City. Good morning. I am Erik Schatzker. I am stephanie ruhle. Erik. Its been a while. Good to see you, my brother. My canadian prince. Goldman,e a partner of you get more than the key to the executor of 100 executive. There is a washroom on the executive floor. If i worked on one of those upper floors i would be able to use the restroom. That is me that it is time for the top Global Business stories of the morning. It is another record in what has been a recordsetting year for alibaba. The Chinese Ecommerce Company sold more than 7. 5 billion dollars worth of merchandise in the first 19 hours. Alibaba has turned holiday into eventggest shopping ever. Thanks maybe five 3 million each. Be fined 3 million each. Among the banks involved, jpmorgan come citigroup, and barclays. A new home for some of googles newest technologies. Leavempany has agreed to Silicon Valley for 60 years. Roboticsll use it for and space exploration. The airfield is known for anger 1, 198foot tall structure. It was built back in the 1930s. Oklahoma Oil Billionaire harold hamm has to pay his wife 972 million. But he is worth a total of 16 billion. He gets to keep people coveys 60 stake in Continental Resources the ball of his 60 stake in Continental Resources bit he told trish regan that control of the company was not an issue. We said it would not have an effect on the company and it wont. Not a part of this. Wifelawyer for hamms says hes considering whether or not to appeal. There is speculation about whether his client would receive 1 billion in divorce. And the best Business School in the country there is a new name at the top of bloombergs ranking. It is the Duke University school of business. Harvard Business School fell out of the top five for the very first time. Duke rose to the top spot thanks in large part to employers esteem for its graduates. You can say the president asked for it. Providers are blasting the proposal for regulation of the information superhighway. The president wants net neutrality. Comcast calls it a radical reversal that would hurt investment and innovation. At t and verizon are both hinting legal action. It is up to the sec to make a final decision. Fcc to make a final decision with us is the head of another media company, which sells cable and Internet Service in smaller towns in 22 states. It is the nations eighth largest cable company. Also with us is alex sherman, who covers media and Telecom Management what do you say media and telecom m a. What do you say . Like everyone else we were totally blindsided by the decision that the president took before he went overseas. Whos deciding on his own the winners and losers should be, and clearly sided with Silicon Valley. It is unfair, unnecessary for the president to do what he has clearly has interfered with the decisionmaking process of the fcc over the last nine months. Why is it unfair . Thing, i donte know what we have done wrong for us to deserve to be regulated. Mediacom speaking for generallynd probably for the entire industry, we never blocked from my weve never throttled, we dont have and we haveion, extended a significant and one of many on our network so that companies that the president supporting could bring a of cash into their balance sheet, and i guess spend them as they wish. We dont charge, we dont make anything out of the internet from any of those companies other than what we charge consumers on a monthly basis. If you dont do it anyway, why you care if the president thinks there should be new rules . You are talking about regulating the most vibrant industry in the country. You are talking about regulating granted, the president says there was no price competition, but you never know once title ii gets applied to our regular for a framework, whether somebody, another bureaucrat in washington will decide to do things that they do today. Rocco, how does this affect mediacoms business in general . Craig moffett has been covering this industry for a long time and he says the only reason to own cable stock is because of internet pricing power. If it ever goes to title ii he would completely reverses buy rating on the cable stocks. Requested. Great question. It is a phenomenal question. I can only refer back to what happened in the 1990s and im in enough to have been there 1992 and in 1992 we got reregulated and now phenomenal government decided to regulate the distribution side of the business and not do anything on the content side. Bloomberg did not exist at that time. Guess what happened in the last 20 years . First of all, during the time there was strict regulation, the investment in our industry the money that we invested during the first three years was 14 billion, which pales in relation to the money invested that was the investments that were made in our networks after the regulation aspects of the 1992 cable act went away. We spent 56 billion, quarter but what we spent in the fire four years. Quadruple what we spent in the prior four years. We have not been able, frankly, to send price increases to the consumer, largely because theyve taken advantage of what 92 and theid in 19 price has gone from six dollars 14 years ago to over 40 today. That is real detrimental on our availability an ability to price our product and retain customers. Going back to what the government did 20 or 30 years ago, that is not bode well for what may happen. If the government is convinced that the only way we can raise prices are make money out of it is by showing the consumer, which we dont want to do i was just going to say, where the problem with this part of the problem with his argument is that both sides make a persuasive case. Cable Companies Like you i state of the free market needs to operate and we do not need to effectively screwed our customers, but the guys on the and folks inoogles Silicon Valley make a persuasive case as well, that regulating the speed at which travel over the internet denies people who cannot afford it content that they otherwise want or need to have, and it constrains or stifles innovation. And what you yourself called the most vibrant industry in the country. Like i say, is there a site does their side of the argument hold no water for you . I dont understand a question. The only thing i know is that extreme competition to have a competition with Companies Like google and apple dont have in their own business not but they also dont have a monopoly. Cable companies have a monopoly. Hold on, hold on a second. You are talking like president obama right now. We are a monopoly . [laughter] i dont know if you noticed, but we lost a huge chunk of our media customers to the competition in the last 10 years could our internet we have seven internet providers. Oinesu live in the des m market, let me list them for you. Mediacom, we own a 36 market share, we have at t, verizon, tmobile. All of them deliver broadband to those markets. Seven different competitors in one market. It is offensive when somebody calls me and monopoly when they dont know what the hell theyre talking about, ok . Let me follow up on this, then. I want to contextualize how big a deal this is for your business. The charter is out there saying they want to be a horizontal acquisition machine and your name comes up as someone who could theoretically sell to them. If title ii were passed, the fcc decided to go with president obama, with this make it more likely to sell your company . Huh. [laughter] god i make those decisions. We will revisit that in the next month, six months, a year. I want you to bear in mind that i have 4600 employees that i am glad to be able to call my employees, and they rely on me being around for them to go out and provide support for their family. We are not selling as of today, but you never know what may happen later on. What do you believe president obamas position should be specifically . First of all, you should not favor one industry versus another. Two, i think it is the present anyone in this position as interfered with the processes taking place at the fcc. Theree, before he writes a lettr or memo and puts it out, he should understand what the hell is going on, all right . We are not a monopoly. If anything, google is a monopoly come have a 70 of the search market, and google and apple control 93 of the iphone business in the country. That with a 36 market share, i was called a companies he the was supporting whenever called a monopoly. One quickly, what is your take on comcasttime warner cable and how does this affect that potential merger . Comcast, they, are my industry but different companies, ok . So clearly, if somebody wants to go off to comcast, let them do it. Comcast is thick enough to take care of themselves, they are pretty diversified with distribution assets. Mediacom is pretty naked. We are only did his division business. Only the distribution business. I dont know what is going to happen. The likelihood that they will do a deal, there will be conditions imposed on them, but i just hope whatever conditions are placed, which i dont benefit from. You know what my take away is . I want to be a mediacom customer. Indeed. And oureo of mediacom, own media reporter, alex sherman. Up, it is virtually the rich will get richer. And the october surprise. Even some the sharpest investors in the game were taken aback by all of that volatility pit we will speak with David Rubenstein. A goldman partner is like winning the new york lottery, and tomorrow a new class of bankers will receive the golden ticket. Michael, what do we know about this Selection Process . Gary cohen and Lloyd Blankfein spreading good cheer, hugging it out . Tomorrow morning they will start calling people. It has been a monthlong process the summer. They have been scrutinizing these candidates for partnership and tomorrow they let them know. Problemat erik the this is a ceremonial title. I was going to say at best, but it is more than just the ceremony because you make more money, too. Md at a Different Bank this is a more selective group. And they have 400 partners. This is the cream of the crop, so to say. You have a real stake in the firm. What are the lasting perks of being a goldman partner . The typical salaries 900,000 for a partner. That is not all of your pay. There is a bonus pool that goes , and it is partners a small piece of the pie but it is nice and you get access to what we wrote about today, the private equity funds that are run for the employees. What is that . Walk us through it. Is set aside a portion of the bonus to be invested in these are investedese alongside goldman with the Principal Investments it makes. Other banks have Investment Opportunities for their mds. Is this just better opportunities because the returns a better . Well, they dont disclose much on the return side, but you dont pay any fees and it is an exclusive thing. It is not like a client fund where you can invest even if you didnt work at goldman . It invests sometimes along the funds and sometimes along itself. Goldman they all basically do it . About half last year. A firms part of secret sauce to goldman did not want the grants of the best schools to go to lehman that is not where they are going. Merrill lynch is gone sort of gone Lehman Brothers is gone, the street is not the same as it is access to enou that is access to these funds enough of a carrot to keep the best of the best from leaving Goldman Sachs for a private equity firm or you can make so much more money . It is a carrot to not leave for one of the other banks. But we talked to one recruiter who said every private equity firm has Something Like this. Is your own cooking is what you have to do if you are a private equity firm or hedge fund. If you are sick of the regulation of a bank, if you want a chance at higher pay, i dont know if it is going to keep you there but what does the Senior Management attention look like compared to other banks . It is very high. They have lost every few people at the top. The Management Committee level, there is not been a ton of turnover. Seen a mikeent cavanaughlike exit. Whether it is a result of the Bridge Street funds are not come something is working. Something is working at Goldman Sachs. Tomorrow the big list will be out. Big class, small class, any hints . Two years ago it was 70 partners, the smallest ever that we know of. It is expected to be around that number. Thank you, michael. Coming up, he cofounded one of the Worlds Largest managers of alternative assets. You will hear from David Rubenstein. We are approaching 26 minutes past the hour and it is time for on the markets. Stephanie, want to tell you about this company that installs and finances all the panels on your rooftop. Solar panels on your rooftop. Crowdsourcing. Everyone does it together. Only way to get enough scale. An adjusted loss of 76 cents a share. They were looking for an adjusted loss of . 20. Shoot first, ask questions later. The stock is getting hammered. Apparently they held a very, very short conference call, doing an exceptionally good job of managing expectations for the future, either. Some people who follow the Company Think there are positive signs. This went public at 16 last month, backed by blackstone, which has a majority share. Shares are currently trading under 12 in the middle of october during the big downdraft. Still, it is an ugly picture. Back in 2 minutes. Live from bloomberg headquarters in new york, this is Market Makers, with Erik Schatzker and stephanie ruhle. Market makers you are watching Market Makers you are watching Market Makers on bloomberg television. I am Erik Schatzker. I am stephanie ruhle. Once upon a time the Carlyle Group was just a private equity firm could today it is a different beast altogether. Carlisle has expanded into hedge funds, too. October was a rough month for one of them. Clarendon assetmanagement lost 11 in the first week of october. When i sat down yesterday with David Rubenstein, that is where we pretty much had to start the conversation. Clearly, volatility was more than people expected. We have not had a lot of volatility in the market in the