billion. merck announced it is snapping up sigma aldrich and a $17 billion deal. 7.6 billion dollar acquisition. hans merck's deal helps it move away from developing pharmaceuticals why is that important? >> this is a company switching midstream. i haven't had a new drug approved since 2003, and merck is moving away from being a pharmaceutical company. of theirl get 60% revenues from the pharmaceutical side but they're moving more toward chemicals and plastic. that is what they get with sigma-aldrich. they make many of the chemicals that go into testing and drugs, they get a big footprint in the u.s. as well. the stock sits at a hundred $40 per share and it closed on friday at 100. that seems like a 40% rhenium. -- premium. in to thes this fit overall strategy? becomings is clearly an industrial giant and wants to be an oil-producing servicing company. they have been eyeing dresser er-rand for some time. i know you have reported extensively on it, it is a veritable revolution. you have a german company wanting a piece of the action. money butis a lot of when you look at what ge paid that was $17 billion they paid a pretty penny on it it is a 37% since the news of the deal started to be recorded over the summer but he gives them a foothold in the shale industry is clearly what the ceo wanted how much our low interest rates contributing? both of these are cash deals. there is some financing. it is true of european and corporations, they have cash on their books that is sloshing around. looking for better returns and are doing it in an mende. -- m&a. tax aversionis the you're having in washington. these companies have a lot of cash and want to put it to use. troubles for tesco. they are deepening this morning. announced investigation into accounting practices at the world's biggest retailer. here's more with caroline hyde. it seems they have overstated rough it's. -- profits. >> you're right to the tune of .2 5 billion pounds. that is the equivalent of a whole year's profit. they have to understand what has gone on here to get into the detail. so clearlying on this is a serious issue. they have asays serious issue and have to delve into it. it is the third time in two months that investors have to swallow that profit will be lower than expected but uncovering some serious mismatches. what tesco has basically done is bringing forward some money that is coming in and delaying some cost that are going out is a mismatch of money. >> some heads are rolling over this one. executivesright, for to be precise. -- four executives to be precise. the chief executive will have to step aside throughout the investigation. we will have to see new people coming on board. total, fourd in executives have been told they have to step aside. there will be key concerns. some analysts coming out saying, they are flabbergasted by what is going on and it is not just the money, it is about the practices of certain key individuals. they say you have to be looking at fundamental questions over the chairman's position. so far the chairman has said he is sticking around. >> caroline hyde live from london. voices in global markets coming together as bloomberg markets most influential summit in new york city. one of them is jason thurman. five years out of the recession nearly 3 million people are still classified as long-term unemployed. why hasn't growth drop that number down more? jason, welcome. when will we see the long-term unemployed get act to work? i'm glad you asked a question because i do think the biggest short run challenge is getting the long-term unemployed back to work. the good news is if you look at the last year, the rate is coming down by 1.1%. three quarters has been the long-term unemployed getting jobs. you've seen the unemployment rate coming down fast. we have further to go but this is a problem we are in the process of solving. >> carmageddon the right kind of jobs? getting the right kind of jobs? >> wage growth has picked up in the last year and a half and that, combined with low price inflation means real wages are in the last 12 months. the typical pattern in recovery. first job growth than upward pressure on wages. do know this is something that has been perplexing. how do you start to see better wage growth and we have been waiting for six years. they're the only game in town trying to stimulate the economy. how much longer do you think it will take? problemnk part of the it's not 50 years or 30 years, we faced a serious set of structural problems with rising inequality and productivity not translating to wages. you're seeing a continuation of that as opposed to some brand-new phenomena. i think unemployment is coming down and you are seeing faster wage growth and that translates into real gains. >> there is a lot further. a lot of people feel that this has been the only game in town and we haven't seen enough from washington area all that we have seen has been enough to scare ceos from putting money to work. once we get through midterms will some of that the behind us? >> i would certainly love to see that. policy, of fiscal business tax reform is a promising area where we should all agree that if the highest tax rate in the world is not something the united states has -- enjoys having, we should lower the tax rate, close leave -- loopholes and broaden the tax ace. that would be win-win for america's competitiveness. i want to move onto tax inversions. a lot of those happening as of late. 61 have taken place over the last three decades. 20 in the last year and a half. it seems there is a real drive for corporate america to seek better tax environments. burger king making its move to canada. the treasury secretary said recently he intends to stop the economic incentives. what does he mean? something you will have to hear from the treasury when they've completed their work. the issue with corporate inversions is that a company thenchange its tax address use techniques to reduce its in the unitedts states and then use other techniques to get that money back. secretary isy looking at ways to make that last trough a double. some of these deals are not going to happen or have the same returns they would have. substitute with solving this issue with legislation. >> tough politically. what my it really mean. what might the administration do here? would they say if you're an american company, that is it? you will be responsible for u.s. taxes no matter what? >> i don't want to get ahead of , butthe treasury is doing the president has put forward a legislative proposal. it says that as long as you are in the majority, your taxes will be in the united states. that is a common sense idea. if you have an economic merger with a larger company of course you can shift their. a smaller company overseas and using as a sham, that is something that our legislative proposal would not allow. bob's frustration was that the united states of america will become like hotel california. you can check-in but you can't ever check out. he said really a smart business present -- person wouldn't necessarily do so in the future in the united states. it would look at other opportunities. do we run the risk of losing out on all of that by potentially forcing future companies to and lose there foundation of our economy? doubt that the best way to deal with this is a broader corporate tax reform. the centerpiece would be to make it more attractive to invest in america, to start a business here, to grow your business. even if we reformed our corporate tax system, republicans in congress have a 25% rate, the president proposed a 28% rate but most of those are higher than the tax rates in small island countries around the world. the united states will never win in a race to the bottom. you will still need some anti-inversion provisions. >> a hot issue and will continue to be. thank you so much. our special coverage of the bloomberg markets most influential summit continues with a conversation with mike bloomberg. miss30, you don't want to leon. an ipo for the record books. the biggest ever. ♪ >> alibaba made a splash on friday. the biggest ipo ever. 15% on strong demand according to someone familiar. it has an outperform rating. welcome this morning. very unique combination of size, growth and profitability. there are few companies like this. the