 2008, we were seeing companies go public in the first round of fund raising. today, we are looking at a much more mature market. >> we are. some of these bankers not only are moving to san francisco, but they are being hired by some of these firms in silicon valley. >> when you see the sock puppet holding a microphone, it is time to get out. [laughter] >> are we there? >> we are close. >> dna data on about 650,000
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individuals. i don't know, guys. had you feel about your genetic material being shared and given to a big drug company? >> everybody is worrying about the pictures of themselves in a bathing suit getting out. [laughter] the fda shut down 23andme temporarily. a saliva test will tell you you are 15% neanderthal. [laughter] >> are you? 23andme is not yet profitable. how do they turn the corner? is it being a source for this kind of data? i don't think this is all bad news. researchers are saying it is a
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legitimate way to design better clinical trials. >> speaking about breakthroughs, elon musk made his first public appearance in detroit in two years. he still has the really cool tesla. he has spent an outlier in the audio -- auto industry. >> the one time i interviewed him, he said -- all of the journalists were saying, when are you going to make it tesla that i can afford? >> do we yet have a sense of how the price of oil is going to affect cars? >> there are whispers that tesla
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is seeing a slowdown particularly overseas. what i have heard elon musk say to any rival that has come out look at their design, they are terrible. he laughs at every single rival. >> they are like apple. there is a lot of overlap between tech. [laughter] >> there you go. it was close, but no cigar. that is what elon musk said after spacex missed their first attempt to land the rocket launch engine. were we rooting for this? >> yeah. >> tesla founder revolutionizing the space frontier. that is straight ahead. ♪
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>> we continue to count down to the opening bell.
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it is time for the deep dive. it is with spacex. they launched their latest rocket to the international space station, but then failed enabled attempt to recycle a used rocket engine by landing it on a ship in the ocean. elon musk tweeted that the rocket made it to -- close to the ship, but missed. while spacex missed the mark the attempt was considered a success by many. including our next guest. thank you so much for joining us. he says it landed hard. what is that mean exactly? >> it came down, it made the mark, it landed on the barge just the speed that it came down that was a little too fast to make it a completely successful landing.
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a little hard of a landing harder they would have liked that said it off kilter little. >> that sounds like it is still a pretty good success because it landed on the barge. landing it too hard, isn't that an easy fix? >> i think it is a huge success. it is like dropping a pencil on a tall -- office tall building and landing in on a postage stamp. -- off a tall building and landing it on a postage stamp. the data they have from this landing is going to provide information for them to get it right. i think it is only a matter of time. >> what are we talking about? when is it going to come to fruition?
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>> they are going to try it again on the next launch. i think that is about a month from now. they will try to do the landing. i think they will be close, if not successful. it is a tremendously huge undertaking. the fact that they came as close as they did on the first time speaks volume. we are incredibly upbeat about what transpired. a lot of people say it is a failure. it is not a failure at all. it is a huge, bold step forward that is going to revolutionize the industry. >> it is a huge accomplishment. if you are at boeing or in the defense department or in the private space world what is the big take away from this? >> you have to rethink the way
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you develop and design spacecraft for the future. with boeing, they have a solid marketplace. boeing and lockheed martin with the united launch alliance. in the truly commercial market, people are going to look at how they're going to reuse rockets. if reusability is an option. what spacex is doing is reducing the cost of flight for them if they are successful. the market will have to adjust to that change in cost. >> how much is that cost going to be lowered by reusing the engines? >> the orders of magnitude, it is not really clear. but the fact of the matter is, you are not throwing away a rocket every time you build it.
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spacex's goal is to get to the point that you can reuse that rocket that day and if you can do that -- the potential is great and the potential of what you can do in space with that cost reduction. >> if you are boeing or any other company in this area, are you looking at doing the same thing? are you following on the lawn -- elon musk's tale? -- tail? >> i think other companies are definitely watching what they are doing. boeing and lockheed martin recently partnered with jeff bezos's company this is able to
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forward by spacex and elon musk. -- uppity. this is really -- company. this is really a major step forward for spacex and elon musk. >> coming up, the president and ceo of volvo group speaks to us live. elon musk is also making an experience -- appearance. volvo has a big announcement regarding china. we will bring you that. we will be back. ♪
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>> welcome back to "in the loop>>." brendan greeley and olivia sterns. it is like surveillance all of a sudden. shire has made a $5.2 billion purchase of nps pharmaceuticals. the drug deals are continuing. >> they are buying the pipeline. it is such a risk to come up with your own r&d. they are trying to get a little bit more into biotech. >> they are so eager to buy the pipeline.
