Transcripts For BLOOMBERG Bloomberg Go 20151209

The left syria and 2013, all three attackers were killed, too detonated suicide vest and a third was shot by police. Congress is tightening visa requirements following terrorist attacks. It will bar people who traveled to iraq or syria the last five years. All 38 countries in the visa program rep issue passports containing biometric information. Joe biden said the donald trump wins the republican nomination he would be defeated easily by Hillary Clinton in a general election. By Vincent Clinton went in a walk but cautions his comments are not in endorsement. On these andore other stories of the new bloomberg. Com. Now over to matt miller. Matt we are getting headlines it looks like from alibaba excuse me. Im going to the terminal here to find alibaba headlines. News coming across right now. Let me just with the yahoo s ticker. Moving a little slowly at this hour of the morning. Looks like yahoo will suspend work on it alibaba plan. We basically had the story already. We are getting confirmation of this story. Suspend their work and it is concerned about markets perception. Obviously, that is the only thing that the market cares about. It was concerned about assets and liabilities. It is confirming basically that yahoo is saying everything we have been talking about and will continue to talk about. I believe that for now. Like that it sounds which is getting followup. Were actually getting the details around what this headline means. We have to get this information from Marissa Mayer. There is a conference copying held at 9 00 today. A file was just made. These headlines coming from that filing. They are exploring what they are trying to do. Stephanie we will find out. We have heard that analyst after analyst have said what they need is a plan. Specifically a plan post alibaba. Give us a bit more before we dig into this. Matt lets look at the rest of the markets. Are looking atow the gains but really little change of the s p. The Dow Jones Futures up about. 2 . Stocks are down, it has reversed those gains. Cac down. Crude is what we want to look at. With a crushing decline around 7 00 a. M. It has bounced back a little bit since then. We came out to 36 a barrel. Then the story, one of the story will focus on todays kindergarten morgan. This company is poised to open lower for the 10th straight day. Yesterday and cut its dividend by 74 . Theve on my terminal now didi i. S. Screen which is the debt distribution screen. Debtows you 41 billion in for a 35 billion company. They have to pay the servicing on this debt. That is why they are cutting their dividend. It has taken some investors by surprise. The size by which they reduce their dividend. Knows about this story as well. It is what investors have been focusing on in a very negative way. Connotations for the rest of the oil pack . Which is a Anglo American cutting 85,000 workers. Stephanie we will get a lot more into yahoo . More headlines crossing but we will get back to that. It is not the only big news out there. A megadeal in the Chemical Industry. Dow and dupont are said to be late stage murder merger talks. At globalf research advisors, what do you make of this news . Mind it was amy game of Musical Chairs government not amongst the agrochemical companies. Remember monsanto had made moves then china came out and place it other bit force agenda which was rejected. Dow and dupont are players with of the agrochemical field. In my mind, and what other analysts were thinking was some sort of members between dow and do points duponts agrochemical assets. It escalated to a broader merger and the larger companies. David take us more broadly. You have the agro business, there are two other components being talked about today. I believe that his plastics and specialty chemicals. How does this work . Indeed. I think the wall street journal article that came out probably has it right. Be a mind, it is going to costcutting story as well as a recognizing that some of the parts story. They come together, probably as be as, then there will costcutting drive that goes on. Probably these guys can take out between 3 billion or 4 billion of costs. Then they split the company into three different parts. The parts will be an agrochemical part, a commodity part, and a specialty part. Agrochemical is truly the one business where they can see Big International growth. Is that also a place that might cut back . Absolutely. March early partially because of the company, but keep in mind that if you take a look across corn,ities beat wheat or , i thesewheat or Corn Companies have already embarked on a crosscutting costcutting drive. We will keep in mind that standalone down has already announced a crosscutting program. Standalone dupont has announced a threeyear program of 1. 6 billion. That merge is 2. 6 billion. As i said, the entities can easily be 3 billion or formerly know as. Stephanie thank you so much for joining us. Both dow and dupont have been targets david thats what i was going to ask. Ordernie we know the gag runs up very quickly. It doesnt feel like a quintess. Coincidence. Stephanie they had no choice at this point. David yahoo is now looking at spitting out assets. They were going to spit out alibaba, now the talking what keeping it and spinning out their internet business. This is a defeat for mercer mayer. Reverse been. It sounds a good dance move. Stephanie the cofounder of yelp sit on the board of yahoo is the reason we saw so much coordination between yelp and yahoo now officially stepping down from the board. Yeah, maybe focusing on venture capital. Back. Go saying iswhat theyre focus on thehis alibaba tax problem is they are insisting this wouldve been a spinoff. The perception that it might not be a spinoff was harming their value. You could see that in the stock prices is down 40 over the course of the year. They will instead spinouts yahoo , it is a reverse spin. Basically what their contention is there is rather value and a business thats real value in is two timesd that with air well went at david they are making money. A lot of money. It is shrinking, and tech stocks are supposed to grow, not shrink. Stephanie all companies are supposed to grow. But tech stocks get a pass. If dow chemical is growing and a yahoo that is shrinking, yahoo gets a higher valuation. That is what happened in technology. That is not happening at yahoo . Stephanie take us the terminal. Matt im not looking at stock reaction right now. , but let me this up just show you what we see since january 27, 2015. The price had increase. If you remember the fiveyear chart, it is increased substantially since Marissa Mayer has taken over. But the started to come down after the irs said it will hinder their taxfree spinoff plan which is really the key to the increase previously. With theyahoo goes spinoff plan and files of the fcc. The stock continues to go down. It turned around in september, that in november it today will pressure alibaba to drop the spinoff plans. Are upie yahoo shares 2 in premarket trading. We are seeing somewhat of a reaction. We will cover this all day long. You are watching bloomberg. When we return, we have to talk about oil. The wild ride continues. David welcome back, im here with your business flash. Apple is suSpending Plans for a live tv service. Building afocus on platform for a Media Company to sell directly to consumers through its app store. In a plan to sell a package for 40 a month. Bd companys wanted more money for their programming. Walmart imports from china have been displaced. Study comes amid Economic Policy institute, a longtime critic of walmart policies. They say does not take into account the jobs created in distribution and majestic. Stephanie thanks a much, we have to talk oil. A sixted its decline your year low. With Inventory Data due out, investors could be bracing for yet another wild ride. He oversees almost 15 billion in energy assets. Nobody is wearing coats. That is a problem. That is exactly the problem. A lot of inventory as well and no one is wearing a coats. Stephanie actually, we have fixed it. You have almost 15 billion in assets, specifically in energy. How do you manage that . Was always opportunities in energy. There are lots of ways to make money across the Energy Sector. Today, we think there is a lot of opportunity. Energy prices are low, that is great for the consumer. We have low gasoline prices, that is a gift for the American Consumer. Companies like bolero have really benefited this year from lower gasoline prices which has really driven demand increases. We think it will be a bounce back next year and infrastructure stocks. They have been beaten up this year. David that sounds like good news, but have to be some negative consequences. Which of the we saw the Anglo American. There are. There are challenges was low oil prices environment. There are challenges for companies that have a lot of debt. If you are a small oil producer that has a lot of debt, it is a really challenging environment to operate in. Youre making tough decisions and trying to reduce your service costs. That trickles down to the service companies. Then they have to cut their revenues. Businesses are very difficult. A strong Balance Sheet and a Measurement Team that has been to this before, you can make it through. Stephanie who has been through this before . Has been a lot of these executives that have been through this before. The big companies, Like Pioneer Natural Resources Company dental, exxon mobil, a lot of these have been around for several years. They have experienced multiple market cycles. David what should we specifically be looking for, layoffs . Cutbacks . Defaults . The first thing we have seen so far in the first full visibly to reduce tool is to reduce your capital. A second year of cuts, declined to Capital Spending this year. The First Time Since 1980 we have had two consecutive years of cuts and Capital Expenditures. The next thing is exec or would you talk about, the rig count. It is now at the lowest level it has been the century. All of that means is lower oil production. That is important to help get this oil price headed in the right direction. Likednie you said you tinier, specifically help us with that. What do you like . Pioneer is an oil producer. Right now, prices are some 43 need to find the producers of the lowest prices because those ones will survive. They will drive an Oil Prices Start to produce. Basinr is at the premier in north america. It is one of the few places right now you can make a little bit of money. Pioneer has been very successful at lowering its cost. Just as importantly, increasing the volume and is able to recover. When you have those two dynamics working in tandem, that means the cost that they need to actually earn and economic return is coming down. That is a good thing for them. David it was some encouraging news, good for them. Thanks for a much rooming with us. So the come, we take a deeper chinas to speed economy and whether may be some opportunities. David now to global go where we are focusing on china. Up, whatprices picked does this tell us about whether it is time to invest in the worlds secondlargest economy . Want to bring in president who helps advise companies on their strategies. Welcome to bloomberg go, lets pick up on those numbers. We have consumer numbers what do you make of them . Numbers were a continuation of what we have seen for almost four years now. The Consumer Price index was up a little bit than we expected. I think what it shows is that there is this continuing trend of a shift in china towards consumption and services leading the way Going Forward in terms of Economic Growth in manufacturing still being relatively weak. It is expected given where china is in its development path. David to oversimplify, is the Services Sector holding up its end of the bargain . Yeah, the prices of services were up. That was one of the strong parts of the price index rises. Services are holding up their end of the bargain. It is a slow transition, it will take time. We see progress in the right direction. David you over the china. What advice would you give, or would be suggested by your research . China is slowing, we see evidence of that. As a market, it is still very attractive. It is the secondlargest consumer economy in the world. It will continue to be so. It continues to be an important opportunity for businesses looking at a Global Portfolio in choosing what to place bets. However, it is the case now where Companies Need to be making smarter and more insightful decisions. What our focus is on, helping Companies Make their bets more intelligent. David i want to to talk about the central bank. You came out with a report talking about different tiers of cities. System as a 50 tear er system. The system minicooper use is making smartul for decisions. With come up with a framework that we think is much more makingand suited to Business Decisions and providing recommendations about how to prioritize cities in terms of investment. Look ats companies china, talk to us about the government controlled economy. Even last night at the the central bank lowered its reference rate a little bit. An unusual economy in that it is a command economy. The government and its policies play a big role in driving what happens in china. It is always something that we are watching. It is always on the businesses need to be watching. It is just something you do look at alongside market forces. David thank you very much. Will talk with Terry Branstad he will tell us what we can learn from my was economy on bloomberg. Sure, tv has evolved over the years. Its gotten squarer. Brighter. Bigger. Its gotten thinner. Even curvier. But whats next . For all binge watchers. Movie geeks. Sports freaks. X1 from xfinity will change the way you experience tv. Tand thats what were doings to chat xfinity. Rself, we are challenging ourselves to improve every aspect of your experience. And this includes our commitment to being on time. Every time. Thats why if were ever late for an appointment, well credit your account 20. Its our promise to you. Were doing everything we can to give you the best experience possible. Because we should fit into your life. Not the other way around. To welcomeck back to bloomberg. Were looking at a Beautiful Day in london. Jeff ever time. Stephanie tom remembers. David first, we go to the first word. Iraqi forces have made a breakthrough. They said they regained control over sections of the city of ramadi. Iraqi forces are getting air support and training for the u. S. In brazil, a Supreme Court justice halted an impeachment committee. That panel was to decide whether to open proceedings against the president. They ruled Committee Members must be chosen by Party Leaders in an open vote. Life expectancy in the u. S. Has stalled for the third year in the row. A child born last year can expect to lived to almost 79. It is not clear why it is flat. Drug overdoses are probably playing a role. David, back over to you. David thanks a lot david. Tom we get the news last china but 8 00 of those headlines breaking. 30 minutes, exactly. Here is alan from dupont in a 2013 annual. I love that stephanie a morning mustread. Only him would bring it from 2013. Tom lets go to when the stopped making gunpowder. They said it did not happen. Significant growth opportunities. You need to growth to make it work. I would suggest you are familiar with this. With your illustrious past. No growth and the growth the phone starts ringing. David it is not pretty. , they did have challenges to emerging markets they were counting on. Commodities have heard them. This is about nominal gdp. This is directly back to Janet Yellens challenge, mark carneys challenge, the growth the economist even colbert is dead on on this. Cory johnson was just here saying Tech Companies have to grow. They dont have to be profitable. You need to grow but you also need to be profitable. It will do that, they will separate into the synergy things. Stephanie that is engineering. David it is job cuts. But to your point, but the overall pie is not growing then you have to rearrange the pieces. Tom you have to, that is the heart of it. In her defense, this coleman clearly identified two years ago. Dupont really is a market performer. That is saying a lot and a great market. Struggles are way behind harshly criticized two and three years ago. How you get the secret sauce to make this transaction. David nudging along. Stephanie you are a special guest, but we have a very special guest with us. The governor of iowa just days away from being named the longestserving governor in u. S. History. What i wastalk a economy. You are and i culture state, he left to think about corn. What does this mean for iowa . Done hase epa has german the price of corn below the cost of production. Despite that, because of the ink we have done, i came with the farm crisis in the 80s. With a much more diversified economy. We are growing insurance and Financial Services and advanced manufacturing. Even with what we produce and new, we are you a leader in renewable fuels. Ad theyre looking at renewable chemical tax credit for the next generation. Heres the second order of fact. Im in the hummer h2 and they have to make the to des moines. Im going 90 Miles Per Hour and a burning up oil. Gas is cheap. But the first order is an income drop for the corn to agriculture. The whole industry wrapped around hydrocarbon. Which wins out . Or is it thatgs, income effect fact that dampens all of the iowa economy . All, weve gone from being totally dependent on , todayd things like oil we produce more ethanol consuming gasoline. We have 43 ethanol plants employing a lot of people. In addition, we have the byproduct which is great handle feed and is bringing back the cattle numbers. Iowa is really were still in a cultural state tom youre not worried about recession within iowa . Taking away the cash benefits . I was governor of the 1980s when values dropped. Today, we have been going through this already. Land values have dropped. Our economy is still there because we are more diversified. We do need to see renewable fuel standards restored. We do need to see growth opportunities. We have a lot more going for us and iowa. That. Lets talk about you diversified your economy, much to your credit. To the epa regulations are an artificial support for the price of corn. Is it your state to supported by the u. S. Government . Terry no. The fact is, the government has from 2005 on we grew the economy in this country and then along came the epa and put the brakes on it. The problem is this we just need access. If the consumer can buy ethanol blended fuel which costs less than regular gasoline they will buy it. The oillem is, Companies Control the supply chain. Unless we have we do will fuel trying to limit the competition we will not have that access. And other midwestern states have done good things to make that available. The growth of renewable fuel has been phenomenal. It has been a good thing for our economy. In the east and west coast stephanie hold on, another thing that is phenomenal and iowa, the majority of stocks that are domiciled in iowa have been the best performer sense you have taken office. Isnt that true . Matt i was going to show something else. I will say that i would drive miles out of my way to get fuel that has no ethanol in it. There was no way i will put ethanol in my gas tank if i can avoid it. Terry let me tell you this. I have a lexus and i have used nothing but ethanol in it from the very beginning. The thing runs like youll probably go for 40,000 miles. That is prejudice is crazy. You dont think you should drive an American Made car . Great car. S a many of those are made in america. Let me just point to the governors record which really speaks for itself. Governor of iowa until 1999 when the state was doing very well as first Carbon Emissions. When he left for 10 years, Carbon Emissions shot up by 14 . The fourth biggest increase of any state. Back, carboncome emissions have dropped by 5 . He has very effectively done good things for the environment. I still would not like to put ethanol in my gas tight. Terry in the area of electric energy, 20 of our electric energy is generated by wind. That is why google and microsoft and facebook have chosen to locate in iowa. They are big energy consumers, they like to be able to say we are using renewable energy. There is no there is no impact on the environment when you have energy generated by wind. Were getting into solar and a big way. In biodiesel, solar, and wind energy. It has created good jobs and has been good for the environment. Governor, there was a little bit of news flow going on right now. Ifis a caucus in iowa you and your state can get it in one piece we must have you speak about religious freedom in this nation and what we heard from mr. Trump. Everybody has german across ied into the mennonites. Across i80 and see the mennonites. How do you respond . Religiousreality of freedom in iowa. How do you respond to what mr. Trump said . I think a lot of americans of every concerned about the lack of leadership tom i want to know what to think about what mr. Trump said. Terry you left look at it in context. December 7, 1941 president roosevelt brought america together. A day that will live in infamy. That brought america together. After 9 11, president bush came to new york and did the same thing. What obama did was divide the byntry by talking about talking about gun control as opposed to bring in the country together. People are looking for a leader. I dont agree with what trump is recommending. Americans are concerned about their safety. A dont think the president is taking it seriously. I think others have a better approach. I think his approaches shows a lack of experience. Stephanie governor, lack of experience how do voters feel about the idea of banning muslims . How would the play in your state . We are very accepting to immigrants, but we want people to come here legally. Isis tryingul about to infiltrate people coming into this country to do us harm. We see what has happened with the boston marathon, chattanooga, fort hood, and california. Governor, isnt an essential part of leadership not only saying where we should go but also making sure it is consistent with the core values of the institution your leading . You cannot lead it over the cliff even if you are scared. Terry i agree with that. My concern is this this administration wont share with me who these people are. Their names, and who they are being located with. I have constituents that are really concerned. They dont want to have a tragedy like what happened in paris or what has happened in california. I, as governor, want to do all that i can. I dont agree with trumps approach but i do agree that we need Stronger Leadership that we have in the white house. Stephanie is Donald Trumps popularity the fault of barack obama . Terry yes, absolutely. He is a leader, and obama has not been a leader at all and is totally underestimating the threat to america. It is a serious thing and it is becoming a bigger issue. Stephanie is he the best candidate . No, but i will let the voters of iowa decide. I want people to come to iowa and share their vision and plan to lead america back to get rid of this Huge National debt and restore American Leadership and our commitments to renewable energy. That is the kind of leadership we need. I am confident the voters of i will will play an Important Role in that. Stephanie hopefully theyll eat some corn products. Thank you so much for joining us. Before we go, we have to say congratulations and how about a happy birthday to the one and only tka. Happy birthday. Tom i am not celebrating birthdays until the yield gets back to its normal levels. 