last couple of years. It is unexpected. Hedge funds are much more volatile than private equity funds. As you pointed out, hedge funds tend to be much more compatible with the markets. That is what some people want when they invest in hedge funds. They want some hedge against the volatility of the market. In that particular case, an Excellent Organization. It has been with us a number of years and they did some things maybe they were say had not invested in, but it has been an Excellent Organization and they have done well for their investors over a long time. Are they changing strategy as a result . Im not going to talk about that. Are proud of it as an organization and they have done quite well for investors overtime. The equity market bounced back from those losses in midoctober. Look at where valuations are today and wonder to themselves, if it felt like we were in a bubble beforehand, perhaps we must be in a bubble now. What do you think about valuations . Valuations are hyped right traditional standards. You cant say that this time is different. We have got to be much more selective in buying things and it is harder for other private equity firms to findings to buy and valuations we are comfortable with. We can from time to time find things we like. Whenever there is a dip market that is when we go in. Investingtalk about in terms of cycles, they use the baseball game analogy. If we would use the baseball game analogy, do you have any idea what inning we are in . And when the bargain Shopping Opportunities are going to come again for carlisle back for carlyle . There are changes that you cannot predict. Energy prices are low and that is produced some volatility and opportunities in the energy sector. When the race begin to go up again, that will change opportunities and probably make things cheaper. Ok. So if you suspect that Interest Rates are going to climb sometime nextr, year, middle of next year . The feds office said they will begin to increase interest and to show that they are serious about raising Interest Rates at least. With that put us in the sixth inning, eight inning . Well i know you cannot predict with any confidence but you have a feel for these things. Nobody knows where the markets are truly going to go, honestly. High bute a little bit there are opportunities in certain parts of the world and certain sectors where you can find things that are cheaper than in other areas. It will make it harder to sell things at prices you want but easier to buy things do you feel pressure as a sole as a result to sell more today . We have been returning a lot of money to our investors and other firms have been doing the same thing. At some point we will reload and we are in the process of doing that now. It takes for five years for something to be bought and improve and then sell. That is a typical cycle. David, you mentioned that oil prices are down. Considerable drop since the summertime. You also mentioned that you are selling things and returning capital to your investors. Many of those investors are in the middle east. Hadexcess capital that they to invest was largely as a result of high oil prices, but you are giving money back to them. Do you expect that the flow of funds into Carlisle Carlyle whatoing to try up do they have capital to recycle now . We managed to hundred 3 million of assets and a lot of the money comes from the United States and other parts of the world, will percentage comes from the middle east. I suspect as well prices come down, that reminds people in the middle east of the importance of diversifying because they cannot be too dependent on oil and energy. Those people have been pumping money into your firm and other private equity firms were alternative Asset Managers, however you choose to describe them, in part because of the returns are generated. That is correct. As you look into the future, with evaluations high, you have to assume that the returns are going to go down. What are you telling investors to expect . We cannot achieve 30 gross internal rates forever. We dont think we can do that in the future. We tell investors that we should expect lower rates of return and the reality that something in the 15, 17, 18 range is a good rate of return. That is ah of function of the low Interest Rate environment and how much is a function of the amount of capital sloshing around the globe today, much of a chasing after the same or similar assets . There is a paramount money looking for assets, fair and one of many looking for assets, but if you have a team of professionals you have certain competitive advantages. You get the best financing and the best managers. I am not as worried about the competition. We have 800 people looking for Investment Opportunities around the world. I think, for campbell, of sovereign wealth fund, which wants Something Like 10 of its assets in real estate in a fairly short space of time. I will not to tens of billions of dollars showing up to an asset class that will amount to tens of billions of dollars showing up to an asset class they are not really an alternative asset, not traditional private equity. They move very deliberately and i expect it will skewer the market. Gigantic Global Market in real estate and i dont think it will skew the market unduly. Firm,n i look in your trading 13 times, trailing earnings, and black, 19 times trailing earnings, there seems to be a disconnect. Your firm is growing faster, generating fee growth at a much faster rate. How do you explain the disconnect and what can you do about it . I dont know if i can explain it or do much about it but the that are growing at rates firms like ours are going should have a higher multiple. I cannot make the market do that. Eventually the market will recognize we have a very good money machine double be here for many, many years. Is the market doesnt recognize it, you find yourself with no choice but to move in that direction of traditional Asset Managers . I suspect there will be some convergence and that firms will move further into Asset Management and the Asset Management and the assetmanagement firms will move a little more into alternative, and there will be some convergences, as i say great i dont think it will be overnight you see dramatic changes. Assetid, alternative managers and particularly private equity firms have a way of attracting regulatory scrutiny. There was a lot scrutiny in 2012 during the election and a fair amount of scrutiny today. The sec has focused on seas in , the kinds of fees that private equity firms charged. What has carlisle than differently as a result what has carlyle done differently as a result . We have a large compliance operation and we are careful telling investors what we do and dont do. Some of the sec plus concerns probably relate to smaller firms that are not as accurate in disclosing everything or may not have as many compliance people or lawyers or lawyers were investors are less sophisticated. I dont know. But the larger firms are lawyered up and we have a lot of compliance officers. I