Transcripts For BLOOMBERG In The Loop With Betty Liu 20140228

It is and thats because it has his back up against the wall. A tremendous amount of scrutiny not just from its Investor Base that mens wearhouse has taken this aga to the delaware courts where it had it has accused joseph a bank of measures that are inappropriate and defending itself against hostile bids by mens wearhouse. Accusingrhouse is joseph a Bank Management team and board of putting up high barriers to a deal such as a poisoned pill, such as creating a deal with eddie power to make it too big for mens warehouse to take over. All of those things mens wearhouse says is evidence that bqank is breaching its fiduciary it is by not coming to the table. Joseph a bank is forced to come to the table at this point and reconsider talks. How much more could joseph a one stock we are watching bank really debt out of mens today is google. Wearhouse . The company has rolled out my sources say that joseph a google fiber. This is the highspeed Digital Service network in solo select u. S. Cities, provo, utah, bank probably would not have invited mens wearhouse back to the table if it were not kansas city, and austin, texas. Entertaining a deal at 65 per share. Google is testing the market for at whichs the price this ultrahigh internet streaming. The parties can come back plans for atlanta, salt lake, together. Of course that would mean that san jose, and other cities as joseph a bank would have to walk away from its yield to i eddiebauer and pay a breakup fee big Cable Companies consolidate. Other cities want to get in on the action. Which is also a source of could google fiber take on a scrutiny. It seems like a big mess at this broader role in the consumer point. Where does this leave joseph media market . What do you think . A bank us current dance partner, come a majore if you will . The most competent a part of player in the media market . The deal after the two parties i dont think they will for a while, but they have been quite successful as the beginning. It started out as a funny agree on price, it might be antitrust. Joseph a bank could demand some project. It was not clear if they wanted to do this as a business or they high protections from mens ifrhouse to make it whole just wanted the Telecom Companies to move faster. Rex blaine how much faster this regulators do not approve of this deal and that in turn may explain how much faster make mens wearhouse walk away from this deal. It is very far from being done. The services. Rex it is about 10 times faster whath a bank could amend on average. It might be 100 times faster is called a hell or high water provision is very unusual which would force mens wearhouse to depending on your service currently. Close the deal with them even it is great. You take a fiber line directly though regulators did not give it a sign off. To somebodys house. Which means you have to wire them up the telephone poles, dig that is an issue of contention and we will have to see how it them up the street, and then lays out over the next couple of take the line into somebodys weeks. Thereot of merger news house. You have to have a city that are a lot of activists agitating these days. Wants to do this. The city has to want to do it stay with us because i want to ,alk about the deal environment and they have to give google or another company doing it special access. This onslaught of investor activism we are seeing. It has to give it the right to deduct the streets. Sweeneynging in paul it is a very complicated regulatory process. And you get clusters of people near each other who all want it. And Merger Arbitrage strategist. You need to have a neighborhood with at least 20 houses. It seems like a lot of cities lets start with joseph a bank would like this. In this saga that is going on in and are doing but they can to ingratiate themselves with the mens retail sector. Google. How do you become the city that is next . There are a couple of things. It is interesting they seem to be going backandforth. Ultimately, who wins . You need to have people who are excited about it and know about ive been covering this from it. The second thing is, google wants a lot of regulatory wheel the beginning. Greasing. I am more than aware of what is kansas city gave google a lot of going on. The Biggest Issue here is the perks and incentives. Timing. I think what google is doing is to say, hey, do you want google when you look at the release, it fiber . Youve got to give us a little said we need to do this quickly. Bit of this and that. If youre going to give us your the other best offer, give it to us right now because if youre not, we will close this eddie bauer d thing to overcome is the other Telecom Companies hate this, and eal. They have a lot of power and control over City Councils and that is what is happening now state senate. And they need the Due Diligence to increase the price to 65 and it worked so well in kansas city that they are working to ban it maybe more. In the rest of the state. Could this mean that google it is not 65 in cash. Replaces the Cable Companies . It could be stock. Mens wearhouse has the door that is what some people are thinking about. Open to close this transaction. The started as a small project, activist fieldhe possibly just to embarrass the Cable Companies, to point out how terrible Internet Connection is in his country. With ebay and paypal. Now it is growing. It could be a standalone business for google. Now with the merger of comcast is rattling the cages and Time Warner Cable with a relaxation of Net Neutrality on almost a daily basis. Rules, theres a lot of fear and he was on with me a couple of a sense that there needs to be against pushing heavily more calm edition in the market place. And google could provide that. The paypal spinoff. More competition in the one thing he is trying to get marketplace. And google could provide investors to Pay Attention to is that. Nick thompson, thank you very the composition of the board. Much. Lets take a quick look at the in april they will have an annual Shareholders Meeting and market. The s p is having another record high. There will be two board seats open and he says there are the fight the bad news in the conflicts now with the board of economy, that the Fourth Quarter directors. He says this is one of the only grew 2. 4 in said of the reasons why they have not spun. Stimated 3. 