Companies, and more. Also asking the asset manager where he is investing. Health care is a big part. Details to follow. We will get you down to the sea d. C. The Obama Administration not renewing its cut contract. Ther cook with me now with change. First of all how much money is at stake . This contract was worth as much as 300 million. The company is out after one year and 90 through one million 93 million. You that the administration has not been pleased with those efforts to fix the problem. They won this contract in september 2011 to be the main healthcare. Gov. Certainly nothing as big as this. Its main job was to build the websites front door, a door that did not work very well for americans trying to sign up in october. Some of its top executives were grilled on capitol hill. Is turning to this new company. It has handled the rollout of californias exchange, covered california. That site has operated pretty well and the administration hoping for the company to do the same thing at the federal level but there will be trend questions about this transition. Are. Gov to thec fed. The president choices president s choices to join yellin. Will nominate stanley fischer, the former governor of the bank of israel to be the vice chairman of the federal reserve. Has hadmeone who experience on wall street. He is a citizen of israel and the united states. He is also someone very well known to janet yellen but they have not always agreed on some policy so it will be interesting to watch this going forward. Personminating the point brainardeasury, lael and jerome powell. H. W. Bushe george administration. Will yeahed they janet yellen at Janet Yellens side. D. C. But staying with the regulatory thing, the trialm Insider Trading of matthew martoma. His attorney argued this will hurt his defense. Su keenan has more. The jury will hear that he was kicked out of school for faking grades. Apparently has. These are devastating details for defense against cheating. Lawyers vigorously fought to keep jurors and the public from hearing information in the sealed documents that they claim have grossly prejudicial information. At is painting mr. Martoma in liar and the eyes of the jury. Prosecutors claim he was engaged trading most lucrative scheme ever charged. These details were sealed and now they are unsealed. Absolutely. The document is hundreds of pages from Harvard Law School panel that recommended he bes he be expelled. Transcripts with his grades. Mistakenly sent them out in his job application, he said. The handle find found he had backdated email to show he withdrew the applications before he was caught. Caused himued it great embarrassment to the state. The jury will was told he is not has not committed the crimes he is accused of. Witness is being called. He was the former trader that worked rectally under martomam, so they will be getting to the heart of the charges this afternoon. Joining us from the newsroom with the very latest on the trial. From hedge funds to venture capital, insight venture than 7. 5aised more billion since its inception. Of a very long list. The managing director with me now along with the managing partner at tengion. Tangent. Marketing 2. 0 this is something that you sent me this morning. This is a big theme. We are investing in it this year. What is it and how are you making moving money to take advantage of some changes . We think the cmo will be the next cio. Theou look at it a lot of Technology Investments happened in the cio suite. Marketing dollars are huge portion of the budget in most corporations. Very little technology can be applied against that. We are seeing and you are saying in large strategic slight adobe and oracle are investing heavily in marketing applications. The view is that the cmo suite will increase the amount of technology spent to more effectively deploy their marketing dollars. We do have a bloomberg terminal and there is a quote of the day. It is steve jobs about design. He is saying it is not just about look and feel, it is about how it works. It sounds like the design or creativity element to your point is going to separate companies out from the ones that will be more successful from the ones that are less successful. That is a piece of it. The companies we have invested in are trying to better increase antarctic and target the marketing dollars. One of the things that has happened is as increased dollars go online, how the dollars get spent are much more measurable. And the return is much more measurable. Increasetechnology to turnaround. Ceeo is exactly what the does. The same type of thing will happen and is happening which is increasing productivity of marketing dollars. How do you see this, youre still following tech. Head a tremendous run. Who would i be to question the wisdom . They are 100 right about this. This is a concrete example about how this trend relates into the real world. All of us are using social networks today. There are 60 different social networks. We talked about twitter and tumbler. There is plenty of different platforms and there is a lot of data on those platforms. Today, people have not used that data in an actionable way. This allows it to be analyzed. People can make trude decisions around that data. Does the Company Provide that . They do not want to go through the entire twitter feed. Data saved gets new pieces of data 3000 new pieces of data per