Happening in ferguson was oppressive and objectionable but worthy of protest. But there was no excuse for violence. Whoever fired those shots should not to tract from the issue they are criminals and they need to be arrested. Olivia last week, a Justice Department report says ferguson had racism and the courts. According to a person familiar with the matter, the fbi is now investigating whether billionaire investor bill ackman and people working for him try to manipulate herbalifes stock. The stock lost half of its value in the last year. We will ask bill ackman at 10 00 a. M. Eastern. In japan, a milestone for the japanese stock index. It is up 172 . The japanese are up more than 10 this year. There is so much oil on the markets there are not enough places to store it. The International Energy agency said that may lead to more price cuts. Storage capacity is already strained. The Senate Intelligence committee has approved a bill that make its easier to fight cybercrime. Companies will be shielded from lawsuits when they share information with each other and federal agencies. That would have happened, but we might have minimized the lost because of the response time. The fears that existed with other health care and other financial companies, they would have also been included by the federal government. Olivia critics are concerned the bill could violate privacy rights. Tom lets look at the data. The markets are always interesting. Futures are flat. Not the drama of 2426 hours ago. That is a huge deal on the japanese index. Brent crude comes in. Sterling showing some rate some weight. The russian bank is coming out with headlines within the hour. Lets look at the confidence in america. I am not a big believer in confidence indexes. Here is the nirvana of the 1990s. This regression down is arbitrary, but there it is. Finally, breaking above it. Olivia it is hard to map this graph along with unemployment. This is not what the comfort index reflects. Im interested in this turnaround. Tom absolutely. Is this the new normal or can we aspire to get back to this nirvana of the 1990s . There is a snapshot on morning in america. Lets have a smart conversation. On a friday, you can do that. A bloomberg Surveillance Data check. Rob has witnessed and written about this strange evolution this morning. He is a cofounder and ceo of research affiliate. I want you to explain the legacy from peter bernstein, Abby Joseph Cohen when, and others when you bring mathematics to investment what does that mean or what are you thinking about for our audience . It is not so much bringing mathematics to investing, as using mathematics as a tool to bring common sense to investing. One of the things that is fascinating about investing is that people think past is prologue. People think the bull markets have a dark side. They set markets up for lower future returns. Bear markets feel miserable, but they have a bright side. They set markets up for Better Future returns. They leave markets cheaper. We are may be at the tail end who knows, of a huge bull market like u. S. Stocks. They feel wonderful, but it leaves markets high, position for low future returns. Tom lets go to investing 101. How important is janet yellen and Mario Draghis great distortion for changing how we invest . We push it aside and ignore economics and the busted macro economics that we have or do you have to amend and adjust . How do you handle that . Rob negative Interest Rates push us into New Territory entirely. They mean that the credit worthy can borrow at the lowest rates imaginable. If you can borrow at the lowest rates imaginable, are you going to invest money in long horizon highrisk projects . Or are you going to take in the low hanging fruit, stock buybacks . Are you going to use the money in ways that capture the easy opportunities . Tom bill ackman is in the news today. Olivia according to people familiar, the fbi is looking at whether bill ackman and people he hired manipulated the stock. Tom kara lack carl icahn bill ackman, are they constructive . Rob absolutely. Anytime you have people who move markets and move assets toward their fair value they are constructive, they are helping markets reprice toward their fair value. Was there overt manipulation . Who knows. Was there an effort to identify stocks that are overvalued and undervalued, absolutely. We are in a regime where you get punished for seeking to identify overpriced or underpriced and get punished after the fact. The rules are determined after the fact and redefined after the fact. Olivia what is your most important metric for valuation . Rob my go to metric is schiller p e ratio price relative to longterm horizon. Olivia critics would say that is too backward looking. Rob it is backward looking, but nothing mean reverts over time more aggressively than earnings. When you have peak earnings like now, the Competitive Pressures in a Global Landscape tend to cause tom i like this, but how do you parse your caution . Rob laszlo tends to focus on cash flows, which are short horizon and drive markets on a shortterm business. The valuation plays out on a long horizon basis. Olivia you do like the schiller ratio, which is retroactive. But you are saying that this sort of jack vogel market cap weighted index, the bull run that has enabled that success, is over. Why are we looking at a valuation metric that inspires past performance . Rob im not saying it is over. Im saying the market is expensive. If you buy stocks today at todays valuation multiples, you are either saying this market is cheap or you are saying i have a selfdiscipline and i know when to get off the train, i know when the bell will chime and i will hear a chime before others do. Tom rob arnott with us. We will speak about all that is going on in passive investing. Olivia coming up, we are going to continue the conversation with rob arnott focusing on emerging markets and why he thinks they are worth the risk. This is bloomberg surveillance. Happy friday. Tom good morning, everyone. Bloomberg surveillance. Im tom keene, with olivia sterns, on a friday. 46. 