2 off paypal. Nonetheless, 1859, a new high on do activists have more swayed the s p. Nowadays . It depends who it is. Coming up, the Academy Awards clearly we have seen more are on sunday. Activism coming out of the hedge you know them as the oscars, but fund community. A 15 l young Dollar Hedge Fund have you ever heard of the site tech awards echo they are also can be heard quickly. Foron and they are he haso have carlicahn, innovators who dream of cool stuff in films. And they are awarding a lifetime a very big bullhorn and is able to get his message out there achievement award. Quickly. What do you do if you are the Jon Erlichman has the story. Company . Ebay is fighting back and many saw paramount companies have said lets try to transformers dark of the mood sothebys is an example dark of the moon you may where they try to work with the activist. Have seen the scene with cars ebay is saying no. It is mindboggling to flipping. Believe what the company is doing. Even school buses. They are continuously attacking the device that makes it happen is the pneumatic car flipper. Him. Musk, the cofounder of he dreamed it up when he was paypal, has said you need to separate the company i cofounded. Helping michael bay shoot armageddon. Scared of exposing heres how it works. The car is placed on top of what looks like a floor jack. Their lack of substantial growth the difference being, it is relative to paypal. Loaded with High Pressure they want to keep this and hide nitrogen. Intou want to get that air some of that stuff. That cylinder as fast as you can and as much as you can. Are activists playing a vital that is what makes it work. 3, 2, 1. Role in this case . He says nobrainer. He dumbs it down. That is how you flip a car. Before car flippers, the these two businesses do not industrys tool of choice with a belong together. Cannon. Look at what they have done in the past. Now they can do it around the globe for a couple hundred bucks a day. Musk he dumbs it down. Cannon in a car, that will cost you 2500 to produce. Look at the valuation. He dumbs down his comments not you times that by 25 or 30 cars might get expensive. Only for the institutional shareholders but the retail rex and if you really want to get fancy, people saying this makes sense to me. You want to get as many you take a cable and you wrapped around the car and you put that back 200 feet, and you people on board as possible . Thats it. Pull on the highspeed accelerator along with the this is a technique to do it. Flipper. It will just pull the car. What do you do with the car once you flip it . Perltz is doing the same these cars will go to a thing. Less yogic as be record or something and probably in four more years, they may look like a bobsled. He has been and more like carl icahn nobrainer. You can catch all of the he likes that phrase. Latest tech in media every day ists going on with ebay at 1 p. M. And 6 p. M. Eastern probably emblematic of what we only on bloomberg west. Stay in the loop. Will see from activist investors Going Forward this year. They spent a lot of time last year asking companies to return capital to investors through dividends and buybacks. Whats going on this year is that they are looking for him and they at tibbetts he m a activity to spur activity for shareholders. They will want to vest teachers. They have seen the stock market they want divestitures. They have seen the stock market at a rally and that of ready fair valuation and possibly at a peak. What they will do this year is potentially Pressure Companies and management teams to spin off assets and we will see this potentially spur some economic and m a activity as well. Is this good overall for the economy, this kind of activism . I think it is. The open market we have in this country, uc see activists come into fine situations where there is perhaps hidden value. Times, it works well. Sometimes, they picked the wrong target. Perhaps ebay might be the wrong target. Why is that . Generally, the company is performing fairly well and paypal clearly is the growth story of the business. I think the longterm growth of ecommerce overall is so positive and so strong that they will create they have an argument that they can create shareholder value longterm and they have an argument that paypal helps them grow their overall business. I have looked at some of these numbers and when you look at paypal, it is growing offbook , 70 is off book and that is growing 30 . There is an argument that is that it is expanding outside of ebay and growing faster outside of ebay. Mensts correct, wearhouse was the trigger. Dont they have an investment in both companies . They do and when they say something, they can tell each Shareholder Base that this is what we want to do. We want to combine the companies. Getting back to activism in general, there is low hanging fruit in the market right now. They have to go and climb this trait. You need activists to do that and thats what they are doing. If it is good for the economy, it is good for capitalism and the stock market. It is not good for jobs. When this happens, there are job cuts. If mens wearhouse and joseph a bank merge, they dont need that many stores that that many people. I want to thank you both for being here. As well. Tina alesci moving on ukraines new Prime Minister knows he is not destined to be the countrys most popular guy entrepreneur elon musk, shares anytime soon. He will have to reside over some of tesla motors are up 619 in pretty painful reforms while he the last year. Deals with the russian menace an attempt to get the country back on his feet will stop on its that is the best performance by feet. Any automaker in the last two decades. Tesla sold 20,000 of its model s is there any sense that things sedans last year and the company are improving their on the ground now . Hopes to boost sales by expanding neck smut. Yes, compared to the another mover and shaker is microsoft chairman john tensions weve seen flaring in the crimea region, here in the thompson. Capital, things are relatively he says microsoft has plenty of resources. Calm. Noise me, the only major he spoke to us in singapore. The issue for us is about going on today has been chopping wood. Focus. Protesters seem to be settling one of the reasons why we chose in for the long haul. Sasha nadella as their ceo is he they have been chopping of fire were to keep the 10 swarm. It is a pretty to keep the has a Strong Technology back rent and understand exactly what needs to happen to move microsoft forward. 10th warm. At the white house, a couple it is a pretty strange scene. The their cages reminiscent of of real movers and shakers, scenes of the barricade is president barack obama and the Vice President appeared in a video as part of the lets move reminiscent of scenes fromles m iserable. Campaign. It is aimed at fighting childhood obesity. But you go to the Shopping Mall they jogged past the rose and people are buying jewelry, garden. Sitting down and having coffee, no records were set. Meanwhile above them it is it was not a big surprise. Almost like a scene out of a movie set. Considering what they were x you say people are buying wearing. When we come back, we will go things you say people are live to the ukraine with a look buying things. Ive heard rumors of a cash crisis in ukraine. At how far this country has come this week and what lies ahead as it are these reports true . Are people having a hard time we go into the weekend. Getting to their money echo ratings fallol to their money . I think that is true. Flat. Stay in the loop. A lot of the cash machines are simply not working. I ran into a lawyer just now with one of the banks and he said they are handing out foreign currency. He was standing there with a series of cards just trying to drain the atm. Pretty extraordinary. You have also spent some time with the militia that is trying to control the city. How is that going . Seemingly ok. Not a lot of violence going on, so in that sense the crime seems to be under control. Some of the group seems to be a little more hard right than you might necessarily want. They are not particularly friendly with a lot of the other militias. There may be some tensions creeping in there. But otherwise a very friendly community. They are all volunteers and they are not getting paid. It seems to me they are intent on rebuilding their country. We will be talking to you again this afternoon and on bloomberg tv throughout the day. That does it, everyone, for todays in the loop. Pimcosp. M. , strategists will be with me. We will take