dont think there are a lot of investors were not fully aware of what we are doing and what ees we charge. Since the Great Recession there is no doubt that the fees have come down and there is greater alignment, and were pretty well aligned with investors today. Lawyers like he was our firms like yours are law yered up and so was blackstone could they say they will get rid of accelerated monitoring fees. We were never a big consumer of those kinds of fees. They were not things we did much of. We have not had to change our practices very much. David rubenstein, cofounder of the Carlyle Group. Manages 200 million. Only blackstone manages more in the world of alternative assets. And it seems like they are only getting bigger. That is what David Rubenstein does so well, traveling the globe constantly in the surge of more money to manage and eventually give it to the investors there for rooted in places like china and the middle east they have recruited in place like china and the middle east. I want to elaborate on this idea he raised of convergence. You are trading at 13 times earnings, or less than nine times earnings, and you look at black rock 19 times or legg mason, you have to scratch your head because the alternative Asset Managers im just not making enough money running blackstone and carlyle fee growth, another way to manage market share, and the returns over time clearly are better. Why the disconnect . David rubenstein is scratching his head. He knowledge is that the only way to close the gap, which he needs to do is to get into their business. And who is going to buy whom . Is carlyle going to buy a bunch of etfs . Probably not. Partner with an existing classroom like in part because i asked him this question subsequently traditional asset manager working by the alternative asset manager, and david said how do you retain talent then . If they wanted to work with the traditional guy there would be doing that now. Is basically saying my guys only want to work for me . Kind of. Wow. Great conversation. Man Interest Rate how much should a company get if something happens to the how much is your ceos life worth . At the romans is the head of romans and associates any health and he helps right top insurance policies that could cover death, disparity, and even kidnapping. Ofp us understand what type person you figure out insurance for. Are the shareholders that concerned about the single ceo . I think they are picked the ceo is the heartbeat of an organization, and losing the ceo to kidnap, ransom, death, or disability is a traumatic experience for any corporation. Is that more prevalent in Certain Industries . Greathink it is particularly when directors and officers are involved in public largeing even in privately held companies, it can make the difference between significant probability and the beginning of the slide. How much are these people in short for . Insured for . Insurance including kidnapping or ransom, the key element of key man insurance come is relatively inexpensive, but the perception of risk by both corporations public and private is that there really are no worries. The statistics are reasonably low for highrisk areas. But that is a misnomer. The statistics are underreported, and the kidnap rate is reasonably high. Beginning in the United States in phoenix arizona phoenix, arizona . Of the unitedtal states, right across the border from mexico. Mexico city, venezuela, brazil, africa, asia and the reason is all the same. This is an organized crime element. It is controlled and run by organized crime. It corrupts governments, it corrupt police department. How often does key man insurance get paid out . Well, that is kept a dark secret. All of this is cloaked in secrecy. We are on the investigation and prevention side of this so we are really not at liberty to talking insuranceee key man yet in terms of the Investment Community . When we look at guys like bill ackman, carl icahn well, carl icahn doesnt have investors they are the heart and soul of their funds and that is why people have given them millions of dollars. What happens if they died . Well, it would be smart for them to get key man insurance. We are seeing it more prevalently, but i really cannot speak about who may or may not have it. How big to the policies get . The policies get very big. When you say very big, how big . 20 million, 30 million, 40 million . Who makes this decision, the board . Depending on the risk of travel that the individual engages in and the value of that particular executive, decisions are made along the chain of command, as usual. Hmm. What about the idea of some kind insurance that doesnt involve death or maiming or mental incapacitation . I think, for example, to your point about bill ackman bill gross, the bond king, the man for whom pimco was so closely identified, one day gets up and leaves. He is a key man. Is there insurance for that . There is insurance for for everything. Good answer. That is a contract question, and contracts, yes, our insured. When you talk about travelers, what industries is true key man risk most concentrated . Well, it crosses most industries, from midlevel executives earning 70,000 others, 80,000 a year, to ceos of major corporations really, and please making 70,000 a year and please making 70,000 a . They often buy it themselves. Are they . I think they are getting staggered by the insurance industry. Snookered by the insurance industry. There is a prevalence in south america and the coal and oil industry. Cheap,you say very what is cheap and why is it cheap . Good question if they are coming up from mexico and tijuana one more time . Nautico traficantes. All worth it just to hear that. Seems like the laws of supply and demand should operate. Right. Well, it depends on where the executive is traveling, but it can be as low as 2000 for 5 million coverage. If an executive is a regular traveler to a highrisk area mexico city, the philippines, nigeria, middle east that kicks up just attack. It depends on what the underwriters feel the risk is and how much protection the executive has relative to preparation, training, avoidance, security, and a whole host of other questions. Thank you, anthony. Im officially scared. Thank you for joining us. During the break we will take out key man insurance on stephanie. On eriks hair. We will be back in just a few. Thet is approaching 56 past hour. Im so excited, i stole your line. Thats all right, i dont mind. On the markets. We will talk about one of americas biggest homebuilders. The shares are up after d. R. Horton reported a 30 increase in orders for the fourth quarter. Therton also reported shares are trading up about 2 . Still well below historical averages and those numbers perhaps also helping pulte group, a rival of d. R. Horton. Listen, d. R. Horton is the big guy out there. They called and the walmart of homebuilders. They have a new ceo. There ceo retired surprisingly a month and half ago. They have a brandnew ceo who was artie with the copy but he is really not known by the