Are doing, as well as hedge funds, private equity, real estate, and more. Blackstone posted record earnings. We will tell you how it closed out at a profit. It is a day of founders. A superstar tech m a lawyer turned entrepreneur is here. She is the founder of giggle. Cred, the founder of news will be with me. And, a superfunny super bowl ad. Squarespace will be here. We start with the largest asset manager in the world and its record fourthquarter profit. Our pe specialist is with me. Blackstone knocked it out of the park. What specifically gave the Company Record quarters it is basically two categories, real estate and pe. Lets talk about real estate first. Private equity makes money from selling assets all right, and then they get fees for managing funds at a performance level that exceeds thresholds. Complex,gate office they sold a ton of office portfolio. In its the fourth quarter, it took three Companies Public. Hilton, extended stay all of these were huge, by the way. These are franchises. Right. They are franchises, and they are usually marked at a lower level in the portfolio and they are when they become public, and after the ipo, think about ,ilton where it has performed giving blackstone a 10 Million Dollar profit on paper and that is reflected in the numbers. 40 of blackstones investment last year were outside of the u. S. Where were they . It is an interesting statistic, a record amount of deal proportion outside of the u. S. All of last year, for private equity in the u. S. , equity markets were strong. Markets were rallying, and that means prices to do new deals were really high. They looked at asia, slowing down economies. When you think about the other businesses, the credit is this, for example, it is finding distressed deals in europe. Real estate has always been busy in europe. They did and ireland deal, spain. The peripheral countries that are still performing well. Ludwig distressed deals and private equity in europe. Here is a wildcard question should investors say if blackstone is selling, it is time to sell . Blackstone is supposedly the smartest money in the room. Issupposedly, but blackstone not the only one selling. Tony james told us the window of exiting and taking Companies Public will be strong for the next year at least, so they are selling, but at the same time they are raising money, looking for places to do deals, raising money for real estate in asia and europe. We talked about them raising money, being in asia, and then competing more squarely with huge u. S. Based companies. Apollo is there. Kkr has been the busiest. All of the firms are looking there. Thank you. Expert. Ur inhouse pe from private equity returns to agreeing to buy googles Motorola Mobility unit. It is the largest in the world. The novo is betting harder on this mobile unit. What is funny is that as we progress technologically, pcs and mobile phones, they become the same thing when you think about how you use your smartphone or tablet. It is not that big of a stretch that lenovo would want to make a bigger impact, particularly in the u. S. And western europe, where motorola has more of a foot hold. They are stronger in emerging markets. Billion, bid by the famous motorola brand. The luster has gone off of the brand to say the least, but of the hardware unit, and they can focus on android software. Alex, those are the moving parts. The patents have not been the best deal in the world for google. Theres been a world of hassle paperwork, litigation. Some of it is needed, unfortunately. There is a hassle, high legal fees with lawsuits from apple and microsoft, but google felt they needed the patents, and a part of this is google holds onto a majority of the patents. There is value there that will increase as the years go by, but other than that, google gives up the entirety of the handset business which will make a company like samsung happy because they provide for samsung and they will no longer have a Division Within the Company Making a competing product. What does this mean overall for the vision of google . A transitionmaking away from the handset industry, but it is not that much of a surprise because motorola was such a little part of google to begin with. It could be considered a win win, which is why you see the stock up today. Google gets compensation, and it also goes to lenovo, who could potentially make the motorola brand a stronger brand. Google may now well, and that is why investors are pushing the stock higher even though they spent over 12 billion on motorola a few years ago, and this transaction is only 3 billion. Alex sherman. Thank you. When we come back, rockstar m a lawyer turned successful entrepreneur. Giggle, the founder of will be here in just a minute. First. Bloomberg. Welcome back to money moves , live on Bloomberg Television and streaming on your phone, tablet, and on bloomberg. Com. She was a rockstar Silicon Valley m a lawyer turned entrepreneur. Ali wing is the founder of giggle, a specialty retailer of Baby Products and more. Lovely to see you. Nice to see you. How did your background as a tech m a lawyer prepare you to launch and run giggle . I was a business person before, and it made me better equipped. There are some nice secrets to have had on the mna syed command a side. You are raising money. To bea unique advantage an entrepreneur that does not feel scared by that side of the equation or unfamiliar with what investors need. How did you know there was room in the market for giggle . You did not do this on a whim. Others say i started this, and i thought it was a good path, but you had a big vision and built up to that. Brandome my job as a marketer, so i did research. I