you through the close. You will also get his revelation this week that a rift between bill gross and Mohamed Elerian may have been overblown. Its been a long week in ukraine. The countrys new Prime Ministers said he will ask russia to extradite the former president yanukovich. Do you get the sense that things are quieting down there or are we going to be looking at a situation where this is a divided country with part of it effectively going to russia and then the eu . When it comes to national integrity, it is crimea. Troopsery worrisome that come a presumably russian troops, have secure the two biggest airports on crimea. Why would they do that . The natural purpose would be to bring in troops. , the government declaration was very good. Ive never seen such a good announcement coming out of kiev. The government has been formed and should be able to start working with its own national integrity. We have a reporter in kiev it is 56 minutes past the hour, and that means bloomer television is on the market. And i know youve got a chance im scarlet fu. Exchange traded funds are to sit down with the new ukraine tracking developing markets that National Security advisor. What did you hear . I spoke to this man last led outflows into etfs yesterday with almost 200 night. Million of capital exiting the funds. Investors have withdrawn 11. 5 i asked him about whether he was concerned about Russian Military billion from emerging market activity nearby. Etfs so far this year. Yes, i am. About oneout plus, billion of that coming in the last five days alone. I am worried about it for sure. Cristina alesci spoke with also, the capture of the guests about Frontier Markets government in crimea but units which, in my opinion, were sent earlier this week. From russia, from moscow. From russia, we see an take a listen. Aggressive method of carrying emerging markets, that is a out Politics Today toward ukraine and we could have served misleading phrase, really. Right now, 85 of the people on the globe live in the emerging their attempt to divide ukraine or at least take sebastopol or markets. I did not say crimea. Would you call for nato minority markets. Gdpll right, but 55 of the support against russia if required . Yes, for sure. Of the world is in the emerging we think we are owed from the markets. You cannot just ignore them. United states and britain. Ignore them because they are nato is a guarantee of safety in small countries. These are emerging as economic the black sea region. Of course, we are sure about powerhouses, like china. There will still be a sin downs and the fluctuations might be nato and it has been announced greater in some emerging they have their own vision him markets, but in the end, the amount allowed a russian greatest growth will be in the federation to create conflict. State andcretary of emerging markets. The greatest opportunity will be in the emerging markets. If you avoid the emerging markets, you will be left with his counterpart have talked relatively few areas to invest in. Ukraine plans of the is a very important place to invest. I think india has Great Potential. Affecting the territorial resume is a very attractive sovereignty. Place still to invest. This has rattled investors here. And then korea, indonesia, south today things seem to be a little calmer in kiev. Countriesgeria, other what are you hearing from the people on the ground . In Subsaharan Africa like do they think they need more tanzania. These are all countries with assistance from the united Great Potential and their growth states and the eu . Rates will not only be high, but they are expecting that nato very little private equity penetration. The private equity penetration rate in Subsaharan Africa, for which includes the United States will step up to the plate if example, is probably one 20th of required. That in the u. S. They have treaty obligations. Therefore a commendation of i think that is something they are expecting. Population, growing the debt situation, one could middle class, all of these are argue is somewhat out of control in the ukraine. We have come out and said we factors. I would not say take all of your would be willing to lend the money and put it in the emerging markets or all of it in the country 1 billion. Developed markets either. John kerry announced that news earlier this week. The overreaction to that is just a drop in the bucket. Can these debt issues be solved . But it hase solved emerging markets is behind us. When the tapering actually began, people were much more modulated in their views of it. It has had some impact. To be properly dealt with. There is no doubt some currencies have had to be adjusted. And there is no doubt that some emerging markets have had some the International Monetary fund is the organization that should take care of this situation. Dislocation. In the end, its a much better thing. I do not see panic in the streets for economic reasons. Willerstand that the imf obviously, ukraine is a more meet early next week to start difficult situation. Working with the new government. But for economic reasons, i do not see panic in the streets of emerging markets. We cannot solve all of the the Prime Minister yesterday problems in the world with the Federal Reserve monetary policy, but there is no doubt that the emerging markets benefited from low Interest Rates. Made a good point in his and the Interest Rate are still declaration and he says its a high priority for the new by any historic measure still very low. It is not likely ratcheted up government and the imf will ask Interest Rates going into a ukraine to do certain things. Recession. They are slightly higher than it will be to let the exchange they were before, but not dramatically so. Rates,king of Interest Rate that has already happened. The fed chair janet yellen said the Exchange Rate has now reached a reasonable value. Yesterday that the Federal Reserve is moving away from its help drop the deficit decision to link the benchmark rate to unemployed. Sharply. She also plans to maintain a. Aper are a taper that will end the corrupt today, treasuries are falling, subsidies to the coal and gas pushing yields higher. Sector. Where does this leave the eu . The 10 year yield is balancing bouncing off a threeweek this is a country that if it low. Were to become part of the eu would be bringing on a whole a and u. S. Stocks are closing out february with a new record high. Lot of problems. The s p 500 setting yet another alltime high with 1861. 01. It is effectively another grease type situation in terms of being in debt. Eusoes that leave the looking at the 10 industry groups, nine out of 10 of them are higher at the moment, led by feeling toward ukraine knowing Consumer Staples and energy if they were to welcome them in, stocks. Telecom services are the only they would be taking on most sector to fall. We will be back on the markets in early minutes. A host of economic problems. . Market makers is next. One of the wings to bear in bloombergom headquarters in new york, this with erikmakers mind one of the things to schatzker and stephanie ruhle. Bear in mind is that the ukraine mt. Gox is gone. Is split between the east and west. Supplier filing many people in the west are proeurope and those in the east are more prorussia. I think we will have to wait to see what happens with the new bankruptcy overnight. Government and whether they can forge a National Unity before we clash of the titans. Can Start Talking about what carl icahn fires up yet another this will mean for europe. Thank you very much for letter, accusing Mark Andreessen joining us and we will continue checking in throughout the day. Of conflicts of interest. X and the senior fellow at the Peterson Institute in washington, d. C. You are looking at a live shot of the deposed ukrainian vichdent victor yanuoklo holding a press conference in southern russia and we will keep an eye on this for you. Coming up, remember the old toyota slogan . You want it, you got it. We will talk about that next. Socalled pink star diamond is back on the market so i will take it. We will be right back. You are watching in the loop, on bloomberg television, streaming on your phone, your tablet, and bloomberg. Com. I am trish regan in for that he lived. Lets get a quick check on the markets. Like we are looking at what could be a lower open. We had a new alltime record on the s p 500 yesterday. 