326. Stephanie still to come, the Export Import Bank is back at work. David after a fivemonth hiatus, the expert import is back in washington. Congress voted to revive the bank is part of a highway funding bill. The Bank Chairman is with us now, welcome. Good to be here. We were working the fulltime. Must pass vehicle. Of all, justrst for us and number of viewers, give us a short introduction to what you do and why you exist. Actually, i even have these Little Pocket cards at a carry with me. We are export credit of the United States. We finance and provide guarantees to u. S. Export for the private sector commercial markets are unable or unwilling to do so. That is largely Small Businesses which have trouble getting credit. Large capital goods things like satellites, airplanes, locomotives, power plants. These are sometimes very difficult to finance. We step in and make sure there is a level playing field. U. S. Can compete against foreign rivals. David to asking market oriented question, if there is so much risk that the private markets, watch the u. S. Government step in . Why should the taxpayer take the risk . Risk in is perceived real risk, and we frequently have Small Businesses where large banks just alike to do business with. Ran a Small Company for 20 years, it is a lot harder to get credit. 90 of our customers are Small Businesses. , butisit perceived risk frankly we report our default rates to Congress Every 90 days. 2 andnning less than report this. David that is over what time frame . Son for the consistent . That has been fairly consistent . Yes. We have gone through the worst financial crisis since the depression. Now default rates have fallen. Stephanie we will like what how impactful as John Boehners surprise resignation to getting the bank reauthorized . There was a lot of effort over the last two years. Lateinly the events in september and october helped open up. We had unusual provisions called a discharge provision were a majority of the house members said we want to get a vote on this. We always had a majority, but the rules of the house made a much more difficult to get a vote. A majority came together and forced the vote. Stephanie there was a lapse in the charter. During that come with actually American Companies who lost to deals to overseas competitors because of the lapse . Without question. We lost three satellite deals, one to france and to in canada. To sell a satellite it is hard to finance, going to difficult places. It requires governmentbacked loans. Either we will back it, or the canadian and french government. That is where the competition was. The customers moved over to canada and france. David do all the other developed nations have an equivalent . Arounde are 85 agencies the world. China has for banks that do this kind of work. Stephanie how likely is it you could lose your charger again . Unless Congress Extends us we actually close. That is why we left for five months. We lost the authority to operate. David how much runway do you have . We going to september, 2019. Have a fullont conflict on the board say you want do. Towe can do transactions up 10 million. Confident that congress will be in recess in a week or so. Im confident we will be working with colleagues to get on board so beautiful work of the bank and make sure america stays competitive. When you lost the satellite deals, who took notice . How good with a for business . How many jobs could they create . That seems massive to me. It is massive. There are Many Small Companies that have stopped reporting. They said they would going to set up a facility in another country. I cant get the order less and the backing. Stephanie who doesnt care about that . Who do they call . Minority who small were ideologically bent and said we dont think you should be doing this. They help things up. Stephanie they think the u. S. Should be doing what instead . Belief in theure market economy and not the world we live in. I was in business for 20 years. There is theory and practice. The theory fact is that we have to compete globally. David thank you very much. Chairman of the exported back. We will be right back with bloomberg. Stephanie were taking a coasttocoast on bloomberg today. Yahoo suspends work on it alibaba spinouts program. Yahoo Board Members stepping down. We will be continuing our coverage next right here on watching theo, markets boom to the green. Marissa mayer may be feeling the pain but shareholders seem to like it. Stick around, with two hours to go. Sure, tv has evolved over the years. Its gotten squarer. Brighter. Bigger. Its gotten thinner. Even curvier. But whats next . For all binge watchers. Movie geeks. Sports freaks. X1 from xfinity will change the way you experience tv. Tand thats what were doings to chat xfinity. Rself, we are challenging ourselves to improve every aspect of your experience. And this includes our commitment to being on time. Every time. Thats why if were ever late for an appointment, well credit your account 20. Its our promise to you. Were doing everything we can to give you the best experience possible. Because we should fit into your life. Not the other way around. Yahoo s reversal of fortune. How low can it go, the price of oil has stocks falling at least for now. Inventory report later today could change that. The ultimate gift for the person who has everything. Lived like james bond for two months, part of an experienced economy. David welcome to the second hour of bloomberg. We just found out he can live like james bond for two and wealthtributor management cio. Lets get you some first solar news. [indiscernible] david there is a battle raging in afghanistan in the secondlargest city. Natoirport is home to a base. 37 people killed, most of them civilians. In paris, a third gunman who attacked the music hall has been identified, 23yearold. 90 people were killed at the music call. Person of thes year seven other finalists, including donald trump and the ceo bloomberg. Now over to matt miller on the markets. Suspending dividends, in a sense following the footsteps of morgan, that company cutting its dividends because of the debt burden that it carries. Ands cutting its dividend has further revisions to its oil and gas Capital Spending land, additional curtailments in copper and production in response to market conditions. When we were talking earlier about what is going on, the question i posed was is this a specifically their issue or does it go across the industry . See the shares right now and the premarket are down. 75 . Stock is down this year. Rough going for a lot of companies. Gold and copper prices have been will look toand we continue to see stories like this. Jobs, usually 74 now, suspending its dividend and looking to curtail Capital Investment plans. Stephen win went out and bought ofther one million shares his own stock in the last quach or days in the open market. He now owns about 10 of the resort. Has been the ninth worst stock in the smp. Costco misses analysts estimates , so shares of costco are moving down in the market after coming out with earnings yesterday. Lululemon also missed thirdquarter profit estimates and had forecasts below analysts estimates. Stephanie i refuse to give us on to you. They sell tank top and work out pants. [laughter] every minute of every day, but if you are north base, i will give it to you. Lululemon, you are barely wearing any clothes. You are planning a chip to the outs. The fact that it is 57 degrees in new york is not affected, i will not get my kid a coat for school because it is warm out. It is reduced to. Stephanie your business has to be bigger. Has to be that my kids a wintern get them coat regardless of the local temperature. How many people say they have not bought a winter coat yet. I normally get cold and then go on columbus avenue for the local mall. There is even bigger news than lululemon today. Stephanie maybe. We have got to talk about yahoo the cofounder of paypal and yelp resigning as the Company Announces the suspension of its alibaba spinoff plan. Off of other assets. We will learn more at 9 00 a. M. Eastern he came here to run a victory lap and wants to say, how you like the now, scott galloway. And cory johnson, bloomberg editor at large. We will not let you run a victory lap. You are not a guest. I live five carry sleep through your instagram feed. It is pretty crazy. Stephanie a scary day former us a myers. A good day for shareholders. A think the board is doing the right thing. When you have an asset trading thing i than zero, the think will surprise everybody, the fact that it will go for a lot. Ore, that is worth a i think we will be surprised how much we go for. It is very much focused on dekes top. They have a wonderful ad business but it is a small part of yahoo . This than 30 of that led up how he to almost nothing. Au are right they have hundred 50 million next year and that is worth something. Those point in the direction of who would be a sensible buyer. I do not think sensibility will get into the equation. You are speaking like a rational actor. Sidelinesng on the will convince themselves. Is the valuation based on . Do you look at the operating profits and and say i will pay 2. 