estment immunity at all already with the company but he is really not known by the Investment Community at all. He is stepping out and the market people like it. We will have bill ford, chairman of the ford motor company. Ford just made a big bet, as you probably know by now, with its best selling model, the single best selling car truck in 150 pickup. F it is now made of aluminum and that required quite a bit of retooling and a gamble on his part. Live from bloomberg headquarters in new york, this is Market Makers. With Erik Schatzker and stephanie ruhle. Get your motors running. Ford heads on the highway. Speaking with ford chairman bill ford. Alibaba sales go through the roof. Will american shoppers join the fun . It is november and to his rank number one. It is all about Business School. Welcome to the second hour of Market Makers. And stephanie ruhle. Erik schatzker. This is the 11th hour of the 11th day of the 11th month. That is when the armistice was signed in 1918. All the sacrifices that have been made in this country and for my country, canada, why i wear the poppy. Remembrance day in the british commonwealth. Honoring those who have fallen in the line of duty. Seeing a live shot. And important day in history. Lets start with the top stories in business and finance at this hour. Half a dozen of the biggest banks on the verge of settling claims they rigged the currency market. The cftc might find the banks 300 Million Dollars each. The banks face claims from other regulators in the u. S. And the u. K. The Justice Department is looking for criminal liability. Investigative investigating whether the banks colluded. Among the banks are j. P. Morgan and citigroup. Ford has grown out its new f1 50 pickup. The vehicle at the best profit margin. Ford had to shut down two truck plans to retool. That cut down profits for a while. Matt miller spoke with the ceo. Next year, we expect our operating profit to improve. Our operating margins and our revenue to grow. A big piece will be the f you will150s. 150s. He f spencer spent three weeks in manhattans velti hospital. He became sick after returning from guinea. He was treated with an experimental drug. He received a blood transfusion from another ebola survivor. Remember the story about the Jefferies Group banker taking a leave of absence because of a nasty divorce . His wife accused sage kelly of toting up hidden cameras catch her using drugs. She claimed employees cocaine and accused her husband of sexual shenanigans. She blames the press for blowing it out of proportion. Her claims were part of her divorce process. This is an extra ordinary saga that goes on and on. I spent last night working on this. Does bloomberg care . We care about the impact for jefferies. , a portionlly said of what has been written in the press over the past few weeks is inaccurate or hyperbolic. To goes on to apologize jefferies. For the most part, what has been reported is a cut and paste word for word from her sworn testimony, naming the head of investment at jefferies and ceos of publicly clientsompanies who are at jefferies. She has not specifically recanted. It is a carefully written this is why we care. We do not care whether a couple cannot get along. We care if there is testimony suggesting things go on inside a firm like jefferies that we may not have known. Thinks clients might find concerning. We do not know whether her claims are true. Questions. Se you know that rich handler and his lieutenants were out there working to maintain confidence while this was spilling into the tabloids. Now that she has pulled it in, people only like negative news. This up ands clean get the genie back in the bottle . Who knows. Upsell. This problem is not going away. On. For us to move it is single day and china. The worlds most lucrative Online Shopping holiday. Later then black friday and cyber monday combined. Signs forllar alibaba. Betty liu is with us. How lucrative business for alibaba . I just got the final numbers from alibaba on what 11 11 has meant for the company. 9,339,000,000 in gross merchandise volume. What is a single day . It celebrates being a bachelor or bachelorette. It is a selfmade holiday by alibaba five years ago. They say everyone celebrates getting married. What about people wanting to be single . You have record numbers of sales. I went on the website. I found things that i loved. They are 50 off items on aliexpress. It tells us two things about alibaba. Move over, mr. And mrs. Smith. Thosemr. And miss chen, are the consumers for the global economy. It is alibaba as a global company. Not just a chinese company. Will be celebrate single stay next year . Who knows. Joe tsai, one of the founders of alibaba, was with us earlier. We have an International Strategy focused on crossborder. You see evidence of that on singles day. Worlders from around the are selling to 300 million chinese consumers shopping on our platform. Direction we had a lot of Chinese Companies that are Manufacturing Products that can sell all of the world. We are seeing that crossborder flow as well. That is very exciting for us. It is exciting for them. As he was saying they are likely to take this model and bring it elsewhere. We may be celebrating singles day. Whether you are in america or china, Everybody Loves good deals. Right. What are their plans . In the u. S. A couple things. It is not just about singles day. It is about coming into the with paypal, for instance. That is a possible partnership. They are talking with apple as well about other partnerships. People have speculated whether they come in with an acquisition. And joerd about jack ma hollywood. Ing to they might be getting into content. The problem alibaba has faced, he has gotten better with the o, not a lot of people know the company. Recognition. The American Public. 60 of the American Public is oblivious to alibaba. Thatknow who jeff bezos is they do not know alibaba. Betty liu giving us the latest not just on singles day, on all the goingson at alibaba. Smashes alibaba records, we raise the question. How are u. S. Online competitors positioning themselves to gain from singles day . Aini has been looking at that. How Companies Like amazon stack up and china. Wants a piece of china. Of whatare scared alibaba could be in the u. S. They are looking for a piece of the pie. If you look at how the chinese taking off in the ecommerce front. This pie chart is interesting. Players in china are Chinese Companies. Alibaba with 80 . 