1848 was the level we need to cross and we got 21852. There is optimism out there and we will see whether this continues today. There is economic it a coming out at 8 30 a. M. Including gdp and personal consumption. We will bring those to you as soon as they cross. We will be on the markets again 30 minutes. Ibm began firing workers yesterday as part of a 1 billion restructuring plan. In addition to cutting staff, the company has sold assets, cut its tax rates, 20 per is aiming for share adjusted earnings up from 11. 67 in 2010. Saw the bays is the proud new owner of the pink star diamond. Caret cut stone. The buyer defaulted. 8. 3 alieneen a record dollars 8. 3 million. Theres a storm that will move across the country this week and could dump snow from kansas city to boston. It will make for a messy monday morning commute. Storm has a silver lining. It is currently bringing muchneeded rain to drought stricken california. Isare minutes away from what forecasted to be a notable revision, lower, to fourthquarter gdp. What will that tell the fed . Was with one of the that president this morning. What is his thought on what gdp will look like . He mentioned the fact that we have this storm coming because thats a big issue. How much has the weather distorted the economy . We saw it in the Fourth Quarter a little this. How much can you take away from that . We asked charlie loss or about that. P losser about that. You are continuing to taper if you dont know if the economy is weak because of the weather or not . Listen to theyou people in the markets, i think there is a lot of people who will complain that there is a search for yield going on. There is worries that we are distorting price signals in various ways. What are the prolonged consequences of that . In other words, is the fact going to continue . Yes emma because there are reasons beyond the economy to get out of qe. Point does weather actually really start to have a negative effect . Or two months but we are heading into march and getting another snowstorm which means people will be staying home instead of buying retail or hitting restaurants. You might want to buy a new snowshoes. Maybe there is a part of the economy that can benefit. At what point does it catch up enough that it has a real effect on things and starts to slow stuff down . Thats hard to say but there is a chance that we will see some depression that will not come back. If you can buy a house, you will still buy it, the same thing with a car or Major Appliance but you might not go out to dinner with your husband tonight because it will snow and that money is lost forever. We dont know how much that will amount to. If you are the Small Business that is basically not getting the money out the door because someone is choosing not to go out to dinner, you wonder at what point that starts to catch up. We got these numbers rushing right now. Is up 2. 8 revised from 3. 2 . Coming in at a revision of 2. 4 , that is a pretty big revision. Personal consumption dropped a big drop. Is this spending, though, not too bad. It was revised higher for up to from 10. 6 10. 6 from 6. 9 . In a way, you could say this is good in terms of the economy, because business spending is better than what we have not seen. As businesses are starting to spend and consumers come back up, you are set up for good news in the future. That subtracts from gdp. And then the trade deficit a little wider, that also subtracts from gdp. Real sales coming in at two point two percent. This point, the economy appears definitely to have slowed a little bit in the Fourth Quarter. But 4. 1 in the Third Quarter last year. We thought we were is 2. 1 . Again, the revision coming in at 2. 4 . Prettyems like a significant decline from 4. 1 . What happened between third and Fourth Quarter that it was so reduced . The big question, especially for the fed. Is it the weather getgo we did see a decline in Consumer Spending and a rise in business spending. Business spending much less affected by the weather. Is it that people are still concerned about the economy . That is a big question that has no good answer even in this data. Im looking at Government Spending and it went down. It was revised lower, and that does not help either with the sequester having some impact. This leave the fed . I asked Charlie Plosser that this morning. He said, basically in march at our next meeting, we cannot do much he cause we dont know what the data are telling us. I think everybody is going to bed at this point no change in fed policy. They will continue to 10 billion taper. We will see at the following meeting if there is any more clarity on where the economy really is. Michael mckee, thank you for talking to me about this. Data showing that ford, the secondlargest u. S. Automaker, is closing the gap with it biggest competitor. We are joined by Bloomberg News s hes not and in detroit for more. Naughton in detroit. However they been able to reverse themselves and capture so much market share compared to toyota . They were at deaths door in 2008. They barely avoided bankruptcy. But they have completely redone their show room, and models like the sedan and the escape, the small suv, have really captured retail buyers. The is where they have made gains, in the showroom. They are gaining a lot of shares here. What has happened to toyota that it is losing its . It is almost a mirror image. It has gained three points and toyota has lost almost three points. Toyota went through a big controversy. There was a recall in 2010 overs over sudden acceleration issues. That was an issue about the quality reputation. And then japan got hit with the earthquake and the synonymy. Thailand got hit by floods. Production fell way back. Everyone thought they would come and roaring back in 2012 2013. They did come back a great deal in 2012, but then slid back a bit in 2013. He had not resumed the gains that they once commanded. What analysts are saying is that they do not have the bulletproof reputation for wallaby anymore. They are not the default choice of everybody. They have a lot more competition now. How is toyota going to hold ford off as it continues to gain shares . That will be a real dogfight. Toyota has the new models coming. They have the new highlander. They will work on their camry later this year. They have a new corolla. They think they can hold them off. But ford has a new f1 50, their biggest seller. Gm or chevythe brand doing . You would imagine that chevy would be the same story as ford. They have redone their show room and have some hot new models as well. But they are not gaining retail finds, which analysts troubling. Gm says, we got out of the minivan business and the small pickup truck business, and we will get back into that this year with the colorado. They say, this story is not complete yet and we will be gaining ground. We just got this Economic Data in, showing the gdp was revised in the Fourth Quarter to 2. 