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>> these approvals can take so long to do. >> they are moving beyond the broader things to a specific emphasis. >> that is because, sadly, that is where the money as. -- is. >> earnings are kicking off this week. big bank earnings are going to be coming out. year-end numbers. bonuses are set to disappoint for wall street. who wants to work on wall street? [laughter] >> those poor guys. >> poor guys. [laughter] >> every 21-year-old coming out of penn is dying to get out to wall street. they are probably heading to silicon valley once they see the bonuses are getting cut.
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>> fines were being culled out of the bonus pool. >> it used to be that you went to an ivy league and you went to wall street. that would be the place to go. nowadays, you would just start a company. there is so much money out there. >> i told people i was going to write plays. that was my plan. >> mitt romney told several donors he is seriously considering a third run for the white house. so many times. he said, i'm done, i'm not going to do it. what happened? >> he was so incredulous that jeb bush's candidacy was being taken seriously. >> he said, a bush-clinton race
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is going to be a referendum on the politics of the other bush and other clinton and he does not see how a bush can win. the opening bell is a few moments away. >> it looks like we are opening slightly higher. ♪
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>> >> welcome you back to "in the loop." very riddles, our columnist, and also olivia sterns. barry, we are bringing you here because you wrapped up a two hour long interview with bill gross. >> this was for the masters in business weekly series that runs on the weekend. it will be a two-parter. i had to let him run over to the barron's roundtable. i could have kept him there for another hour. every question, he had a really detailed -- >> tell us what bill gross said.
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>> a lot of fascinating things about the fed, about his exit from pimco. he basically said they fired him. i do not think he said that previously. he said he made them an offer that in addition to total return funds, which is the big flagship fund, he was running five small close in funds, which was the subject of our bloomberg review column today. according to morgan stall, the close on the funds were spectacular. >> he was offering what? >> he said why don't you let the team take on total return, i will step down gradually, and just let me run the small funds that are $1 billion or so apiece. he said he made a terrible mistake turning it down, that it was the wrong thing to do, and i am now adding that is why they saw tens of billions almost $100 billion in outflows in the last year and a half. >> what did he say? >> he said normally when we have
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a great recession that -- like lehman brothers precipitated congress steps in with a big stimulus plan. you get infrastructure, hiring a lot of things. we did not get that this time, leaving the fed the only game in town. he said ultimately they had to do something, but he would have stopped at 1%. he would not have gone down to effectively zero. for two reasons -- first, you are penalizing savers. the united states has effectively a zero savings rate. if you give some incentives to states, you will get more savings. he said the big impact has been in the real economy is expressed by corporate executives. so normally when you start to see the economy pickup, you cpap ask -- you see spending. buybacks was the better investment when rates were low. you should see more hiring by
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corporations. instead, according to bill, we see an increase in dividends. >> ok, i want to continue this conversation with bill gross. >> fascinating guy. >> david kelly, the chief global strategist, and jpmorgan funds joining the conversation. let's get your take. you have been listening on what harry said -- on what barry said. most interesting here, he said that he would not have taken interest rates down like the fed did to near zero. what do you make of that? >> i completely agree with him. i do not always agree with bill gross, but i agree with him on that. there is an element of pushing on a string here, and i believe pushing rates to zero has had more negative side effects than positive effects to the economy. one of the reasons has been a slower than normal recovery. the logic says that if the
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economy is improving, the unemployment rate is coming down, the federal reserve should stay on track and raise rates in june. >> is it your belief that they will do that? >> it is. i realize the bond market has rallied again, on friday, because wage growth was negative in december. that is very puzzling. but when we look at the overall trajectory of the economy, over the next few months we will see wage growth and a little bit of rebound in oil prices from their current lows. i think that combination, along with economic growth will keep the fed on track to raise rates in june. they are horribly late getting started, but they will get started then. >> what does bill gross say about oil? >> he says it forced the fed's hand a little bit. there is a risk of deflation, not inflation, and everybody seems to be looking one way, and the commodities markets surprised people. they won fascinating thing he added to that was all of the
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petro states are big buyers of bonds, especially u.s. treasuries. >> iran? >> maybe not iran, but saudi arabia, and russia certainly. when you end up with oil getting cut in half, that will reduce some of the demand for bonds not that that has shown up in prices yet. >> i am sure you saw this note from goldman sachs and jeff kerry's team over there. in the near term we could see west texas fallen to $39 a barrel. it needs to remain below a 65 per barrel marginal cost creating a reef is -- creating a physical rebalancing of the market. what do you make of that? >> i would not get involved in the long-term investor short-term investor trying to trade the price of oil in the past few months. we spent quarter years with the