62. Olivia we begin with the latest from ferguson, missouri. A manhunt is in progress. There were more protests overnight, but they were peaceful. Bill ackman has made a big bet against herbalife. The fbi wants to know if ackman or people working for him try to manipulate herbalifes stock. We will ask bill ackman about all of that later this morning. He will be right here on Bloomberg Television at 10 00. A new biography says steve jobs refused an Organ Donation. They say he refused when cook said he would give him part of his liver. Doctors had told tim cook that the transplant could extend tim jobs steve jobs life. More followed for the fraternity at oklahoma university. Some other Fraternity Chapters new about the racist video. Research done for the fda says slowing teen smoking could be attributed by raising tobacco age to 21. The volcano in costa rica is acting up. A huge plume of smoke and ash in costa rica. Wow. Tom this is close. This is not like, over there. Olivia yes. Tom i flew by mount saint helens. Just stunning. Olivia remember when the airspace in europe was closed because of the iceland volcano . Tom yes. Happy volcanoes. Rob i am hoping i see lots of volcanoes and none of them erupt ring. [laughter] tom lets continue with rob arnott. And the investment racket, they are treated with all. Investors to bring firstorder mathiness. Rob arnott has led the way. What not to do and what to do. Right now, the to do list includes investing abroad. I picked up on this six months ago. All of a sudden, everyone is going, but where abroad . Rob i think the best opportunities are in emerging economies. Emerging markets are cold as ice in the eyes of most investors. People are afraid. Every election in latin america in the last three years has gone socialist. Tom cfa level one. Can you trust the accounting . Rob the accounting in emerging economies is dubious. It is almost as bad as u. S. Accounting. My goodness. When it comes to profits, when it comes to simple p l, they have revenues and expenses. They dont have stock options. They dont have accruals. They dont have preferred shares. It is as can be. I would trust the accounting there as much as i would trust the accounting here. Olivia Political Risk is one thing. There are also economic fundamentals. They say the taper is going to cut the legs off any growth. Rob that is the obvious fear and the fears are legitimate. The fears exist for a good reason. The simple fact is that there are no bargains in the absence of fear. The other simple fact is that valuations there are half the valuations here. The stocks in the emerging economies are trading at singledigit p e ratios. Olivia wordy you invest in the emerging world . Rob i like broadly divested i like broadly invested portfolios. Tom these negative Interest Rates are stunning. The german yield is much higher this morning. Genuine buy siemens, nestle can you buy giant euro blue chips that we trust . Rob i would say yes. I would not necessarily go for the blue chips, but the broad economy, fundamentally weighted. Not in accordance with the popularity of the companies. The Companies Use named our big market companies. Olivia they have also seen a big runup in the dax. Rob if you wait the companies according to their economic footprint, there are a lot of bargains in europe. Rob would you bet on india or china in the next decade . Olivia would you bet on india or china in the next decade . Rob i would bet on china. India has high valuation multiples. I would not bet on china to win in terms of gdp growth relative to india. India has more upside potential and if they get their corruption problems under control there is more room for them to play catchup. Tom we are going to talk about your Investment Strategy in a bit. Within that, there is the banks. In every system you are in you have got to be aware of a financial system. How messed up is our Global Banking system right now . We are out in front of clearing markets. Rob chinas Banking System is problematic. What we need to do is let banks be banks, instead of having them be manipulated arms of government. Let them get in the business of borrowing, putting risk capital at risk tom . Should janet yellen raise rates to normalize so that banks can do business . Rob absolutely. I would recommend that they begin a process of raising rates and get them back to normal levels. Olivia what is normal . Rob 2 3 would make normal and perfect sense. Getting from here to there would be perceived as devastating by the market. Tom ok. Lets come back. Rob arnott. We will talk about this bloomberg Magazine Article about passive investing. In our next hour, Kevin Roberts brings the spirit of marketing and advertising. He is with a small startup firm. We will talk to mr. Roberts about facebook. Tom good morning, everyone. Bloomberg surveillance. It is time for my morning mustread. It is a mysterious mustread on a friday. Rob arnott is with us. We have to do cinderella. Which 1945 film character helped inform kate blanchetts evil stepmother . This is back in the 1940s. Take it julie miller. The moment she comes on the trailer you know she is going to steal the movie. Olivia i feel it is much more of an Mommy Dearest kind of thing. Tom this is very exciting. We are going to talk about this later on. Olivia there is the costar, the belle of the ball. You might recognize her from downton abbey. Tom i might. [laughter] when you look at the risk that disney is taking on this why have they given up risk investment . Olivia i was wondering where you were going with this. Tom if we go down three percent in the markets, we have a coronary. Rob people want returns they dont want risk. That is a given. Of course. They go hand in hand. We are showing Richard Madden in cinderella. There is no difference. The prince talks to cinderella what is your number one advice . You are prince charming to the american 401 k . Rob there are no bargains in the absence of fear. Invest in markets that you are afraid of. Olivia very impressive, the cinderella allegory. Tom good morning. New york city gorgeoisity. Olivia sterns gets ready to see cinderella today. Olivia authorities have yet to make any arrests in the shooting of the two Police Officers wednesday night in ferguson, missouri. Both have been released from the hospital. There was a peaceful protest overnight in ferguson. This is all fallout from last summer. Now, it is activist investor bill ackman who is being investigated. The fbi is investigating whether he tried to manipulate herbalife s stock. He has 1 billion bet against herbalife. Their stock has lost half of its value in the past year. We will ask bill ackman about the investigation later on at 10 00 a. M. , right here on Bloomberg