second. They want to know what is relevant to them, whether it is sports related or company related. They get the data they need that is relevant to what they needed to do. They can be other types of decisions as well. Good data andas it is the way that it is analyzed and organized that makes a difference. We will continue the conversation after this quick break. Also the science of finding your dream job. A company that uses an algorithm to match jobseekers and employers. Is an asset later that coming a lifeline for Small Businesses. We are back with more in just a minute. We continue the conversation guests, my cohosts for this hour. Theseuded to the idea of Companies Getting distracted. You had a great tweet this morning talking about software. Trend. Is this new these physical routers that transmit the data so i am interested to hear your thoughts on this subject. Is this a thread to cisco . They are very significant thread. If you look at Gross Margins they are 65 to 70 and if you compare that to other hardware like servers it is double the gross margin and the reason is it is an oligopoly with cisco and juniper in that market. Defined that working does is taking a Software Layer embedded right now inside the device and extracting it out. Ad basically managing commodity hardware box. And so i think that it creates a lot more flexibility and allows it allows much easier for applications to be built on these types of networks and with the increased migration to private and public clouds, that type of infrastructure is more likely to be used. The result is a lot of pressure longterm in Gross Margins. What does this mean as far as Investment Decisions . What it means is there are a lot of companies that are focused on Software Defined in defined in networking. We think it is an interesting trend and one that were looking at very carefully. I think there will be a lot of opportunity in that marketplace. Where do you stand . I agree. It is part of a larger trend. Remember when Virtual Machines first came around and used are two separate the hardware and Software Layers and computers themselves . This is another example of how that is happening. The pace of innovation is going to increase. Yous so much easier once have extracted the software from the hardware to improve on the software and it will create a lot more competition and disruption going forward. Competition, disruption, innovation. How much can Big Tech Companies really innovate . You are making money essentially at inside by bidding on disruptors. Bigll hope gone for companies as far as innovation goes and they can only do it through him in a . 250oogle is one a 250 billion dollar market cap company. No one would argue that either of those companies do not have a lot of innovation and disruption. What theyre continuing to do it. [inaudible]it is were able to strategically use m a as it good way to buy next generally next generation technology. The reason they cannot do that here, and you look at the price points of their product and adjust for where the new price points will be they are going to new lines of business. How do you see that landscape . 100 right. The question i have as an Angel Investor is a simple one. Do you think Angel Investors can compete in this kind of rapid innovation . Can angels really play this game these days . I think it is tough. The risk return at the angel level is challenging. We spent a lot of time thinking about where we play. We think we play where we play because of the return relative to risk at the point we are investing is the right one. The challenge is officially in companies in the network, the one positive is you had angels in the hardware space. The capital intensity was so dramatically different. The ability for an angel to play today as a start of when you are building a Software Layer is better than it would be to go sarent. Trouble deploying the capital you have, is it difficult to invest as much money as you have been raising . Ande have seen last year continuing to see tremendous opportunity. We invested one point 2 billion of capital last year. Pace. In a similar we see lots of opportunity and that is good news for all of us. A lot of Great Innovation that is happening. We will leave it there. Insight. S there from bob rice is staying with me. A focus on where the jobs are. A company that helps employees find dream jobs and Companies Find dream or employees. A mix of algorithms and people. We are back in just a minute. Max jobs data out earlier today. A mixed picture. The Vice President of Corporate Strategy at bright and bob rice here with me, my cohost for this hour. You helped both sides reduce time with the idea that time is money. When you are looking to fit the best candidate. Absolutely. Theyre focused on a Machine Learning algorithm that matches goal is tosumes. The reduce inefficiency. What are you seeing . What were saying is that there is there are more openings in the u. S. Labor market. More online vacancies than there have been at any point in u. S. History. We see that there are 25 more openings right now than there were in 2007. There are twice the number of vacancies than there were at the peak of recession in 2009. I have seen stats that say there is to million jobs per month that americans cannot fill. Silicon valley has been lobbying to get visa changes passed that allow workers to stay here. What do you