had thiso, when hypothesis, i found three compelling things that are still true today. The average parent is older than they used to be. A 30something is a different consumer than a 20something. Two there are a lot of things you could sell a parent. , most places have a model of showing you everything that is out there for the cheapest price, not the best way to invest in this stage of life. You try and succeed with a service mentality that is stronger, but it is curious. On average, if you say i will launch a retail business, i will make it curated, and will get excellent service, a lot of businesses fit that description, but you are executing differently. The difference is everything eachl is the best of, but new parent has different needs. To the needs. It there might be four different ways you live that affect how you should buy a stroller. You have a partnership with jcpenney. They have had a rough past few years. As far as brands go, do you think that is the best connection for you and giggle . Our jcpenney partnership is something i have been and continue to be proud of. To say they have been through a lot would be an understatement, so there is complexity to the relationship, but what we are excited about his customers in all 50 states are loving giggle baby product and we are super excited about that. You could have this amazing brand, which is perceived as a luxury brand, but luxury, by definition, only suits a small part of the population, and i am assuming what you gain with jcpenney is a bigger set of pipes and more pipes. There is a look and feel that should not be the exclusive domain of a luxury customer, so jcpenney allows it to be more broadly exposed. That is a win for both of us. Withggle does so much philanthropy. What led you to make this part of your mission . As a brand marketer, i do not think you take philanthropy as a strategy, as much as you have a brand dna. Giggle, the name, we are a family brand. We have to have an ethos about humanity and caring because we are helping people become families. Even if youre a nice person, this makes business sense. It does. We say these are the things we do, and how could we do any of them with greater egos around helping egos around helping question mark you have helping . Nd you have different ways for donations. We have people that need products and we have access or samples. How will we get rid of the things we do not need . We take a philanthropic angle. Do you ever worry that willey wrote your brand somehow . It is all about how you do things. Execution is everything. Seinfeldn the jessica Organization Called baby buggy, which gets gently used items into the hands that need them. It is not necessarily check sized industry knowledge, but every quarter giggle donates our samples to baby buggy, and that is not being philanthropic for philanthropic sake, but being giggle and what will we do in that way. But before that you go, parting words for entrepreneurs, especially female entrepreneurs . Love more than what will get you rich. We will leave it there. Giggle. , founder of existing home sales down the most since one 810. A few real estate trends to talk about. Bob rice will be with me in just a moment. The latest edition of Bloomberg Businessweek hitting newsstands and your tablet, within in both indepth look at facebook and how it is maturing. To read the latest issue, and download the Bloomberg Businessweek plus app. We shift to looking at home prices because sales launched in december by the most since may of 2010, but on the same day blackstone announced record earnings for my in part due to real estate strength. Bob rice from tangent capital partners. There seems to be mixed signals. A lot of analysts say it is the weather. I love the explanation. Ills. Covers a lot of it also indicates something about the analysts, because these numbers were far worse than even the worst analyst rejections, so the explanation projections, silly explanation implies they were not aware of december whether until today. When hard to dismiss this you knew whether would be a factor all along. Weather, affordability, i would have to imagine is in the mix. Mix,fordability is in the but in a way i think is troublesome. Typically, you think of affordability as Mortgage Rates rising rapidly, and that is making things unaffordable. They are still low. Exactly read theyre still. Theyre exactly still very low, and the real clue was the analyst saying we might run into headwinds because home prices are rising faster than personal income and that is an ominous, scary sign. The personal savings rate is also falling and incomes are going flat while prices rise and that is ominous. Here is the personal savings chart. Never mind savings. A lot of people are still looking for jobs. Of course. And we had another uptick in jobs this morning. If the jobs environment does not improve dramatically, how do we close the gap between rising home prices and flat income . I do not think we can. Does that describe this as a hiccup due to the weather are not looking at the underlying factors at play. Lets bring in the conversation about institutional money. Posted earnings, and real estate is one of the reasons why they had a record quarter. Where is institutional money . Institutional and individual investor money is coming in, buying up the homes, more than 30 . Homes thatone. Of exchanged hands were all cash. That is a strong indication that you are talking about investors at, and the bo institutions are not that discriminating because they have to buy in bulk. To deploy millions of dollars, you have to buy a lot of homes at once. What is happening is it looks like the individual investor