Transcripts For BLOOMBERG In The Loop With Betty Liu 20140630

The day gm victims have been waiting for has finally arrived. Disaster response expert ken feinberg automakers fund to accommodate victims of an ignition switch defect will finally unveil his plan on how they will be compensated. Yang yang is in washington with more on what we could expect. Already, details are beginning to emerge. That is right. Announcement. According to a gm lawyer interviewed by bloomberg news, ken feinbergs Compensation Plan is expected to offer for all drivers and passengers killed or hurt in one of 2. 6 million recalled callers cars in an uncapped fund. Money is expected to be offered even if the driver was treating and even if gm thinks it could otherwise fight the claim in bankruptcy court. Good news for victims. We will find out for sure at 10 00 a. M. One feinberg unveils the plan in d. C. And answers questions of how much victims will get and how much more will the company. Ost gm already asserted faulty ignition switches to 57 crashes, 13 deaths, 680 million in and rentals for customers. It agreed last month to pay a record 35 million fine and a probe into how the company handle the recall. Piece ofust the latest the puzzle for gm. The cost is put at 3 billion for how much we will eventually. Ave two pay up what about more than 100 losses against the company . The idea is to settle all of those. Todays announcement, a voluntary plan, and they will have to give up their right to gm to reject the deal that reaches too few victims or makes inadequate settlement offers and those victims can pursue those claims. Feinberg has become quite the expert at putting the price on tragedy and is known for persuading people to settle rather than sue. Only 94 people out of 3000 eventually went to court in the 9 11 case. The victims should feel good that can feinberg is behind all this . He is getting paid quite a lot for this. Gm has not disclosed the amount but they paid him 1. 3 million per month that can today for handling the oil spill fund. Given completeen independence on this one and they want to reach everyone who suffered. Part of this is determining just who is the victim. Who exactly is the victim . The case has gone on for quite some time and that is the question may need to answer today. Thank you appeared earlier this month, i spoke to ken feinberg about the claims process. Gm, i must say, has delegated to me without any ambiguity here. Full discretion to evaluate each individual claim, make a determination, and pay the claims eligible. The program should kick in as gm has demanded around august 1. I want to bring in my guest host this hour, the former chairman and ceo of crisler and home depot, now the founder and chairman of accelerate. Good to see you this morning. Should victims feel good can feinberg is doing this . They should feel very good. He has great reputation, high integrity. It is not surprising he was picked to do this. The strategy is to get this behind him as fast as he can. He will be very equitable. The victim should feel very confident they will be treated fairly and expeditiously to get this part of the issue behind them. Those with the fun will give up their right to sue gm down the road. The whole idea of uncapped compensation, how dangerous could that be to gm . It sets the right tone. He is setting the right tone that people who are harmed or lost their lives, it is hard to put it down a dollar sign on it. His abilitystory of to do that. That was the right thing to say. Equitable inll be administrating this and not being cavalier about it. I think victims will be treated fairly and hopefully they will get this behind them. We have seen with this internal report on what exactly happened and already, critics ane come out and set on independent report that mary barra is too much of an insider to claim she will be able to turn around the company. You say . Challengeshe biggest for mary was to distance herself, after having been there for many years on this issue. She has done a great job for many years. She had the talent she had the meeting, providing independent review going forward. She has recalled a significant number of cars. She stopped selling some cars. This will be a test now for her relationship with the dealers. It will be impacted based on the revenue and not selling the cars. She still has to navigate troubled waters going forward. Today, i think she has done a great job. She has in your view, but for gm to signal this is a new company, should they not look for a ceo outside of the company . It is hard to secondguess. I do not know if they were aware of this situation when they picked her. Ellis part of the problem. Part of the problem. She brings a tremendous amount of knowledge, and it is always hard. When i went to crisler, they said, bob, youre not a car guy and i said, they got you in trouble. I really enjoyed my time at crisler. But i think she is doing all the right things right now. Picking him was another major strategic move. As he is going through these claims, what should the company be doing in the meantime . The big challenge is to get the claims behind her. My second advice is to get the recall repaired as quickly as possible. Do not let people drive their cars while they are still in the recall. Heavily have to lean for air bags and ignition switches to get them repaired. In my experience, not everybody will bring their car in and get repaired. They have to continue to go out there and encourage them to get it done quickly. This may be over a yearlong process doing this. Stay with me. Accelerate, my guest host for the hour. Make sure to watch the Market Makers interview with ken feinberg. That is 8 00 in the morning. Moving and shaking this hour, mark zuckerberg. Once again, he has a deal with users concerned their privacy is being invaded. A facebook researcher apologized for an experiment that temporarily influenced what 7000 reserves saw on their newsfeed. The result of the study, people who saw fewer fewer negative fewer positive posts roads more negative posts. Facebook says there was no selection, just influencing how they think. Area, over the weekend, a temporary suspended its service. Violated copyright laws. Billions ofled dollars in retransmission fees local programmers received. For more, were joined by alex, who covers technology on the east coast. Temporary suspension, what