4 , down from upwards of three percent, and this comes on the heels of the Fourth Quarter where we are still seeing declines in gdp. Where does that leave the automakers . I heard you guys talking about the weather issue, and that is something automakers have been talking about. In january, sales were disappointing. We are coming into february and we will get those results on monday. Were already hearing it was a bad month. The weather is keeping buyers out of showrooms. It is just too cold and snowy for many to go out and buy in parts of the country. The weather is definitely impacting sales. It is having a macro effect. Everyone is will it is blaming the weather and we will have more bad weather to come on monday. Thank you very much. Coming up, American Idol is losing its appeal with its fans. Meanwhile, another network is setting up for its game day, the Academy Awards. But it is not just about abc. A whole host of stars who hope to turn their primetime debut into a lucrative career. Todays bloomberg big number is 650, that is how many potential votes American Idol fans had last night when the final season contestants took to the stage. The competition complaint about the lack of transparency in the voting process. That has now changed thanks to google and facebook. Viewers can now vote up to 50 times per contestant and they dont have to wait. Whether or not that will help the struggle in ratings remains to be seen. American idol could end up losing money this year. Numbersfu digs into the he high and the demise of foxs biggest money maker. What has happened . It is pretty simple. Less revenue, higher fences. Tmz has been reporting it is possibly losing money, but the numbers are not too hard to corroborate. First, sponsors are dropping out or cutting back. At t, for instance, drops sponsorship of the program before season 13 began. Cocacola is still a big sponsor, but the company did tell wall street journal that it had cut back by one third. And ford admits that it has also tweaked its monetary support for the program. In terms of ratings, we heard about how fewer people, and older people are now watching idol. It is not the Procedures Program it once was. On average, 12. 1 million viewers, down 20 from the same time in season 12. The average age of the viewer has gone up to 51 from just under 49. Precious9 is the demographic that marketers all want to see. Expenses, that is where it gets interesting. Jennifer lopez is the highestpaid judge on the program, commanding 17 million. Ryan seacrest, about 15 million. Keith urban and harry, Harry Connick jr. , roughly about 5 million each. And there is the salary that the program is still paying out to two executive reducers that have since been executive producers that have been fired. Back in 2011, the show brought in 6. 4 6. 4 million per halfhour. What does that mean for the future of the show . Will it continue on fox . Is there a chance that they might pull it . But there is always a chance that they might kill it, but tmz said he will it they will bring it back next year. It would have some holes in the primetime schedule if they dropped idol. For now, its not going anyplace. Mind it still brings in 12 million viewers. This is a live event programming that the networks and any broadcast provider still want and still really hangs onto. Almost no show makes it to season 14. You are right. The numbers are still overall pretty big. And think about the licensing. Idol all over or the world effectively, because they replicate this show in many markets. Thank you, scarlet fu. Staying with entertainment, the Academy Awards are this sunday. Which means getting the winners and watching them on tv is going to be part of what everyone is doing. It is also a time to strategize. We measure the influence of celebrities our next guest measures the influence of celebrities. He has just completed the study of the value of an oscar, what it actually adds to the winners reputation. Good morning. Great to have you here. The it is so cold. I know you are from l. A. Enoughare the lucky actor that wins on sunday night, potentialhat mean for Going Forward . It is a complicated question, but we have city 500 different celebrities prior to winning an oscar and then after they have won an oscar. Essentially, what we are seeing is their are certain personality attributes and characteristics that they are markedly higher in after winning an oscar. In particular, 62 more likely to be admired. 45 less likely to be disliked. But most important, 51 mostly most likely to be trusted. And trust is incredibly important when it comes to celebrities. The test trust is directly related to influence, more so than popularity. Give me an example of actors that have translated this into more money in their wallets because a brand wants to embrace them and have some kind of partnership with them. The first thing to say is that an oscar nomination, or even a win, is no guarantee of a brand wanting to partner with a celebrity. A look at a variety of different characteristics. What is the dna of that particular celebrity . What are the colts roll trends that are going on . Who is the celebrities what are the cultural trends going on . Who is the celebritys fan base . Last year after Silver Linings playbook, Jennifer Lawrence renegotiated her contract with Christian Dior for three years. That was a good example of how somebody can the can renegotiate. What about the movies that are out right now . Hustle was nominative. Also, gravity. If an actor wins, does that elevate all of the actors in the movie . Not necessarily. Equity andas a brand the movie has a separate brand equity. There is a lot of pressure on people, right . A lot of pressure to hopefully win on sunday. There is a an incredibly an incredible amount of pressure, especially because brands have become integral in weping celebrities now as have seen record sales falling off the revenue stream. They want the brand to help them. Do you have any picks . Oh, gosh. The front runner is not my pick. Christian bale and Jennifer Lawrence. I am for American Hustle your co ok, thank you. Coming up, you dont want to miss this report. A virus that can cure cancer. World renowned designers will come together on march 10 for the Second Annual Bloomberg Businessweek Design Conference in san francisco. One of this beakers one of the speakers is a scientist that has made major accomplishments, can cure a virus that cancer. For me, the design is the ideate to id eight and then in vision and create and then envision and create the design. The beautiful part of the sign is the learning that comes from realizing your design and having it in the world. This is a Software Company that makes design tools, modernization, visualization, optimization. And the bio nano verse that im a part of his looking at a subset of those tools that can be applied to genetic engineering and cell biology. Many people look at genetic engineering in a negative way. I dont. The more we can grow the things we need as human beings, the more we will be able to keep the world sustainable. Inm particularly interested