only company that has the same characteristics is facebook. there is a lot of demand for a company that can grow this fast and is profitable. how do you account for the china factor and the risk taking with the chinese government? >> china is the risk and the reward. the risk being the unique governance structure. y in ahey regulate alipa more strict fashion. it also rewards, the entire growth is driven by the chinese consumer. that is the trade-off. >> where do you see the stock going? >> i think it should continue to do well. right now is in the middle of the evaluation range. it should do well, i would expect there -- the stock to be vetted over the next few weeks. i expect some bad news to come out to challenge volume numbers and business practices. a lot of things will come out but at the end of the day growth is what will matter. >> tremendous growth and tremendous margins which in some way separates it from other e-commerce companies out there. amazon being one. if you had to pick between amazon and alibaba, is alibaba going to win? it seems like is superior to amazon in almost every way. it is growing faster has a longer runway and has a more profitable as this model. timenly company with this a possibility is ebay and they are not growing as fast. alibaba is faster and more profitable than amazon. keep up these kinds of margins? isn't there going to be competition that makes it harder? competition is already quite intense in china come a but the marketplace is this model -- ebay has been able to sustain high margins and it has 40% margins in the face of competition. it doesn't have as much growth. alibaba has this marketplace model but it is growing in china. i think it can sustain very high margins. over 50%. >> now that alibaba has this money what will they do with it? least they will expand their ecosystem and china adding things like mobile capabilities, content and things like that. now they have substantial ability tovery good purchase with their share capital. i look for them to make bigger acquisitions outside of china in order to capitalize on this ability. perhaps even the u.s. or the west. any names before we go to break? >> if they wanted to extend quickly to the u.s. and europe it would be easy to buy ebay's marketplace. >> will watch for all of it. thank you so much. up, the data storage from emc -- firm emc is looking for a partner. dalio andlk to ray mike bloomberg. ♪ >> you're watching "in the loop ." i'm trish regan in for betty liu. hundreds of thousands marched through manhattan and cities climatehe world for change. organizers called it the largest ever demonstration. emc is weighing its options including a merger with wall street journal. it is under pressure from activist investors. a new way to get your news. the first virtual reality news report this morning. announced its headset is expected to go on sale in 2015 130,000lling development kits over the past two years. bloomberg tv is on the markets for you. whenever they markets correspondent. on the floor with the traders take on it all. we will take a look at futures for silver. they're trading near a four-year low. >> this is about the federal reserve. the moment we had fed projections come out on wednesday and suggesting they might be raising rates earlier, because silver is so well linked to gold in terms of trade, we saw silver take a hit. would you be trading silver? i think silver is down at a thingear low and a major here, it has solid support around the $16 $17 level. ouncee went up to $50 an this is what we broke up here in this is a natural level. i see a buyer here at the natural $15 level. it is tied to this bet, it is tied to other things bringing it down but it sometime those things will change. if things result faster, somebody has a chance to go to -- silver has a chance to go to $20 or $25. this is a great spot to take a step and take a shot at buying. todd would be a buyer of silver at these levels. he thinks it is headed back to $25 which is a profit of seven dollars and $.50 per ounce. is --ying 5000 ants ounces he would make a profit of about $37,000 for one trade. >> the bank of england is still talking about easing. there is still the industrial appeal of silver. if we hit the four-year low you might see people come to the market. are you looking at any of the fundamentals. you have to look at the metals. from a fundamental basis it looks like it is on a great level that we could buy. and the value is worth more fundamentally. they're selling relentlessly right now. >> time now for our word of the week. can you explain what it refers to? to buy the metal now and have it delivered immediately. don horowitz good to see you. we are awaiting some news out of the chicago fed. we are anticipating moments from now, the scarlet fu is digging into those numbers and we are waiting potentially on numbers out of apple. we will see how many iphones were sold over the weekend. that would be one million more than what they sold at the last around. fu who iso scarlet getting ready for the chicago fed numbers. is an economic indicator that draws on 85 different indicators as well. now, -- we have a negative read for the chicago fed national act in the index. the first negative read since january. the consensus was for a read of -.33. it has gone down to 0.26. we will keep you focused on what kind of market impact that has. you mentioned apple, the first weekend iphone sales topped 10 million. 10 million is the number we were watching for the iphone 6 and iphone 6 plus. keep in mind that analyst say this 10 million number is an indicator of supply more than demand because you had a couple of questions about complex production challenges. million is a way to prove that apple can execute on that. normally have a muted reaction to these first weekend numbers variant people want to see how it plays out in the longer-term. have sold over 10 million new phones. apple's shares surged up and have now come back down. they are higher on the morning. pointed out the reaction is muted. >> they topped 10 million because the expectation was around nine. there was concern because they were selling in china that they wouldn't do as well but an impressive number. a new record here. you wonder what this tells you about the overall economic global environment that we are living in where people feel that they need to buy this new phone the weekend it becomes available. >> as long as the product is what people expected, people are willing to do that. headline,add another apple says the iphone will be available to 20 additional companies september 26. look for those numbers to accelerate. included at the introduction so there were concerns but apple has sold more than 10 million new iphones. >> good news for them this morning. head of one of the most successful hedge funds ray dalio at the most influential summit. >> in an interview with charlie rose he spoke about how developing countries -- >> the critical thing in this country is for us to have more andvation, more technology in areas outside of computers as innovation ineed energy and health care. biomedical and transportation. there are many areas where we can be innovating. today technology means computers. >> would we lose our technology lead to china? not, because they have certain inherent social limiting factors. >> is a big mistake to underestimate china and i wouldn't say there is anything in the chinese culture that means they uncreative or can't innovate. i think the kinds of problems we have are different from china. china needs to copy things that work. you can skip a few steps. they don't need to enter they -- innovate. not much room to penetrate things that exist? atif they just copy things work they can improve things tremendously. he says airbnb is his fame it -- favorite of the next generation internet companies. you -- the folder near the full interview tonight at 8:00. ♪ >> the rockefeller brothers fund them a a charity that has its money from an oil fortune will get rid of its investments in fossil fuels. it will be announcing its divestment today. it comes one day after the united nations opens a climate science -- climate summit here in new york. the dow is set to start the week near an all-time high rising every day. more on what to watch in these