does that mean . They are in a holding pattern. They have to wait for the case to kick back to the lower court. They are trying to figure out the next that, what their other options are, can they continue to go forward even with this Supreme Court case rule . Customers have lost arguably one of their favorite ways to watch television. Aereo made it easy. What is left now are these services where you have to go out and buy a box and set it up with an antenna with your tv, point the antenna the right way, and that is to the way to get your broadcast television if you do not want to pay for cable. For the broadcasters, they won the big case at the Supreme Court. What is next for them . They started using comcast and others are looking into Services Similar to aereo for paying customers. Online,given to you getting it off your tv onto your other devices. They are starting to explore that. They see customers like the area of service. Do they want to get into that and rope some people into cable packages . We have seen other rivals of aereo come on board. They are saying, ok, aereo is suspended but we are still operating. Come onto our service. How many of these rivals have we seen . Tivo, which we have all heard of. Some came out and posted on their site, aereo is gone, come with us. The differences, you have to pay the upfront cost of the box, a Monthly Subscription fee, another box if you want to stream it to your other devices. It is a different process. With aereo, it was an easy eight dollars a month. To buy a box upfront can be 200. Some of the customers who liked the less expensive service might not want to fork that over to get going. More to come on this story. Thank you so much. Coming up, president obama turns to the Business Community to clean up the mess at the department of veterans affairs. Plus, a summer blockbuster already. Tell you howyou transformers did on its opening weekend. President obama is turning to the Visitor Center for his next press secretary. Runer ceo Bob Mcdonnell to the department. To run thenald department. Has more, peter cook on the pic. The president is raking tradition with this pick. He is. Normally, the job goes to someone from the ranks of military or medical community. Instead, he is turning to someone from the business sector, someone who has experience with the military. Asis really better known running a company as ceo until 2013, a fouryear time. This is someone in the present turning to for his management skills to turn around his agency that had so many troubles. This it will be a challenge assuming he is confirmed but it is the managing side of his experience that make him the right pick for the job in the president s mind. This is no ordinary project by any means. No, it is a difficult organization to run. It is much egg or in terms of employees. It is an organization that is basically a health care organization, one of the biggest in the country and the world. Applying the management skills the white house has detailed itself, there are big robbins within the organization that need to be cleared up. They call it a culture of erosion. That is what we have to do, to try to use the management skills to get the money in the right direction for a growing population of veterans using these services. 8 million veterans using the healthcare component in the system. The early reaction to his nomination . Surprise was expressed that he was picked. He was not among the names on the radar. Cautious optimism he can address the problems. Notable support from republicans, which is important. Including the hometown congressman john boehner, saying he is a good man, a veteran, a strong leader with decades of experience in the private sector. He is the kind of person who is capable of implementing the dramatic systemic change that is abilene needed and long overdue at the v. A. John boehner will not confirm the nomination so it is senators who will make the choice. Well. Of confidence bodes thank you. Thel with me as my host, former chairman and ceo of kreisler and home depot. You also served on the board of the veteran Services Group Wounded Warriors as well. You know quite a bit about the area. Ceo to run a former the government agency, you say im very encouraged with that selection. I think he will bring tremendous rigor to an organization that needs an improvement. I do not think it is about more money. Think it is about operational efficiency, improving productivity. The Wounded Warrior project on the board there, we financially support over 50,000 Wounded Warriors. I hope bob reaches out to us because we can give him good insight as to possibly some of the things that could change to improve our service to the brave men and women out there who have protected us and allow us to do what we do every day. You have come into companies were there needs to be a turnaround, a change of culture and a change of organization. What would Bob Mcdonnell bob mcdonald need to do in veteran affairs . Lead and learn and listen. His experience will be tremendously helpful. Give him tremendous credibility, his operational experience. I think he needs to go in, function by function, facility by facility, and understand, where are they against dustin. How many patients are they looking at against test in and what kinds of services are they delivering . My dad was a world war ii veteran who worked as a volunteer in the hospital in pennsylvania. I got an opportunity to spend time with him and got to know folks at that particular hospital. There is a tremendous our nity to improve service to the tremendous men and women. A government agency, that will buy him more time . He should not take time. We have a crisis here of credibility and service. Men and women are waiting in line and losing their lives. This is not something we want to take our time to fix. I do not mean to be cavalier, but we have got to go in quickly , make change quickly, and improve things for these men and women. Bob, rate of change will be critical. Just hang on. Bobbled the back to talk about the economy. Coming up, bloomberg crunched the numbers to find the best strategy when it comes to world cup shootouts. Less, nasa hopes the second chime is a charm. The mission is to study climate change. We will be back in two minutes. Good morning. Here is a look at the top headlines. American apparel is trying to gain control of the company he founded. Doug try to call a special chair holders meeting shareholders meeting. Own 27 of American Apparel and is trying to increase its shares and gains. And making plans for his future. After his nine year term on the board of the oil company, he is set to seek investment banks partners as an advisory partner. The former oil chairman also served as chairman of nokia until 2012. Paramount pictures, transformers aid of extension was the big winner at this weekends box office. The film pulled in 100 million, making it the biggest a mastic debut so far of 2014. It is a first in a new trilogy of area alien robot movies. We cannot get enough of those. It is 26 minutes past the hour, which means Bloomberg Television is on the markets. Scarlet loo has more. For futures in focus. Oil futures this morning, even as iraq stepped up its direction. Prices are up about 2. 