Television. The Prime Minister of greece said his country has started fulfilling its commitments on the economy and it is time for europe to do the same. He said he is optimistic a solution will be found. European leaders have said they will not give any more emergency aid to greece unless it reforms its economy. Benjamin netanyahu is not so sure he will keep his job after next week. He told an israeli tv station he will lose the election. The Zionist Union favors renewing peace talks with the palestinians. In pro football, we have not seen Something Like this in seven decades. Demarco murray has signed a fiveyear, 42 Million Contract with the philadelphia eagles. It is the first time in 68 years that the nfl leading rusher has switched teams. Tom you football junkie, you. Olivia i went to school in philadelphia. Fly, eagles, fly. President obama got a few laughs will talking about life in the white house. It happened when he appeared on jimmy kimmel live. President obama i cannot drive. [laughter] i mean, i am able to drive. Jimmy do you have a birth certificate . [laughter] [applause] president obama in kenya, we drive on the other side of the road [laughter]. Olivia the president also made it clear that he has Hillary Clintons back. Tom very good. Russia out with rates. The ruble moves a little bit. It is not that big of a move. It is the snapshot of a troubled economy. Inflation, 16. 7 . They made it clear that they are on top of this. The weak economy is helping slow inflation. Yeah right area there is the messaging from the russian central bank. It is not news that passive investing is all the rage. But there is a collegial heated debate. The tradition is to replicate an index off of market capitalization. Rob arnott disagrees. He suggests there has to be more and that is conducting at around regulation. Why is your world too complex . Rob it is not at all complex. It is very simple. You Weight Companies by how big they are, not by how much the market is willing to pay for them. Just how big is the business. Tom strategists get a belief in a ratio of price to sales. Which of those Dynamic Ratios is fundamental . Rob they all have fundamental value. If you just weig companies according to their salesht, one of them ties the way to the price. The more expensive the company is, the bigger its weight. Tom are you sort of kind of like passive investment or like active investment . Rob both. Relative to the market. The market is cap waited. Relative to the market, we are active. Relative to the economy, we are passive. Relative to the economy, jack vogel is active. Tom this is a zen approximation, olivia. [laughter] there is a lot going on here. Olivia jack vogel says that your approach is going to shake out just like his in the long run. Rob absolutely not. If you go back over the last 50 years, you find that weighting companies by their economic footprint means that the companies that have been winning in the marketplace by dint of rising and valuation, some of them deserve their high multiples, some of them dont. Tom take us back to december 2008. What was rob arnott doing . You have to get on board in february 2009. Rob rebalance into the deeply outoffavor companies. You rebalance into the outoffavor financial services. Tom how often should our listeners and viewers rebalance . Rob you can do it annually. You can do partial rebalancing quarterly. Move a little bit toward rebalancing quarterly. The rebalancing is where the value is added. At the beginning, people said this is just a warm over reversion of value investing. Value investing has underperformed for 10 years. We have outperformed for 10 years. Olivia does the market the jack vogel built his model for not exist anymore because prices are not there the way they used to be . Rob prices have never been fair. They have always been too high or too low. Jack was and is a genius. He did a wonderful thing for the marketplace. He said, prices of the products manager matter. He said, you can invest in the whole market and you can do it for free. What a wonderful thing to do. Olivia how do you feel about being stacked up to the other people as carrying the torch for jack vogel . Mark weidman, bill mcnabb. Rob these are very smart people. They are terrific leaders. Olivia who gets it most right among those . Rob i would not want to pick that. The notion of who is going to be the next jack vogel is kind of silly. Who is going to be the next tom keene . Tom i want to know where you are right now. People are going into the weekend. Where is rob arnott right now . Rob i would be aggressively trimming the beloved tech names that are trading at lofty multiples and rebalancing into the outoffavor segments of the market. I would be trimming u. S. Equities and rebalancing into emerging markets equities. There are cheap stocks in the world, lots of them. Tom pick a nation. Rob im going to get really controversial here. Russia. Tom you are going to go long to you back right now. Rob if you dont mind supporting a thugocracy. If you dont have ethical qualms. Olivia and you dont . Rob i do. Tom this is not dr. Phil olivia. [laughter] rob if there is no expropriations, the stocks are relatively cheap. Tom i am in the leveraging allcash fund. [laughter] olivia i am doubling down on cinderellas shoes. Passports, please. The superrich are fleeing some countries. China is one of them. Tom good morning, everyone. Bloomberg surveillance. Im tom keene. With me, olivia sterns. It is time for a single best chart. Olivia is scrutinizing the literature right now. [laughter] this is a cool chart. Olivia it is about immigration worldwide among the wealthy. We talked about the Record Number of millionaires in the u. S. 10 million millionaires. The chart shows the biggest outflows of millionaires. This is according to a new report. I think this is very interesting. We think about immigration as being low income workers leaving their country and going abroad for work. This shows that one of the things that has happened in the last decade as a consequence of the more ching emergingmarket wealth is that wealthy people are leaving china and india and going abroad. There are huge implications for policy. Tom this is permanent. This is a structural shift. Olivia ask sydney, melbourne. 