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price of brent crude somewhere between $100 and $110 per barrel. if you cut the price in half you will change consumption and production, pushing consumption up, production down. there will be so much of a surplus it will flip it. then we will have excess demand for oil falling from the low prices, and that is why i think over the next two years you will see prices move up gradually to the $80 to $100 a barrel level. i feel very strongly that the next two years will be recovering oil prices unless something catastrophic happens to the global economy. >> in the short term, before we go, the second we saw this near crash in oil prices, are you going to see that reflected in this earnings season? will the energy sector be decimated? >> yes, it will affect their
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earnings season this quarter and even worse for the first corning that for the first quarter earnings season. -- for the first quarter earnings season. what we can see is the indirect effect insinuating consumer spending, which is definitely boosting confidence and i think it is boosting retailing. it will be hard to pinpoint that, but it will be easy to point fingers at energy companies underperforming. >> david kelly, it has been a file. and also to barry reithotlz. again, i am going to be very anxious to hear what bill gross told you. also olivia sterns as well. i want to head straight to scarlet fu, because you have your eye on a stock that is on the move. sandisk? >> 12% in early trading. it takes you back to about mid-october when we had the
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tumble in u.s. stocks overall. sandisk coming out saying that preliminary quarterly sales missed the forecast of average analysts. versus the forecast of at least 1.8 billion dollars. analysts were looking for sales of $1.83 billion. this is an early heads-up to investors. shares of micron, the memory chip maker, also down in sympathy with sandisk's. sandisk makes chips for mobile devices. it is notable when you have markets modestly lower and micron is down 2% with sandisk down 12%. >> thank you so much, scarlet fu. we will take you to detroit and the auto show. matt miller gets the latest on what is being unveiled today and he will join us with an interview with the volvo ceo, coming up. ♪
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>> as we mentioned, the automotive industry leaders from across the world are gathered in detroit for the start of the 2015 auto show. the big announcement debuts have been announced. matt miller is there, joined by the president and ceo of the volvo car group. >> thanks very much. we appreciate your joining us here. you have so many new models for volvo it is obvious you are trying to do something in the u.s. with all these new cars. >> we of course have cornered the market, which is important. but we have to back it up with a broader product offering. we have all new cars, but we are also demonstrating that some new very interesting project -- new
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interesting products. we have a more luxury longer wheelbase offering more leg. i think those demonstrate really the way we are going to come back to growth in the u.s. >> i am glad to see the taller s 60. the s60l is the one making headlines this money because of the possibility of free importing it from china. how possible is that? >> that car will be made in china, but it is important to see that it is not a chinese car that we are exporting to the u.s. it is a new volvo, attractive offering for our customers in the u.s. it is a volvo quality built in china, but this one is built in
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gothenburg, and belgium. there are three bolosvolvos being built. we can use our chinese factories also for customers in the u.s. >> how difficult will quality control be building cars in china? >> the control of course is the challenge. being built totally to volvo standards. we are convinced that we will have the same quality from those cars as the ones we rollout in belgium are gothenburg. but of course, it requires huge investment. it is not something you can do in the present factory. it has to be an all new factory and then introduce all new although processes. >> there is so much pent-up demand in the u.s. for a new product from volvo. will you possibly build a
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factory here? this is a good place to manufacture cars. >> long-term, that is something we have never ruled out, the right now i think it is important for us to say we have to concentrate on coming back to a reasonable level here of volume, and we have to come back to more than 100,000 in the midterm. to do that, we need new product. we have an example of two new cars. we showed already in los angeles two others. the second half of this year we had four new cars for the u.s. consumers. that is what we want to highlight. >> will you be able to meet them and? so many people are wanting to get a hold of the new xd 90. will you have enough? >> i hope we will have enough it is very good demand. we are about expectations. we already have 6000 customer orders for the new cars before
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it has started being ill. that is a very positive sign. >> thanks so much. really appreciate it. hakan samuelsson, from volvo. >> still to come, the ceo of toyota north america will be joining us from detroit at 10:00 a.m., in the 10:00 hour. be sure to stay tuned for that. still ahead from business in detroit to business in haiti. five years after the devastating earthquake, we will give you a sneak precut a special -- a sneak peak of our special show tonight, "haiti: business?" ♪
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>> here is a look at our top tech stories on bloomberg west radar. apple changing the cost of apps from canada to europe because of a strong dollar. apps now cost 20% more or last month apple raised iphone prices
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in russia after the ruble plunged. batman can bring in the customers. teaming up with time warner to open a family entertainment center at the casino. there will be a batman ride and other attractions. a genetic testing startup backed by google, teaming with biggest drugmakers. pfizer will have new targets and to design drugs tailored to them. it has been five years since the 7.0 magnitude earthquake devastated haiti. now the government says haiti is moving forward and it is betting that tourism will be the country's golden ticket.