5 , bringing the rise to almost four percent. The advance is not that much bigger. Joining me now, greg bender. He used to treat oil futures. We have also got scott bauer. I want to start with you. Why do oil prices seem so resistant to developments . 2. 5 in june, given the kind of movement we have seen in iraq and on the ground. There is always a question of how strong the economy is in general. The seasonality right now is not the best for oil. August 10 to be negative. This has been a breakout. We did clear resistance which is important. Which has gone sideways and not up to the target everyone is expecting. Notably, we have seen the premium the market is paying for immediate delivery. We will get to that in a moment. With all of that in mind, reg out in ways greg has called it, how are you trading in oil . It is very range bound. Atbroke through resistance 104 and did not get to the 110 level. We are just above 105 right now. If we see one of five get hit or any debt, i would hop on the short side here. We are very range bound. I would hop on the short side and look for support at the 1. 2 level. With all the strikes we have seen in iraq, the shock value is out of the marketplace. Greg alluded to looking at that in the option volatility and oil. We see that way down. The shock value is gone. A lot of pressure is off. If anything in this trade, we will see some Downside Pressure in the next couple days. Laymansput trade in terms. Potential profit of about 275 per valid per barrel. Since the contractor and trolls 1000 barrels, the total would be 2007 hundred 50. Greg, when you look at what is going on in oil, you see the u. S. Posttentative steps toward exporting crude. Is that a bigger factor . It does not look like it. Specifically, if you look at wtis discount to brent in the world oil market, that is right around a two week average of eight dollars per barrel. There does not seem to be an immediate rise impact in the short term. I want you to explain what means. Dation future contracts have expiration marks and it is a condition that exists where future contracts for more immediate delivery trade a premium. That condition generally exists in times of high demand and or limited supply. Do you expect that to continue . I absolutely do. I could not agree more. In the options world, i am looking to buy august puts in u. S. Oil. That plays right into what greg is saying. Thank you so much. Ustt and greg, for giving our options insight. We are on the markets once again in 30 minutes. Thank you so much. In the firste quarter. We know that. That meant corporate profits also melted. The biggest decline on the bottom line since the beginning of the great recession. Mike mckee has the real deal on whether this means the end of the bull run. Still with us, our guest host, chryslereitzer ceo ceo. Were are not talking in s p 500 corporation. We are talking about all the asfits public and private reported to the government. They were ugly in the first quarter. Tax raises, profits fell, the first decline since the beginning of 2013, the worst since the Fourth Quarter of 2008. Aftertax adjusted profits, even worse, down 13 . And will it last . We have a good idea about the first part. We do not know the second part. A big debate about that, and like Everything Else in the first quarter, profits were recovered by lousy weather. You will see a retraction and corporate profits as well. The government ended an accelerated depreciation at the end of last year. There was one big tax break they could not use. That may be a reason why stocks went nowhere for most of the first half of the year. We are barely higher. What about the second part of all this . You have to guess whether they are going up and down. Snape seeing the economy back in the Second Quarter running a three percent gain to match the three percent loss. Even with a firstquarter decline, profits are at an alltime high. Sometimes, with the Company Expanding again, there is no reason the graph cannot continue expanding. You have got to have a reversion. Look at the longterm, three percent corporate profits to gdp. Back to the 6. 3 . An interesting article this morning. Of stocks overe the last six months or so and found the only buyers are Companies Buying back stocks and individuals hedge funds everyone else is net short. I hope they are right. Discussedtive, we more of a realist than an optimist. The things you talk about, certainly, we have a back rub of uncertainty. Fedex, a bounce back after the first quarter. We saw him recover from the weather and other problems. I am more conservative in my view. A correction stocks . I think so. I think corporations have done a great job overall with corporate, except for taxes, which we need to take a hard look at in this country. Is there any possibility that maybe the economy could surprise on the upside and that could be an earning striver . Questec could always do that. What we have not seen in the recovery so far, and you and i talked about this at length last week, is the switch from managing the bottom line to growing the top line. We are not seeing Companies Invest a lot to try to build revenues. They are just trying to hold down expenses. That is the real question. The switch over as the economy gets better. We are seeing megadeals. Because they had huge cash reserves and money is relatively inexpensive, they will go out and buy revenue, or they are get theorporations to tax and they cannot get it out of washington, they will take control themselves. They have the