markets. are starting the day lower here, but nonetheless at a new record for the dow. the market seems to be on this unstoppable tear and yet looming is a great -- rate hike from the fed. can we keep it up? >> you're starting to see fox that and if it from a rate hike going up. thoses on and on, all of in a positive way stocks are starting to outperform. in general the equity market is getting comfortable with the idea. we know it will be sometime next year. >> the most telegraphed rate hike. and atknow it is coming least for the equity market a don't feel comfortable with the idea people say the is doing well enough to withstand it. bonds are so low right now there is room for it to get higher. >> we also have the biggest ipo in history last week, alibaba. what does this tell us about investor sentiment overall? are people feeling better? >> i think it was pretty impressive that the market handle that larger supply of shares. technology underperformed last week and that is some people hitting out to get into alibaba. the dow closed at a high. the s&p is pretty close. as dee celebrated a little bit area -- bit. the dow has been outperforming all year. a little bit of catch-up there. >> you think about the u.s. economy and consumer spending and the challenges consumers are facing, 3 million people in long-term unemployment. 7.5 million americans working part-time. you have wage growth that is pretty much nonexistent. challenged, yet look at apple sales. 10 million. a tremendous amount of activity on the apple front. people are still buying products. and the consumer rebound and should we see something good in this news? own ecosystemts apart from everything else. it has been underperforming all year. one of the interesting things last week, fedex is hiring 50,000 people for the holiday season. that shows they have some faith -- maybe not in brick-and-mortar retailers that in consumer spending and general. going to get consumer sentiment later this week. up, ray dalio and bridgewater associates is joining us. >> news crossing just minutes ago one apple iphone sales. they exceeded the expectations topping 10 million devices sold during -- sold. analysts that we talked to were looking for 8 million or 9 million, 10 million is a new record. what does this tell you? >> more than 10 million phones and it tells me there was a lot of pent-up demand for these larger screen phones. apple was a little late to that game. stay with me. i want to get to the panel right now at that influential summit. peschel coverage continues with a panel of heavy hitters. speaking right now with mike bloomberg and ray dalio. >> in your form you're never going to be happy and you're not contributing. , bridgewater in a nutshell is meaningful work and relationships. meaningful work meeting we have to be on a mission together and i'm determined to do that with other people and the meaningful relationships part we are on that mission. then the radical truth and transparency, means to be a will to talk about anything including mistakes and weaknesses. surface them all to the so that we can deal with them. the idea of radical transparency is somewhat everybody see everything. we have a culture in which we take everything for everybody to see. >> video? audio, notd everything is video but that way there is no spin. that is an interesting way of doing it. i understand that your offices are all open. there must be something you find about that openness and transparency that is comfortable to you that is an extension of your values. >> people ask what is the difference between government and the private sector and i say, not that much. there is a handful of things in money fromthat move projects that don't to projects that work, but fundamentally, people are people. i want recognition and respect. one of the reasons i believed in an open seating plan with me in the middle is that if you complain that you don't have a good view, i'm in the middle of the room, i don't have a view. get back to work. you can come up to me and say high mike, and i don't have a walking by if you have cheese it's under desk and taking them, because i pay for them and because it is a way of communicating. ever watch the president of the united states arrived at an 747 and thisp on a pomp and circumstance and they play "hail to the chief." and he gets away and says i'm not a crook and they walked down the stairs. you are fascinated by it. what you don't see in the back of the plane there is a ramp that comes down than 200 people get off of that plane. everyone of those 200 people have said to their families, i'm sorry i can't come back tonight, the president needs me. they get way compensated with recognition and respect. i think open plan does that as well. people want access and if they have it, even if it is just hello, that makes them feel part of it. governmentyork city for 12 years the number of times you saw a story in the paper that says an unnamed source says, almost never. you could count them on two hands in 12 years. people felt part of the administration so they didn't try to leak it to gain favor with the press or to get even for a slight internal war. >> when i give people fancy titles and promotions? >> i give you a title and you think you're better than the day you were before or you look for a job or you want a raise. number two the guy who didn't get the title is pissed. you know who you work for an you know who works for you. all titles do is discriminate in a needless way. why do you want winners and losers publicly within your company. loserst to help the become winners and keep the winners with you. you don't have to rub it in people's faces. >> what you hear, it is deep seated. when mike started his business had these things in him. the culture reflects what people have in them. for me i didn't want to have spin. i wanted meritocracy. everything in the company for everybody to see. now you haveright a separation with your ceo. all of that would be taped for everybody to see. >> do you need to do that? isn't there some level were dirty laundry is a need to be shown? >> i'm sure there is some level. me we're talking about personal values. i think it is important not to have spin and to be able to see people who are struggling and what the issues are. to see things firsthand and the transparency that you get by being able to understand with no spin. it is an idea of meritocracy. this is the deepest value. if i want thoughtful disagreement which i need to an opinion that is different from the crowd. that, to have thoughtful disagreement to work that through, is tremendously productive. it builds trust. there is no spin. when you drive people down so they don't know what is going on and everybody is talking about what is the real deal, they can't bring up what they think is that. in our company, everybody has the right to make sense of anything. i can be challenged by anybody and i had to be in front of the company and have a conversation about that or everyone to look at. that keeps it as an idea meritocracy. those are my core values. nobody says whether it is right or wrong. it's not the right place for everybody but to people who can't go to other places because they can't know what is true. >> because you had an extreme philosophy is it difficult to maintain diversity of thought because you are bringing people who need to be like-minded. >> the type of people that we have are the type of people who don't want to be in an environment where they have a particular thought. they're the people who want to disagree, to be heard and work through the disagreement. accountable hold me or others for answering their questions. what they bring to me are the problems and the issues that make us better. us areple that come to the people that need to be themselves and need to argue and make sense of things. >> you have to have some structure in a big organization, but people who are really competent and proud of their abilities want to be able to have some authority to go along with responsibility. delegating down and letting people make mistakes but defending them, if they were that isgood conscience, how you get good people. anybody would put together an administration like we had for 12 years. most of those people would never have gone to work in