5 times . A lot of problems and what do you turn that into . Marissa mayer has not been able to make that turn. Whatever some individual will be able to craft a narrative around, whether it is comcast or a private equity deal, i think they will come up with whatever will justify there being a price , a lot greater than they are estimating now. Facebooksy forgets came out. The stock tanked because facebook adapted mobile. Stephanie but in the long run. Listen, it trades down to the teens because mobile is running away from them. Can yahoo make that same pivot to mobile . Stephanie can i do with mercer mayer . They have been trying that for a while now. She will find a need to spend time with her family. There are other things she can do out there. Lastly, its daschle an extraordinary woman. Take a look. I have a lot of confidence in her ability to create yahoo to be successful in whatever she does. Would you hire her . In a second. She is amazing. Completely magical. Bloomberg, we rank the highest 200 paid executives in the u. S. Her paid for performance rating out of five stars gets one star. I think that is because it is not possible to give her no stars at all. Down hereak compensation in 2014, about 42 million the lions share of that in 2014. S, granted set for the stock price 16 months earlier, that is very unusual. Typically a straight price is set when the options are granted. Hers was set at like 18 and the stock was at 38 limit her the option. Only one other ceo has such general generous pay package. Great payshe has a package. That was an understatement. Stephanie mark was critical of ceos and their compensation if the stock isnt doing well. How is it getting paid more . She said the company doing 5 billion in revenue and put it and will walk away with about a quarter billion dollars in costs. Board level compensation. It just is not right. To marissa, could someone has got to speak up for in fairness to her, isnt the only exception to the rule that you cannot bring a company tech back apple . Ibm . Ibm has come and gone and coming gone. I think you are right Technology Companies tend to start new one of the reasons, and i have talked to numerous us specifically about this, one reason i have been critical hard toe acquisitions, do when you spent the leaves of dollars in acquisitions but they have done it, people leave Tech Companies because they can get better jobs and a second. You have a bad day of work in san francisco, you lick your finger and hold it up to the wind and walk in another direction for a job. They were going out and buying companies to try to get all the people in. Yahoo ,beat of leaving leaving yahoo for decades. Ago, there have been massive departures from that company so it has been hard to turn around yahoo . For the same reason, everyone Silicon Valley really cares about yahoo . Did you say yahoo has made some of the work act worst acquisitions in tech history . I would argue aol me to come back. I think there are others. Last acquisition in the five years is tumbler and 1. 5 billion, more than instagram and what is instagram worth today . And what is tumbler worth . A lot less. Worst acquisition in tech. Revolving door, the coal mine of the yahoo canaries dying everywhere. Been an unmitigated disaster and a quarter billion dollars for disaster. Stephanie thank you so much, cory. Scott, we will see you later. There will be a 9 00 a. M. Conference call from yahoo continue the conversation on a potential merger that could be the biggest deal in the Chemical Industries history. Stick around. David we have been talking about already, a major deal involving Chemical Industry. Set to be in late stage merger talks. Joins anor conversation. Tell us what you know about this and what your voice what your viewpoint is. Jason it could spell the end of the chemicals conglomerate era. Weve seen these two companies spinoff major units this year and what it looks like would threef this would be leaner and more logical specialized firms out of what looks like the hugest deal in chemicals history. Many problems as you would think, or when you dig into what they actually do, the biggest overlap is actually in agriculture. What wouldt together really validate what monsanto was after earlier this year. A very powerful player. How much is the low price of oil, one of the key inputs costs of chemical striving this . Is that a factor or a happy coincidence . It is a huge factor. But when you look at what has happened, the plastics is this has to run the vast majority of Earnings Growth in the past five years. , 240, the come down ratio between oil and natural gas has collapsed. It is a barometer of u. S. Chemicals competitiveness. The collapse in oil has not yet spelled doom but it is a huge light barreling down on us and look like a lot more sense stephanie take a look. Frankly, this Company Delivering consistent earnings strong cash, big arabia, willaudi enable even more cash. Our focus is not a midday. It is returning that cash to our shareholders. Both of these companies have activists in their kitchen. How much does that affect Something Like this . The standstill was about to expire december 13. Mount nelson is still highly engaged with dupont. It looks like he was maybe playing the long game. It appears not just with these two companies to be a major factor. For ie come December December 13, david lowe would have many words. Who are the people out there who are saying they may be left out of the dance. The second drop in it and in two years now. A ton of activity with cam china so sam gent, already fraught and frustrated, woke up nervous. New competitors as well as whatever the three split offs or unit that come out of this, he will challenge a bunch of mid here firms internationally. It seems very likely the amount of chemicals has risen. I met with more bankers in the past year than i ever have in my rear. There is a lot of enthusiasm and the pressure is on. Of the is the impact strong dollar on these deals . Does the export market affect this . Is it not a significant element in putting one of these together . In terms of putting it together for this one, it has a muted impact, a competitive impact are sure. The europeans have become more competitive pushing material as the dollar has strengthened. David this is Bloomberg Intelligence with jason miner. Thanks for big with us. Barry, stay where you are. We will look at the most important quotes from Business News here on Bloomberg Matt oil has halted its decline this morning after a volatile, turbulent day of trading. Wti crude and brent oil touched their lowest levels since 2009, a sixyear low after opec effectively abandoned its output ceiling. Joining me to discuss where oil is going from here, from the cme in chicago, philip, let me first ask you how low you think oil could go. You saw a decline three days in a row. The relativet strength index, it has not gone down to 30. It looks like we could still see more selling in oil. I expect oil prices to go down about 30. That would be a start, the floor right there. We start to curb production. Operating costs are two great here. I think rising over the long run will put the most pressure on it. We have got the dollar point back of touch. Oil prices are slightly higher. Epi coming out yesterday. It showed a small drawdown in oil. We will probably see something similar to that with the department of energy. Oil inventories, still sitting well over the fiveyear hyperion that will continue to put the downward pressure on here. The problem is the u. S. Companies are competing against the big boys like opec. Opec will continue to pump no matter what happens here. Go ahead. Matt what turns it around . Andfuture seems so bleak then we hear stephen say it will bounce back to 70 by june. What could make that happen . Philip u. S. Production has come down but foreign imports have gone up. Foreign imports has got to slow down a bit. It has got to fall automatically at that point, we will see prices. We are competing against opec and that is a huge problem. Oil prices very low for a long time to the dollar index may be makesng after the fed their announcement. I think the price will move back , 35 on the low side. I expect that to come all your longneck steer. Matt thank you for joining us, phil. More bloomberg right now. Stephanie welcome back. You are watching bloomberg. This is a special time in the show when we take a look at quotes from around the world, something we like to call say what. We are going around the world. Good stuff from our colleagues here at bloomberg news. I want to start with the minors. Great piece this is specifically about angloamericans troubles. A series of strategic errors, the collective madness of the super cycle, where everyone got it wrong. Look, one thing that really stuck out from the story is they will eventually employ 50,000 people. It means they will go down by 85,000 people. It is an amazing retrenchment if you can even call it that. It is like a 14 billion mind that they may walk away from. Stephanie that is amazing to me. What does that say about the state of the industry to walk away from a 14 billion project . Collects it says there is really bad management making very bad and expensive decisions, if ever there were a place where investors should be shaking some cages, that is where. This is not an angloamerican problem. It is a sector problem, as they said. Us tocond quote brings the familiar world of investment banking. Im interested to hear what you say about this one. Ors is the Deutsche Bank ceo not to be in the u. S. Would be inconceivable. I have spent time in asia. The Capital Markets are not deep and it is just not a replacement for the u. S. Stephanie it is not like you are setting up a shop on 5th avenue. U. S. Ill you be in the without a significant business, significant talent, and significant commitment . Without that, being there saying, we will layoff of bunch of you, but we will stay in the u. S. I do not know how that will happen. To downplay asiatic time where other banks including Credit Suisse exactly. Interesting to see the two banks to emerging there. Well get to the third one. My sister was crying and we all had a feeling a crisis was coming. I always knew i wanted to pursue a knowledgebased business. It is too dangerous for the whole family to rely on making christmas trees. Is a member of the family which started a company in china. What it is about this story, the story is really about the shift from manufacturing to Service Economies in china. Christmas booming tree business and they are now in the Video Production business. An amazing shift. Jason kelly giving us say what. Inventory,e back, talking oil. Sure, tv has evolved over the years. Its gotten squarer. Brighter. Bigger. Its gotten thinner. Even curvier. But whats next . For all binge watchers. Movie geeks. Sports freaks. X1 from xfinity will change the way you experience tv. Tand thats what were doings to chat xfinity. Rself, we are challenging ourselves to improve every aspect of your experience. And this includes our commitment to being on time. Every time. Thats why if were ever late for an appointment, well credit your account 20. Its our promise to you. Were doing everything we can to give you the best experience possible. Because we should fit into your life. Not the other way around. Welcome back to we are talking wutang clan, stocks, oil. We will give you some first word news. Arguments today, a major case on affirmative action. A look at how a university admit students. It could eliminate or abolish. Achel racial prejudice recent terror attacks, the house has overwhelmingly voted to bar people who have visited iraq and syria in the last five years, a program that allows visa entry into the u. S. Allowing people from 38 countries into the u. S. Raising hopes trial come up with a fix for pollution, the first time the alarm has been raised at the highest level, level red. Impose restrictions on driving, more clean energy and eliminates Production Capacity and air quality. Now over to matt miller. More headlines on carl icahns exploits. Carl icahns proposal. It mays said yesterday be a superior proposal. Here is another thing carl icahn is involved in. Lng, he is into pep boys, xerox to we can do a whole block just on carl icahn. Cutting its, closing down mines, and yet this stock is up. We saw what happened to morgan, only down 2 in the premarket. It was down 6 and down 36 in the past eight days. I should say 10. Today will be the 10th day morgan trades down if it opens down this morning. Were talking about Anglo American. 