see from your data . There is a bit of a mismatch in the labor market. We see friction causing a slowdown in the labor market. One of those is that workers are less mobile so workers are not able to relocate for jobs as much as they were 10 years ago. Another thing is that a lot of these online vacancies indicate between workers expectations and employers expectations. Many employers are posting vacancies with salaries lower than workers are expecting. We think one of the primary reasons we are seeing friction in the labor market is because of that. Can you tell me about what youre seeing in terms of the classic skills gap . This is the thing that most people talk about when they talk about the despair of disparity between the number of vacancies in the following job Participation Rate were saying now. That is right. We see a demand that is not being met by the market today. And technology, skills that are associated with a data. Apache storm, there is more demand than there are workers in the u. S. At this point. A real the skills gap is thing to consider. I have noticed as well from some of the data on your site. It seems like the regions with the most job openings and i do not know if this speaks to the skills gap our santa clara, texas, it seems like pretty heavy texas and california. That is right. The top three markets in december for job openings relative to the population were san jose, austin, and minneapolis. All three of those cities are seeing a significant amount of tech demand. Y are series on the list there are cities on the list that are not Traditional Technology cities. Sioux falls, south dakota was on the list last month. Not a Major Technology hub. Thanks for the time. Joining us there from right. It is 26 minutes past the hour. In theime for her murder markets. Everything you need to know entree. On trade. Rising only by 74,000 jobs in the month of december. The weakest gain in unemployment in three years. Were seeing a bit more reaction than the treasury market. Yields coming down. The yields on the 10year note dam by 10 basis points as traders appeared to be unwinding bets that the fed will accelerate. Back on the markets in 30. This is money moves. Report outr jobs now. Adding 74,000 jobs less than the most estimates to rejection. Bad weather may be partly to blame. On employment fell to 6. 7 . More people are giving up looking for work. Mom and elerian gives his take. Not changeber does the expectation that they will continue to taper and exit qe but it does suggest you will not see rate hikes through 2016. Massive Security Breach of data bigger than not. 70 million may have had data addresses,ames, home email, phone numbers all part of the breach. Target is offering those who were affected one year of free credit monitoring. Tesla motors will upgrade its wall charger adapters after reports of overheating in garages. Tesla is under investigation over fires and its a model in its model s sedan. Taking a look at assets, someone who has 3 billion in assets under management, a leading all asset firm. We are bringing in the manager, the founder, and ceo. Are youbillion, what doing this year . We are messing as normal but a little bit slower. A lot of liquidity. It needs to be taken out. The fed tapering has to happen because theres a lot of liquidity and velocity is increasing. The money is turning. There is a lot of demand for deals but we are finding some good ones. Some economists reaction to the data point this morning saying the fed does not taper. It could go either way. The fed wants to leave it as much as possible. Liquidity has to start getting drained from the system. Washingtonearing for from some Top Economists is they want the yields to go higher because it is going to force the banks to take markdowns. Which forces them to put the money to work increasing velocity and the economy. I thought that was such a good explanation of why the head the fed wants to start to taper. Isnt it true that the banks being out of the market has created [inaudible] the regulators were all over the big significant [inaudible] and that has created the alternative lending space. You will see a new Public Offering next week from american capital. Everyone is trying for alternative lenders because we are needed. Where do you see the most growth question mark where is the most growth this year . Lending will be Significant Growth continued for alternative lenders as the banks suffer through the regulatory environment. The banks went to us. We have a 600 million plus credit line. They went lend to the investment companies. Where do you find your deals . Where does your deal flow look like . 