government. they didn't have the ability to affect change. the same is true in the company. you have to be able to affect change. if people who you want need to be a will to affect change. businessy running a has to be able to make a decision. these types of decisions can be made openly as part of that conversation or they can be made behind the scenes. idea meritocracy is important to make those decisions openly. >> i have always said to managers, if you have to lay somebody off which is never wasn't, it may-- turn out better, but the rule is if the person that you are letting go is surprised, you didn't do a good job. your job is to help those people when they are not doing well to tell them and tell them what they have to do. if then after all of that it doesn't work, then is this is or governments run to help their stockholders or citizens and you have to make those tough decisions. a manager you have the obligation to help your employees. every time i've had to let knew, thank while i you for the help, in ways i'm not sure i would've been that nice about it. i have stayed friendly with all of the people. everyone became a bloomberg customer so it is hard to not -- [laughter] >> patty responded to the criticism that you have a cultlike environment westmark -- environment? >> toldulture means we have her that we are living it every day and occult means people are following without thinking. they have to work through the thoughtful disagreement. you have to have a system. that means you have to have a culture. the united states has a democracy, these are things we believe in. does that make it a cult? i think you attract people who have similar values. if you don't have people who have similar values or you don't talk about your values, then you have no values and you're going to be at odds because people work for different reasons. some people are working just to make the most amount of money. some people are working just to have an impact. some people are working for community. if you are not clear when those things, thoughts, you're going to have important disagreements. being clear about your culture is important. >> i don't know anything about the automobile business but i would bet anything that chrysler, ford, and jim have different cultures if you worked there and get they fundamentally do the same thing. sometimes one is up on the other is down. works forthe culture an environment and sometimes the culture does not work when these he diced -- when the zeitgeist is different. answer to it but clearly, google would have a different culture than ibm. whether google and twitter have different cultures, they both are new company so it's hard to see and people go back and forth but eventually, even those two companies fundamentally have tracked the same kind of employee and will have very different cultures and very different politics internally. they will have different levels of success. >> we're all living out our deep-seated desires or deep-seated wishes, some of which are even subconscious. mike is living it out and bloomberg will reflect that. the fact that he is describing a culture the way he is and the fact that he went into public service the way he did and then evolved is already a flexion of what he is living out. what are you living out, tell me? m, i'm living at the great american dream. i came from a family -- my mother once said when someone accused me of doing -- of getting something because of influence, she said the only people we ever knew was names ran the paper were in either the obituary or the crime section. i will never forget going to harvard business school my first year and i met the sons of people whose names were in the newspaper. i was so impressed with myself. i was with chuck thornton's son. nobody remembers who he was but one of my friends father's rent pillsbury or grumman. i had a chance to meet people -- i have a chance to meet people today -- i never met justin bieber. i don't know who he is but i met j-lo. [laughter] you just said j-lo. >> who knew/ i have a chance to do something and the company's culture was ktoroff. became dan doc dan's culture and the way he manages is very different than mine. having said that, he did a spectacular job while i was away. i am sorry he has chosen to go off and do something else and he will stay in the bloomberg family, joining the board of the foundation and you better be nice to him because he will do and of your compensation which i have asked him to do. there is no one answer to what the right culture is. awever, i believe i would run company is the right way and he believes the way he would run a company is the right way. the answer is there is no one right way. >> there is no one right way. there are things that are complementary values and then there are ways that are at odds. for example, there are some organizations which are very hierarchical and autocratic in nature. there is other types of organizations. there is a simpatico. in order for your organization to have closeness and to build admission, that basic simpatico has to exist and there could be variations. if the change in the organization is so great, the organization cannot jump from one set of values to another. i imagine that while it might be different as you went through that process, it cannot be that different because you cannot expect those core values to be at odds. >> you said people all go to work for different reasons. why do you to go to work? clearly, you have extruded -- you have created a short area businesses and it made more money than you can spend. what makes you get up every day and run bridgwater and mike, why do you want to come back and be at the helm? >> my alternative is to stay at home and talk to diana about feelings. [laughter] if that does not get you back to work, i don't know what would. >> i cannot follow that . [laughter] for me, it's personal evolution. and be theake on best i can and do that in a symbiotic way with meaningful work and meaningful relationships so it's like skiing. i want to get better and better at skiing, it's a passion and i like getting better at it. who areat with friends in the same mission with me is like a dream come true. it is symbiotic. i believe in a community and having a symbiotic relationship. >> i think every successful person has a little bit of a tension -- as a little but of attention deficit disorder and want to keep doing things and have lots of things going on at the same time with lots of challenges. a lot of those people do things in the philanthropic world or the athletic world or the arts. successful people are driven. that will -- from the moment you get up to the moment you want to go back, -- you go to bed, you want to be overscheduled. there is no greater high. >> do you feel the carefully constructed culture you have would go away if you're not at the helm? >> no, i feel like a parent of a 35-year-old. it's up to them. you have raise your kids in the best thing for them to do is make their own decisions. they willse them well be happy. the important thing is not to do it my way. important thing is to know how to do it for them to get what they want. bloomberg,ase of it's not clear if the company had been there i would have been successful as we were in the last 12 years. >> how hard was it for you to release to them/ >> i'm sorry,. go ahead. >> i never looked to the past. if you asked me what i did yesterday i couldn't tell you. i can tell you what i'm doing today and tomorrow but you have to have the confidence that you left something good and everything is not going to be the way you want it. people keep saying what do you think about my successor. i won't talk about it but it's not my job. i left what i think is a great legacy and hopefully whoever comes after me will build on that. , would've,hould've and could've. who are my age but i am 72 and most of these people are 65 or so and the just finished great careers and they cannot do with the fact that the press does not call and say what should janet yellen to or who will win the super bowl? all of a sudden, people stopped calling them and they cannot separate the job they had from who they were. i don't have that problem. howoes that indicate insecure titans of industry are? >> some are and some aren't. at a certain stage