how we can design things living very fast, very cheap. I have been fascinated with viruses. I have been learning how to use Software Tools and some of these print technologies to go and make viruses in a way that allows us to deposit things with them. I want to see viruses be used to hunt down cancer cells to kill them. Excitedwhere i get every day. What i like about doing this from the bottom up is a lot about the lego bricks and the dinosaur you have an frame here. By themselves, they may not seem like much, but you can make really complex structures when you have these bricks and can assemble them in different ways. By understanding the very fundamentals of living systems, living cells, we have this Incredible Opportunity to make and design beautiful things around them. Cox mt p, mount gox bites the dust. What it means for the currency. Goingwith this industry with the pizza industry growing, which giants will stay there . Good morning, 56 minutes past the hour. We are looking at a market that could open lower here. There are some concerns about the economy. Get fourthquarter gdp coming in less than expected. It looks like the economy grew 2. 4 in the Fourth Quarter, this is compared to 3. 2 that had originally been estimated. Its also take a look at citi. It looks like it is going to open lower here. Earnings lower by 235 million after fraud was recently discovered at a subsidiary in mexico. They believe the fraud was isolated to this particular incident and they are rapidly reviewing the issue. But again ,citi lower. We are on the market again in 30 minutes. 30 minutes to the opening bell. This is in the loop with betty liu. The countdown begins right now. Good morning, everyone. I am in for betty liu. Of a p 500 is coming off record close. It begins today at 1854. The economy grew at a slower pace in the Fourth Quarter than previously estimated. The government revised the gdp number downward from 3. 2 to 244 . 22. 4 . A possible merger. This after five months of takeover offers from both sides. In washington, the republican chairman of the house ways and Means Committee is a man on a mission. Congressman dave camp wants to blow up the tax code. But the plan he unveiled this week has been drawing fire from all sides. Peter cook spoke with him yesterday. And peter joins us now. Not everyone is happy with camp here. Just point out, its a difficult process to get anything done when it comes to taxes. Youve got to go all the way whento the 80s and reagan we saw this really revamp. And youve got to look at this and acknowledge that he has done something very few lawmakers have done in the past few decades. He has put to paper 900 pages, a specific plan to overhaul the tax code. He has gone after a lot of sacred cows in that tax code, and as a result, he has ticked off a lot of people that could see their tax bills go up. He made the case that this is about growing the economy and everyone will benefit overall by his plan to lower the top rate of corporate taxes and 35 to 25 , and bring down the individual rate three tax brackets for the current seven. From the current seven. He said it is about growing the economy and making things simpler in terms of filing your taxes. But he has ticked off a lot of people. At the top of that list, the biggest bank. Point 3. 5 basis point tax for the biggest institutions on total assets. I asked him about targeting a specific industry and here was his response. I think it affects about six banks. Asand Insurance Companies well. They are going from a 35 rate to a 25 rate. In the financial sector, there are not a lot of provisions, loopholes, etc. To close, because there are not many. They are getting a tremendous tax break, and i think it is important there be a tradeoff. Quick that is his defense. That is his defense. He takes on a host of people. He takes on the nfl odds taxexempt status. Taken on the nfl taxexempt status. I guess it is good if everyone is upset. Dave camp wants to change that private equity tax. That is right. He would change the rule for the carried interest that affects both the Hedge Fund Committee community and the private equity community. They are just one of several groups that will go after that and complained about that. He says, youve got to look at the whole balance of what the financial industry will get out of a more healthy economy. He thinks 2 million jobs will be created. Growth is perhaps 20 better, that is the figure you put out there. And he talks about the politics. It is a Midterm Election year, and there are some republicans that dont want to rock the ship. I asked him about that. Has he put his own party on the spot . Here is part of his response. We need to be engaged in the big issues of the day. Growing the economy, creating jobs, and i have specific proposals to do that. That is what the American People sent us here to do. They did not send a few to warm a chair. This is one way to do that. As you know, there are some lawmakers in chat in town that would like to just warm a chair and not rock the boat. His plan will pose a challenge for them because no one thinks this will pass this year, perhaps not even come up for a vote. House Speaker Boehner has not committed to a vote for it this year. But now this is the template, the metric that all other tax proposals will be judged by. And dave camp has at least put details to paper. It is one thing for republicans to be worried, but you assume democrats would also be worried. Because now, carried interest is being put on the table, and it is a republican putting it on the table. Also, hes going after the big banks, which is something you might traditionally think of the Democratic Party thinking doing. Leave the that democrats . There are ideas in here that president obama has talked about. It is very similar to the financial crisis that he talked about a couple of years ago. There are ideas in here that democrats can support. Their assessment so far has been pretty muted. Ac the possibility that this could be good for them clinically, to get republicans tied up in knots over taxes, but at the end of the day, there are a lot of ideas. If anybody in the Democratic Party wants to see tax reform go forward, they will work together. And we saw treasury secretary jack lew talking rightly yesterday with dave camp privately yesterday with dave camp. It may not be dead on arrival. At least they are talking about it. Thank you very much, and great interview with revisited cap. Moving on, mt. Gox filed for bankruptcy today in japan. The company applied with 64 million in debt. It lost three quarters of a million bitcoins that belonged to users. Carter dougherty joins us now with some of the details. Where did this money go . That is the 24,000 bitcoin question, i guess you would call it. We dont know for sure. What are the options out there . Is the reasonable hypothesis. We dont have any evidence of malfeasance. But what there is evidence of is some internal Company Documents that have surfaced, that mount mt. Gox mixed up the hot wallets and the cold wallets. The cold wallets are the way you store it coins that are offline, disconnected from the internet so that no hacker can roll in there and start pilfering. That thoseappears two wallets got linked together at mt. Gox. This is according to their internal documents. Over time got in there, possibly over a time frame of years. Have hot it that you wallets and cold wallets to begin with . Why not keep everything cold, and then it