Bargain. It is a ceasefire. It means budget peace for the next two years. They do not tackle the big ticket items. No they do not. Entitlements, not in there. Taxes, not in there. What is in there . Federal spending is set at a trillion dollars. That will be controversial with republicans. It replaces 63 billion in sequester cuts with other savings. Reduces the deficit by 20 billion or more. No major Big Decisions on taxes or entitlements. How do they replace the sequester . A grab bag. Aviation security fee, federal military pension increases in fees. Other savings there. The two people who made the deal, paul ryan and patty murray, they know this is not perfect, but they feel ready good about it. This bill reduces the deficit by 20 billion. Our deal puts jobs and Economic Growth first by rolling back sequestration. Providing for some sequester relief. We are paying for that with more permanent reforms on the autopilot side of the spending ledger in excess of the sequester relief. That is a good deal. We set bipartisan spending levels, this deal allows congressional committees to proceed under regular order and give Government Agencies and the companies that do business with them the certainty they need to hire workers and make investments. This is a step in the right direction. There is always a price to pay when you compromise. We knew if we forced each other to compromise a core principle we would get nowhere. That is why we decided to focus on where the Common Ground is. We were not able to close a single Corporate Tax loophole. I know republicans had hoped this would be an opportunity to make some of the kinds of changes to medicare and Social Security that they have advocated for. Congressman ryan has set aside our differences. You dont always get what you want. We still can make progress toward our goals. You do not always get what you want. That is ryan talking to conservatives like the tea party and other rightwing think tanks. They do not like this deal one bit. They say it trades concrete spending cuts for future promises. John boehner, he has a message. They are using our members and American People for their own goals. This is ridiculous. If you are for more deficit reduction, you are for this agreement. It is looking like he will have a handle on this fiscal go around. The budget deal will get the majority of the majority in the house. Translation, republicans in the house will vote for this measure. Add to that, democrats will back it. You have yourself a budget deal. The deal is something that accomplishes deficit reduction, permanent pension reform for government employees, and it does not raise taxes. Is consistent with republican efforts to try to replace the sequester with permanent savings that make more sense. This was a hardfought negotiation. I want to thank leader pelosi and my fellow conferees for making it clear as recently as 12 to 24 hours ago that the way the agreement was taking shape would not be acceptable to members of the democratic caucus. I will support the agreement. They did an excellent job of describing it. It is not a deal anyone would want in the ideal world. It is a government where democrats control the senate and presidency. This is a real step forward. I think every republican should support it. Ryan lost some fans. I would give him the lowest grade for republicans to ryan. He is proving that he is a fiscal fake. It is his job to stand up and tell the truth and when he says we can raise spending for the defense back to the pre sequester level or for domestic, that is evident that we are going in the wrong direction. One criticism from democrats there is no extension of the jobless benefits for about 1. 3 million americans. It could cost him votes. The final vote is expected by the end of the week. If you need a room and a hot ipo, hilton can help. 12 hours in kiev. That is later on lunch money. Smoke them if you have them. Uruguay became the first country to legalize marijuana on a national level. Do not book your plane tickets yet. One of the rules, no selling to tourists. The Worlds Largest hotel chain poised to go public, hilton. A 2. 4 billion ipo which would be the largest lodging ipo. This is a big win for hilton, who got slammed during the recession. Blackstone bought hilton back in 2007. The equity group is expected to land one of the biggest private equity profits of all time. What about competition . There are two things we like about them coming to market. We will get more information about them. We are competitive. We intend to win. We love that we will be able to see quarterly numbers from them so we can measure our performance against them. It will make the hospitality space more relevant in the market as a whole. It is a good thing. We are excited by our business. We want more people to Pay Attention to our business and invest in us. This may not be the best time to go public for any company. In a time like this where the markets are enthused about stocks, or we are at record highs, you cannot dismiss that. It becomes difficult to price an ipo. You know there is a lot of demand and you know people are enthused. A lot of Retail Investors are enthused about equities. Trading becomes difficult as opposed to being easier. This could be the best time to go public. Here is the head of lodging research. It is a great time to take a Hotel Company public. Stocks are up 30 year to date. Most would argue that there is another three or four years left of the recovery. There is limited new supply. The economy is improving, jobs are accelerating. Great time to be a hotel operator. What did blackstone do to make it a leaner company . They cut costs in the front office as well as around the globe. They expanded their footprint by about 80 . They have 100,000 hotel rooms in the pipeline today. They are making moves in china. Your report is fabulous. You talk about an 18 share to enter this transaction. Are institutions under pressure to acquire the shares of the ipo . Is it like twitter or facebook or is it a more traditional deal where the guy is going to call up and say buy hilton and they will say no . We say fair value is 20 a share where a buyer, anything around 18 or 19 a share, would not be surprised if it trades really well. The question becomes where is there more value . Bob knows what it is like to turn companies around. He works for cerberus. Here is his take. This is probably the second largest ipo coming out. I think the value is there. They have done a fabulous job. If you look at the remodelings going on, customer satisfaction, they have done a great job. It is 100 something per room. Against the industry is my point. They can command high price. They deliver. They deliver on consistency of expectations of their customer base. That is very