90 of applicants for the investor visa in australia are going to australia coming from china. Tom we have heard that from david haro out of chicago. They want to move the money where there is a legal structure. Olivia forward buyers are really booing manhattan real estate. Tom finally, we have the stronger dollar, which may dampen the trend. Olivia if you had 1 billion in rubles, wouldnt you rather on the penthouse . Tom what is your research and mathematics on the value of real estate first is intangibles . Rob i think real estate, broadly is relatively fully priced, but there are opportunities. To be sure, Flagship Companies are going to have a market of their own. When it comes to Specialty Markets tom top photo. We nailed this yesterday. There is that headdress. Lets get to our top photos. Here is o. Sterns. Olivia we start with Robert Downey junior. He fist bumps a voyeur received a 3d bionic lamimb. In South Carolina, a sea turtle was released into the atlantic ocean. We are suckers for cute animals on surveillance. It was found stranded on a remote beach. The South Carolina aquarium documented the event. It is believed to be 15 years old. They can live to be up to 100 years old. Our number one photo of the day. It is rob arnott. He was voted into the elite eight of wealth magazine. Tom wait a minute. Give me your hand . 1 this hand does not look like that hand. Rob when i take this off this fats it, i look like that. [laughter] i do. Tom this goes back to theory and thinking about investment. Rob one of the things i learned in the intervening years is how tremendous the influence of policy choices can be on capital markets. Olivia i will point out that you moved into the elite eight with 70 of the vote. Congratulations. Rob thank you. Olivia coming up elsa gears up for frozen 2. Another princess in my shadow. Im a legendary story of rags to riches. Olivia it is a princess showdown. Can cinderella win back her crown . When we come back, Glass Slippers. Tom good morning, everyone. Bloomberg surveillance. Olivia a manhunt is in progress in misery. Missouri. A new turn and the governments investigation of herbalife. Activist investor bill ackman has made a big bet against the company. The fbi wants to know with bill ackman or people working for him try to manipulate herbalifes stock. Acumen has 1 billion bet against herbalifes shares. That is coming up at 10 00 a. M. Eastern, our interview with bill ackman. Prosecutors plan to convict Oscar Pistorius of murder lawyers for the doubleamputee tried to block the move, but they were turned down by a South African judge. Pistorius is in prison on a lesser charge for killing his girlfriend two years ago. Concern about Carbon Monoxide fumes prompt and auto recall. General motors wants to fix 50,000 chevy bolts. Volts. Gm says to people have been hurt by the problem. Tom yes, i have heard this. Olivia nothing succeeds like success for disney. It is planning to release a sequel to frozen. Tom yes olivia should we just pause and listen to the song . [ [let it go] olivia that is my favorite part. The cold never bothered me anyway disneys shares hitting an alltime high. Speaking of frozen tom. Cinderella is back. Cate blanchett is her evil stepmother. Disney is hoping to replicate frozen success. That is the belle of the ball. From downton abbey. Joining us now is the senior overseas analyst from box office media. Can cinderella hold a candle to frozen . Those are really high standards we are holding it against. I think it might be the first 2015 release to hit the 200 million mark domestically. Olivia this is not a cartoon. We actually have the liveaction movie. How does it compare to an animated one . They are doing pretty well. They are diversifying their assets, if you will, over at disney. They did malifacent which did over 750 million worldwide. They did oz the great and powerful. Tom the casting to me is extraordinary. Rob stark from game of thrones. Cate blanchett how did they get her on board . Was it the mighty check that they wrote her . They are doing very well financially. But these are the types of projects that actors want to be a part of. Getting Angelina Jolie for maleficent. Tom this burner shows burn ishes the global brand. Olivia with all the respects i think we are burying the lead. The fabulous Glass Slipper that jimmy choo has come out with for 5,000. I tried it on. A tragically does not fit. I am not cinderella. The question is one about marketing. How does disney appeal to one adult audience . Is that the appeal of a liveaction rather than a cartoon . I think that helps. Disney has much more than princesses. They have star wars. They have the marvel movies. On a film output level, this might be the best time for the studio with the Many Properties they have. Tom Nicholas Kirkwood here with a shoe, as well. Everybody climbs on board the frenzy. Why cant others do this . Dreamworks has had success. Warner brothers, to some extent. What is the disney pixie dust that has allowed them to do this . They have generations and generations of experience and of Brand Recognition around the world and across generations. We dont think of disney anymore as just childrens movies. With marvel and star wars, they are getting all of us. Olivia that is where the marketing opportunity for sex with avenue comes from. They have created these exclusive shoes. When we came into this, we played the song let it go. Cinderella is song free. So much of the success of frozen was driven by the hit song. It does not have to be musical. Maleficent. Olivia it did not do nearly as well as frozen. It is not an animated movie. Tom i want to rip up the script. What a bitter debate about whether gay families should win 700 out of a 60 million pie. Olivia i have moved on. Tom you tried on shoes, excuse me. Just keep trying it. I can stretch it out for you. Olivia please do. I really want the Creative Community to continue having the tools they need to produce the tools they like. Tom thank you so much. Thank you for having me. Tom finally a quiet day. Rubel is a bit weaker off the russian centralbank moves. Ukrainian currency, nobody is paying attention to me on set. Cinderelly cinderelly there is a fat chance, olivia. [laughter] tom japanese at stocks hit a 15 year high. The world adjusts to the new yellen dollar. The power of facebook. Is it a friend or enemy . Bill ackman investigated for delivering this deliberateness. Good morning, everyone. This is bloomberg surveillance. It is friday, march 13. Lets get right to our cap headlines. Olivia a manhunt underway