is less vulnerable to hackers . Measure, andcurity a fairly smart one if you think about it. You put these things on paper, but better yet you put it on a computer that is not and will never be hooked up to the internet in a safe place and that keeps everything cold. You have to have a measure of bitcoin in the hot wallet, so you can regularly process transactions, exchange fiat currency for bitcoin and on and on. Need to keep those two things segmented, and it is possible mt. Gox did not pull that off. The emerging best practice in the industry, to the extent that we can speak of in this small industry, is that you keep something on the order of 95 , 98 of the coin in a cold wallets or keep it safe. Of bitcoin in a cold wallets to keep it safe. I spoke to a guy the other day who lost 300,000 on mt. Gox. And there was a part of him that said, you know, i probably should have seen this one coming. He did not fully track the exchange overall. There were a lot of people in that where there a lot of people in that camp . One would think you would be outraged. Was there some skepticism about mt. Gox to begin with . There is no shortage of outrage among no question about that. The social media channels, the email absolutely exploding this morning as news of the final bankruptcy came. On the other hand, there are , one example of a business not doing business with mt. Gox since last year. Their phrase was, since they became a roach motel coco a roach motel. They had trouble getting bitcoin out of the exchange. There were some who stop doing business with mt. Gox as much as a year ago. The problem is there was always this price discrepancy where bitcoin was worth more at mt. Gox than other exchanges. People were tended to pull this arbitrage. I talked to a guy of fairly modest means trying to arbitrage the difference, and he lost them. What does this mean for bitcoins future . We have all of these negative headlines coming out on a weekly basis. And if there is one thing a currency needs to be a it is secure. What does news like this do to the future of bitcoin . Think theres any question that everyone involved in the bitcoin business i dont think theres any question everyone involved in the bitcoin business will spend a lot of time about best practice in the security. You could see it coming from all sorts of angles. The Bitcoin Foundation trying to talk about how this is an emerging industry and he can get better. Otherve other one emerging trade association for the business that is trying to establish some best practices for security, and youll will have a small explosion of dedicated to protecting your bitcoins. Theyve got to do something, so maybe this is a blessing in a in disguise, anyway. And perhaps you might see some of these rival Digital Currency starting to flourish in the wake of all this negative news. Thank you very much. Moving and shaking this hour. Ceo said they showed a profit as opposed to a loss of a year ago. It is now trying to acquire the part of series xm that liberty does not own. Competition in the pizza industry is heating up. Figured outies have a way to carve out an extra slice. This manuch is actually worth . He claims his net worth is being underestimated by more than most people will learn in a lifetime. Will earn in a lifetime. You know, every day, 13 of the u. S. Population will eat eat, making it will eat pizza, making it and only 10 billion industry. The truth is, it is still the pizza giants to dominate this business. Olivia sterns is here with more on the pizza cartel. I want to talk about who is winning. I was saying during the commercial break it is sacrilegious to say this, right . I am a huge dominoes fan. Good, that proves my story. What is your story . Areow these pizza chains calling them a cartel because they have the bulk of the market share. They did not a few years ago, but he cut they do, their sizes enabling them to get even bigger. One reason is because they have the cash to heavily spend in technology. Cannot afford in rural areas to do that. Dominoes, for example, your favorite, and now 40 of their sales are from online or you online ordering. Their app has been loaded 7 million times. Do you order pizza online . Yes, and i still order locally. But dominoes is great. And i grew up in rural areas and it was the one place that delivered. And it is easier, right . It is better for them because it is cheaper for them to do not employ people to be on the phone. They poke fun at them themselves in the commercial. You call and you get put on hold and there might be something lost in translation. This veryin healthconscious environment right now where people are trying to be nutritious. At the end of the day, is that just online . Line . T a it really does seem to be the trend. America has his great love affair with peta. 13 of the population every day. A slicethey have eaten in the last two weeks. And one quarter of the cheese goes to be tough. Pizza. Papa johns is killing it. Big three. He what is the third . Dominoes, papa johns, pizza hut. Oh, pizza hut. Thank you very much. I know what im having for lunch. Gets an updateed from investors on its weatherrelated miss. And we will take a look at the man who won the what the Lifetime Achievement award. Here is a look at the top tech stories on our radar. Apple has won a 2. 2 billion patent filed by a germanbased patent curtain patent company. The lawsuit alleges that the Patent Infringement is on priority for calls on mobile networks. The owner of another mobile phone carrier [inaudible] an salesforce. Com forecast firstquarter revenue that made top analyst estimates. Them a top analyst estimates. The Fourth Quarter closed more than 200 seven figure transactions. Markets keep setting records, but our guest is not buying it. The bearish strategists the most bearish strategists on the street. Us through the opening bell coming up next. Is rolling out its new fiber across the country. Welcome back, everyone. You are in the loop. Bloomberg television is on the markets for you. Scarlet fu has the latest on futures in the last moments before the opening bell. S p futures little changed. The euro, though, strengthening to above one dollar 38 one. 38. That means the European Central bank is under less pressure next week to take action with a rate cut or more stimulus. Natural gas futures, we should note, are headed for the worst week in 17 years. It turns out they are not being drawn down as quickly as anticipated. We are on the markets once again in 30 minutes. Thanks so much. Lets count down to the open right now. This is our top 10. These are the only trades you will need to know about. Scarlet will stick with us to stop Olivia Sterns joining us as well. I will kick it off. The number 10 is gap. Fell 13 ,rter profits but still came in above analyst estimates. Navy, the Banana Republic chain, also reported its eight straight quarter. I got number nine at salesforce. Com as Cloud Computing Company Reported beating estimates. Itorce also said it ceo will resign next march. And fourthquarter results beat analyst estimates, but as always, if the forecast that matters more will stop and oh did issue that matters more. Issue a palladium last. Libere upgraded to buy. Number six is mattel, the worlds biggest tour maker 20 maker. Biggest toys maker. Number five, united continental, the Airline Warning that is fourthquarter capacity and passenger unit revenues will come in well below previous projections. Severe winter weather. United continental has canceled almost 23,000 flights so far this year. Is blaming the weather, right . And we will get more bad weather, coming up. Number four, is flunk. Slunk. Up after they reported a wider than expected fourthquarter loss, but revenue mix beaded estimates. Revenue exceeded estimates. Pier 1 imports down stating significant disruption from the weather. And at number two, citigroup. 