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tv   In the Loop With Betty Liu  Bloomberg  April 21, 2014 8:00am-10:01am EDT

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the s&p is coming off its best week since july. it's lowest is -- mark in two weeks. hasbro returned to rough it ability. girls toys led the way. toys are up 21%. the beijing auto show gets underway this week. we'll flag and marks the occasion by once saying it will outsell all other foreign automakers in china. they beat out gm last year. we want to head to washington to discuss ukraine. joe biden arrived in ukraine this morning. the crisis appears to be in trouble. members of congress from both parties are calling on the administration to turn up the economic heat on russia. peter cook has the very latest. this is a delicate moment. is a very delicate moment.
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the vice president is arriving in ukraine. he is the highest ranking official to arrive there to support -- show support. on sunday, three people died in a shootout at a checkpoint in eastern ukraine. of both sides blaming the other for what happened here. questions about who was responsible in this incident. activistsro-russian and military men and women still arming and still occupying eastern ukrainian cities in terms of their government facilities. tennesseeican from said unless the russians show a willingness to back down, it is time to turn up the heat in term of sanctions. >> unless they immediately begin to move the 40,000 troops on the border which are intimidating the people of the ukraine thomas
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i do believe we should be sanctioning some of the companies in the energy sector. we should hit some of the large banks there. we should beef up our security relationships with ukraine. he was joined by top democrats as well. they called for stepped-up sanctions against the russians. that was no indication they were backing down in any way over the weekend. you also had for the first time news from last week that the has treasury department briefed asset managers in the u.s. about the prospects of more sanctions and preparing them for the possibility that that was coming. >> what are the russians saying about the possibility that they could see more sanctions? >> it would be a step back. it would be counterproductive at this point. they can withstand that pressure. this is russia's ambassador to
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the nine states. >> you cannot work with russia and try to achieve anything with us using the language of sanction. beenanctions that have introduced are significant. it is russia. we are very solid-state and well-developed. we can withstand pressures. the russians are acting defiantly in the face of the prospect of more sanctions. what would it take for the united states in the eu to move forward. how long will they try to let the geneva agreement take shape? you also have members of congress headed to the region as well. >> thank you so much.
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>> moving and shaking this hour, tesla motors founder elon musk. he is about to start selling the in china. he says that in three to four years, they will be making the cars there. it would allow tesla to sell them at cheaper prices by avoiding the 25% import tax that the government imposes. it will cost about $118,000 in china. that is compared with about 71,000 in the u.s. the supreme court of their arguments in the most important media case in years. american broadcasting company versus area. what is the legal issue of the court is going to be deciding? sam grobart explains. >> you may have heard that area. it allows you to watch broadcast
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tv over the internet. is it legal? here is how it works. farms.ve created antenna these work like the rabbit ears you use to attach to your television at home. they receive a free over the air signal. they take that signal and re-sends it to subscribers via the internet. you can watch live tv on your computer and smartphone. puto will even let you shows on the cloud. here is where it gets sticky. before aereo there were three ways to watch broadcast television. company. pay a cable you could pay a salary company -- satellite company. you could use an antenna and watch it for free.
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you know how much area pays broadcast networks? zilch. they argue that they are just pulling down a free signal that anybody can get with their own antenna. the fact that the antennas are in a warehouse should not matter. the broadcasters say this is bunk and they are no different than a cable company. .hey sued area of -- aereo the lawsuit hangs on one thing. if this is a public performance, aereo is infringing because they have not paid for the program like cable does. if it is just a lot of private performance, it would not be in infringement and aereo would not need to pay the broadcasters. so far the lower and appellate
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courts have sided with aereo. arguments will be in april and there will be a ruling by july. >> tomorrow i will have an exclusive interview with aereo as they fight for their companies survival at the supreme court. am joined by rob a barnett. total request live when i was watching mtv. produces original online content. we're going to talk more about some of the partnerships that you are creating. , who do youreo think is going to win? supreme court is going in with the white house. elias is getting very angry. -- goliath is getting very
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angry. has theems like aereo legal edge. in your view, is it fair what they are doing? >> the question is whether they are going to have to pay retransmission fees. we all started recording our own shows a long time ago. i keep thinking not about media experts but real people who are getting more and more frustrated with the amount of money you spend to get cable television. they can get their own shows when they want and how they want . it is frustrating. >> it is frustrating. or vh1,re back at mtv what would you be thinking right now? oni would be focusing creating the very best content and figuring out as many smart new ways to get that into the hands of people who want it when they want it and not when we
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want you to see it. i read programming at mtv for years. whenlled up the schedule we pushed of the shows to you that we wanted you to see. that world is ending so quickly. the concept of prime time is now your own and not the networks'. thosewe don't get retransfer fees, we are not going to be able to provide such great content that you have had like american idol or whatever. does that hold water? hell out ofes the them is the technology. it is the size of a dime they can pull their world into your hand onto any device. that is terrifying. i am not a legal expert. i cannot predict the supreme court. the broadcast networks will do everything they can to either
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crush this company or buy it. >> what do you think is the likelihood us to mark --? >> aereo area will get acquired. by one of the majors. >> would that be possible? then you're talking about. say cbs bought aereo, then they would be rebroadcasting signals from nbc. >> the public will do everything they can to get the entertainment the way they wanted at the lowest price. that is not going to change. whichever way the court decides over the next few months, someone is going to figure out a way to get you and me our favorite show at a fraction of what we are paying the cable companies. >> are you surprised it is taken this long for a company like aereo to disrupt the model? >> we started our company in
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2007. we thought original series would the to you through not just majors but through disruptors like our company. we did not think it would take seven years for house of cards to come out and be great. it got 11 emmy nominations. the public is certain to realize that great original programming can come from a variety of broadcasters and disruptors. >> i am talking about the actual technology. taking those antennas and making them dime sized. warehousing them. does it have to take this long for aereo to come up with that? >> the music industry did not see napster coming either. it bit them on the butt. it took 10 years for the music industry to start figuring out
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how to deal with technology that was taking the power from their hands and would it into the hands of the consumer. >> why is that? are they to legalized? >> the reason i started my company was because at my last job i worked for less moon does. average meeting had 18 or 19 vice president in a room. innovation does not always come best from the giants. it often comes from the garage. how'd you get through that wall of lawyers and vice presidents and others? stay with me and we will talk more about disruption. it is the 800 round gorilla. to release a new version of the air jordan. if you have kids you probably
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a drag to the theater to see captain america. more on that later.