for the suspect who shot two Police Officers in ferguson, missouri. There were more protests over last night but they were peaceful. All this from the fallout of the shooting of an unarmed black teenager by eight white Police Officer a white Police Officer. What happened in ferguson was objectionable. Was worthy of protests. There was no excuse for criminal acts. Whoever fired those shots should not detract from the issue they are criminals and they need to be arrested. Olivia fergusons government fostered racism in the government and court. The fbi is investigating whether ackman tried to manipulate herbalife stock. The stock has lost half of its value in the last year. We will ask bill ackman about this investigation later on. We were at the tail end of the. Com boom last time the nikkei index was this high. It is up 172 . Japanese stocks already up more than 10 so far in the year. The glut of oil has gotten so big, we are running out of places to store it. That may lead to more price cuts. Boosting estimates for u. S. Oil production this year, with the inventory already at an alltime high. It is up to the full senate to decide whether to approve a bill to make it easier to fight cybercrime. Critics on both sides of the aisle are concerned that the bill could violate privacy rights. It is welfare like you have never seen him before. Will ferrell like you have never seen them before. He played all nine positions. He is expected to raise 1 million for College Scholarships for cancer survivors. Tom very cool. Let me do a quick data check. Today, not much going on. A pressure from their fresh air a breath of fresh air. Weaker oil through this week. That bears some scrutiny into the weekend. In the old days, there was the dow and this and that and the other thing. We have a lot to talk about. Kevin roberts joins us from stodgy in such soft insideachi and sachi. What happens next week . Kevin this could be a big fed beating. Fed meeting. This is where it comes to a head. Tom are the markets telling janet what to do or are the markets telling janet what to do . They have consistently priced for lower for longer. We will see those come up next week. It is hard to imagine 2 . We get a press conference. Olivia weve been talking about dollar strength. Does janet hold off on the rate hike because of the dollar . Josh that is not clear. The fed was cheerleading for policy stimulus from other countries. A weaker euro and stronger dollar mediumterm, that should come back to help us. Tom the dollar is not at extremes. Olivia it is at 100. Tom but not extreme looking back 20 years. Josh they are aware that there is this mediumterm game they have to play as well. Olivia tom what does a weaker pound sterling mean for harrods . Kevin what is good for harrods is good for qatar. They may see oil going like this. Olivia a lot of customers are from commoditybased i have retail on the brain. Much pause did yesterdays sales give you . Josh it is a cause for concern. We have to see how the numbers play out. It looks to storm raoni disturbingly like the First Quarter of 2014. Tom you wrote an article in the telegraph yesterday. There is a chart from the atlanta fed. The sector is going down, down down. Re economists shifting to a sub 3 gdp and staying there . Josh that looks like what we are headed towards. There is still a good chance that the Consensus Forecast you have the strong job growth supporting that. There is downside risk. Kevin if you get behind the data and the numbers we are listening to how consumers are feeling. They are feeling very good, very confident. Everybody is finding work. People around them are finding feeling buoyant. Tom the theme i am seeing this is the toronto star. Shutting down their tech news website. Everybody is focused on the giant. Facebook and their new speed. News feed. Where will they be in 24 months or in five years . Kevin facebook is the force. They are innovating. Look at what is happening. Most news in the next 24 months, almost everything we are going to see will be video. Olivia does the same argument apply for snapchat . Kevin they will be one of the top five. Tom how does facebook adjust their news feed to defend against snapchat . Kevin they will attack. Defend is not in facebooks playbook. Tom are they the frenemy of all news organizations . Kevin you better collaborate connect. If not, you can close. Tom the telegraph leading the way. Olivia the new facebook would be more like a scrapbook today it will be a lot more like twitter. Kevin what do you think twitter will look like 12 months from now . Olivia one is news and one is personal mementos. Kevin you will see a real blurring josh i have my cousins in middle school making amazing videos. Tom within this when i see an ad in my twitter feed, im upset. Unless upset when i see a facebook ad. I am less upset. Kevin your time constrained on twitter. You made a choice which is about concise and speed. You go on to facebook, you are still into entertainment. Surprised me, to like me. Let me share this your in a different mindset. Olivia will you buy an apple watch . Kevin an apple watch two, maybe. I think it will be massively successful. Olivia all right. Looking forward to the conversation. Josh wright, thank you so much. Tom a conversation with one of our favorite guests. Our comptroller. Scott stringer on shaking up the boardroom. Futures up three. This is bloomberg surveillance. Good morning. Tom good morning, everyone. Bloomberg surveillance. Lets get to a morning mustread. I sent an email to olivia. Olivia i deleted it from my server. Gail collins writing in the new york times. Hillary clinton comes back. Kevin roberts with us. How should hillary change her messaging . We have seen her tweeting grandma knows best. Kevin it starts with this quote you just put up. The new personality. The difference between clinton and most other people is personality. They have one and she doesnt. It is a bigger problem than messaging. Olivia what would you advise her for messaging . I dont understand this litmus test of what i want to drink a beer with her. Kevin she shouldnt retire and disappear and let the field come open for a younger, more dynamic and it. She should retire and disappear and let the field come open for a younger, more dynamic candidate. Tom someone so visible and so known what do you do with someone who isnt so visible you have to reposition them is it so visibl