2013 earningsed lower for the Fourth Quarter and the full year by 230 5 billion. This after finding fraud in its mexico city area. Subsidiary. The company said it was isolated to just one particular client. We are coming up on our number one stock of the day. It is deckard outdoor, the footwear maker. Forecasting an unexpected fourthquarter loss. They did expect fourthquarter profit surging 24 . [opening bell] here we are at the open right now. We had the economy growing 2. 4 instead of the originally predicted 3. 2 . This is in the Fourth Quarter. Some softness there. A lot of people are saying maybe this just because of the weather, but harmony questions about what the fed will do and what that will mean for investors. Joining us now is the managing director from the chicagobased spectrum asset management. He is live from chicago right now. Michael, how are people interpreting the data that we got . Theow could you not rock boat with a number that is revised and then comes out that level again . The markets try to anticipate these moves, but the first tip of the hat was the weakness in the u. S. Dollar overnight, especially against the british pound. Regardless of what is happening in the ukraine right now, i think that number is not bullish for the market. More important, will the fed come back into play . Fedverybody wants the there, ready to help. , basically if you read between the lines yesterday, said that the fed would, in fact, be there. The market was ever so slightly higher right now at the open. Investors seem to become at least for now we will see how this plays out those up they seem to be shrugging the saw. Are we back in a situation where bad news is good . All. , not at i would not read into janet yellen line by line. I think she has to say those things, but implementation at the beginning of her tenure is not going to be her forte. That is why i say these measures will not be implemented, and for that reason, i think that the stock market will start you think the taper will continue . No, starting to step away from the punch bowl one back step at a time. I think that is what im seeing. All right, we shall see. The market is slightly higher despite this news that the whenmy grew only 2. 4 productions had it at 3. 2 . And this is on the heels of the Fourth Quarter where it was 4. 1 . Clearly, some swelling. Michael, thank you. Slowing. Y, some michael, thank you. I want to bring in jeanne adams with wells fargo securities. Her call, the bear just raised her earnings. You think companies will make more money, even in what you could say is a very slow economic environment. Ex we actually think Companies Made more money in 2013 and the growth estimate is only revise down a little bit. The result is, the bass goes a little higher. We had anticipated a little less growth in 2013 and we grew a lot faster than we expected at seven percent growth. It increases the base on the s p earnings numbers. How can you say we are making more money when the economy is slowing . What do you make of this headline today that well grew 2. 4 in the Fourth Quarter . A couple of things. We would have loved to. 4 a year ago when we were growing at two percent. Some of this is expectations. You have 4. 1 in the Fourth Quarter, so you think, wow, this is great. You have what we saw was 3. 2 . It is hard to take a step back now and say it was only 2. 4 . Expectations,s is honestly. Our expectations got inflated. Take a setback to 2. 4 . If you take a broader perspective, not a lot has changed. We are still incrementally growing at a slightly faster pace. Firee market has been on in 2013 and has continued that upside into this year. But if the economy is not growing that much, how can we sustain that . It is our forecast that we. Robably just tread water we consolidate the gains we had in 2013 and we get the upside as the economic numbers start to beat, probably. But then weve got a lot to contend with, with the fed stepping back on the other side of the scale. We think january and february are pretty indicative of what it looks like. Is this stepping back echo stepping back . You have data that is not encouraging. I think the key part of the testimonies that she actually acknowledge the weather as well. I think the fed will use the weather as the scapegoat and continue along that path until it is very clear. april comes along and we dont get better numbers, then maybe the fed does reduce the taper somewhat. But now, they are on track. , i know you have been looking at the link between equity and bonds. That is right. When the Federal Reserve began its its asset urges program, it resulted in higher prices and lower yields. Its the fed trimming activity, the thinking was that yields would move along with gdp. Yes, we are seeing stocks move higher, but bonds are still very much in demand, which means that yields are not moving higher. The current tenure is below two percent right now. Olivia joins us now with a look at some of these sectors, specifically utilities. What do you think . Conventional wisdom goes that if gina is a bear, you would try such ason sectors utilities, not just because they pay great dividends, but you think the market is going lower and that is a safer sector. But if you look at the s p 500 by sector, they are up year to date so far. Utilities are far outperforming the s p overall, which is basically flat for the year after recovering. Up five percent for the year, compared to other sectors. Financials, which is one that i believe gina picked, also in the red for the year so far. And stables are significantly underperforming utilities. Gina, where does this leave your productions for the market this year . We anticipate that the Market Trends lighter. We have it ending the year where it started. Not tremendously bullish or bearish. You have to pick your stocks carefully. Sectorsallocated to the where we do see accelerated earnings, where we do see reasonable valuations. Our favorite picks right now our tech and health care. Those two sectors have outperform the market so far this year. We are also in financials. I want to interrupt you, because you look at tech and a lot of people are saying, look, 19valuation on whatsapp billion, was so insane, astronomical. People have all kinds of adjectives to describe it. Which is also leaving a lot of people to question tech valuations overall. You are saying you are still picking tech as one of your stopped top sectors. Overall, look at tech 70 of the names in the s p 500 are trading well below their valuation. You have an opportunity there. Tech outperforms when their earnings stream is accelerating faster. Gina adams, thank you very much. Coming up, google spreads its presence, rolling out new fiber across the country. How worried should other Telecom Companies be about this . We will investigate. And it is lights, camera, action. We are talking to this guy. Well introduce you to the man who has made a name for himself by flipping cars in action movies. We are just a few minutes into the session right now. We will be back with more in the loop after this