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>> the president, when he took power, said we do not want more aid we want investment. we actually invested in sectors of tourism that can bring revenue to the country. >> stephanie is haiti's tourism minister. developing the country's coastline into tourist destinations. she is focused on a tiny island 6.5 miles off the coast. where the government wants investors to create luxury resorts. >> this is where we started some tourism project, and we are building a runway, a port, and the main road. >> until the airport is built, the only way to get there is by boat or helicopter. the government has spent $40 million developing the island.
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so far, no foreign invest have signed on. -- no foreign investors have signed on. >> stephanie ruhle was in haiti last month to see if haiti is really ready to set up shop. it is beautiful there. are they going to come? >> it looks beautiful there, and the government is promoting tourism, but let's think about it. just what you were looking at the government has spent $40 million trying to develop it. that is a huge amount of money for a government. its entire budget is $3 billion a country where most people make less than 2.5 dollars a day. the beaches are gorgeous. but of the 25 million people who go to the caribbean each year, 500,000 go to haiti. 4 million go to the dominican republic on the same island. to haiti, you need malaria
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pills, shots before you get there. there are no public hospitals. running water is not to be found in 90% of the country. so, yes, they are gorgeous, romantic beaches, and the idea if they can build tourism there -- i get it, but is it going to happen? carnival is going to make northern haiti a big port, investing 70 million bucks. this should bring in hundreds of thousands of tourists at the port. that will create a lot of jobs but most of us are crossing our fingers saying let's see this happen. this is a country in unrest. >> so you spend quite a bit of time there. what did you see? it sounds as if there are a lot of doubters, but what did you see? i saw an incredible country. today marks the five-year anniversary of the incredible earthquake that took over 200,000 lives. of the $9 billion in aid that supposedly went to haiti, it is hard to see.
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the rubble is out of the streets, but they have massive infrastructure problems. would you really start a business, go visit a place where there is not just no wi-fi there is no running water? it is a boat ride away from miami. they have advantages that make it possible for there are t-shirt manufacturers, tablet manufacturers, but they have just scratched the surface. they need a seismic shift and a government that will support that. >> they clearly need to make some investments first before they get the foreign investors. stephanie ruhle of "market makers," thank you. we will have a lot more. tune into the premier of haiti: open for business? that does it today for "in the loop." tomorrow, we will hear from the ceo of ourcrowd, jonathan
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medved. ♪
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>> it is 56 past the hour meaning bloomberg television is on the markets. we are 36 minutes into the u.s. trading day. the dow industrials losing 120 points, off by 3/4 of 1%.
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a three-month low as investors are worried over the drop in oil prices. nymex crude up by 4%, to 46.33. we will stay with oil. this is the second straight day of decline, the lowest level since april of 2009, hovering around the lows for a while. goldman sachs cut its oil price rejection. the firm's energy analysts slashing their -- down from 73 to 75 -- when you cover all of the oil price cut forecasts, it must be incredible how the numbers go from 73 to 47. >> absolutely, but look what the actual price has done. it is a little bit of the analysts paying -- playing catch-up. saying if we predict more than a 20% decline, we will look crazy. to some extent they have to,
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when it is as steep as this. >> the thing with goldman sachs, they say it could drop to $40 a barrel. tell us more about what the report includes. >> goldman is looking at a new break-even price at $65 as the new normal. they are saying that capital is going to be the lever that will rebound the market, so what they are saying is watch the forward curve futures, 12 to 24 months out. as long as that is below 65 that will deter the investment that gets the supply reduction the market is looking for. >> basically what opec is looking for as well. >> that's right. goldman is reiterating that they do not inspect saudi arabia and core opec members to reduce to support the price. >> you have venezuela calling on opec to work together. how much weight does venezuela have with opec?
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>> none. this is the problem with opec. you have one block that has all the need and no power, and the other block that has all the power and no need. >> it was said that oil like any other commodity tends to overshoot the bottom. are you hearing that from analysts and traders? >> a lot of people are saying absolutely, but at the same time no one knows where the bottom is the cousin it is an unprecedented situation. >> opec's last meeting was december 27. when does it meet again? is it precluded from acting before its next scheduled meeting? >> they could have an emergency meeting. some of the weaker members have been calling for that, but they called for the before and it did not happen. it seems unlikely that the core and the stronger members will agree to that. otherwise, it is back to their samuel -- back to their
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semiannual meeting in the spring. >> is $40 a barrel the lowest you have heard so far? >> from a big bank like goldman, i think so. >> right now it is at $46.29. thank you so much. we are "on the markets" once again in 30 minutes. "market makers" is up next. ♪
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>> live from bloomberg world headquarters in new york, the his is "market makers." >> keep on trucking. american format for pickups again. toyota has the pickup of the town. >> the top goal paradise you have never been to. all haiti needs now is to arrest. >> good monday morning, everybody. i am erik schatzker.


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