01 ofs platform has 0 the marketplace. It is on the board, but barely. Want to grow that slice. If you look at the b to c players, amazon china has a bigger percentage. They want to grow their presence in china. Strategy . Amazons many would argue they do not have a strategy. This is the second time they have launched sales for singles day. They are offering better delivery. Recently they set up a warehouse in the shanghai freetrade zone so they can expedite delivery from point a to point b. Their offering access to other amazon site. Amazon russia, amazon brazil, amazon u. S. Analyst and hean says amazon is going to struggle in china. Perhaps they will do better like partnering with a company like baidu. Every american retailer would love a piece of the chinese market. What are some of the other Companies Looking at china . They include kenneth cole, nike, costco, tesla. ,he companies that are doing it they are not just going in and setting up their own commerce platforms in china. They are doing it through t mall, a subsidiary marketplace that alibaba overseas. They could do that within amazon china. Have them set up their own online marketplace. That is one of the pros amazon china has. A placehe big cons in like china, they have higher transaction and inventory costs. An analyst note, they say one of the reasons amazon is going to struggle is because it is harder to scale up. Compared to Something Like alibaba that has all the logistics. Amazon owns shipping in the u. S. But not in china. Time will tell. , u. S. S an important Area Companies better catch on. Thank you for bringing us that angle of the alibaba versus amazon story. Happy singles day. I have forgotten what it is like to be single. New aluminumls a pickup truck. We will be speaking about it with bill ford. Businessweek says it is the top Business School in the nation. Dukeked the dean how knocked out the big names like harvard. Welcome back to Market Makers. Stephanie ruhle with Erik Schatzker. A new top dog in American Business education, dukes fuqua school of business. Business week naming of the number one ranked mba program. It knocked out university of chicago. Francesca leavy runs businessweeks Business School coverage. School as dukes fuqua of business dean, bill boulding. He joins us from dubai. Why do you think duke beat out schools such as harvard . The basic reason is that it that pulls together towards a common goal. We have worked really hard to identify and attract the the characterve values and sense of purpose to make a difference in the world and to work with and through other people. That makes them attractive to employers, in whatever sector they operate in. Bill has a smile on his face, for good reason. What are the ingredients, the factors that we analyzed to determine the belongs at the top of the list . We have three elements that we measure. Make up almost half, 45 and 45 . The third is 10 . Assessment of students opinions, graduating mbas. The ranking. F another 45 is a survey of employers. We ask them what they think of the and he has they are hiring. The rest is a tally of faculty research. When you say sense of purpose, what kind of employers are looking for graduate to have that as part of their interests . Kindsompanies across all of sectors. Whether they are in the Health Energy sector, advisory services. Everybody at once somebody who puts the ambition of others and the ambition of the organization ahead of their own and has a purpose to make a difference and help others make great things happen within those companies. Are you seeing a shift of students enrolling to get their mbas who have those ambitions . When i think back to when i worked in banking and we did recruiting at schools like duke or harvard or princeton, that was not on the agenda. School it hasua always been on our agenda. We want to attract those kinds of students. The world has shifted in our favor. People understand that what you really need in order to a things is that you need to put together great teams and allow people to effectively collaborate to drive innovation and create value in organizations. Tohave always been able identify those people, create experiences within our program that reinforces those values. And then allow people to go out to a variety of domains and carried those skills with them on the job. When is the last time harvard did not make the top five . Harvard has been in the top five since we started the rankings in 1988. What are people saying . Was sayingl Boulding Duke went up because employers are happy. One thing that drove harvards onk down, it did less well the measures by its own students. Students said, we asked whether there was a good climate for people of all socioeconomic backgrounds, people of all races and genders. It got some of the lowest rankings that is 10 . That is 45 . Those are the questions we ask in the student survey. We ask what is the School Climate like . What is the Student Experience like . The marks were not as high as they once were. G, studentuldin opinion is important. Employer opinion is important. Placement is critical. How much time do you spend with prospective employers making sure your graduates get the best possible jobs in the industries that are the most desirable . That is a really important aspect of where we put our emphasis. We want to be responsive to the world that exists today and the world that exists and the needs of those employers. Put into ourhy was dna 40 years ago when a dean who felt like we had to respond to the needs of the Business Community and adjust our curriculum and our admissions policies to find those individuals. Getting a lot of time feedback and asking how are we doing. Which companies . Where are the jobs going to be . Are trying to cultivate relationships where your students are going to want to go. Where is the priority . That is a right. There are a number of areas where we are especially strong. Those areas are in the technology sector, where we have seen Enormous Growth in jobs in that domain. In advisory services, where we have a large number of consulting firms. Services, those firms feel like they had studentsd that fuqua have the right stuff. As well as the health domain, we had a strong presence in the health sector. Now a growing presence in the energy sector. Ets on bigde b areas of the economy. When you are pulling students, does any of this have to do with lifestyle . Leaving the are workforce and getting to live in North Carolina and go to basketball games. Versus paying massive rent in columbia. They tend to be really happy at their schools. At duke one of the things we heard was how much they loved their classmates and how much they loved working as a team. It is not just lip service. We asked employers this year find, theyies may think our hardest to find, collaboration was one of them. It matters. Thank you for joining us. Francesco leavy of Bloomberg Businessweek and Duke University school of business dean, b ill boulding. Full list ofthe rankings at businessweek. Com. Number one, harvard out of the top five. More Market Makers when we come back. Live from bloomberg headquarters in new york, this is Market Makers. With Erik Schatzker and stephanie ruhle. Welcome back to Market Makers. Im Erik Schatzker. 