and Institutional Investors are , and,g the vote boat by the way, the number of new owners keeps falling. They are also managing the hangover from the credit crisis referring to blackstone because the numbers came out i remember Steve Schwarzman saying we were buying at a discount in 2008 and that is why the numbers look so good. They bought at a huge discount because they had the cash. People who have the cash without another good place to spend the money are continuing to buy these homes up. Prices are rising. Personal income is flat. The savings rate is down. The number of families buying for the first time is down. When you do get that together, you worry, are we beginning another bubble. What does securitization, if anything, bring in . It creates a mechanism to fund further incidents of the trend Institutional Investors buying up more of these things. , of 2008, and mark twains quote, history does not repeat itself, but it rhymes, and this rhymes. There are people saying it is only the big firms that have audits of cash and they can absorb losses if there will be losses. but this new securitization becomes popular, just like last time. The big boys do it and it is fine, but as people get desperate, it creates another huge incentive to buy more houses and youre at the beginnings of a bubble again. Bob rice joining me there on housing, affordability, and potential bubbles in the housing sector. It is almost 46 minutes past the hour, and that means it is time pastloomberg 26 minutes the hour, and that means it is time for bloomberg on the markets and Mark Crumpton. A day of strength on wall street. The nasdaq up one and three quarters percent. Numeral oneup over percent. The Dow Jones Industrial average is up about. 5 . In currencies, we are watching the dollar, the greenback strengthening against the euro. There is also speculation amongst traders that if emerging markets moved to protect currencies, Central Banks will overfund in dollars, which could result in them selling euros. In commodities, natural gas coming off of its fouryear high. You might not be feeling it today, but forecast had been revised, calling for a milder winter in the united states, lower demand for heating fuel used in about half of american homes. Another Market Update coming up in about 30 minutes. I am Mark Crumpton in new york. , whereis money moves we focus on alternative investments. I am deirdre bolton. President obama is continuing his fourstate to are pushing what he calls an opportunity agenda, Building Support for initiatives on higher wages, retirement savings, and education. The president was in maryland and pennsylvania yesterday. Is York Hedge Fund scout shutting down. At firm will return 90 of customer funds by april 1. It manages about 6. 5 billion. Traffic is moving around atlanta after a crippling winter storm. Officials worry are warning that icy roads remain a threat to travelers. Police responded to a number of accidents. Speaking of the cold and the energy play, weeks of wild weather have caused explosive volatility in natural gas futures. Surging more than 10 yesterday, the highest and four years. Su keenan has more. Andare finding ceos consumers are bracing for the effects of Higher Energy costs. It will be depending on which side you are run. Consumers are going to get sticker shock on utility bills. The ceo of southern company, experiencing shock in general. An atlantabased power company. Ceo tom fanning never expected to see natural gas at five dollars for the rest of his lifetime, and probably never expected to see snow and ice in atlanta. At the peak of the storm thousands of cars were abandoned on highways throughout the south, and you could add in the ice storms in texas and the drought in california. 8 ural gas is down about having to do with a contract expiration yesterday, and there is warmer weather ahead. Especially in the south. Right. It is starting to thaw out. Yesterday, the National Guard was helping people reunite with the thousands of cars abandoned by the side of the road. Some are calling this a oncein alifetime event, the unusual wave of ice storms in frigid weather. Natural gas was driven out before he came down today, by as much as 9 at one point, and all of this, in particular because of the contract expiration, and as bill flynn, a veteran trader in chicago said, there was sellers remorse as prices shot higher. We also see retail prices, which typically lag futures, about to get hit. Check out how partner Power Companies are doing. Analysts say the winners are power generators, those that in nine e. G. Units dynegy, they will generate more revenue because of the shortterm spike. In terms of the outlook, what do you hear . Bears are crowding in because of the warmer weather. Supply remains ample. The cautionary note is the wacky weather could continue and that in the mix. Ls correct su keenan, with the very latest on natural gas volatility su keenan, with a very latest on natural gas volatility. Isay, a senate panel debating whether a ban on crude oil exports is necessary. Megan hughes, where does the debate stand . It is important to point out there is no legislation on this just yet. Todays Senate Hearing is asking the question, should the export ban be lifted, and it has positive our full supporters like Lisa Murkowski from alaska, Companies Like exxon mobil, the u. S. Chamber of commerce their argument, you send more crude abroad and it will bring the world gas prices, and it will mean savings for Oil Producers here in the united states, but they are having problems with refinery capacity, specifically the light, Sweet Crude Oil from north dakota, and they say that the ban is outdated. Here