in your life, it's pretty healthy to have transitions so that you can go on to do all those other exciting things you are doing. i am the same way. i am running around like a kid in a candy store. there is so many interesting things. there is neuroscience and so many different interests. the important thing, most importantly, it's like being a good parent. being a good parent means the next generation is self-sufficient and they are strong. not that you are the big shot, they are. they need to be strong and capable and independent and that's the joy. >> there are plenty of people who have gone out of running a big company and built other things and devoted their lives to other things like family and charity and helping young people get going. thomasano whosam ran ibm and the people who ran the big banks who have gone on to real careers in philanthropy. guys cannot those handle the fact that nobody called think they are not getting on with their lives. it is six months later. suck it up, i guess no one will call me and it goes out of your mind and you have to do something and you move on. >> there is a joy in mentoring. suck it up argument, what do you make over the last year of the criticism that bankers are making young people were too many hours per week and they are going to adjust it and millenials say they are not going to work for a big company and want to do their own thing. do you laugh at that given the thousands of hours -- you have perave put over 100 hours week and you have 24-year-olds saying i don't want to work for goldman sachs if they make it work that much. >> last time i checked, there are a lot of people that want to work for goldman sachs. always somebody who says that in they will get in the newspaper and it is good theater but the number of people who want a law business -- i don't understand why they would but you were karen is hours for a long time. it's a very tough -- you cannot have any personal life for the first 10 years if you want to be successful. many people do and the same thing in investment banking. go to work for macy's. if you want to move up, you have to work hard. my strategy has always been to at work the other guy. i always want to make sure i was the first one in the morning of the last one to leave at night and take the least vacation and id that my desk and talk to people. . >> it's great working for someone like that. [laughter] >> you don't have to. you seem to love it and you thrive and you are a doing a great job because of that. >> we are not exactly the same meaning that i think we have a lot of people who work real hard, too hard. we think it's a good thing to make sure they have a good work/life balance. the point is that there is no right one-way. people who interpret one organization as being one way and another organization should be that way, they should not make judgments. a group of people should gather around whatever they think is the right way to operate in that culture and then find the culture match. i don't think it's appropriate to comment and criticize either that they are working to hard. those people can go wherever they want. people have a lot of variety to choose from. i think the most important thing for anybody picking at job is the culture they pick, not what the salary is. out and self-actualized, you have to be in an environment that suits you and is that kind of match. >> we have a whole program to try to get people around the world involved in their communities and the arts and mentoring and a whole bunch of things. that is to make our employees have a chance to network and find girlfriends and boyfriends and spouses and all the things young people want to do, have a good time. we expect you to work hard. if you want to get paid, you have to work hard. that's the way capitalism works. there was a professor at harvard who studied happiness. it was very interesting. pass the poverty level, there is no correlation between money and happiness. the thing that was the highest happinessn between was community. if you have a sense of community, that's a very our full influence. a very powerful influence. that extends to culture. what mike is talking about in terms of how you bring your people together in community, this is important and effective. >> remember, happiness cannot buy money. [laughter] >> when you think about the financial industry, it is filled with egos, filled with people who love to have their stuff. >> it's the media business. by comparison, people in finance don't have egos at all. try athletics. finally an industry where people do not want to have their rings kissed. >> how do you get them in the door and break that down? >> we break it down. >> i get that. >> just deal with reality. everybody sees how you struggle. everybody is struggling. if you are not struggling, you're not operating at a high enough level. job, and go a new to higher levels, you will struggle and fall. if you want to be powerful, you have to have humility. >> you to run companies were the walls are broken down and there is no senior boys club. when you look across industries, why is it that we still don't see enough women or we don't see any women in really big positions? >> we have actively recruited. we agree with you. to attract women is a difficult thing. i think you can probably answer better than i can white women are less likely to apply. street -- 100all women in hedge funds -- we go to them and our ceo -- we have two of them -- one of them is a woman -- we do at that question and she faces questions like we face in terms of why isn't that? i don't know, you tell me. is there a perception that this is more of a jock-like culture or do they feel excluded? >> if you compare bloomberg television to cnbc where i can look at the screen and see whether it is male-female, we have more women than they do by an awful lot. our presenters and stars are female. if you go to the engineering side, the data processing side of our business, we do slightly better than what the engineering schools do. you have to have a base. at johns hopkins, i think it is up to 35% women. when i was an engineer there, it was an all-male school so it was zero. the problem you have is the pipeline problem to some extent. there is also discrimination. i don't know whether it is true males except females are not. my perception is that young people are very worried about hiring older people. older people have no problems in hiring young people because they are the only people that come in the door. >> younger people don't want to hire older people, why? >> that has been my observation. you'll always -- they will always find an excuse. they might not fit into the cultural they don't have the latest technology. given i'm 72, my sympathies are with the older people but i have always wanted to have somebody that judgment and experience and had been there. risks get them to take and try new things. i think that's the easiest thing to teach. to read a book on skiing and they could can ski is ridiculous. get me somebody that has queued for a long time and i will teach them how to get on a snowboard. i think that's easier. >>.i would see that video . why not take either of your company's public? >> for me it would be a nightmare. i don't want the whole public as partners. >> radical transparency. >> what would it do for you? the money? i have enough money and when i you can'te money -- pick your friends. i want to be able to pick my friends. it sounds like a nightmare to me. [laughter] to0, the scrutiny and the demand for quarterly profits. stockholders have different interests. someone short-term profits and some want the long-term and that's fine. i only have to worry about one desires interests and and that's everything i want to build and the company and a goes to the foundation when i die or if i sold it before then. long-term and we have been generating enough profits to take care of the philanthropy. last year we gave away like $450 million. it is structured to do what i want to do. youou had outside partners, would have to listen to them and do some of what they want. nothing wrong with that but there's no reason to go and get those and have that diversion of what you think the company should do. >> who have you wanted to satisfy every day? has it been