11 30 on new york city. Newt riding on fords pickup truck. se f150 makes up much of ford profits. Matt miller is life for the with the chairman of the ford motor company. Im here with bill ford. To alle giving a talk the workers. Something i did not realize is a decade ago they were thinking about closing this plant. You came in and said no, we are going to revitalize it. It wase were talks that ran down and maybe excess capacity. I stepped in and said absolutely not, this is the heart and all motor company. Lets not just say this, lets make it a showpiece for the next generation. I went to bill mcdonough. Bill and i sat around and reimagined this place, it is the most environmentally friendly place in the world. People were talking about the. Phone conundrum when the new truck is coming out, a lot of people do not want to buy the old one. You are going to have a drop in fromt to about 6 billion 9 billion, do you expect a blue back up to the handling dollars we saw in 2013 . Anytime you run out of , you have an interruption. I think the team did a nice job of building enough of the current truck to get us through the tough times. Table,eave enough on the we do, that that is always the case. What is interesting is how many people are putting their hand up and saying i want this vehicle. Fields was saying he had 850 jobs. I assume you are going to add more in kansas city. Are these sustainable jobs . Do you think you can keep the workforce growing . We have been growing our workforce quite a bit over the last four years. The oppositepact in that dark days. We are adding jobs in america. We are competitive here now. I have to ask about the mustang. That is theamerica, most iconic american vehicle. It is going overseas for the first time. So cool. I introduced the truck in europe and they went wild. We had owners clubs from places like the czech republic. Even had a mustang and they already had clubs. Im going to dubai to introduce the mustang, it is a world phenomenon. They first brought it out in 1964, they only expected to sell maybe 100000 and a sold almost. 5 million. No way to project. It went on sold in europe and was sold out in minutes. We have. Two iconic vehicles, the x series and mustangs. You do not have to set ford mustang, people already know. Places they had never had mustang, they already knew it. I wonder what you will do with jim farley in europe. He did a great job working for toyota with lexis. He has come over here as the chief marketing officer. Now he is going to an operational position. I think he will do great. He has a great product background. That is the heart of what we do. He has a Product Development background. He lets cars. I think hes going to do great in europe. It will be a good move. He is going to enjoy it. Are the problems in europe brand orith the ford problems with the european consumer . The ford brand is doing well in europe. Our products are well received. But you have some years of struggling economies. Now russia is not doing so well. Really you have a structural. Roblem in the european area we are coming back. One of the issues with the profit cut was the european glasses. Issueser is the currency affecting you and south america. A seven year low against the dollar. That has not to affect asia. Anytime we look at a new trade agreement we got to make sure that we have currency as part of that though there are no fun and games played with currency because that is debilitating. If we are going to remain a strong exporter out of america, we need to have some fairness in the currency system. Ask about gas prices. Coming back home it is important to americans what they are standing at the pump. Sellu think that helps you more trucks . I think people will make their own decisions. What is interesting, with gasoline relatively cheap today, the fuel economy improvement on this truck, people are still asking for it because it is the cost of doing business. Cost for our customers. If we can bring the cost down, they will love it. On the detroitd lions. A pretty good season, 72. Do they have a shot as a super bowl contender . 72. Are we had a long season ahead of us. I love the way the team is responding to our head coach but it is a long season. Is it important for detroit to have a strong team like that . The city has been through a lot. A huge sports fan. We have seen it with the red wings, the pistons, and that. Igers bill ford, we really appreciate your time. Back to you in new york. Thank you very much. Matt miller interviewing the motoran of the ford company. Hope, height, or something more . The promise of technology in virtual banking. We find out. So, you like apple pay . It is the beginning. Products and services that bring Silicon Valley to the business of payment and investment. People descended on las vegas for money 2020. I caught up with the ceo of the Credit Card Company that operates as a bank. I asked if Financial Technology is overhyped . We are focusing on being the leading direct bank and payments company. Everything we do is technology. We do not have branches. We deal with the internet and mobile. Are they overhyped . Now. Up toal, they all add more ability to access someones account. More ways of managing the account. And more integrated with commerce. They overhyped . I think do people think it is going to happen overnight . They might be overhyped on timing. Why . Time tose things take change. At the checkout counter. In the u. S. , there is 9 million places that take credit cards. You cannot change that overnight. One of the big tailwinds behind Companies Like discover is the move from cash to credit and debit. If i can pay for something with my phone, whether it is an iphone or an Android Phone or even somebody elses phone, is the line to speed further transition from cash to credit and debit . It helps. I do not think it is dramatically faster. Card is pretty fast and works pretty well. It is cool. Over time it will get integrated with other things. It will add and make it easier for people to manage their accounts and keep track of all their receipts and returns and so on. Meano think it does not that the plastic card goes away anytime soon. It is an additional way to spend money on my account as a perez to a total replacement. Plasticong this survive . I think plastic is a at least for the next 10 years. To onlineee migration and mobile. The natural progression is onto the phone. I do not see plastic going away anytime soon. Is plastic going to stick around longer in the u. S. Because people are so used to using their credit cards . Other parts of the world might make the leap faster. In a few places like africa, people might jump right to mobile and bypass the plastic credit card. Most markets, plastic has become ubiquitous. People may, some markets are more debit versus credit than others. Plastic is ubiquitous throughout most countries in the world. How important is apple pay . It is very important for the development of mobile payment. Payments are not brandnew. They have been around. But they have not taken off. I think this will give it the apetus for it to take off to faster degree. There are not a few discover customers who want to know how long is going to take before they can use their discover thatnts on their iphone so they can use apple pay. Can you give them an idea . Like to do that as well. It is going to take some time, i