cash, as we talked about. See top linenue to growth. Is that not troubling when companies have to buy their revenue . Collects most of these companies could probably invent some of the things they are buying out there. But they need to get top line growth to get the expansion. We are in a chicken and egg situation where companies have to start spending money. We have now seen it on the personnel side and we have had four good months on jobs gains. Ofther 210,000 in the month may. We will get that number on thursday. If we get that, people start spending money and the companies see that. It has not started feeding on itself. Facts you cannot just create jobs with no market expansion. Even janet yellen talked about pulling back from the original forecast for the year. I would love to see a gdp. The forecast is, we will get over three percent for the Second Quarter. Todays the end of the Second Quarter. It will be interesting to see what happens starting tomorrow. Everybody goes shopping. 29 in the first bearded goes in and goes out and will be pretty level. Thank you erin economics editor. Of home depot and crisler. Coming up, the former treasury secretary is among those signing on to a new warning on climate change. We will see what our guest host think about that warning. Plus, summer interns do not have to worry about paying drinks on the weekend there they are cashing in by working in Silicon Valley. Stay in the loop. Mainly a more expensive rocket we use. His recent oped, he wrote, we are staring down a climate bubble that poses enormous risks to our environment and economy. Clear andgns are growing more urgent. Very strong opinions about climate change, the former crisler the former home depot ceo. Warnings of a coming climate crash. Do you believe it. Is just my opinion. Based one saw pictures maps, heat zone maps that showed significant improvement. The utilities in the energy industry, if you look at what auto and auto regulations and cafe standards, we are making progress. The interesting thing about the environment thing is that we hold no borders. All the work were doing in the u. S. Could theoretically be offset by all of the plants going up in china. I lived on the Canadian Border for a while. Acid rain was a reality there. We have to be careful we are not imposing strict regulations to our corporations. I am not against improved environment. You are signed onto the knowledge meant that what we do and what man does does in fact affect the climate. No question about it. Anything we can do to improve it is important. Partners asiang of the crisis you have had in the country, i always questioned why epa is driving more Energy Policies than the department of energy. I understand the charters on nuclear and so forth, but i wonder if we are imposing more hardship on utilities, because we are gaining Energy Independence. The latest legislation on coal fire plants, we are just starting to get Global Competitiveness on energy costs, which is endowing allowing energy to come back on shore and see that trend stymied by new regulations. Not buy into the keystone pipeline, that being a major disaster. We are woefully deficient in not approving the keystone pipeline. The decision to approve that is taking longer than it took to build the empire state building. As an environmentalist, i would much lap much rather have a pipeline transiting oil than railcars going through every small town north to south. It is much safer and more efficient. Maybe it does not all mash with refineries, but we are making a huge mistake from an economic standpoint and environmental standpoint, not improving the keystone pipeline. It does not sound like we l get any decision it until the elections. It falls into the category of politics versus policy and kicking the can down the road. What did you make of the news that we are ready to export our unrefined crude oil for the first time in 40 years, except really toward Energy Independence that we have been talking about in the United States . It is a good thing and we ought to be using the gain in energy inter independents geopolitically. We ought to be using that and give it to our allies offshore and gives it to them to help them with energy demands. It bodes well for job creation, increased taxes for our government. There is a lot of good benefit in being able to export oil and we ought to with more gas, also. I have heard people talk about it being a game changer in the u. S. And not a lot of people have talked about it. It has not been on headlines. A couple of reasons. Tremendous credit to the industry for driving energy. In spite of init some cases. It has been kept quiet because they do not want it to be a political issue. Mobil,are running exxon hes doing what is right for shareholders and investors and also the right thing or our country. As we goolitically focusing. Thank you so much and great to see you this morning as our guest host. The chairman of accelerated. Coming up, yesterdays world cup matches came down to one hit. Digging to find out what the the best about strategy for nailing the gamewinning penalty shot. Sunny days line country paid internship very Silicon Valley never looked so good. Stay in the loop for the details. Economics that go into it all the data. The first strategy is you want to win that coin toss. If you go first, you will win 60 of the time. There is so much pressure on the team. We saw what happened on the team we saw what happened this weekend. The team that kick first one both penalty kicks. It is human nature. What kind of strategy can the team put in place . Is a lot of Economic Data. Real economics professors have goingd tens of thousands back decades. They have all these strategies depending on the strength of where the goalies like to go. They have a huge report based on this guy kicked to his right 80 of the time. But the goalie likes to jump to the left. Depending on who you are matching up against, there are different ways to approach it. Is most compelling strategy to try to be as random as possible. A lot of the mediocre penalty kickers are not that random. They tend to go for a spot they are comfortable with and that is when the goalie can try to guess that in advance. How much data is really out there on this . Other has 9000, professors have different numbers in the thousands. When you add it up, you can look at each kicker. Goalie, he hasch got