1998started the firm in and were here 16 years later. We have over 70 professionals. What we do is we originate direct from the private equity sponsors. Written private equity firms have money. You buy something, we finance it. What do you think of pe firms stepping into the role that banks use to play . They are very smart money. Debated do they create value. They create jobs and value. Companies will be optimized but they only make money at the companies expand. One thing that is interesting. Loan to them corporations. You are lending in a deal in which a pe firm is active. That cuts down your Due Diligence requirements. You have a big brother in there and front of you in the deal. Which is terrific. Financials. Monthly you sort of have to which is why you need all these people. Buying paper i would not need 70 people. There are board seats in 90 of our assets. As far as the portfolio mix and i have it from the fourth quarter. Senior secured debt is the biggest part of what we do. Stay safe. Date conservative. It along. N follow is this the mix that will continue this year . Absolutely. It needs to stay 75 , 80 the whole way. This was us in visa. I grew up in that distressed environment. It is going to happen again at some point. How soon . We talked to a lot of distressed investors and traders. Those people are standing up for a pretty good next few years. Between march and june there is too much liquidity. We expect the markets to be flat. Next year is the year that there is more trouble. Hold that thought. We are back and continue the conversation. Were back in a few minutes. We continue the conversation with our guests. Len said there will be trouble next year so i want to hear how and when and all the details. We were talking as well. What kind of environment with rates are we in . How do you see it . Everyone hopes they are rising but i am not sure that when you get gator like we got this morning that that is being borne out. Some very profound deflationary issues still in the economy. The question for you is how do you position yourself as a lender in an environment where it is not clear what will happen . For leaders. Fifth street floatingrate. For thist public exact reason. We make or money. It is a tough thing to take public create it is below book value. In a better position. Can stay 100 voting. We want to reading in the ceo of ondeck. Our conversation earlier. Banks have stopped lending to Small Businesses. Do not know if you have been hearing parts of our conversation but how do you make sure youre not going to get burned . Thanks and it is great to be here. Thanks rang at for having us. Ondeck is a unique and proprietary model where we use electronic data about the performance of Small Businesses. Here is a restaurant that does a certain number of transactions and our algorithms analyze the performance and what we are able to do is make a loan to that restaurant. At relatively short term bet on the merchant to provide them a loan. That is how we manage risk and we were founded in 2007 before the first credit crisis. We have lived through downturns and we understand how our model works in good markets and bad. Len was recounting his 2008 experience. It was definitely important to be positioned. I look forward to meeting. You do. Uable asset that finding the way to lend to Small Businesses that is efficient. To lend to the really small guys take so much diligence and so what you are providing a market in terms of making a more seamless, you cannot possibly lend to these types of companies without a product. Can you tell us about how you do that, tell us more about what distinguishes you from the example for somebody Like Lending Club who could come after the same space. Very lucrative space. What is the advantage that you have as opposed to a lending club . We are partners with both of those companies and they serve a different segment in the market. They are providing consumer loans trying to consolidate Credit Card Debt and maybe a lower Interest Rate from capital one and so forth. We have a businesscentric approach. We analyze the performance of these mainstream is mrs. And what were doing is opening up a new market rather than transferring assets from capital one to a peer to peer lender. Were taking businesses that may not have been approved for bank loans in the past. Maybe he can visit their size. Or maybe because of other factors. How long they have been in business. We are extending credit using our proprietary model. We will continue the conversation. All three guests with me. We are back in two minutes. We are back with our guests talking about the growing trend of Small Businesses getting peer to peer lending. I know you have some pretty ,eavy hitters, Google Ventures but there is some wellknown wall street banks that are providing you with capital. Where are they doing it . A think they see the Market Opportunity that we do. We have been lucky and fortunate to have folks like Goldman Sachs and Deutsche Bank and keybank get behind what were doing. Banks have so many things going on right now, this is not a Market Segment they focused on historically. It is not a Market Segment that has been profitable to lend to. New approaches are required and these providers are stepping in to give us the capital to lend to the Small Businesses. Could you tell us more about how youre are using that new technology to harvest social information from the web in order to evaluate the companys in whether or not you want to make these loans to them . Absolutely. We have a number of cap makes techniques. We collect 2000 data points for application we evaluate. It is a combination of public and private data sources so the public data sources include things like social media, public records, and so forth. The private data sources can include things like the cash flow moving to the business. The last thing i would want a oneer to take away, because there is a negative that they cannot get a loan. The business operator with a track record of success, just walk through the economics with me. Goldman lends to they lends at libor to 25. 