so visible you have to reposition them . Did the british do this . They have their own politics right now. Kevin we helped labor lose the last one. Josh so much of it is driven by money. Clinton, whatever you think about her politics or personality she has the money. Kevin i dont think it is about money at all. When obama was elected ran the worst marketing campaign. The advertising was terrible and the money was wasted. There was a Grassroots Movement created. Hope, change, dreams. The movement was created from the grassroots and he got in. Money is oldfashioned. Tom hope and audacity. Kevin it is too late. Im a radical optimist. Tom coming up, bill ackman in the news. He will be on Market Makers. Tom good morning, everyone. We are having fun on saturday. We are going to see the matinee of in the relevant. Cinderella. Olivia a manhunt in progress in ferguson, missouri. There were more protests last night. But they were peaceful. A new turn in the governments investigation of herbalife. They want to know if bill ackman or people working for him try to manipulate herbalife stock. He has bet 1 billion against the companys shares. We will ask bill ackman at 10 00 a. M. Islamic state accepting a pledge of allegiance from the Extremist Group that inducted abducted two and 75 schoolgirls in nigeria. 275 schoolgirls in nigeria. More fallout from the university of Oklahoma Fraternity video. Sigma all caps on investigating chapters at other campuses. Sigma alpha epsilon. A new biography says a steve jobs refused an Organ Donation offer from tim cook. The apple cofounder refused when cook said he would give him part of his liver. Jobs died four years ago of pancreatic cancer. A volcano in costa rica acting up. A huge plume of ash. It is the most powerful eruption there in two decades. The airport was clouded. 140 billion dollars, how much Public Companies could grow their market cap by if they embraced proxy access. Let your longterm shareholders hire and fire the board. Scott stringer has been leading the fight and he joins us on set. Thank you for joining us. Shareholders can vote. Why should they get to call the shots with management . Scott we have always had this right. Part of what we want to do is grow the holdings. Companies that actually have the ability to have proxy access make the Company Stronger and more powerful. This is a movement that is sweeping the country. We are making agreements with staples and abercrombie. Olivia those companies are a bit desperate. You are not going to get apple on board with this. Scott if the fcc would deliver rules. Tom what is the response from major do they love what you are doing . Scott this is a national coalition. We have organized treasurers and controllers around the country and we are talking to companies saying we want to have the ability, we want a say in the direction of the company. When we see you are not a diverse board we want to change that. Tom what is the response when you talk to these major owners . What is the conservative response . Scott look at what is happening. Prudential is doing proxy access on their own. Look at ge. We are working on it. Olivia why shouldnt it be voluntary . Scott part of what we we have a right to ask for this during the proxy season. This is the way you impact change. We have a stake in growing longterm value. If we see Companies Going the wrong direction, we want to have the ability to say to them, you do not have a private system. You have to open a little so we can work on these issues. Kevin its about nominating people. Scott this is hardly going to turn Corporate America on its head. This is the most responsible way to create longterm value. Olivia why are you auditing Success Academy . Scott part of the law says, we audit all schools. Olivia your critics would say you have the right to financially audit them. Not audit their full performance. Scott part of doing a financial audit is also looking at a whole set of issues. Part of a construct we go in we are not auditing the political issue. Part of my job is to make sure everything is transparent, open so parents can see whats going on. Olivia was there something going on that concern ed you . Scott malpractice as controller if i was not doing my Due Diligence auditing agencies and charter schools. It is what i do. I dont care about this from a republican or liberal perspective. Idea my job making sure we get the best bang for the buck. I have to do my job. Tom what about the potholes in new york . How do you audit potholes in new york . It is like ive never seen. Scott what in the blah zerodid build a blah zerobill deblasio say . Olivia we see of the Cyber Security bill will keep you safe. Tom good morning, everyone. A strange morning. A little less economic finance move. Lets look at the bloomberg terminal. I dont look at confidence indexes all that much. I dont have faith in them. Here is a monthly chart back 30 years. Here is that state of malaise weve had. We have come up nicely through we are more confident than a year ago. Josh did we have euphoria in the 90s . Tom that is normal versus josh it does look closer to a normal of what you get. Tom does this mood look the same in london . Kevin london is very confident right now. Josh what is common between the two . Proactive policy. Proactive central banks. Their willingness to take the tough decisions upfront. Olivia is it the british consumer that is confident or the International Wealth . Josh consumers are confident. Kevin if you are a british consumer living in britain, who cares . You have food deflation, supermarket wars low cost flights. France is in the poo. Tom can we say that on air . France is in the poo. Olivia a manhunt continues this morning after authorities have yet to make any arrests in the shooting of those two Police Officers in ferguson, missouri. They were shot during a protest at the Ferguson Police station. Both have been released from the hospital. There was a peaceful protest in ferguson overnight. Dems stringer say they will keep working for change. All of this is fallout from last summers shooting. Demonstrators say. Bill ackman is being investigated over herbalife. The fbi is investigating whether or not ackman try to minute later life stock after the fund that a billion dollars against herbalife. The stock has lost half of its value in the past year. We will ask bill ackman about it. The priming us to her of greece and says