customers, investors, your bosses or do you simply want to satisfy yourself/ >> i don't break it up that way. i want to have friends. to havee people i want relationships with. that's the way i look at it with. there are people inside and there are customers outside. i won't have a customer that i don't want to have a relationship with. relationships, it's all that goes into having a good relationship. how we care about each other and what we like together and can you be frank and hard with each other? are you operating by principles? all of those things are important. our relationships with our clients are like your relationships with the people there. i don't distinguish them. >> i think you have to be able to describe your kids what you'd did during the day without masking it or avoiding telling them the one bad decision you made for political reasons or selfish reasons. if you can tell your kids honestly what you'd did then you probably did the right thing. customers are everything, our employees are everything. those are the two groups you have to work for long-term. if you are open with them and talk to them-- today, is mayor, even walked down the street and there is a police officer and i will cross the street to go shake his hand or her hand and say thank you. that is what they care about. by and i amk comes a purist the garbage truck does not stop in the guys it out and take a third lausanne, richard shake hands. that's because i tried to help them. they are part of our city. i have always tried to have a relationship with every city employee. there are thousands and you cannot shake every hand and a lot of them you don't know what they do but you've got to treat people the way you would want to be treated whether they are customers or employees. , peopleo that honestly want to believe you are genuine. i have always thought that george w. bush got elected and reelected not because people like him but they thought the bushes were genuine and they were. bush whated george w. you thought was right, he would say yes and pass a lie detector test. whether you agree with him or not, there is a genuineness that people want to believe in. that stephanie ruhle is crazy but she has always been consistent. she always thought you should enter the stage left or right or do this or have this kind of question or whatever. that is what makes you you. but they don't want to think that you are making it up. they want to believe you really have values. >> we are out of time but thank you so much for having a relationship with us this morning. [applause] thank you. >> thank you. >> thank you, everyone. >> thanks very much, stephanie and thanks to mike and ray. a dynamite way to start things today. >> that was the big boss and ray dalio - happiness can never by money. we will have much more from bloomberg markets most influential summit said don't miss it, it is happening all day here live on bloomberg television. i want to take a look at the top tech stories. theosoft has delayed chinese rollout of its xbox one videogame console to the end of the year. they say they need more time. china has listed a 13 year ban on consoles. google will partner with htc to buy a nine inch nexus tablets. they have not made tablets since the smart tablet flopped a few years ago and nasa's maiden space probe is orbiting mars. they are studying the martian atmosphere. i want to send a manned mission to mars within two decades. tech up on the latest in and media every weekday at 1:00 and 6:00 p.m. weekdays right here on "bloomberg west." i want to turn my attention to alibaba and the massive ipo that raked in $25 billion. what's next for them after a huge payday? cory johnson is with us now. a busy week last week for you. there was a lot of excitement on alibaba last week. we sought to mend his demand. now what? now that it's listed, what does it do next? any acquisition targets inside? >> theoretically, their view should be the same but for the ipo. for investors, they've got to look at this company and at $68, it's a different company. one of the most important parts of that is how fast will it grow. toibita is important. the way the company is valued, 54 times operating running, are difficult but the company is not growing that fast. you got to expect growth not just to grow to the level of the price to operating profit level but also maybe grow faster into the grout -- and to the valuation. something will have to change. >> let's contrast this with other e-commerce companies such as amazon. anyway you slice it, this is a company that still has much better margins and is making serious profits. isn't that something that sets it apart? you cannot just look at four or five different companies in and comparenesses their valuations without looking at how successful they are at growing. fundamentally, it has to be about growth. a company trading at 10 times earnings might deserve it. a company like alibaba that is growing at 20 times year-over-year will have to start growing faster. you have to imagine some kind of change in the business to grow into that valuation. --estors were hoping some for some changes occurring in that business. >> we are watching a little bit lower in the premarket so we will see how it shakes out. thank you so much. . it's 26 minutes past the hour which means we are "on the markets.' let's check the futures action. you can take a look and see we are a little bit lower as we go towards the open, minutes from now. apple front, we saw the apple numbers come out with iphone 6 sales coming in at 10 million, more than 9 million people had anticipated and more than the 8 million we saw last time. market watch the futures carefully but it looks like we could look at a lower open. we are "on the markets". again in 30 minutes it's time for the countdown to the open. , the most stocks important trades and stories you need to know about. i am here with olivia sterns so we will walk you through all of that. let's start with intel. the israeli government approved their plan to upgrade a manufacturing plant in the country, the largest investment by a foreign company in israel. shares are up 50% so far this year. apple is selling over 10 million iphone6 models in its first weekend. the number topped analyst estimates and set a new company record and tim cook says it has sold more devices than it had before. >> number eight is finish line which was downgraded to equal weight. they lost market share in the second quarter an analyst at morgan stanley do not think that loss affects the shares. >> number seven is clorox with takeover talks. a bid was rejected from a competitor with him the last 36 months. iconist investor carl offered to buy the company back in 2011. >> number six is microsoft postponing the launch of its xbox one and china which was set for release tomorrow. it now says the game console will be released within the year but does not know when. >> number five is yahoo! sanford bernstein downgraded the stock. bank of america cut its rating to neutral from a buy as they say is no longer the best exposure to alibaba. longer in the sites for that company. number four, siemens is buying the company for $6 billion. europe's largest engineering per stock.l pay $36 >> shares are surging after company agreed to by the chemical company for $17 billion. it's a 37% premium. emc, it's saids to be weighing options for a sale or merger with arrival. it recently held talks with dell and hewlett-packard but the status on both is not clear. >> there is the ballot here we are at number 1 -- it's alibaba. all eyes are on the chinese e-commerce company as it kicks off its first full week of trading. shares were soaring 38% on the u.s. debut friday, the biggest first-day jump for an ipo for $10 billion. shares are trading down just at data and we will see how the day shakes out for alibaba. as the markets kickoff, another week of trading and i want to bring in anastasia amoroso. she says the strong apple iphone 6 orders in the alabama successful ipo or testaments of investors appetites for growth and willingness to invest. i think it is overall a positive sign when you think about sentiment. >> that's absolutely right. both of those things are positive. the iphone sales is a testament to the fact that consumers are back and we know how meaningful