several dozen. There is enough you can get a true pattern on what individuals are likely to do. Guess inow you could each game. Thank you so much. If you get an edge on your world bloomberg. Com. To coming up, how much did you make as an intern . To affordot enough your own apartment. We will take a look at staggering pay coming up that Silicon Valley next. And, mcdonalds introduces a new weapon in the battle to reduce customer wait time. We return in two minutes. X you pack up your best close, you find a cheap place to live, and you worse you work in a place that you hope looks good when you get out of college. Almost half of summer internships are unpaid. That is Silicon Valleys internship. Unpaid, no way. You will get more than 5000 dollars a month interning at yahoo. Com. And intel, youre hoping to ess the boss so much more than 130,000. Just starting off. And Bloomberg Television is on the markets. Point to a mixed open although we are on track for a sixth quarterly gain. We have been on a bull run for the last several years. Where will we continue for the second half of 2014 . On the markets again in 30 minutes. Coming up, the second richest man in the world will take home the spoils of the directv deal. We will tell you why the price tag is worth it to carlos slim. And, mcdonalds wants to make your fast food even faster, which means they might finally be ready to hire me. I was practicing at mcdonalds. On are watching live Bloomberg Television, streaming on your tablet, and bloomberg. Com. Futures indicate stocks are little changed at the open. The longest stretch of quarterly gains since 1998. Will the bull run continue . General motors is continuing a payout fund for victims of crashes due to a faulty a mission switch system. A similar task for 9 11 victims. An hour from now, we are expecting to get a major Supreme Court ruling on obamacare, the issue being whether employers must pay for Birth Control even if they are morally opposed to it. A criminal investigation will be settled with u. S. Authorities today, putting an end to an investigation that has been going on for more than seven years. Phil mattingly has been following the case and is with us now. Final details are being handled handed out still. Number forthe final the fine will be 8. 9 billion. Case, far in the way and we also know good news in the negotiations, theyre going to be banned from handling certain dollar transactions for up to a year. We learned from people familiar with this case have at least about a sixmonth reprieve to set things up. Good news on that kind that side of things. We will see the bank will plead guilty to a criminal charge. Expect this toy happen sometime after market close. Unless something major falls apart in the last moments, it looks like today will be the day. In ais is unprecedented sanctions case. What makes the actions so much worse than others . It was an interesting question, one we have taken to state officials often. I think everyone saw it as being extremely egregious. What is expected to be paid today. What i heard from u. S. Officials directly involved in this case over the last couple of weeks is , it was particularly egregious on levels. They did their own self examination at the time the 2009ce department in 2007 they reported their own things themselves and then went back and did these things again. The Justice Department became very frustrated with the lack of help in this negotiation. Way the by far in a largest one we have seen. A reflection of how banks reacted looking into this. Of the this mean the end Justice Departments look into bmp . For the bank itself, and you can just look at the Market Reaction today, the bank is starting to trade up. Theyre getting this out of the way. This has been looming. U. S. Officials have made clear it does not mean individuals are totally out of danger. They are looking to bring charges to individuals. You have seen this in tax related cases as well. Just because they finalize the settlement with institutions, it does not mean individuals are in the clear. The charges are not expected in the near future but the banks should be go after this. Individuals still have something to be concerned about. Prosecutors are still looking into bringing in charges. Thank you. A handful of fast food restaurants have been toying with ideas of how to reduce customer wait time to get an edge over others. They face is how do you ensure orders do not get cold between when the order is placed and when the food is actually picked up . Mcdonalds is testing a new approach. It is also an act. That is right. Mcdonalds is testing a new app in 22 stores. How it works is, essentially, you open your app on your phone and put in your big mac and fries and when you get to the restaurant, that is the point you hand in your phone and they give you the order at that point. It saves you time because you do not actually have to speak with the cashiers to order your food. You still have to wait with everyone else to get your meals. Is because you want your fries piping hot. How does mcdonalds expect this to improve sales . Mcdonalds has had operational problems for the past year. Customers complained their orders are either not accurate or they take too long. This has been a tribute it to a complicated menu. The theory is that if they can reach consumers through multiple platforms and are of ash obviously, our smart phones are one of the best marketing tools. And it is fairly easy to use. Yes. And reaching consumers through new platforms and also increasing speed, hopefully improving satisfaction in that way, we can get customers. Even shaving 10 or 20 seconds will improve as it gets as it gets tallied across the day. Absolutely. Especially at the drivethrough where seconds really matter. These customers really want to get in and out of a restaurant really fast. Whenever i drive by mcdonalds and i see a drivethrough with the line curving around the restaurant, i think, im not going with that one. What are restaurants doing . Lets other restaurants have been pursuing digital rigorously. The narrow rolled out a function where you could place your order ahead of time and you just kind of pick it up from a rapid take up shelf. I think the restaurant area that has been most successful with online ordering has been pizza. It makes a lot of sense in a Delivery Service model. In some markets, about half of these