Overall. Let me read to you from the minutes to a majority of participants judge that the participants he was declining even though purchases to continued. What were they worried about in terms of costbenefit analysis . The minutes go on to say participants were most concerned about the marginal cost of additional asset purchases arising from risks to financial stability. Financial stability. In the end, they decided to by 10he tapering million per month. There was a healthy discussion about whether Economic Conditions were sufficient enough. Let me read you more from the minutes other participants preferred a larger reduction. Future reductions they would like to see a more deterministic path of the taper going forward. More guidance to the market as to exactly what the pace would be and when the entire thing would be wrapped up. We did not get that at the end of the day. There were other discussions in here about the Forward Guidance language. There was some discussion lowering that threshold of unemployment to six percent from 6. 5 . In the end they did not do that. The decided to beef up their Forward Guidance line which to make it clear they could prevent could hold off on raising until well past Unemployment Crisis that six percent threshold. Discussions, a little bit of a surprise not a surprise, testingc members a reverse repo program. This is part of what they are doing and their exit strategy. It was deemed that testing was successful and should be expanded. It is also contained in the minutes here. Headline the idea of measured steps. Janet yellen taken the helm. What has been the buzz around d. C. E most economists are saying she will continue Ben Bernankes work. Most economists are saying she will continue Ben Bernankes work. What we see in these minutes, there is certainly no indication of any new course or path of action on the part of the fed run by janet yellen. I think we can expect more of the same. These minutes suggest there has been some Pretty Healthy discussions about the pace of purchases. While he agreed to do 10 million, apparently some in that room favored a more aggressive we aggressive move. She seems in lockstep with ben bernanke. That is the most Important Message washington is focused on. Thank you very much. Peter cook joining us there, our chief washington correspondent with the very latest from the fed. From breaking fed news to breaking sports news, we are going to get you out to the breaking news asked. Mark crumpton is there with details on who has been admitted to the home the hall of fame. Which families are going to be making trips to cooperstown . Selecting three riders to the Baseball Hall of fame. Maddux, tomy, greg glavine, and frank thomas. The firste two time in a long time that two pitchers were voted in based on eligibility. Maddux and glavine were teammates in atlanta from 1994 through 2002 and they helped the braves win 10 Straight Division titles and they won the world series in 1995. We should mention some notable names did not make the cut, including the former Houston Astros greg mike piazza, and jack morris in his final year of eligibility. Barry bonds and Roger Clemens caught up in that steroids scandal. Linked to the scare that to the scandal, dark maguire of the st. Louis cardinals and the oakland as. Mark mcgwire of the st. Louis cardinals and the oakland as. Former great from the Chicago White sox, frank thomas. We will have more as we get more information. Back to you. Think you so much. Mark crumpton joining us from the breaking news that. Rickey news desk. Jason kelly is aside me now. He is an and now that he is an he is anraves Atlanta Braves fan. I saw you do that one person wave. I did. This is your years. I feel like i almost need a moment here. This is huge news. As someone who grew up a braves fan and watched ted turner put on ostrich races on the infield back in the 80s, this represents the golden era of Atlanta Braves baseball. And was talking about bobby cox. These arevery multiple young award winners. The error some of the greatest players ever to take the mound. This is very exciting for braves fan. Jason going from his oneman Atlanta Braves connection wave to private equity. Talking e been larger theme investing in real estate and having more and more private equity firms. What are you hearing from your sources . It is interesting to go at it from a private equity angle. We look at private equity as a leading indicator. They tend to buy when other people are not buying. For the last year or two is a clutch of names. Also some other names, colony capital, tom barrett has been a guest on this show and on stage with bloomberg link in number of times. How thisng about is a place where they dont even need to find an exit yet because the market tends to go up. One of the Big Questions is are they done buying . Private equity firms counts for everyone is saying that is the start that is the smart money. For other investors who have small pots of money to play with. That is exactly right. Is that it is a matter of converting that into an that isnt that is he more broadly available to the public. Shares to the broader public market, the retail investor, to get a piece of this. It is also an interesting indicator of a broader economic if youou well will. Housing is a crucial part of the broader economy. It is a reflection of some consumer stability. As people go from renting to buying, which we have heard a lot about recently. Speaking of pig voices, tom schapiro joined us and waited on this idea of the bubble. Schapiro voices, tom joined as an weighed in on the idea of the bubble. Of big voices, tom schapiro joined us and weighed in on the idea of the bubble. Still affordability is incredible. Were down to a five months supply of houses available. We are seeing things much in equilibrium right now. We just heard renting, not tying him at least in his point of view. People should be renting, not buying. What