his country has started fulfilling its commitments on the economy. Prime minister of greece. He says he is optimistic. At the end of the day, we will solve these misunderstandings and go on with this compromise. Our intention is to implement these decisions. Olivia european leaders said one of the Dallas Cowboys biggest stars is going to play for one of their biggest rivals. Demarco murray hasnt signed a fiveyear 42 Million Contract with the philadelphia eagles. The marco murray hasnt Demarco Murray has signed. Maybe obama was practicing he was on jimmy kimmel live. Is there anyway we could flight obama to some golf course have to way around the world and leave him there . I think thats a great idea. Olivia the president had some fun at Hillary Clintons expense. He said he would not give hers new email address his new email address. Kevin the most popular leader on facebook. Tom i have seen him live a number of times. Olivia he gives katy perry a run for her money on twitter. Tom let me do a data check. Bring it over to the terminal. This is three days of oil. We fade in the afternoon. We are fading down to a 46. 34 on oil. Stephen short is adamant we are up to our eyeballs in oil. Talking 39 a barrel at goldman sachs. Futures up two. Good morning, everyone. Bloomberg surveillance. We look to washington. Olivia one issue every ceo on the planet is losing sleep over. It is Cyber Security. We have seen a humiliating hackett sony hack at sony and a creepy data breach at anthem. A bill to get private companies to share info amongst themselves about a threat. Peter, so much criticism here from privacy advocates. Peter once you have the business sharing information with the government, the business community, you have the risk that personal information will be shared and this will be another open door for the government to conduct even more surveillance. That is the concern on the part of privacy advocates. Supporters say they have addressed those concerns. They are not quite clear how much farther they need to go. They believe this legislation is a breakthrough in terms of voluntary cooperation within the business sector and the government in addressing this issue. Take a listen to the chairman of the Senate Intelligence committee. Everybody gave a little bit. We got a bill that legitimately can go to the senate floor and find a majority to overcome the obstacles we have seen of late. Hopefully pass the senate with a significant margin. We dont see a lot of bipartisan votes like that on capitol hill. A good sign for those people waiting years for Cyber Security legislation. Still a long way to go. Olivia another interesting take away was he said if these rules are in place, the hacks still would have happened but would have been resolved quickly. What are the chances this will pass . A 141 vote is a rarity in a committee. It needs to be cleared in the full senate and over in the house and the white house needs to weigh in. The white house was critical of the spill a few days ago. There were efforts to address those concerns. Of this bill a few days ago. This might be the best vehicle for Cyber Security improvement in this country right now. Olivia peter cook, thank you so much. Kevin roberts still with us. How worried are your clients . Kevin they are all worried about it. You would not want this to happen. This is important legislation but the real issue is how do we stop the thing happening in the first place. Internally from companies and guys putting in new systems. The hackers are getting smarter and smarter and faster and faster. We are lagging. They are on the offense event business is on the defensive. Tom are we awaiting a big crisis . I do not see this galvanized in my twitter or email. We are waiting for Something Big to happen. Kevin sony did not care about it, either. All of a sudden, they care about it now. Hollywood really cares about it. Png and the Big Companies are going, we have firewalls up, we are saved. As soon as the first thing these first big piece of data released josh its also about individuals and public education. It is going to require more education. It is not clear that this bill addresses that. Kevin the bill is good. We need to get that in place. That is blocking and tackling. The offense is over this side of the spectrum and we have to find different ways of actually fireproofing ourselves. Tom William Ackman had a bang up 2014. This morning, a discussion about herbalife. He will have a discussion on Market Makers this morning. Look for that this morning on Bloomberg Television. Olivia good morning. This is bloomberg surveillance. It is our favorite topic on bloomberg surveillance. The fed. The labor report for february shows the retail sales have dropped. Why arent consumers buying more . Betty liu hopes her guest will be able to solve this puzzle. An american mystery that only you guys could help solve. It is a big conundrum here. We have the chart of the last year. Look at what has happened in the last three months. We have added 863,000 jobs. Great news for the economy. The retail Sales Numbers have continued to decline. Down in each month in the last three months. Im not quite sure why. This is something we want to ask Alan Greenspan about. We are not seeing spending. Could the solution be in the wage growth or lack of wage growth . Josh some of it is the weather. Retail sales are reported on a nominal basis. We have lowinflation consuming. Olivia more of a surprise to me that they are not spending. They are saving more at the pump. It is because of this permanent Effect People wont spend the savings until they believe it is there to spend. Josh the savings you get each month are not all that much. Olivia not enough to buy an apple watch. Josh that is affecting the Consumer Confidence numbers. Betty another story is forecasting the weather. On monday verizon dropped the Weather Channel in favor of this other Company Called accuweather. We have the ceo joining us. Bryson says people are not getting their weather from television. Verizon says people. We will find out. Olivia a very punchy move. Betty the weather affects everybody. When you have nothing to talk about, you talk about the weather. Kevin mainly moan, complain. Olivia is that a holy grail for advertising . Kevin it is. Theyve got themselves so geared that store by store they are moving that is done through the Weather Channel. Im astonished that