is billionaire harold hamm of Continental Resources who we heard from today. The world has drastically changed since the opec oil embargo. Was symbolice band as we had no oil exports. Consumers would benefit from lifting these restrictions that inhibit the export of crude oil induced in the u. S. There is a split in the oil industry. For refiners, it helps for the crude to stay in the u. S. , they turn it into gasoline, and is allowed to be exported. We heard testimony from your presented of altai, who is a huge consumer, but also a refiner. We believe strongly that the ban on u. S. Crude exports is good policy, and lifting export limits would come at the expense of the american consumer, who would pay more for gasoline, heating oil, and more for the price of an airline ticket. Ofwe have seen an abundance crude has been bringing down prices at the pump, down 10 since march, even though global prices have been around 107 a barrel. Barclays estimates if you remove the ban, it would cost motorists as much as 10 million a year in higher prices. Megan hughes, thank you. We had a quick break to take. When we come back, a new way to gather and consume media and news. At the ceo of tech startup talk aboutins me to how he sees the evolution of the online industry and what it means for his company. We are back in just two minutes. Newscred is a leading content marketing platform. America bank of just three of the clients. Shafqat islam is here, the founder and ceo. What do these Companies Want from you . It is great to be back. Newscred is a content marketing platform and we provide number one, access to worldclass content from a network of publishers everything from the new york times, post quote to even bloomberg, and we provide a Technology Platform that they can use to publish to their marketing channels. What is in it for them . Is it just about their brands , enrichingbetter their experience . Brands are trying to tell more authentic stories with purpose. Charactert is a 140 tweet, or an article, if you take pepsi, their audience cares about beyonce, the super bowl, so they like content about those topics. How did you know this was a business. You say it, and im taking it is a great idea, but how did you know to launch this . We started five years ago. We have integrated our business quite a bit. We always listen to the market. We have great relationships with publishers. We realize that if we connect stakeholders we can build a compelling business. Listening and responding to feedback there is an interesting idea. You went through a series c raise. We just raised 20 million. Quite a big chunk of change, and this is your third round. What are you using the money for . Not a super bowl ad, unfortunately, not yet. To be honest, the market is hot. The category is large. We have to defend our position. We are the leader. We need to separate ourselves. We will double sales staff in new york and the u. K. , and we are in the innovation business, not just the software business, so we will double down on product and Technology Hires as well. You said technology, but theres a creative aspect. Who else are you hiring . Design is a perfect example. We believe software companies, even businesstobusiness software Companies Like us should have amazing designs. We also provide access to a freelance network. Even though they are not our direct employees, we provide access to him aging journalist, designers amazing journalists, artists. Oryou are finding it easy difficult to find the talent that you want . It has been easy. Our mission has been to create an industry handheld news creators and content creators thrive and we pay top of the market prices. It has been great working with these freelancers. Islam, thank you. He is the cofounder and ceo of newscred. When we come back, another founder will join us. We will talk little bit about the super bowl. He took a website publishing platform from his dorm room and grew it into a super start. The adack to preview that he paid for for the super bowl. It is silly, funny. Were back in a few minutes. Lower your mortgage. We cannot change squarespace provides an all inone creative tool that allows users to create and specialize their own websites. Anthony casalena started the company in his dorm room and 10 years later they are advertising at the super bowl. [laughter] click here. Click here. You may have a virus. 100 off. Lower your mortgage. People who bought this, also bought this. We have not we cannot change what the web has become, but we can change what it will be. It starts with a better website. Squarespace. It was a lot of fun. What do you hope your company gets out of it . We hope this raises awareness around squarespace. We have this platform we have invested a lot of money in and design talent into, and it is our thesis consumers are not choosing between squarespace and our competitors, they just do not know about squarespace. Aboutt is funny and apt your advertisement is showing to what extent the level of noise has gone up as we consume different types of media. You are basically saying, if you want to weed out all of this and focus on your brand, we could help you. We are taking a playful jab at all of these things we have seen on the Internet Time and time again. Click here buttons. We are inundated. Yeah, you are inundated. The distinction we are trying to draw is this is what we are used to, and at what when it comes an idea online, what kind of presence do you want to have and squarespace is a clean, elegant solution. We alluded to your background. You started the company in your dorm room, and it is more common that we hear stories like this. You borrowed money from your dad. Now, youre gone through index ventures, more formal fundraising. What are you doing with the money . We raise money about 3. 