does this mean for blackstone . Isknow Invitation Homes securitizing some rentals. Renting and not buying is very good news for these folks. That is the entire investment piece for them, their ability to go in, buy foreclosed homes on the cheap, fixed them up to whatever extent they can or want to and then rent them out public who is much more inclined to rent than buy. That provides a very stable income stream that they can securitizing to something they can sell on the Public Markets to investors who can take advantage of this security that is out there and then play the Housing Market in a different way than we certainly saw a few years ago when it was all about rmbs and other more complicated things. A got a lot of people in trouble. Hold that thought, its got a lot of people in trouble. Hold that thought. , don lindsayback will be my guest. Why he still likes u. S. Stocks. We will also talk about the other Asset Classes that he is looking at. And connected household appliances, the difference between consumers thinking is something in school and actually buying something. There is a lot of gray space there. And m. I. T. Technology review editor will join us. He is not impressed to get the of a computerized refrigerator. More on the markets and more on alt assets. We are back in just two minutes with more on money moves. The s p 500 closed up around 29 last year. My next guest says u. S. Equities is still the best investment opportunity. He is the cio of George Washington university, a 1. 4 billion dollar endowment. He joins me and jason kelly, my special cohost for this hour. Glad to have you from our d. C. Bureau. Why are so may people out there saying 29 , youre never going to see that repeated or at least not this year . Dont look at whats the return is, look at what the opportunity is. The market is generally more highly valued than it was last year. Are still great valuations. You have to step back and take a 30,000 foot view. U. S. Stocks is going to be a great place to invest over the next decade. First of all, cheap and abundant u. S. Energy, we are now going to be the leading producer of natural gas and oil in the world. That is great for our economy, that is great for all of our businesses. Business productivity is starting to increase again. You have a situation where companies are no longer looking at trying to outsource to countries like china and bangladesh for cheap labor. They are looking at the advantage of coming back to the u. S. ,producing in the having an efficient supply chain, and then on top of that you have very strong balance sheets. A number of companies have a lot of cash. If they Start Capital expenditures, the market is going to really move. I expect that could start happening this year, as well. Those are your reasons, basically available energy, tons of cash on the balance sheet. It comes like you think it might be a great special situation kind of year for people. Certain hedge funds you are invested in have those private and mende please available to them. What about the u. S. As compared to emerging markets . That does currency between u. S. And emerging markets is significant. Is lastdifferent now decade was a decade of the bricks. Start looking at specific companies, rather than specific countries. The two additional bricks are becoming more like developed markets. Now you have some of the Frontier Markets which have Great Companies with great cash flow, but they are trading at a enormous discounts just because they are undiscovered. There is certainly a place for emerging markets, companies within the portfolio. The longterm gross story of consumer growth of rising middle class in many countries brought the world, that story is still very much in place, is still it is still very much in place in china. There are still great opportunities that will continue to be there. There is a Record Number of private equity firms on the road, as you probably know. Certainly many of them are knocking on your door. What is the case for alternatives in a robust u. S. Public equities market right now . I think you are going to see a lot of Institutional Investors begin to question their hedge fund exposure, if they havent already. Is veryenvironment, it very difficult to short. There is no short rebate. The shorts are not adding any value. In most cases they are distracting. Is so much, there competition within the hedge fund are region hedge fund arena that managers are trying to preserve capital and, in doing so, theyre taking down there and that exposures at the wrong time. This is the type of market for we will have 80 pounds short term selloff and then rebound. Call they difficult to timing on that. Hedge funds that try to do it are going to miss the turnaround. I generally believe theyre going to underperform the broad indices and underperform the active managers. Certainly when you add on the structures to hedge funds it is a much more difficult game. Speaking of those fees, are you trying to negotiate lower fees . Demo we are not, specifically. We are not a large enough asset allocator. I would assume the welfare funds are doing that. I have no knowledge as to what type of the advantage they are getting. Have not seen fees within private equity come down significantly. A lot of Hedge Fund Managers are starting long only products and theyre charging much higher fees than the traditional long only managers. When you look at the Energy Opportunities that you referenced a few minutes ago, what specifically how specifically can you play that given where we are in that cycle in terms of infrastructure investment, in terms of upstream, downstream, where do you see the most opportunity in the short term from the perspective of u. S. Energy . It is a very broad opportunity. The beginning of the last decade, around 12 at around 2003, 2004, all you had to do his own a company that produced and sold oil. Well prices went from 28 per barrel to well