important. What does this say for 2014 . I am optimistic that will continue. We bought seven companies this year and i think the momentum and the optimistic outlook should continue. You are familiar with the public private, go public again scenario here. What are the risks for hilton . By going private, we were able to do things you would not be able to do. We were able to monetize about 1 billion of what are non earning assets. We were focused more on cash than the book value. If you are public, the analysts would give you a whack for that because it was below book value. You have to make sure you maintain the operational focus and the focus on excellence and Continuous Improvement in those operations. Ipos are hot no matter what . People are being selective. Good Business Models are relatively easy to finance. Most importantly as we are in a period where we do not have volatility to the equity market. A lot of sponsors and companies that we see, particularly in health care and technology, are taking advantage that there is capital. Is it giving your clients pause . Does that make them think, if these guys do not see the buying opportunity, should i . There is natural evolution. A lot of the companies are the endgame for the lbos that got done in the late 2010s. It was the natural evolution. As the things become public, five to seven years after they become public there will be an offering. People are paying close attention to valuation. Things will get done at levels where they think public investors can make money from here. You can watch all of our hilton ipo coverage online at bloomberg. Com tv or on our tablet app, btv plus. Well find out whether it that ownership to change business. Up next, matt miller is going to be joining us for bitcoin 101. Before that, apparently santa likes to swim. He will be hanging out with sharks and feeding stingrays in tokyo. It happens twice a day from now until christmas. I hope he makes it to christmas. We are celebrating 12 days of bitcoin. We are focusing on the digital currency. Matt miller is back for day three. He bought bitcoins on monday, started spending them yesterday. Today, he is talking logistics. We call this one bitcoin 101. A lot of people have asked me, i saw your piece, how does that work . So you know, i have put together a simple view from 35,000 feet. It starts with changing your dollars, your euros, whatever you have, into bitcoins. I illustrated this by putting a regular wallet with dollars and a digital wallet here. That is what a digital wallet looks like . I would love to see you with a clutch. There is a matrix thing there. Let me explain wallets. You have to get a wallet before you can do any kind of transaction. For a consumer that is looking to spend money, it works like a regular wallet. You spend out of it and you can get money into it. For a merchant, vendor, service provider, it works like a cash register. To make a transaction happen, each wallet has two keys. A private and a public key. If you are selling something or accepting bitcoin, you show someone your public key. That is your qr code that you see there. You can take a picture of that key with your wallet if you are a buyer and then it generates a numeric code that is random. When those two things come together, your private key and the merchants public key, it makes a transaction. Those transactions go into blocks. You can think of it as a page on a ledger. There are hundreds or thousands of big Mining Operations that are competing to try to verify and secure those blocks. As a reward, they get 25 bitcoins. They wrap a kind of digital armor around each block, each ledger page, and secure. They do it over and over again so the transactions are not reversible. Bitcoin has risen about 8000 this year. How does it compare to gold . They are superior. If you take the industrial value of gold and you subtract it from the trading value of gold, what is remaining is the diversification value of gold. That is the value that bitcoin can address over the longterm. With a lot of volatility, it will trade similar to gold. Bitcoin might be poised to trade like gold. Will it go down like gold . I think the proper way to think about bitcoin is as a commodity, not as a currency. A currency requires price stability and bitcoin does not have that. It is a great way to diversify away from sovereign fiat currency. It could be more than just a gold substitute. Cheapair. Com now lets you buy tickets with it. I have been fascinated with bitcoin. I never put two and two together until a customer asked one of our travel advisors if they could pay in bitcoin. I got wind of it and thought, how cool would it be if we could provide a way for people to buy flights with bitcoin . I did some research and it is technically feasible, economically feasible, and we got it done. Also very volatile. How do you protect yourself from the wild swings in bitcoin . To be honest, we do not have to. I have been getting all of this undeserved credit, it is so wonderful that you are taking this risk, but the second they come in, we have to pay the airlines in dollars. We are exchanging them immediately. We are not taking any currency risk at all. What kind of new customers are you hoping to capture by accepting bitcoin . We are reaching a different market. We sold a 34,000 pair tickets to australia with bitcoins. We are not selling a lot of 34,000 pairs of tickets. We are appealing to customers we have not appealed to before. Do you assume a 34,000 pair tickets in bitcoin is a polite underworld transaction . That is not something cerberus called up to make that transaction, did they . I dont think that is fair. There are many have criminals that buy tickets in dollars. A 20 bitcoin is now worth close to a thousand. They made their money that way. The people i have talked to, i have emailed a lot of bitcoin customers. They are heroically well intentioned. They are passionate about trying to get big banking and Big Government out of the currency market. Even the big banks are paying attention. Jpmorgan applied for a patent on a bitcoin like payment system. It includes an online wallet which would let users transfer funds from a bank account or credit card. There goes the anonymity of bitcoin. We are going to be going around the world. The first, ukraine. Howard buffett is investing in rwandas future. That is next. Selling big western brands in the east. Selling cosmetics and coffee. We will ask ceos of two household names. I am betty liu. This is singapore sessions. Singapore sessions rings together executives with the perspectives and experiences to talk business in south east asia. Tonight two icons of international business, andrea illy of illy coffee. And William Lauder of
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