cannot give you an exact answer. Frankly, the thing that is going to take longer is to have more places to use the card. The Merchant Acceptance is just beginning. These are the early days. Over the next year, theres going to be a lot of progress that is going to be made on places to use the card as well as to have their favorite cards be able to be used. Lets look into the future, say, two years or three years from now. Enabledere are more nfc terminals at the checkout counter and people can do the cap and go purchasing. What percentage of the transactions on your network you think will come from that technology . It will be less than have to years from now it will be years fromalf two now. I expect it will be a growing share. Are the most important trends or issues right now in your industry as the ceo of discover . Start with a security. Weve had some unfortunate breaches of merchants and banks. Despite the industry working really hard over the last five or 10 years to address security. The recent ones have been a wakeup call and weve realized we need to increase security. There are attacks. It is one thing to have a wakeup call and another thing to have a satisfactory response. Has the response been satisfactory . Not an easy response. The industry is coming together. Consortiums of networks, issuers, and merchants are attacking this with full force. One of the problems is if you strengthen security in one place , it will pop up somewhere else. The good news is that we do protect the consumer. One of the great things about the credit card is that sumers are responsible consumers are not responsible for fraud. That is different from cash. It is different from the inconvenience of a reissued card and having to change numbers. My interview with the ceo of discover, david nelms. If you listen to ces at established Financial Services companies. American express, visa, mastercard. Also Western Union. You have the feeling they do not think change is coming very quickly. Maybe theyve been emboldened by the way apple has died, apple decided to rope in the Credit Card Companies so they can get it faster. Arent they talking their book . Established Companies LikeWestern Union or american express, they do not want things to change. The status quo is working for them. That is the scary thing, how fast things can change when you do not think it is coming. Look at what happened to nokia, motorola. Google thought they were getting a good thing. We cannot give other credit to the disruptors, there are companies who are leaders of industry for a reason. We like to talk about the disruption of thinking but i do morgannk citi and j. P. Chase are going anywhere. Apple is not a disruptor. See you in a couple minutes after the short break. Us. T can you believe it . Our first day back seat in our nfl week. That was a good show. Tomorrow we will start up. Talking about razors. Its november. Dont you think you think he would look great with a mustache . Do you remember when matt miller had a mus mustache . High near. Ler was a he was participating before it was cool. It is not a joke. It is about raising awareness for mens health. The guys at harrys, trying to disrupt the razor business. The cofounder and ceo will be here tomorrow. Time for bloomberg to take you on the markets. 56 past the hour, bloomberg is on the markets. Im scarlet fu. After four days of closing at record highs, the dow and the s p 500 are little changed. Not Much Movement whatsoever with the dow industrials city ear its author and, 70,622 city near its alltime high 17, 622. For options insight is the chief Investment Officer at recon capital partners. Gone back down. Nothing big on the horizon causing consternation. What is everyone looking at as the next potential area where we could get into volatility . Is looking into january when volatility will come back. Seasonality of the options market. Saying that we are going to have a slow rise to the end of the year. Earnings have recovered the market, up 10 in 17 days. That is as if october 15 never happened. Is it also a case of investors saying i am back up for the year, i am down and im not going to trade anymore . Investors are looking at where the fed funds rate is going to be at the end of 2014. The features market is indicating around 57 basis points. When you are looking at trying to get returns and the rest, people are what to be in equities. Pastially after this quarter. Earnings up about 10 and sales of about 5 . What asset class are you looking towards to lead the way . So much fixation on oil prices this fall. Investors are seeing that now. Oil is down, gold is not an asset class people want to be in. Look at correlation, people are going into highyield bonds and equities. That is where the returns are and the growth is in multinational corporations and equity. Lets get to specific names within equities. Alibaba. Day, it ended in china. Sales are destroying records. It sold more than 5. 9 billion of merchandise within the first 14 hours of the promotion. Alibaba shares are declining. Are the options activities similarly bearish . And ever since alibaba went public in volatility was around 43. This morning, it was around 40. Can they continue the growth in the future . Are the chinese consumers going to continue to spend at that rate . What are those numbers going to be for the rest of the year . Investors are worried that alibaba has pulled sales forward. As well as what is the mobile use . Day, is chinas singles november 11. Is it going to get that much more of a push at the end of the year with christmas . Nooks. Thats what everybody is worried about. There going to focus on return number. They are concerned the consumers were going to come in and in return. They are going to shoot first and ask questions later. Eportibaba does not r until february. Tesla shares are up. What is your strategy . One of the reasons i see upside is because the market took it asews and good news. They delayed the model x production to the Third Quarter of 2015, which everyone saw that as a positive sign. They had a lot going on. The retooling and the warehouse, as well as enhancements to the model s. One way to play tesla is to sell the 2. 500 put, buy call, that will give you direction to the end of the year. Potentiallyis bigger but you are looking for upside and that will allow you to lock in a profit. Thank you for joining us. Kevin kelly with options insight. Back on the markets in 30 minutes. Keeping and i and the equity market. The bond market is closed for veterans day. Money clip is up next. Have a great rest of the day. Welcome to money clip. Readysingles day so get to treat yourself, alibaba has met a multimillion dollar debts multibillion dollar monster out of chinas new holiday. We sit down with the boss of four to talk about the rollout of the new f 150 truck. Worldis not just the leaders, blackberry Ceo John Chen is looking for dance partners. Goldman sachs brings back a pe fund with no fees for senior employees only and this much is be the biggest perk yet