over 100 per barrel. Very competitive today and the money is not going to be made by producing and selling. Order to make money there you have to be the lowcost producer. Because of all the activity that is taking place, the companies that are producing the piping, the infrastructure, the meters, the digital apparatuses that are needed, and even when you think about we have this whole new industry that is going to come out about lng exporting. It is not just the facilities that need to be built throughout the country but all the supporting infrastructure as well. There are lots of Industrial Companies that you generally would not think of is eating involved in the energy sector, that are going to drive a large portion of the revenues and profits from the growth in the sector over the next decade. It is a very broad and attractive opportunity. We thank you very much for the time and sharing your insight. We are back in just two minutes with a simpler way to move money digitally. Changing the way money is moved digitally, that is the transfer service that lets users send money to family and friends in developing nations. He is a cofounder and ceo, with me now from ceo. Matt, glad to have you with us. You started this in kenya. The service is now party widespread in the philippines. Why is it working so well in these underdeveloped nations . Thank you for having me. Philippines the because of the fact that it is a huge market their. There are a lot of people that live in the u. S. They try to send money back on a monthly basis. It is a big pain, the vast majority is done offline. What we have done is build the best mobile products and be able to send money back with their fingertips, whenever they like, wherever they like, and being able to deliver funds to 10,000 cash pickup locations. And i know you thought of this when you are living in kenya. When you are there and nine when you are there in nairobi, where people saying it was a hassle to get money from the family seattle that is exactly right. From the family from their families. That is exactly right. I personally have a hard time getting money back home but it was even more difficult for people my kenyan friends do not have Bank Accounts and getting money back to kenya was expensive. It was an old antiquated process. Everybody had mobile phone so it felt like the right opportunity to disrupt this market. I know you have some heavy backers here. What do they see that made them invest in your company . Over 400 billion is sent from developing countries every year. That means there is a lot of customers out there to help. It is an old antiquated process. Onlynk our investors not saw a Business Opportunity but saw an opportunity to help millions of people get money back in a less expensive way. Thank you for joining us. A quick minutes for on the markets. We are back into. This is money moves, were a focus on innovative alternative investments. I am deirdre bolton, here are your top headlines this hour. The latest fed minutes were released 30 minutes ago. Officials see diminishing economic benefits from the bond buying program. The last meeting the fed took the first step to stop to cut of bond cut the pace purchases. The bank assigned 400 underwriters to mitigate mortgages. As many as 40 of those loans are likely to fall outside of government guidelines. Training a group to increase lending without decreasing volatility control. Investors have grown doubtful toys r us will repay or refinance close to 3 billion of that. Toys r us has had three years of consistent profits. Shifting away from retail to the winningest fund was glenview capital, posting an 84 again. Su keenan is joining me from the newsroom with a little bit more from our market magazines latest ranking. That played as particular row on that thats success. Activismler version of and many college suggested his suggestiv call it ism. Were still waiting on final returns. Robert s Robbins Robbins grew up it helped him that on the bet onocks help him the right stocks. I like that, managing the odds. Who are some of the other managers that really managed the game well . , moore b to the s p. Beat the rest of the funds. They did not come in above the s p. Asset backed strategies came out on top and this is according to the bloomberg rating. Heavily invested stocks did well. One of the worst performed strategies was macro, falling in average to. 2 last year. Of 2. 2 ing an average last year. It was a struggle for many of these funds. Any surprises . You follow this sector closely. Any names that stuck out to you because they were there or ones that should have been there . , there were a few. Most funds failed to beat the s p. John paulson was clearly a standout. He took a beating with golden and some other investments early in the year. But finished. 13 with a 63 gain for his recovery fund. Stocks doubled, clearly playing a role here. Lags thege hedge fund s p by 23 this year. Thank you very much. Sue joining us with some of the standouts from last year in the hedge fund industry. We bring in bob rice, managing power managing partner at Tangent Capital Partners i knew you were going to cringe when we compared a basket of hedge funds. I could hear the groan. You always tell me you are not taking your average date to the prom, you are taking your date. For a couple of reasons. Dispersion is huge in management performance. There are j norman us number of bad Hedge Fund Managers out there. Sayould us some would too many. I will say that. There are way too many. Much more portly, from a conceptual standpoint, most of these categories are not designed to beat the s p. Is it surprising that they dont . They are not trying to. The main reason Institutional Investors are investing in them is to protect capital, not make crazy bets. The drunken millers, they are doing one thing. Theyre going after maximum absolute returns. With a year and trend going like this, how much our