85,000 jobs, more than half of its jobs. Cutting its dividend. Dave and busters, a chucky cheese kind of but way bigger kids, is upace for right now. The forecast. We talked about the economy on the program. This is one place where they are spending money and it has raised its forecast. More people are going to dave and busters. If you went in times square, you would think it is the hottest restaurant in the city. Matt i do go there and i have never seen you there. Stephanie so do i. Matt the Investment Outlook available today, we have seen the global head of Management Investments joining us to get a preview. In 3 30. Ut look it over. O talk to me first about Interest Rates. It is a slamdunk that janet yellen raises rates in the meeting next week but what does the trajectory like look like in 2016 . Upwe can imagine it going one and one quarter percent over the next 12 months but that is the more obvious story. The impact of the Interest Rate rise is less long known because it will have impact for the dollar, doing extremely well for the euro and the and and emergingmarket current is. We think this will create the story for 2016 from an investment standpoint and as we look ahead. Interestrate and the ever strengthening dollar on the commodities . We have seen a harder show today. It is not turning out well for investors right now. That is right and i think you have hit upon something we have hit upon a medically in our outlook. Commodities cycle is now actually still down. If you are an emerging market producer, this is a very different all time. It is the highest default rate we have seen in a while, high yields, and we think the story continues. We think there are Investment Opportunities that arise out of this, cynically in the oil sector and energy more broadly. We think ultimately there will be supply and demand equilibrium in 2017 and for some of the stocks that are very beatendown, it could be excellent Investment Opportunities over the course of 2016. Maybe that is why we see carl icahn piling into these things in the rearview mirror. It means foru what spending. When the price of oil for started dropping, the question was is this bad because of what it does to the Energy Sector or is it good because of the money ofo the pockets, the boost the economy. Do you expect the boost to come for gdp . The answer is yes overall. You had again on the point. Energy is a major part of the economy. We are seeing significant cuts in Capital Expenditures and employment in the Energy Sector. That will be a significant drag on the economy in 2016. Consumers have been slow to adapt to the fact that we have extra dividends, the amount of and Industries Related to that in airlines. People will start to write it into their own interest statement that theyll keep the statements and it will be a andt to the general economy 70 is in fact a son the consumer. A net positive for the United States. Thank you. Glad to finally get this. Clients can get it right now. I will hand it back to you. Klein. Oil halted its to under 38 for west texas intermediate and just over 40, not that it is roaring back. Crude Inventory Data out later this morning. Lets bring in michael , barclays head of energy and commodities research. We have barry. You oversee over 15 billion in oil. Barry, you dont. Not. i do david we do not know of oil will go up a little bit but it seems like we should get prepared for relatively low oil prices for a while. Take us into that world. What does that look like . For ministers could do nothing more than just agree to disagree. The balance overall for 2016 are already weaker and stand to get weaker overtime. I think rebalancing will bring up the market, not nearly to the levels we saw in 2014 but a level that is Sustainable Oil to continue to grow in the mediumterm. Opec as an organization is not nearly as of active as it once was. Of the meetingh friday, that is what the market is trying to digest here. Until there is some kind of agreement and guidance on the level of output and until the market understands how much extra oil iran actually add to the market, we will be in uncertainty for a while. Research, we think oil has to continue to grow at a rate of 400,000 Barrels Per Day to the mediumterm, consistent with an outlook showing demand growing to one million Barrels Per Day in 2017, 20 18, and 2020. We believe the prices need to move higher than where it is currently showing. How much higher, our calls for 80 dollars by 2020. Low demand environment, we expect prices up about 75. That is based on our analysis about what extra oil is needed given demand and other price thatll come on irrespective of what other things are going on the market. Collects Everybody Knows saudi arabia is pumping for a variety of reasons, angry at russian read correctlyi that iraq is now the second largest producer and opec, is that accurate . This is amazing. A lot of analysts have been calling for iraq to not increase production. The introduced a new grade and enable to increase out put by half a million Barrels Per Day by 11 months. That is huge. They are now producing basically 4 million Barrels Per Day. Earlier this week, the Iraqi Oil Minister said they would increase output by 200 barrels a day over the course of the next year. But they are susceptible to the same problems of low prices everywhere else. Companies are cutting back on targets in iraq. May have also got many infrastructure problems, exports to increase. Stephanie take us to the terminal. Matt everyone loves to say this. But it is interesting to look at. It is a spread here between gasoline in green and crude oil in orange. The spread is represented by this flight line. We have gotten up to levels we saw in december of last year, 2000 or team. Does this tell us exactly . People talk about the crack spread so much in the and is and in the energy industry. What does it mean for you . You have to understand this represents the difference between one product and crude oil. Not representative of the entire margins. High spreadg a versus oil because the American Consumer is driving a lot more. Not only is the American Consumer driving a lot more, but mexican consumers are driving. The u. S. Refiners are also exporting the gasoline all over the world. Is two sides of the coin. We see extra demand demand for gasoline which is consumer lead. A downturn in petroleum products. Youre doing for calculations, every time we see the present will drop significantly, and matt could discuss this in great detail, we see huge lift in the sale of larger vehicles, trucks and isrts cars, anything that truly efficient and when you try to calculate prices Going Forward, how do you work the dynamic into the shifting efficiency of the u. S. Fleet . Way we try to assess it is look at a couple of Different Things that are the basis for the u. S. Demand outlook. Like . S employment what is the fuel economy of the existing fleet and how much to the existing suv that suv sales affect the overall economy . And there are economy issues. How much are we expected to it here to for removal standards and the other fuel economy standards. It all has to be taken into account and we do in our projections. David im hearing for michael we need to get to 85 per barrel. Iraq is pumping more than ever. We have not seen iran yet. How do you square the students things . A great way to play the oil prices everybody think it is going up. It is just a matter of when. The way to play it is, energy infrastructure. You can buy any infrastructure, ofctra energy, a lot infrastructure names, pay your really good current income and you get paid while you wait for Commodity Prices, whether it is oil or gas. It is one of the Major Products and we think it is a great place to be invested while you look at Commodity Prices to be improved. Demand is not increasing fast enough to soak it up. It looks like we have a weak market for a while. Demand this year for crude oil has skyrocketed 80 higher. 1. 8 Million Barrels of oil. It will be a lot higher next year because of low oil prices. There has been a demand response for the low oil prices. Supplies are coming down in the u. S. A little more balanced and next year, we will have more demand and that will help reduce inventories and help to get us on the path to ohio higher oil prices. Stephanie thank you. A great conversation. Michael over at barclays. Hank you very much barry, were not letting you go anywhere. Living like james bond for two months. Anybody can go to bali but very few can hang out on the edge of space. The best experienced gift next on bloomberg. Yahoo welcome back to has decided to give up a long planned spinoff stake in alibaba and instead is exploring spinoff of other assets, major businesses. The reversal has been seen as a defeat for the yahoo ceo Marissa Mayer. Apple has plans to sell a tv service. Apple will focus on being a platform for Media Companies selling directly through the app store. Apple planned to sell 14 or so channels for up to 40 in the a month but Media Companies wanted more money for the program. Cheers of lululemon trading lower in the premarket. Lululemon was forced to cut prices on more items to make room for new merchandise. Stephanie we are continuing our weeklong series on the economy as consumers spend more on experiences and less on physical things. We are joined now by the bloomberg editor of global luxury. Returning from where he saw mariah carey live last night, truly a christmas experience. And School Professor scott galloway, truly a grand man. You have set onset before that , how do they reinvent themselves in this environment . I used to buy levis when i was a kid. Play music, make it a nice environment. A look at what Urban Outfitters is doing. Chain andt a pizza are criticized for it . It is a good idea. The hottest right now, the ralph lauren restaurant. The two are coming together. David it is not entirely new. Williamssonoma, in the 40s, he started with cooking lessons in. Is stores he used to travel to france with a hardware store, it sold more than the wrenches and the screwdrivers and that was the birth talk about an amazing life and dies in his sleep. What a life well lived. Featuree you did a big on the hottest gifts for billionaires. We do this every year and it is so fun. One of the top few things on the list are always experiences. As you said, you can own a million different