225. Goldman sachs and Deutsche Bank provides capital with different rates depending on the risk of the loans. We turn around and lend the money to Small Businesses. The way the loans work is they are shorterterm loans. The parlor might are over six months. Save a borrow a dollar. Ony might pay 15 to . 20 that loan. They might sell that inventory or retail at two dollars. They put . 80 in that pocket on that transaction. That causes their business to grow. Like a factor. Someone like a factor but it is a cash flow analysis. We are not factoring any specific receivable. It is based on the Business Credit performance of the merchant. Pcwe want to get you down to d. C. Aret is a case we watching. Cbs and disney, 21st century fox, and the Supreme Court did make a decision but they decided they would ticket up. This means that we will have a decision on this case sometime before july. This is something that both aereo and the broadcasters were hoping for. Of copyrightatter law. Podcasts television to paid internet subscribers in the broadcasters say that is a violation of their copyright rights. Ereo ise not paying ar making the case they are doing it on an individual basis through tiny antennas and dvrs in the cloud. They said this is what broadcasting is meant to do. Public broadcasting, people with an antenna are supposed to be able to get this programming for free. Those are some of the big issues. There is going to be hearing on this and they will make a decision again before july. Some very big names in this. Least of all barry diller. Chances are we will be falling following this throughout the afternoon. Ceo of ondeck and bob rice joining me for this hour along with len. We have been talking about this more from the business side. The larger institutions that are helping to define you. Why are the smaller businesses looking for money . What are they using it for . Rex the best uses for growth oriented purposes. 85 take the loans to grow their business. Also asset purchases or remodeling or opening a new location. Think about basic eye surgeon who wants to do marketing to attract more patients. It is growth oriented purposes that payback in a short time frame that matches the loan. Onjoining us there, ceo of deck. Glad to have you with us. Listing with me. For his final thoughts. Were back in two minutes. Final thoughts from my cohost. We talked about a lot of different businesses. More smaller to medium size companies. The overarching theme that ties the whole thing together including the hightech Job Finding Service is radical efficiency. The kind of radical efficiency that devon was talking about. The technology is bringing to our society. It is cool that we can go peer to peer lending for smaller businesses but it does mean we do not need a lot of people in the banks underwriting those loans. Rex when you look at todays jobs data, that comes to mind. When you see people giving up looking for work, fewer and fewer middlemen are needed in almost any business in the most any sector. A lot of time we talk about Technology Destroying Jobs but it is the information revolution which is making the society radically more efficient all the time. Eliminating these layers where people were in the business of getting information, processing it and handing it off to someone else. All those jobs are going away and those are one of the reasons are seeing such anemic job growth. Thanks for keeping me company this hour. Joining me there from tangent capital earners. It is 57 minutes past the hour. We will get you out to our newsroom. My superstar colleagues matt miller, Olivia Sterns as well. Not a lot going on in the market considering the big mess you had on the jobs number this morning. Almost no movement here. The s p dead flat. The Dow Jones Industrial average down 41 points. The nasdaq gaining a little bit. Interceptching pharmaceuticals. Massive gains yesterday. I looked this morning and could not believe it was surging again. More than 70 . It was trading for 70 on wednesday. Now it is worth over 450. For us. Terns covers is what is going on . It is an incredible story. We saw the story said intercept was up 280 . You would think that would be a move that could happen in the penny stocks but this is a company with a valuation still up about 60 . It has a market cap of a billion dollars just to give you some perspective. Room 1. 52 days ago. Is worth somewhere between h r block and expedia. They have a drug that helps people with nash syndrome create syndrome. It is delivered disease. Without the roses liquor. Analysts think the market is huge for that. Bank of america has upped the price on their stock. That is unbelievable. Was not a penny stock. It is not unusual to see a penny stock make a huge junk jump like that. That is a move i do not think i have seen. It is an incredible move. Very rare that a Nasdaq Company would double. 70 in one day. Analysts thinkn, that the market for this disease could be bigger than hepatitis c. The drug was so successful they stopped trials. Thank you for that. We are on the markets again in 30 minutes. Street smart is up next. Good afternoon will live from bloomberg world of girders in new york, im cory johnson. Welcome to street smart on this friday. One of the stories that is breaking in the last few minutes eo, they are going to get their day in court, and that is what they wanted. He wanted to show that this broadcasting over the