verizon took that view. Olivia thank you so much. Looking forward to that interview. Betty liu will be joined by Alan Greenspan. This is bloomberg surveillance. Tom good morning, everyone. It is a gorgeous morning. Lets get to our top headlines. Olivia a manhunt in progress in missouri. Please looking for suspects in the shootings of two Police Officers in ferguson. A new turn in the governments investigation of herbalife. Bill ackman has made a big bet against the company. The fbi wants to know now if acumen or people working for him try twominute relator blackstock. Ackman or people working for him tried to manipulate herbalife stock. Russian centralbank announcing it is lowering its key Interest Rate to 14 . The move comes as inflation stabilizes and moscow tries to boost an economy crippled by low oil prices and sanctions. Prosecutors plan to convict Oscar Pistorius of murder. He was already in prison on a lesser charge. The pfizer ceo got a big paper used in 2014. His compensation dropped 23 jumped 23 . Nothing succeeds like success for disney. Tom i dont care what theyre going to say tom the shoe never fit anyway. Olivia that is cinderella. Disney is planning to release a sequel to frozen. Disney shares sitting at an alltime high. Will you sing let go . Tom the shoe never bothered me anyway. Many will say a great mystery is what about marketing. He cut 50 of his ad budget. Kevin roberts suggests marketing is dead. Where did this come from . What is marketing . Kevin there are different definitions. Peter said it was about creating the performance, the pricing of this kind of stuff. Building a brand. Tom building a brand. Kevin there you go. That is dead as a doornail. Building a brand is not enough. You have to create a movement. Olivia how do you create a movement . Kevin go talk to steve jobs because he did. You add mystery, sensuality and intimacy. You dont learn a lot of those at nbat mba school. Tom you represent cadillac . Cadillac is going to move to new york. They need marketing to rebrand branding cadillac. Kevin they cannot rebrand cadillac. They had to create a movement behind detroit, behind america. If you see the stuff they are doing, they are trying to create a movement. They are about a purpose bigger than the brand. Olivia they are not doing any advertising. Kevin they dont have to anymore. The movement now is fantastic. You want to be part of the Uber Movement . What is the brand . Olivia ive been struck by these new android commercials. Look at that. I love this. Try to take a page from steve jobss book. Be together, not the same. How does that stack up . Kevin desperate. It is a try hard use animals, use babies. Tom 2015, young upandcoming is there a place for a peggy olson anymore and advertising in advertising . Kevin 65 of our people are females. They are all ambitious and taking charge. Tom its an entirely new formula. Kevin they take it to a new level. Tom go on twitter or facebook . Kevin go where the people are. The consumer is the boss. People have all the power now. Tom how do you watch the super bowl . Kevin as far away as possible. Olivia we had Tim Armstrong and he was saying 4 of all advertising is done by computers. Can computers get it done . Can they create movements . Kevin no. It is all iq. You have to add the ideas creativity, how you communicate with consumers is what has changed. You dont tell. Tom what does bloomberg do . How do you handle a global brand like bloomberg . Within that shameless plug, how do you leverage that . Kevin through your personalities and the emotion. Tom bowties is the answer right . Olivia he has those. Josh i like this point about iq versus eq. How much can you plan in this new world . You can design something before hand or you have to put out lots of Different Things and see what swims and then expand that . Kevin the answer is the second. No plan today. You dont have plan a and plan b. Tom where are you in five years . Im fascinated by where kevin the companies that win will be those companies that have iq, eq, t q vq, powered by cq. Smart people, iq. T q come on top of technology. Bq bloody quick. All powered by cq, creativity. Thats what bloomberg needs to be. Olivia and they are. Tom i was thinking dq. We should make a trip to dairy queen. Olivia time for the agenda. Cinderella hitting theaters today. Move over elsa. Kate blanchette playing the evil stepmother. Is there the same brand power behind a live action movie . Kevin not for kids, no. Disney were caught there is no great strategy behind frozen. They were bewildered. They were way late on the merchandising and music and way too late on the sequel. For kids, the magic of disney is the dreams and that his cartoons. Tom i cannot wait to see it. The casting is brilliant. Also, the casting at the federal reserve. Kate blanchette will be playing janet yellen. This meeting has snuck up on us and it is a big deal. Josh it may have snuck up on you but for economists, this is one of the most longterm anticipated meetings. Its not a burning fever right now tom can it move the market quickly . Josh it could. There are expectations that the fed will make some changes. Olivia you know who i could see playing yellen . Helen mirren. Tom she only plays world two. Wait, janet is a royalty. Olivia bill ackman the fbi investigating whether he himself tried to manipulate herbalife stock. Catch the interview right here on Bloomberg Television on Market Makers or go have a greats. Have a great weekend. Betty good morning. It is friday the 13th. We are live from bloomberg world headquarters. I am betty liu. Your nine minutes away from the opening bell. Have a great lineup for you. We are forecasting the economy and forecasting the weather two Different Things that affect every american. Former federal chair Alan Greenspan joining me in a few moments on why spending is stuck and why we keep adding hundreds of thousands of jobs. Plus, the skies cleared up. The activist ceo is taking over from the Weather Channel on verizon files. It was announced this week. Is it true that americans do not need the weather on tv as much as that used to . Then, i will speak with senator ron johnson who was one of the 47 senators who signed the letter to irans leader undermining obamas policy on a nuclear agreement. We will find out how he can defend that letter. First, a check at the top stories. The price of oil skidding to a fourth weekly decline. A