cars, but experience is oneofakind, rare, and just for you. We had some really cool ands this year. One was you could travel to the edge of space 100,000 feet in the air and see the world from there. A new experience. It is four times the height of mount everest. That onether one costs 90,000. Stephanie where do you buy that from . This is what i want to point out, lehman markets, a department store, place where you by china, perfume, and handbag spirit why do they sell this . Because they cannot tell handbags anymore . What they sell is a lot of their products and also, incredibly rare and special experience that are quite expensive. They are selling the lehman markets fantasy. Lehmanntasy life is markets and that is what they are trying to sell. Stephanie does anyone actually buy it . Of times people dont. I talked to lehman markets about what they made out of urban barrels. Bullet buy it full of burden. I said i would love to use it for a photo shoot but im sure someone already bought it. They said no. It makes the 2000 bottle of perfume more reasonable because you are anchored at the 90,000. Stephanie does this speed to the fact the. 1 has gotten so rich that there are no prices . You are the luxury extra. Go ahead. A lot like millennials. They are very smart about how they decide what is most valuable to them to for most, it is time. Something,me to which you have to do for experience or a trip, is actually running the most on that item. The new star wars movie. I am more excited about that than anything else. Exciting. You have seen it . [indiscernible] you were about to elevate yourself. Barry, you are still with us and alex go over to matt. You are following a story we broke earlier. Matt you can buy a baby elephant and Ronald Reagan alibaba on from the pet shop. Stephanie that was a very different time. A number of Commodities Companies are coming out with stories that they are just getting crushed by the market. This is no exception. It is suspending it dividend, closing down mines. The biggest miner of copper and gold. It is up in the premarket. It is actually gaining, one and one third percent right now. We have seen Anglo American crushed. To be fair, down your today, but on the news it is spending its dividend because of a horribly depressing commodities market, it is actually up in the premarket and morgan is now turn around. David we look forward to the answer. A few months ago, Meredith Whitney is now overseen equities bermudabased and arch capital. Mac abelson joins us now. It is quite a saga. Tell us about the new gate. Last year, we were talking because she was starting her own hedge fund it was a big deal. Were looking great but it did not end well for the hedge fund. Ago, she said the chapter in her life was closing and known was quite sure what she would do instead here we this she is at that is true. That was actually a clue that help me put this together. She does live there. She will be overseeing a portfolio and managing the managers. You have got jpmorgan and blackrock, equities. Stephanie hold on. If she is managing the managers, then she is not managing any money. It sounds like it will be something slightly more glamorous. How much money . 809, which to be fair, her hedge fund was 59. Stephanie it was a little more than 50. The fact that she is investing in other managers right now, it is a whole lot here at it is true. I bet you it is not what she was thinking she would be doing at the end of 2015 she was probably excited about the idea of running money, running hedge funds. How much of this is running managers versus, here is a clean paper. You go. A good question. We have a hint of what the answer might bp we were told as of late september, before she started, the portfolio is a hundred nine dollars. That says to me it is an existing portfolio she is diving into work on. I think she only started literally last week. Stephanie we have to leave it there. We have a millennial on the set. Max, thank you for joining us. Everyones dream job is to work in an environment that supports work life balance. The best place to work is airbnb. Millennials love it. Everybody wants to stay at airbnb and work there. Would you like that, matt . We will be right back. Sure, tv has evolved over the years. Its gotten squarer. Brighter. Bigger. Its gotten thinner. Even curvier. But whats next . For all binge watchers. Movie geeks. Sports freaks. X1 from xfinity will change the way you experience tv. Tand thats what were doings to chat xfinity. Rself, we are challenging ourselves to improve every aspect of your experience. And this includes our commitment to being on time. Every time. Thats why if were ever late for an appointment, well credit your account 20. Its our promise to you. Were doing everything we can to give you the best experience possible. Because we should fit into your life. Not the other way around. David 30 minutes its way six seconds away from the opening bell in new york. Bethany we are joined now by our friend and colleague, brendan greeley. Brandon you are so good with the math every morning. Stephanie we are a data and analytics company. David closest for other networks. Brendan bloomberg first word news brought to you by david. Afghan troops are battling the peoplelargest city 37 , mostly civilians, have been killed. It is the biggest Taliban Attack since they seized in Northern City three months ago. Airstrikes in syria, targeting islamic states, that is an assessment fighting the militants. Bashar assad in the u. S. Thinks russia is bombing rebels who want to overthrow it. , person of the year. In the shown leadership greek crisis and the debt standoff. Runnersup, donald trump, and the black lives matter movement. More on these and other breaking stories. Now over to matt miller. Matt i will deliver and all carl icahn segment now. Down acrosstures, the board. 30 minutes away from the opening bell. Check out the individual stocks carl icahn has taken dates stakes in this year. Look at these stories. Pep boys is not changed but carl icahn has a 12 stake in pep boys. He has offered 1552 by the whole company. At 15. Eady wanted in bidding war as carl icahn tries to drive consolidation in the auto parts industry. Another company he took a stake in, i think starting in july, he to double down, he continued get in. He owned 100 million shares right now. This stock has taken a serious hit down your today. Company, you can see it has bounced back a little bit but not much to make back the 600 million carl icahn has lost the far this year alone. They suspended or dividend and revised the plan. Investors are buying a little ahead of the opening bell. Carl icahn got into herds and had a 12 stake and has raised that 214. 3. You can see in the premarket it is up on that news. Million. Ver 600 a lot of states that carl icahn has doubled down on this year. Usually in the rearview mirror, carl icahn tends to look pretty good. Brendan time for the three stories that matter to markets now. Yahoo has announced it is scrapping a spin off of alibaba and the company will instead what we used to know as yahoo cory johnson is on the call. What can you tell us about what we are about to hear . Fisherprice our producer for some reason the calls just starting right now. They are talking about streamlining the business and what to do Going Forward. We will listen for any sort of sense that there is a concrete plan here, that they have a spin off to how the will work. It could be applications from yahoo , as much as there might have been with alibaba and it is really just getting underway. Display advertising the market and the u. S. Right now, Melissa Meyer could not turn that around. Can anyone . Cory it sounds like the voice of web. There is an acid there. A lot of users on yahoo , as a wonderful ceo wants that to me, everyone has got a yahoo email address and everyone is looking at the home page. Yahoo sports is a big business. Strong onesing is a and it powerful one. It is also focused on the desktop, not successful mobile. They have made big mistakes, as pointed out in the last hour. See the mistakes they have made but there is an asset that is very profitable. It gives them a basis to do something. Yahoo has always been a land of opportunity. A lot of people have come and gone, but phone will look at this and value it probably more than it is being valued right now. It is worth more than zero. Thank you. E will check back in with you chemical and dupont are in late stage talks to merge. The largest deal in the Chemical Industry ever. After the merger, the company would break into two or three business part because of like regulatory and other issues. Both stocks are up in the premarket trading. Is to earlier said that was a great idea. I am new at this. In may of this year, he and toor costcutting divide the distance up into three different units, life sciences, plastic, and chemicals. Isnt that exactly what they will do now with the merger . Pretty close, that is right. Became the activist investor over a year ago. December 13, his hush order. You cannot hear him speak public the about this company or his intentions. I would say, a coincidence . I think not. Is this the ultimate longterm effect of activist investment . They will eventually do what you are dragging them to do. Have maybe investors ideas. It strikes me the analysts we have talked to inks it sounds like it makes a lot of sense. They are not in there for their health. They take these changes will be good for shareholders. The way it was tough about this morning was interesting. This is low growth rather than talking about the a specific problems with those two companies, if you cannot grow organically because there is no organic growth in the world, then this is your only option. Is a lot easier to cut costs, which means people, when you have restructuring going on. We will be just the way we were except one third left less of us. Headquarters the from the east coast to the west coast, all of a sudden, there are not as many people on the west coast. Stephanie amazing. A selloff in European Mining companies extending to the seventh day, dragging down equities. Trading down more than 8 in london. The Company Announced yesterday 85,000 jobs in scrapping its dividends. Get your head around the magnitude of that. 50,000 jobs, that is amazing. I am in no way qualified to call the bottom of the market, but people who have been saying what , look for cutbacks in capacity. I wonder, is this the first step in admitting the capacity will get you somewhere . They continue on the trend today. I just want to take a look at the ftse 100 index in england right now. He can see Anglo American is the worst performer. You to date, the stock is down 75 , a company that held the on diamonds for essentially century when it was in its growth, down 75 purity look of the list of the bottom 10 performers, there are a lot of mining companies. Rio tinto, here. It has been a rough year for the and it has not stared even Anglo American. We will follow the pain for many months to come. That is the story that matters now. And exclusive look inside the home of one of the biggest art collectors. Noland and alex, one of my favorites, are totally different. Then you look at chamberlain, which looks like, some people say that looks i get car that was crashed and they go like this to the car. At a junk place. And they spray some paint on it. Stephanie a big green canvas and a pile of scrap metal and it is worth millions. I found out from george perez. All that and more is coming next. Stick around. David welcome back. Here is the latest. Apples Spending Plans for a live internet tv service, sells about one dozen channels. The Media Companies wanted more money for the programming. Dying after a kayak accident in chile. Who suffered hypothermia when his book collapsed. 