that is to the u.s. economy. we know how meaningful it is to corporate earnings. on the back of bad unemployment numbers and disposable incomes, that supports the notion that we are hungry for innovation as consumers. as investors, we are also hungry for innovation as well and that's why alibaba was the success it was so far in the first day. everything weents are out to find in technology ore e-commerce and retail mozilla, data analytics and virtualization, social media as a means of marketing. it's not surprising that investors have responded. >> do investors have too much appetite for that second byron? you look at other valuations. $18 billion orr, app acquired for $19 billion. oculus is getting acquired for $3 billion. these big deals in the tech space, is there any reason why we should worry that this is like 1999? >> the first thing to note is that the ipo issuance is not quite what we saw in 1999. we are still below those limits. the reason why investor appetite remains supportive now is because we are looking for secular growth and cyclical growth. as the fed starts to tighten policy, it's the gross assets we are out to find, not the yield assets. there was some research that we can out with insider buying and selling. year to date through september 12, you look at around 7000 or so on insider purchases of shares. you have 23,000 that have sold their shares. that ratio is about the lowest, around 2000. in other words, a lot of insiders are selling more than are buying. not only that, they don't want to use their money to buy shares but they're more than happy to use corporate money to buy shares. we have seen this blockbuster of buybacks, 270 million dollars this year. what does that say about what they know that we don't know? >> that needs to be put in a different context. of course valuations are not as cheap as they were. it's only natural from the private client perspective to want to pocket some of those gains. the ceo of public corporations are private lines and looking to protect and build their network. i would assign that more to perhaps that development rather than saying there is no upside left in the tech market. i don't think that's the case. >> thank you for getting the wardrobe memo. >> we are very patriotic. what is fueling the rally? andsay you like materials over the weekend, the g-20 met and the chinese finance minister said some things that have markets a little worried. he suggested the chinese government might be shying away from stimulus. he said there will be no major policy adjustments. spur growthrms will suggesting reform not stimulus and he says the response to the wrought overcapacity so we see a bit of a selloff in asian equities this morning across the board. commodities are trading at a four-year low. why do you like materials given this macro context? >> there is the china and the u.s. aspect. let me talk about china -- but comments he made our right. there is no major stimulus. however, the keyword word is major. there is a lot of minor stimulus that china has been pumping into the system. they do this periodically. they dumpices rise, the brakes. if home sales and rices go the other way, which they have in the last few months, they start to introduce mini stimulus. whether it is lending to the banking sector that will find its way into the economy or whether it's additional infrastructure spending, that's the type of mini stimulating we will see. we are talking going from 7.1% to perhaps closer to the 7.5% level. it's not necessarily a one-year out look. it's not a to your outlook. i think it's a short term headed into the fourth quarter. you got china adding stimulus and you've got the pricing of the ini stimulus and the pricing of iron ore that has had absolute lows. inventories of also hit those lows. that is the idea going into the fourth quarter. >> interesting perspective. thank you for joining us this morning. coming up next, we will talk about the nfl with more fallout. sponsors are considering breaking ties with teams. we will hear from a former nfl agent plus, we will go back to the bloomberg influentials summit. leon cooperman will be with us and we are minutes into the session. the s&p and nasdaq are all attached lower and alibaba is lower as well. we will have much more. ♪ >> nfl commissioner roger goodell rejected suggestions that he would resign even if he admitted his leg had yet to " get our house in order when it comes to responding to cases of domestic abuse by players." the nfl will form a personal conduct committee on players behavior off the field. brand relationships have been swifter to put their feet down. agent is owner brand strategy. it is with us. it seems as though roger goodell and the nfl have just had fumble after fumble. i might argue that right his press conference was just one big fumble in addition to the facts. what was your take? >> it's hard to get a clear answer on what roger goodell is talking about. some factse to get from what he was trying to tell us. from a brand perspective, where are they now? if you are affiliated with the nfl, what is your take away? that's the bigger question. >> the reality for these brands that you are affiliated with the nfl and there's a good chance you are affiliated with an organization that seems to be quite permissive of domestic violence. that in and of itself is the heart of the problem. >> it comes down to their policies. i don't know that they are but from a brand perspective -- >> suspended six games? that it is that his taking them so long to react to so many of these issues. they had a hearty from the carolina panthers still out there playing despite having been convicted of two accounts of domestic assault and threatening his wife's life. it has been one after another. and you are brand running pepsi -- i look at this and say this might be more of a liability than i would want. watchedfl is the most sporting event as we know on television. brands have to be aware of where they align themselves. roger goodell should pull it together on those particular issues. any brand or particular applicants to be very aware of what that athlete is doing individually. there are risks inherent with associating with brand with any athlete or any sport. look at soccer or basketball or any major league sport and they all have disciplinary issues. >> we saw procter and gamble pull out of the nfl's breast-cancer awareness program. we saw the radisson hotels pull its funding from them. strong statement but did not pull away any money. is this taking on a life of its own? >> it seems to be. it's a broader issue of how athletes are perceived and how them. affiliate with a brand needs to make the decision that they will associate with an athlete or celebrity and there is inherent risks. it is incumbent on the brand to protect their equity and that's what you are seeing. some are more tolerant than others. jr, this does not really affect them but s.e. johnson is much more sensitive to this. imagine ofor me to any brand being tolerant of what we have seen from ray rice and adrian pederson and greg hardy. thank you so much, we will have much more, i am back in two minutes. ♪ >> everyone from leading bank is to policy makers and invest in destin investors are at the bloomberg most influential meeting in new york today. >> thank you. i am here with leon cooperman, founder of omega. calperse it about you, is polling your money out of funds, will you make the rent this month? >> i will try my best. >> what do you make of this? >> maybe i can read a statement. i made a comment to my team over the weekend. we were arguing back and forth with e-mails. the answer is resample -- they are probably in excess of 10,000 hedge funds with differing objectives. monolithic. there are macro funds and market neutral funds in small club -- in small cap funds and long and short and credit funds, etc. these funds should all have performance executives clearly stated and articulated. account invest because they are accepting the projections. time, if itive underperforms the objectives, you should expect to be fired. if the client changes the objectives to measure capacity -- calpers and north carolina are underperforming their benchmarks because there has been a trend in bull markets and they want to change. if you saw me