orders are now coming through online, which also gives the restaurant an opportunity to upsell. You have consumers at more toppings. People to order a little bit more. Dominoes has done well with their pizza app. Thank you so much. In colorado, thought leaders are gathering for the 10th anniversary of the ideas festival. Ahead byine what lies 2024, the big order. Rik schatzker is there tell us the buzz and what people are saying about the next 10 years. Good morning. I would have to say the buzz because, asmistic you just mentioned, people are looking 10 years into the future and it is not a gloomy perspective they have. They are trying to come up with big ideas that will change the world over the cores of the next decade. They are talking about the future of the economy and industry. Brian is here. He will talk about the fact that, of the 500,000 people in brazil watching the world cup, fully 20 of them are using this. The state is talking about the future of energy and fracking, something the state of colorado is trying to manage aggressively. The future of politics with hillary clinton. Is she running or not . Know people will be asking. And the future of education, two presence of Harvard University university. Larry summers is sitting down here at the aspen ideas festival this morning. And, here with us on market eastern hour,0 9 00 Mountain Time this morning, so is the president of the aspen theitute. Later in the day, former secretary of labor in the Clinton Administration now at talking toll be here me as well. I suspect we will talk about unemployment. A great day ahead of coverage here on Bloomberg Television live from the aspen ideas festival in aspen, colorado. Back to you in new york city. It looks gorgeous. Thank you. Reportsorward to his live from aspen. Keep watching for more from the ideas festival all day long. Moving and shaking this hour, former ceo bob mcdonald. President obama will nominate him to run the department of veterans affairs. He is a grad who spent five years in the army. He will take over an agency the white house says has a correct a corrosive culture. And a lack of accountability. Veterans complained they had to wait months to get appointments and officials state records to cover up those delays. In the four years he ran the country the company, the stock was up 51 . Just lookingok in for the seasons latest faction, look no further than ebay. It is no longer a place to get retro fashion. Arlos is a big winner we will tell you why the worlds second richest man will take over the spoils in this merger. Stay in the loop area loop. Ebay Just Launched a new shopping hub where consumers can buy full price currency reducing merchandise directly from designers. Departing with 16 u. S. Concession brands, and the founder and director joins us now. Great to see you this morning. What made you decide to partner up with them . Is ebay came out with a new idea , the designer collective, for men, women, its asterisk, and they asked me to be a part of it as an number a merging designer. Ebay has 140 five active buyers and it is a great website with and itustomer service seemed like a great next step. Place it is not seen as a you go for highend fashion. If you have hesitation . Currently, we have our own website, upscale websites. But ebay had such a great reputation. The world is changing. Women do not have time to shop like they used to in stores. And there isay Great Customer service and guaranteed returns. What is the biggest thing on your mind, when neighbors approached you and said, we would like you to do this. It was important to me we get to control the image. For allk well with us other designers. It is onestop shopping for the consumer. With otherthere designers. Might getyour items superseded by others . That is one issue with all online shopping. It may be hard to tell we use better fabrics or our designs are better made. It,fully, when people order they will try on and where it and love it. Heavy seen a bump up in sales . I have seen a lot more traffic to our website. I think because they have a wide region internationally and domestically, that were seeing an increase in volume. Thank you so much, founder and creative director of the Fashion Design line. Were two minutes. A ruling today comes from the states highest court. A group of municipalities that block fracking. We will continue to follow the developing story. At tsflynn will buy out stake in American Mobile 45 . 5 billion. At t is selling its holdings after a 24 year relationship. I want to bring in creighton. At t has another big deal, buying directv. It creates a conflict of interest because directv has a bunch of operations in latin america and they compete against each other for customers. At t and them investors and for that long . Carlos was the guy who invatized the phone company 1990. Partners. Have been they forged an alliance in the beginning. This was years and years ago because the Mexican Government was going to sell the phone company. At the time, he had no company. E in the phone he came along to help guide him in the industry. Slim want to see at t to vets divest its stake . I do not think he would, but they had to find a way. It was an 8. 3 stake in that company. Takingngs that helps is shares and getting diluted. All right. Thank you so much. Bloomberg news editor. We are just a few moments away from the opening bell their the top 10 trades you do not want to miss right after the break. Tay right here. Welcome back. It is 26 minutes past the hour. Bloomberg television is on the markets. The latest rate before the open. Prettyt now, it is a flat open. Dayle change on the final of the Second Quarter. We have a lot of Economic Data coming up in the coming days. In the next 15 minutes, we will get purchasing managers. The dollar weaker at a onemonth low versus the japanese yen. A quick check on crude oil as well. Weaker this morning even though we have got continuing violence in iraq. Be back on the markets in 30 minutes. Thank you. The only sauce you need to know about today, scarlet stays with us and julie hyman joins in. Is tothe nasdaq adding ready list shares of the companys exchange. At least 2. 5 million. 20res are trading below cents. A giant step for mankind. And inhales a diabetes treatment, coming after an almost decadelong application process. A company is getting ready to release data on its delivery drug for my grants. The findings will be at the 56th annual meeting. The companys third day for publicly traded company. 