72 years old. Some users scratching their heads. Twitter is trying to show the most relevant post at the top. Early reviews including my own on social media are overwhelmingly negative. That is the latest, over to matt miller. Off, i have been talking all morning about suspending its dividend, cutting capex, shutting down mines. Investors seemed to like that in the premarket. It is down 70 year to date. Also down about 70 year to date. It was down for nine consecutive days. It looks like we might find some today. For the company it also cut its dividend by 74 . Stephen wynn bought himself another million shares and now owns 11. 1 million shares of the company, about 10 . The ninth worst stock in the s p 500. I guess he felt he might as well divide because he believes he runs the company. We have been talking all morning about this, possibly historic it is historic, if possible merger here. Dow chemical, late states late stage talks right now. They put it together into three different companies. Very interesting, agriculture and plastic. Dupont and down both rising on the news and they have boast on well because oil is one of the main costs especially for the profitable elastics business. Dear to my heart, krispy kreme at a disappointing thirdquarter profit and outlook and most recently on the conference call, the ceo sees the timing of christmas as slightly negative. They will raise prices throughout the year and i wish they would quit more stores around here and new york city. The only one is in 10 station. Who goes to penn station . Stephanie 30 used to be more. There was one on 23rd street. They actually closed down. The problem they face was a onehit wonder and all they sold was glazed doughnuts and there was a big downturn. To sell ishey need those glazed donuts. They are delicious. Stephanie we do not know his investment thesis. With bill had dinner gates. Maybe over dinner, bill gates gave him advice and profit him to buy some shares. David conspiracy theory. Matt very possible. We will go now to a break. When we come back, the first commercial airline to fly and airbus 18 350. We will talk to the ceo about the u. S. Growth strategy and why the big u. S. Carriers are not happy about it. David welcome back to Cutter Airways has become the first pushne part of a major to expand market share in the United States. Delta, american airlines, and united are saying not so fast. Subsidies government are giving an unfair advantage over them. Were joined now. And whyabout your plans is it they are objecting . We have an open sky with the United States and we will exercise what is allowed by the governor in that open sky regime. We are opening new the United States, two l. A. , and then to boston in march, and then eventually of the doorstep of delta in june, which would be my great pleasure. What is being said about the carriers is not true. To thet documents government, and i will leave it to the government to decide what they have to do and if they are complying. Nothich part of that is true . The industry has come up with some of the subsidies at 42 between you and amorous. Which part of the numbers not right . That is what they claim to be, the total subsidies we have received. Deftly tell you about airways, that whatever we received from our government is an equity owned by the government. What the american carriers are not talking about is the biggest legal subsidy they get under chapter 11, they also have an indirect subsidy, receiving fuel subsidies by the government, so i think mudslinging does not work. They should stand up and face and give theon passenger good value for money. And chargingcity excessive amounts to passengers, the american passengers, is, i think, not fair. They are worried about the product this apply to passengers in america. American carriers have had a monopoly for the last century. They have the slots they want and you have a situation where you have an investor making an investment in the business to make the business perform better. In meet with u. S. Senators and congressmen to discuss the situation . Met many u. S. Senators and congressmen but the people had a very convincing story that what they are claiming in the United States is not true. What my government is investing , that infrastructure everyone else in the whole world invests. It is interesting to see the american carriers are not talking about the same business that they have. Guam, takingn and shareholding and companies that are subsidized, they never talk about india, they never talk ut African Company countries, they never talk about china, because they are afraid. They do not talk about russia. Their only talking about the middle eastern carriers. They must not forget that china is a sleeping giant. If the airlines are not to what were doing over here with limited frequency, i would be interested to see what the reaction is of these three american carriers that are all the time crying wolf because they cannot stand up to competition. Line is we arem all capitalists and we won investment in infrastructure. We need it for sure here in new york airports. Also in airplanes. You have made a lot of noise about egg orders from airbus for more efficient plants. Are you prepared to make a big order right now or do you have anyone on the docket . As a matter of fact, we have at the moment ordered enough airplanes, but yes, we have Investment Opportunities in airlines and other parts of the world and when that materialize and we finalized Investment Opportunities, we will order more airplanes from boeing and airbus. A quick question about oil and how that is affecting your business positively and negatively, positively, it is interesting for my business because the lower the oil price, we can recover our lost margins we were areng when the oil prices very high. It is not good for my government. It is very efficient. We do not rely on oil, we have other Natural Resources and we can still continue our progress. Stephanie thank you for joining us this morning. Thank you. Welcome back, you are watching bloomberg. Call just wrapped up and cory johnson has been on the call. What can you tell us . It features the voices of the cfo and the chairman and they all said that there are versions of the theme. At ken golden said this is mirror image of what we proposed before in spinning off alibaba. Could do aink we taxfree spinoff, we have done it that way. But they many years we would have taken to resolve the tax issues, we had to go a different way. So now they are spinning off the business andhoo keeping the alibaba. Marissa mayers got on the call and said it will result in double taxation. Taxed forrs would be the gain. It was interesting to hear them problemst the various various proposals they have been through and why they will not do this as a separate spinoff. Marissa mayer says it is a very different yahoo today that it was before. She talked specifically about the challenges of hiring people and retaining talent. She think it will be easier. Was interesting to hear from ken goldman. That the spinoff will purely be a thing of the marketplace. They said that it would trade better if it was not combined with another yahoo business, which of course was the spinoff to put alibaba with yahoo s Small Business. About the they talk tax treatment of the Small Business . They did not. They said they still have a lot of things to work out. But they did not talk about the tax consequence of spinning off. A lot of investors were asking questions like, why did you do this in the first place . And they said that alibaba was the smartest thing to do but it looked like it would take too long to figure out. Stephanie what does this mean for marissa and her job security . Still says he sees a lot of value in her, specifically because of how she has managed the taxation around the alibaba stake. They were preaching to the choir there. Everyone was universally saying that there was more value to be had here. Yahoo is not being valued appropriately by the market. When people see what it is, they will see the big file big pile of cash. Are valuingey the company at effectively nothing. It wasnt clear what they would do about yahoo japan. They said the focus right now is japan. Libaba, not yahoo so the suggestion is that they might keep the japan, it was not directly addressed. Marissa has a little bit more time there, and there is certainly a lot of criticism about the decision she has made. They also talked about tumblr which will go down in history as one of the worst acquisitions. She says that it is doing well and it is particularly successful in mobile. She got really defensive about that one. Stephanie i dont want to say that the stock is tumbling, but the market opened one minute ago and we are seeing shares trade down slightly. I know you will be covering yahoo all day long, cory johnson. But first, lets take a look at commodities and currencies and foreign exchange. Commodityt just a impact. Crude hit the lowest price in six years and now we are seeing its trade up a little bit, begging the question, has oil hit the bottom. I want to bring in john normand. He is at j. P. Morgan. Also with us is rachel evans. Set the stage. It seems like oil has been in a continuous slide with no catalyst to turn it around. John it has been. And the catalyst is adjustment in u. S. Supply. It looks like it peaked a few months ago but it isnt following quickly enough to rebound the global market. Given the focus of the last few days and whether they will go above target, that says more about what the u. S. Adjustment resuming. David is that the reason why it is not coming off line . Because it is easy to extract . John i think so. There is a technological impact to this. Ist is really where the risk in terms of most peoples outlooks. We know the adjustment has to happen in the u. S. , because the process as we have witnessed before, it is tough to how it will evolve. Stephanie currencies that represent commodities, the we have seenar them continue to go down. How do they defend the currencies when they have no ability to give more oil . That is an interesting point. We saw the governor of canada come out yesterday and talk about alternative ways to stimulate the economy. That hit the canadians hard. We saw it slide to an 11 year low. That begs the question, how much further can it go . 