whether you are an individual or institution i would say these are my objectives. if my objectives don't fit yours, i would rather you not invest because that's the asus of a flawed relationship. my objective for all make a is i'm a hedge fund. i could be long or short or down or up. i have had down years but i don't change objectives. i want to beat the s&p 500. i am not market neutral. -- i want to beat the s&p. i don't want a lever sportfolio. my investors. to have less market volatility. that is my value proposition. if i underperform value proposition, i should expect to be terminated. that's better., there has been a trend in bull markets of march of 2009, and anyone running a hedge has been underperforming and we tend to be less hedged so we are in line with the market. people are unhappy. weathers the light time to change, i am dubious. >> calpers has been overweight rabbit equity, not hedge funds. are they looking at this the wrong way? >> i don't know, i cannot speak to them because they are not a client of mine. i would observe that they have probably underperform their and have paid s&p financial fees are not happy and want to change their approach. in 2008, remember reading many articles were they were overcommitted to private equity and were having issues regarding capital calls to private equity. 20 is the answer that2 in is not the problem? in the last six years, everybody and their brother has been on the sell side. money goes where money is treated vessel hedge funds grew because they were outperforming conventional. on till 2008. in 2008, even though they got substantial redemptions, they went to hedge funds but they did not understand what they were doing. was down 18% and the s&p was down 35%. they were download much less on the market. money goes were money is treated best. as ar two, if your choice money manager was to work in a neutral fund and many of them are fine operations, managing my for one percent or less, or work for a hedge fund, you would rather go for 2 and 20. the compensation scheme is so much better. it has attracted a lot of people who are not able as they should be. everybody knows how to swing a golf club and some do it better than others. it's a watching a process. of the 11,000 hedge funds, there will be a failure rate but that does not mean people will try our it's always a good value concept. funds ask about hedge being monolithic. there are dozens of different kinds. >> money seems to be treated best with you. what do you like? >> i am underperforming this year, up about five or six percent which is behind the s&p which is unusual. i have no shortage of ideas. likee to mention things one that was down 29%. >> what company? >> i didn't mention it yet. monetize. it's a mobile banking tech company. they provide their software on your smart phone to enable you to do any purchase you want to do and pay bills or your mortgage or move money to accounts. unequivocally, it's one of the rapidly -- most rapidly growing areas of the economy. the customer wants it because they don't want to go to a bank. they want to do their banking other phone in the bank likes because cheaper to service a customer on a smart phone. there's no question about the growth and demand but the issue is if they have a better mousetrap than someone else. that many years ago, these amid a large investment in the company. mastercard put in $25 million a few months ago. recently, they did a deal with ibm where they took on 500 monetize employees to market their product into the banking and financial services and astray. visa said they will reduce their ownership of equity and bringing more divisions in-house but they were more -- they were not part of the big road plan. >> does that change your view on traditional banking? >> no, theoretically, it makes it more efficient. it is cheaper to service a customer on a smart phone, it has no relative effect on banks. >> as of june 30, you have ebay with a big holding. now we've got crazy about alibaba, is that -- does that make you concerned? >> i got some of that, too. >> george soros said you can never be big enough on a winning trade. >> doesn't make you want to not be so long? >> we own ebay because we think ultimately the right thing for them is to spin out paypal. we think the two parts would be worth 20% or more and we kind of agree with carl icahn. we tend to be more passive rather than actively expressing our views. ebay knows arab views privately. -- we think they will resist same conclusion. i don't think apple pay has big implications. >> are you bullish on domestic energy? >> yes, given what's going on the middle east, having ownership of domestic oil and gas reserves in the united states makes a great deal of sense. the group has been under pressure of late the cause of a decline in gas and oil prices. when you look at the middle east, it seems that you want to have a decent exposure to domestic oil and gas reserves. we buy something that down a lot, we own a big position in sandridge energy and tpg launched a proxy fight and was highly critical of the prior ceo. they said the asset is worth 11 or 12. they won the proxy fight and replace the ceo and the stock immediately went to seven and now trading under five because of the decline in oil and gas prices in the ceo got up in front some analysts and said the asset type of the company is between 9-15 dollars per share and we think it is 10 and the stock is under five. >> you make it sound like this is a stock picker's market. does that mean volatility is going back? >> i think volatility in individual stocks never left. i think it's a stock picker's market and it's not priced to perfection but it's reasonably fully valued. i think people cannot dismiss the significance of zero short-term interest rates or 2.5% government rates. if those rates are right, it tells you returns and equity are going to be more modest going forward. last year, the market was up 30% -- twods returned toward point three percent. inflation was 1.3%. you cannot keep making 30% per year if interest rates are zero. i think the market worked 16 times earnings. if you discount next year's earnings in the fourth quarter of this your computer to a market maybe 25000 and the s&p which is where we are. john temple said bull markets are born and despair and growing skepticism and mature in optimism and die in euphoria. there are not many signs of euphoria other than the ipo market. market is basically ok and i would be surprised if it went up a lot. >> you and i have to leave it there because we are about to influentialthe summit. we will sit down with howard marks. i will send it back to you. >> thanks so much. have a big afternoon coming up for you on "street smart." i will see you back here at 3 p.m.. the president of the world bank will be joining me as well as valerie rockefeller of the rockefeller fund. they are getting entirely out of the fossil fuel stocks. is a family that built its fortune on standard oil. olivi stearns will bring you up-to-date on the markets. we are about 30 minutes and the trading day. afteres are moving lower commas from the g 20 meeting in australia over the weekend warning of uneven global growth and comments from the chinese commerce minister that the chinese government may not be ready to throw a wall of money at the market. on the bond market, treasuries are getting with yields coming up for third day in a row. the correlation between stocks and bonds is usually important to watch. would typically be a sign that you should sell stocks but rbc capital markets says not so fast. we find out why things might be different. his studies show that mainly because yields are coming off historic lows that the correlation is positive between stocks and bond yields. when yields rise, stocks actually go up as well i'm about 61% of the time. until 10 year treasury yields reach five percent and the correlation reverses. coming up on >> why do they reverse? >> once these low yield start picking up a little bit, it seemed as a sign of optimism and growth. that is where we are now. the fed scheduled hike interest rate sometime next year and that plays a role. >> we are excited about the bloomberg most influential summit so we will get back out there. a special edition of "market makers" is coming up. ♪