investors beating Hedge Fund Managers up on fees . There is a lot of pressure. It isnt just because of results like this. It is because you are getting more and more into liquid alternatives were a lot of the strategies are available in a mutual fund format. A lot of the pressure is coming from alternative formats with lower fees. As you know, being the private equity expert that you are, only a certain percentage of Hedge Fund Strategies can fit within a mutual Fund Structure and attract those lower fees. A lot of the less liquid forms of hedge funds are were the really larger returns are coming from. We spoke with the cio of gw university. He is running more than one billion there. The flip side, though, there are these funds that do outperform his investors want to put more money in. It is this very different world. You have a best in class which is far and above the rest of the average. That is absolutely right. To spite the fact that all the media loves to draw the comparison between Hedge Fund Returns and stocks, woe is me because they are underperforming. That is the smartest money in the world, putting more money than ever to work and hedge funds. Maybe that should make you wonder, are those people really stupid or is there somewhat is there some idea and it is not an absolute return idea about why they are doing this . Theyre trying to get exposure to different strategies and risk profiles. They are not trying to beat the u. S. Equity market all the time. Will people get out of the business . People will get out of the business because they will be chased out of the business as Higher Quality managers start to migrate toward liquid format. A lot of the average guys who are in it for one reason, because they can get to and 20. Youre going to make a ton of money. Bob rice, we thank you as always. Bob rice joining us from tangent capital harder. Jason kelly with me as well. We have a quick break to take. Were going to take you out to vegas to the Consumer Electronics show. We are back in two minutes. Ces is happening in las vegas and companies are showing off their newest gadgets. Some highlights, wearable devices that track your fitness, help, fitness, health, and sleep. , therere on the internet is a slew of home tech that allows you to turn on and off your electricity and appliances remotely. Every object from your toothbrush to your refrigerator can be connected online. Brian bergstein is with me now. You are not that impressed. You say there are a lot of wow factors but the difference between thinking something is interesting and buying something is different. Wheresee this every year a lot of stuff comes out. There is a big splash, a lot of Media Attention on it. Things kind of fizzled out. You never hear from some of these products again. Ofhink you will see a lot that with some of these interconnected gadgets that have come up. That is actually a good thing. Us is it is showing very cheap now to make a wearable device or to put internet intelligence into something and connected to the internet. Why that is good as people are going to start throwing a lot of things against the wall to see what sticks. Itll put some Network Intelligence into them. Over the long run, some of these will stick. I think we are at the beginning of a huge opportunity for the internet of things to be the next big platform and computing. To any stakeouts that you read about, that you have seen, that you say this is useful and people are actually going to buy this . I think in Certain Applications there was the internet connected door lock. There was somebody that allows you to greet thats greet visitors remotely. You can see who is walking up to your door and with them in or out on your smart phone. Things like that will be useful in Certain Applications. I am not sold on the internet connected toothbrush, for example. The bigger point is that these kinds of gadgets are going to come and they are going to create a lot of data. Theres going to be chips and every one of these, they will all the network. The real money is in the enabling technologies that make it possible. We are why i am saying at the beginning of a huge opportunity for Companies Like qualcomm or even intel to create the foundation of this new wave of computing. All these apps on top of it, it is like the website is in the mid90s. A lot of the websites seem trivial or frivolous in the mid to bring in my colleague who has his Atlanta Braves toothbrush connected to the internet. You mentioned wearable technologies. Friends have fueled bands and job owns and things like that. Seems like a huge thing coming out of ces. Is it time for that technology to catch on with costs coming down and it seems like costs are coming up . I think wearables are somewhat like that, some of the prime products. I think you are right. We have seen this in this competition here. Wearables is coming at this from different ways. Aboutith its band is all getting you to score points. Other ones are a bit more about combining that information with the diet. There are lots of choices in wearables and that is usually the hallmark of a market that is about to go really big. What about security concerns . How much do we open ourselves up to letting information that we dont really want out there available. It is a huge unanswered question in the internet of things. Online, that you put whether it is a car or a is a newtor, there vulnerability attached to that. A lot of them can be managed, the skewed in a lot of these devices needs to be taken more seriously. Some initial research has shown that security concerns have not really been addressed. Newe devices and all these internet connected things are going back to sure that whatever they enable is so good that you may be willing to take this chance. Right now that is a bit of an open question. Thank you, as always. We love having you on with us. Brian bergstein joining us there. A special thank you to jason