31 on thursday. It closes on friday as well. Number six is International Pay shares which could encourage it increase 40 . The magazine said and improving Global Economy for its cast for stock buyback could be significantly higher. American apparel adopted a plan designed to prevent the ceo from rejected chinese request for a special shareholders meeting. Number four is walter energy. The Company Warning it has an unsustainable level of debt. It also says it has a negative outcome. It expects the market to peak over the next 12 months. Number three is yahoo . The tock price target was raised 37 dollars. The firm says yahoo s stake in ali baba is undervalued. Two, a company agreed to buy a company that a competitor can buy. It plans to be funded primarily from using currently held cash and shortterm investments. General motors, gm. Ken feinberg will sue soon accommodatelan to consumers for a faulty switch. Interview watch an with ken feinberg later today at 11 00 a. M. Eastern time. The last warning for decision to be released by the spring court. Obamacare and providing comprehensive coverage. Standing by at the high court is megan huge megan hughes. What is the legal question . It is all about religious freedom here. It is a very controversial issue. The loudest day of decisions we have seen so far. Requirestroversial and employers to cover, trip to cover contraception. Of oklahoma and one out of pennsylvania. The owners of these Companies Say there are two forms they find morally disagreeable, equivocated with abortion. Law want to opt out of this that allows individuals religious freedom rights. They want that extended to businesses. Ery controversial justices seemed pretty divided. Is the first time they looked to be Affordable Care act since 2000 12. Clearly come impassioned protesters behind you. Some impassioned protesters behind you. They say that is against their First Amendment rights. Makes at mays broad decision, it can have a tremendous impact and they are fighting against the right to work through, with a lot of big conservative deep pocket donors. It will be interesting to see what happens again and if it affects half the company. Thank you. Outside the high court. Coming up, apple, what the Largest Company in the world is doing. For 29 strike, looking on the west coast. Negotiators avoid a repeat of 12 years ago where a similar strike cost 30 billion a day . We will be back. Reid hoffman has been called the startup whisperer of Silicon Valley. He has had his hands in so many of techs most successful companies. Emily chang sat down in her new series, and what did you discover that we did not know about reid hoffman . It is really an opportunity to go in depth. We talked to these guys all the time on bloombert west when they make news but we do not talk and wherethey are theyre going. One of the most decorated guys investorl, a personal in dozens of companies and on the board of seven companies and now the author of not one but two books, out with a new book next week about rethinking the relationship between employer and employee. Take a listen to how he describes it. The key thing is, in many circumstances, employees and employers are lying to each other. The notion is, the modern career is actually changing and career checks are changing. How do you get the entrepreneurial relationship between the company, the employer, an employee. The short answer is a lie. You set up for a project that is three or five years long and it transforms your career, and transforms the company. The idea is the job is not forever and Neither Party should be under the pressure the impression it is. Just forot a book Silicon Valley. It is something he hopes every middle manager in america will want to read. I found it interesting and any manager would as well. What was the most surprising theme you heard . So many surprising things. We talked to him about everything from growing up to berkeley in berkeley to being assessed with dungeons and dragons. He talked about paypal and the paypal mafia. Now, beyond all the people who came together to found an start paypal, it is really a group of people who are all entrepreneurial themselves. He went on to Start Companies like tesla, facebook, yelp, linkedin, all of these companies founded by members of the paypal mafia. I asked them what is special about the members of the family. The people who started the company said all of them have their own entrepreneurial spirit. One of the most interesting things he said is that they still call each other all the time. Peter andan will call when he is thinking about the data and Business Models with respect to technology, he calls matt. When he thinks about crazy and big ideas where risk is not a factor, he calls you on must. That is fascinating that it is well. Uch alive and thank you. You can watch the full interview later today. That brings us to the top tech stories on the bloom brought bloomberg radar this morning. Asias Largest Internet Company ,ants to improve online content and will expand the choice of local Services Available to users. Apple is looking to hire managers for six new Outlet Stores in china and the company tries to make good on a pledge to Double Stores there. Apples website did not indicate when the new stores will get open but a fifth of its sales are from china. A facebook researcher apologized after conducting an experiment that temporarily influenced what almost 700,000 users saw on their newsfeed. It altered the number of positive and negative comments a users saw. The him to death the incidents revise concerns for some about privacy issues. We will return in two minutes. On the west coast, 20,000 longshoremen could strike, move, and may cost the u. S. Economy billions of dollars. Jon erlichman joins us now from the l. A. Harbor with more on this story. Our understanding is right now, these talks are continuing and the talks do sometimes continue without a work work stoppage. Even the potential cost is worth discussing. Even if you were to just take ports, e the l. A. You are talking about more than 40 of the Nations Capital supply on that front. You have also got fleets of trucks taking these goods and moving them around the country. Retailers and manufacturers have been speaking out and saying theyre