5 years ago to bring the business to the next level. We have a strange funding history. Years ago i raced 30 servers, and the company was run to break even for about seven years, and we reached an Inflection Point where it was time to take a bigger step. We still run the business with a lot of the principles it had from when i started, making sure it is sustainable, that it can stand alone, but we have been able to take bigger and bigger risks recently to bring the business to a new level. One of the decisions you had to make with squarespace, sometimes this product is offered, and it is altra cheap. You have begun charging real money to your customers. How much did that freak you out . We actually made the decision to start charging very early on, probably nine years ago, and that was a con just decision. Conscious decision. Andanted to focus on higher publishers who are serious about investing and owning their own space online as opposed to renting it. It has been a successful strategy. Toarespace is not meant break the bank. We have plans starting at eight dollars a month. You also have big name targets. Sony. , yes, which is one of the most Amazing Things about the squarespace platform. Consumers and highend brands are actually using the exact same service. Andlopers sometimes come in use the developer platform to create a custom site. Those are the things we are using to create templates on the platform, and our front sight is just another squarespace site and we are all in the same boat. Biggest challenge . Awareness, increasing or marketing, aching sure we are an option in the minds of consumers, so when they are putting their business online, their identity online, it is something they can consider. How difficult was it for you to compete with heineken, budweiser, pepsi, for the same super bowl spot . So, you know, we have been advertising for a long time, since the beginning of the company, and our advertising budget has gone up and up. Last year we spent 20 million. This year we will spend about 40 million. Were getting to the level where our creative has developed in such a way and our budget has moved in a direction where we feel comfortable playing at this level. It is a huge gamble in the spend, but you think it will pay off. Absolutely. We watch it live. Anthony casalena, founder and ceo of squarespace. A quick break to take, and when we come back, everything you need to know about trades. Two minutes. Tomorrow on money moves, appropriately for the super bowl, former nfl great Boomer Esiason will be with me to talk about the game and what he expects, and for the dozens of collectors, super bowl champ rings will be here. Well tell you how much they could be getting at auction. All of that to look forward to tomorrow. Minutes past the hour, which means it is time for Bloomberg Television on the markets and Mark Crumpton has all you need to know. We see a rally underway. Stocks on wall street rising from a twomonth low with data showing Consumer Spending on the rise in corporate earnings beating estimates. The nasdaq up 1. 9 . 1 . S p 500 up over the dow industrial up over one hundred one points, and 15,840. Time for the sector report. Pending home sales month, from the previous but homebuilders have been doing well, and beating earnings estimates all this week. An analyst with Susquehanna Group joins me in the newsroom. What is behind what looks to be a schism in the market . Thehe two things driving ratesas mortgage increasing dramatically in the fall, and we are in a seasonably quiet period. Beatending numbers all estimates on deliveries and better orders and they sold at higher prices. There is a disconnect for sure. Are they concerned . This is something the fed will take a look at. You have inflation and Unemployment Rate that they are keeping their threshold of respectfully 6. 5 and 2 . The biggest driver will always be employment, so as that number includes, housing will improve. Builders that reported said december was better than november, and that is not a normal trend. They also said january accelerated. I think the pending numbers we saw from december were a pause, a breather. People said lets see what i could afford. People have been conditioned to think that housing is a buyers market, not a sellers market. That is shifting, and i think the buyers took a breather. What we are hearing is december and january are showing signs of a rebound. You talk about the sellers raising prices. However the builders been able to sustain this . Prices are up 10 to12 yearoveryear. They are offering less incentives. One is offering about 1. 5 in incentives, down multiples from just a year or two ago. Inventory is the key. You can charge better prices. The Commerce Department reported the economy grew 3. 2 annual rate, october through december quarter. The strongest Consumer Spending we have seen in three years. How will that translate into the Housing MarketGoing Forward . Also we focus his mortgage credit amount what we focus on his mortgage credit availability. It loosened over 2014, but i do not read Consumer Spending as a read through to housing. Jack micenko, thank you for your time. Stay with us. More on the markets in 30 minutes. Street smart is next. Are live from bloomberg World Headquarters here in new york. I am betty liu. Lcome to street smart i am erik schatzker, counting down to the close of the market. A Dow Jones Industrial average is making up about half of yesterdays losses. Visa, caterpillar, nike, on the move higher. 10year yield to get up. Gold losing