kelly. Thank you for joining me. Back, a Bloomberg Television exclusive, the creators of snapchat will be joining me. Sending and receiving untraceable disappearing messages. Snap chat has a multi billiondollar valuation by creating technology for discolored disappearing self portraits aimed at teenage users. A similar off the record messaging system for the corporate world. So glad to see you guys. How did you come up with the idea . , it was simple, howard whats it was simple, howard was the cofounder and ceo. I sent him an email saying i know this guy is work for, i would like a reference for him. That it took us six days to connect. We said there was a fundamental problem here, it needs to be solved. Great, a realworld problem, you take to find a solution. How is the Technology Different from snap chat . We use endtoend crimp and to end encryption. We couldnt look at the messages even if we ask we were asked to or want to. Device canhysical actually read messages sent to you. In theory, if it is not being stored anywhere it is safe from hackers . It is. What did you think we saw these headlines about snap chat . Everybody thought that was safe and then 4. 5 million users later was that a test case for you . It is more of an on more of an authentication problem. We have taken a number of safeguards. Theres a kennedy in cat and mouse game. But the fundamental architecture was different for us. People have warned some of the programmers that theres a lot of people in the tech community. What about regulatory challenges . The seems that it is for professionals. What about these ideas of sending messages we have been following these allegations of Insider Trading and you can go the wrong way with this pretty quickly. It is a Communications Platform similar to email, instant messenger, even the phone itself. The users have to do what is lawful, what is appropriate for the workplace and themselves. Any other tool can be used for evil. We hope for good, we created it for ourselves. Forecause youre working corporations, do you expect more regulatory hassle than the average company that is not working with Business People . We are still a consumer app. We are not selling anything to businesses. We are sort of like linkedin. It is a professional angle but fundamentally it is a consumer app. I know you are growing word ofmouth. We are going to see this in a couple of different industries. You are going to invite him onto the platform to do that. The cofounders of the Company Called confided. We are back in a few minutes with a quick update on the market. Tomorrow on money moves, one of the leaders in cybersecurity will be here. We will talk about the latest acquisition. A little bit more on how data and privacy function in the equation, that is tomorrow. In the meantime, it is 56 minutes past the hour, that means its time for on the markets. Olivia sterns with me now from the newsroom with everything you need to know one trade. What is going on . Stocks have been fluctuating between gains and losses throughout the day. It is a mixed picture. That was in the red and the s p is pretty much flat for the day. The nasdaq is climbing. Traders are reacting to those minutes out of the fomc we got earlier. The fed seeing diminishing efficacy of quantitative easing. The are reacting to other than expected data we had earlier this morning. The adp survey coming in well ahead of estimates. Shares are searching today. Theyre trading at the highest level since 2004. The Company Announced it will buyit by that it will for 2. 9 billion in cash. We asked them what made outhouse so attractive. It is a compelling opportunity for forest. Strong strategic fit to our business. We are already a big player in g. I. In europe. Stronglso a very financial fit, delivering strong sales, about 700 million to our fiscal 15 sales as well as . 78 15 eps on a fiscal noncap basis. I want to bring in cristina alesci. This is an interesting one. Carl icahn out on twitter taking credit for the deal, what gives . He is taking credit for it. He has been in the stocks for a while and has been agitating for change at the top. He finally got it back in september when they basically were successful in replacing the former ceo, carl icon spoke highly about the new guy. This goes down to the very fundamentals of what is happening in the industry. All the major drug makers are facing the reality that their drugs are coming off patent, theyre going generic, and theyre losing tons of money. Last year alone, between 2010 between 50 billion to 60 billion was lost in generic. Theher 50 billion over next five years. That is a tremendous amount of revenue lost. Acquisitions is one way to go elsewhere. We are seeing it a cross the sector. That seeing it across the sector. Betty liu put that question to tucson, asking if this would be the first of other deals to come. We have a mission to continue to build out our business in the key therapeutic areas that we are in. Respiratory, cardiovascular, and hospital and invest us and Infectious Disease type products. We have the capacity to continue to go out and fill in those franchises. Literally sounders thinks this is a good idea. Clearly saunders thinks this is a good idea. They would like to see him do other deals as well, so they are waiting to see what happens. This all stems back to the fact that they are losing patent protection on their on one of the bestselling antidepressants. That sounds pretty depressing. Thank you for your time. We will be back on the markets in 30 minutes. Street smart is up next. Good afternoon, live. I am cory johnson. I did not have heat in my apartment this morning. Welcome. It was really cold. We have breaking data coming out right now. Consumer credits come in a bit light for november. The numbers will be the interesting ones to see. ,eople are taking out loans jiving the Auto Industry and the economy. The fed
comparemela.com © 2020. All Rights Reserved.