working on plan b. It is difficult to implement when so much of the wood just six far right here. Ports want to keep costs down and stay competitive. On the union side, you have got normal issues like who is shouldering health care costs. There seems to be debate over how much flexibility the court has to bring in computer technicians, electricians, workers who may have a skill set some of the workers do not have. That ultimately will be one of the issues that decides if this gets resolved very quickly. Getting solved quickly is what businesses want. There was a big port disruption back in 2002. How often have we seen these situations . A lot of people have talked workern 2012 clerical disruption. But absolutely. The white house had to get involved. That is why retailers and manufacturers know that billions of dollars can be at stake. One thing they are watching closely is, some have argued productivity has just slows down. It is possible the economy could take a hit because of lower productivity. It is something we are watching. Thank you so much, Jon Erlichman at the l. A. Harbor. Time now for the Global Outlook very the iraqi army has announced a major offensive to. Ake the Northern City military Officials Say the ground opposition started saturday. The tank moved in from the south and helicopter gunships also fired on the area. The competition is heating up in brazil and so is the temperature. The world cup game featured the First Official stoppages of the tournament. Referees gave the players three minute water breaks with temperatures topping 86 degrees. Many fans left their seats and watched all the action from inside or in the shade. Ikea is going urban. The retailer opened its first germany,er store in which costs 109 million, an experiment to the swedish chain, which wants to see if the concept might expand to other urban areas. The day they have been waiting form a have arrived. Expert wasresponse tapped by gm to administer the automakers fund to compensate victims of an ignition switch malfunction. Gm. Re joined to talk about sus full confidence in feinberg and the ceo. Reputationa great and high integrity. It is not surprising he was picked to do this. Her strategy is to get this behind them as fast as they can. They will make sure to avoid a classaction suit. Confident should feel they will be treated fairly and expeditiously. Be sure to watch the Market Makers interview with ken feinberg about an hour from now. No intentionsars, of retiring. He has set himself huge targets in the next years. A century ago, a family of italian brothers set out to build both beautiful and fast, designed for motor racing and the road. A hundred years later, plans are even more ambitious and they are nearlyto lift sales by fivefold. Sales were doubled last year and they are set to do the same again. That is good news for their owners, who need sales out of. Urope eyeing the growing asian and u. S. Markets, introducing six models, including this one, named after one of the founding brothers. The United States is one of our biggest markets and i expected to account for more than a third. China and the Asia Pacific Region is the second strongest center of gravity for our business. You look back a couple of years and you saw it late in the markets in a year. Winning american and asian hearts will not the easy or cheap. The company paid top dollar this year for the super bowl. Confident. O is we are competing and this is a an important value in our product and the luxury market. The italians see this as a perfect opportunity to seduce new markets. Love those got to cars and the personalities the hi mems tomorrow, shauna matthews, the ceo, will be talking about record market highs and another hot market, the real estate market. Bloomberg television is on the markets. We are 30 minutes into the start of u. S. Trading. We have just gotten the chicago purchasing manager index number, which came in a little weaker. Readtle bit of a lower than what investor verse what investors want to say. We are seeing the s p pretty much flat, off by 1 5 of one percent. The nasdaq is in the green right now but only by 1 10 of one percent. We are still waiting for pending home sales numbers, which come out in four minutes. Oil has not been moving as much as you might expect given the continuing violence. Brent, down by half of one percent or 112. There is a remarkable lack of volatility. Blackrock is the world passes biggest asset manager and sees opportunity in opportunity there. Joining me now, mary. Say in termsckrock of why investors should pick up in investment now . Theyre basically seeing the same thing you cited. You say, this is really low and really cheap. On the flipside, you look at s p valuations and bond prices and bubble. Re is a blackrock says, ok. If protection is so cheap, why not . Protection for your portfolio with valuations like this and we see a bunch of different risk factors, like you have risks the central bank oroved and you see crisis decline and a bunch of different factors where they are not powerful saying, put it away. What they all fixate on. Right hereexactly and people are bored and looking at the market and saying, what is there to do if there is not a whole lot of volatility. They also say, theyre just uncomfortable. If you are there, things have a tendency how does blackrock differ from its peers . It is the exact opposite of pimco. Saying by this protection and pimco is saying, we will be here for a while. So they think you are better off selling that protection and taking home the premium. The kind of timeline is black let blackrock projecting . It is an interesting difference. Co sees it as a short form shortterm trading opportunity. Blackrock is saying, we will keep updating you every six months with what we think. So far, it has been pimco. Theyres saying not saying this is our big trade of the moment, but you sleep better. Pimco says, say, you can and blackrock is like, i am just fine to wait it out. Thank you so much. Market makers is up next. General motors posse general motorss big payout, we will talk to the compensation expert in charge, ken feinberg. The Supreme Court takes on obamacare. We are expecting a rolling moments from now. The issue whether the company t pay for the companies the employees Birth Control even if they are morally opposed. The largest bank in france will be hit with a record fine ie