134 today. E are at john may have thoughts on that as well. John there is a difference between the g 10 commodities currencies they can fall as much as they have been doing. Central banks arent under because they are dealing with a lowinflation environment. It is more the emerging market economies where there is financial instability. Theyhave to decide whether will use reserves or let the currency continue to depreciate. David to change to a different place, the yuan in china. They changed their preference rate overnight. There seems to be a general devaluing. What effect does that have on the marketplace . Leading the currency respond more to pressures. Which have been obvious for a few years. They dont let that response come through the market every day, week or month. But they have shifted tactics recently. Private sector demand for dollars that is why the reference rate is moving up. A huge think this is influence on commodities at the moment because even though china is a major consumer, the size of depreciation you see in the currency is modest. But it will get more interesting as time goes by because the higher the dollar goes against the yuan, the greater the implied tightening is. It will make the fed debate. Said debate interesting. Stephanie is there a said debate . Is it around the timing over which we will continue to see rates go up . John there are a couple of things. Thingsre a couple of leading to december being the liftoff date. Datare telling us it is dependent which means they dont have a stephanie i hate that. John the debate will shift to whether the combination of higher rates and higher dollar will show the will slow the u. S. Economy. It will go into the thought process. David i want to go to matt miller. We heard that china was eating through some of the reserves. Where are we . Matt they are falling further than we had estimated. Despite inclusion and the imf special drawing rates. Here in white, Chinese Foreign reserves. The orange lines are gains or losses in foreign reserves. You can see big dips here as foreign reserves come down. One of the things i would like to know, china is spending money on old. Why does it continue to boost their goal . John i assume it is basic diversification basic diversification. A bit of gold. In there, it doesnt accomplish much in terms of diversification. But a lot of Central Banks with massive reserves like to buy amounts of nondollar currencies and old. I dont think it is significant. Stephanie on the commodities front, help us in best. What is your outlook in terms of First Quarter next year. John First Quarter you want to be short commodities, all of them. You still have oversupply with metals, iron ore and oil. The only place you could see turnaround in 2016 is oil budget is in the second half and on the assumption that u. S. Rebalance is the global market. Of 2016. E first half , think the easiest investment if you want to call it that over the t six months, is dollar. Rachel do you think that with commodities set to come back in the next year, with that make a buying opportunity versus commodity currency as well . Or will the stronger dollar keep commodities on the back foot . Onn if the only thing going next year would be the oil industry tightening prices, then you would but that is not going to happen. Dont want to be short on Oil Currencies for all of 2016, you maybe want to be neutral look for buying opportunities later. If the fed is tightening, i think it is too big of a hurdle. David thank you to j. P. Morgans john normand. We are eight minutes into the trading day. Ring us up to speed. Matt lets take a look at what is going on. We see indexes bouncing up a little bit in the first few minutes. 500,e change on the s p the dow jones has added 31 points. The nasdaq is down. Take a look in my terminal, i have the imap up. We can see from this picture up today. Ials are energy is actually up today. Utilities and industrials have little change. The big losers are consumer staples, health care, telecoms. Take a look at oil. Most ofy and monday and yesterday they showed huge drops and then bounce in afternoon trading yesterday. Now, we do see them at 1. 38 . Below 40 andwn yesterday it went down below 37. We are at a onemonth high on gold. 10. 81 an ounce. Maybe goal doesnt have much an effect doesnt have much of market, but chinas an effect is that the u. S. Dollar has weakened. Take a look at the euro dollar right now. 1. 96. As far as the companies we are looking at today, yahoo is one that we are following closely. You did hear cory johnson talking about that. The were down 2 in premarket. Mcmoran fascinating. It is down 71 year to date. 70 er morgan is also down year to date but also the first gain in 10 days. Lets go to Abigail Doolittle at the nasdaq for a check on one big winner and loser. Areail lululemon shares plunging this morning after they missed the thirdquarter estimates and the high end of their fullyear revenue range. Year overown 17 year. Not something that investors want to see. To blame bloated inventories. The company has been fighting to restore the image after the whole seethrough yoga pants. Whether or notis this will cause the companys profits in 2016 to decline below the levels in 2013. Then they made one dollar 85. They are looking for 1. 90. Resorts,ng to win shares are popping after the ceo bought one million shares between december 48. Thats just that the buying momentum could continue. Stephanie . Stephanie our own Abigail Doolittle joining us from the nasdaq. Come have next on bloomberg , we go to miami with jorge perez. We are talking about up market and whether brazil will cover. Coming up at 10 30, an interview monday greg maffei. David gura welcome back to bloomberg. Local investment banks faced five years of cost cutting. Among the reasons, tighter regulations and slumping trading revenue. They had a 9 return on equity in 2020. Walmart imports from china wiped out 400,000 u. S. Jobs. Timestudied a 12 year ending in 2013. They said they did not count the jobs that walmart creates. And 350,000 cars a year. Prius hybrids have been sold since the debut years ago. Jorge George Perez Perez is known as the real state king in miami. But he made a fortune building up neighborhoods in florida. And hasw collecting art become one of the biggest collectors in the world. The Miami Art Museum bears his name. Grove,ed him in coconut florida and asked him if he is worried about prices in the real estate market. No intention of selling so i am never wondering if my art is less value. I presume like real estate, arch will have a fall and that is expected. Like a commodity. And still buying buying the good pieces are being devoured. Stephanie there is huge demand for really high end art. Jorge no, im sorry, i disagree. Huge desire for money to participate in the Creative Process of the art. You are seeing a lot of go to south america, cuba, and discovering young artists. So it doesnt have to be a 1 million piece. It can be the 20,000 piece or 40,000 piece. Stephanie but the risk is supply and demand. Artistare buying from a to is no longer alive, you know there is no more supply. Jorge i agree. It is far riskier to collect and careertists artists who still have a lot of production left in them than to andynsecrated artists like warhol and so forth. Andif you look at art compared to other things like commodities and real estate, stocks, different investments you can make over the last decade, art has had an impressive rise in price. I dont do art financially. Stephanie real estate is what you know at your core. Luxury real estate and luxury art. Do they move in tandem in terms of value . Jorge not at all. It is almost like gold. Something safe that we can move and keep and look at. Miami a few years ago, there was a housing crisis. Now there is Development Going on everywhere. Are you worried it is going to bubble again . Jorge yes, we are building a lot. Perhaps we are getting above getting ahead of the demand. Nevertheless, there is almost no speculation because the buyers we are selling to our cash buyers with 50 down payments. We have tried to make it much safer. A market slowdown could happen but it is not a critical as a matter of fact, there is one that i like happening because it is getting some of the people out of the market. Crazyes who used to do deals at secondary locations, they are saying that they cant build. Stephanie so you have less competition . Jorge we are starting to. Stephanie brazil. Is it time to market or old . Jorge is it a country that rebound strongly . Yes. How long will it take for the rebound to happen . It depends on a couple of things. One is china, remember, they sell so much Raw Materials to china and the second is political. Stephanie what are you going to do . You already have projects there. Slowly inare selling those projects. We came in at a very good time. We are waiting. I have investments that i sold and now off back and now bought them back. Real estate is really undervalued. I maybe wrong, it could be undervalued more. You, jorgei warn perez has over 1000 pieces in storage. When we talk about potential in miami ors is latin america or brazil, he said the key right now is that there is less leverage in the system. The same thing we hear about the financial markets. , in terms ofcuba real estate and art, they are the next great place. Next we will review highlights from todays broadcast of bloomberg go. David welcome back to bloomberg go. Youll take a look at what we had on the program today. I dont agree with Donald Trumps approach but i do agree that we need Stronger Leadership there and we have in the white house. This administration wont even share with me as a governor who these people are. Their names and who they are being located with. I have constituents who are concerned. They dont want to have a tragedy like what happened in paris or california. Ideologically bent and said, we dont think the u. S. Should be doing this and they essentially held things up for over five years. Stephanie and they think the u. S. Should be doing what instead . The world reality of we live in. I was in business for 20 years. There is theory and practice. The practice is that this is how we have to compete globally. It is interesting to see that the american carriers, they are not talking about the same business that they have. China is a sleeping giant. If there Airlines Start doing what we are doing over here with limited frequencies, i would be interested to see what would be the reaction of the american carriers that are crying wolf. Because they cannot stand up to competition. David we just have time for a post it. The common theme this is been a tough day for ceos. Whether you are angloamerican or Marissa Mayers. Stephanie im not going to feel so bad. Sorry, you will have to sit back in your giant chair in your really big office and take a deep rest. That is it for bloomberg. It is 10 00 a. M. In new york and 3 00 p. M. In hong kong. Welcome to bloomberg markets. I aman good morning, renting greeley. Dupont and doubt are talking a merger. s reversal of fortune is a defeat for Marissa Mayer. They are scrapping their alibaba stake. What does it mean now for that ceo. And media is at a crossroads. Greg maffei. To we will head to the markets where matt miller has the latest. Has it been a half an hour already . Futures were down this morning. But then we saw a turnaround after the opening