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netflix announces earnings after the close today. it is helping to attract more subscribers. rob barnett is the founder of on
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the entertainment. i know. you said that the world changed. the television world changed the day "house of cards" debuted. >> companies like ours the started making original video 2006, a thousand internet years ago, saw world studios and up-and-coming talent could make the kind of original programming that would get the views the television of old got. i don't think it was until house of cards really broke through that the average person on the street started to be aware of the fact that they could get great original series from their computer and not from the
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television. >> the views are still nowhere near broadcast networks. >> there is some mystery there. exactlyknow if we know how many views "house of cards" has had. their audience data is mysterious. >> you make your business on that. how do you unwrap that mystery? with arbitronlife ratings and then with nielsen ratings. i will take on line any day of the week. you can dig down into who is watching. on the advertising model, you can give advertisers the real data about people that are really looking at it. >> hadn't advertisers treat that data? there are still old school and look at nielsen. >> online, you have some true believers. in our company we have the backing of tony pace for four
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years. marketing director of the subway. he believed in 2011. they integrated subway into the program itself. you are not just seeing banner ads or video pre-rolls. you are seeing advertisers reach a demographic that is watching online by integrating into the content at cranium prices. that is smart, visionary thinking. >> you want there to be a mass of tony paces. your first venture into television is now. you sayigital, but when success is when you go onto a television channel. am i right about that? really didn't see -- did see a moment in time where a lot of the digital pioneers that have been slugging it out are now looking for more dollars
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from traditional at the same moment that some of the most powerful and smart visionaries in traditional are looking at digital. devils going to play advocate. if digital is so great, why do you want to do a deal with tv? >> it comes down to who is making the best programming. i worked for jeff gassman before he went to run nbc. he had three words that he instilled every day. that was the best idea wins. that are renovated in digital can sometimes translate to television. >> you are doing a program for headline news. you also discovered sarah maria fortin berg. why is she a star? i don't get it. >> the credit goes to my cofounder.
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damn channel with me. she creates a video from her home in finland on march 3. it speaks many of the world's most popular languages and perfect dialect. she is actually speaking gibberish. she is a comedian. >> how do you know she is not a flash in the band? >> it created 10 million views in the first days online. she got offers from every place in the world. ellen degeneres sought and had her on the ellen show. videos begun to put new up and getting hundreds of thousands of views every shot. >> thank you so much for joining us. rob barnett, the founder of my damn channel.
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>> you are watching "in the loop ." we are streaming on your phone and at bloomberg.com. here are our top headlines. the 6000 people will run the boston marathon today. it is one year after two bombs killed three people. this is the second largest field in the history of the 100 -- 118-year-old race. in this years race were still on the course last year at the time of the bombing. halliburton reported better than expected first-quarter earnings. they earned $.73 a share.
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paid a pretax charge. captain america won the weekend box office for the third straight week. the super hero film by walt disney brought its three-week over $200 million. 56 -- 26 minutes after the hour. julie hyman is watching the markets. we are up. >> not a big change after the big week we had last week. going to be earnings driven once again this week. we'll be looking futures as those numbers rolling throughout the morning.
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it is time for futures in focus. we will look at copper prices. they have fallen 10% this year as china is facing an economic slowdown. copper is used in a cyclical industries. metal, i amthe joined by cap hoffman. -- cannot hoffman. man.n hoff very strange. the price of copper is heading up or down. right now, it heads down. then it goes back up and then it goes plunging down. when we talk to investors, they are very confused as to the new amount of supply that is coming on and china is falling down. how will that impact the market. bag will play it as a mixed of mostly bearish. >> how do you play that
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situation? it is a distressed asset at these levels. years it has five been crucial. you have to look at it on a weekly or monthly basis. sellout, copper does not hold economic barometer status than it used to. the next upside target is 315. if he can get through there, it will be up to 340 and then 390. i see more upside. i am a buyer here. china is 10% off. i don't think that is pushing -- putting pressure on copper that people think. it's not the think economic barometer it used to be? was not at fault. you can't have it both ways.
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when copper was high, the economy was in surging. i think it is lost a bit of that status. it is also of value as the dollar gets weaker. that is supportive of metals. i would rather be a buyer and lean on three dollars that a seller when head is artie come down to deal. >> i am curious what you think of that separation of copper and the economy. >> i think you need to understand china to understand copper. when it moves higher, the u.s. and europe have been week. whatbody is wondering china's next move is. that will tell you were copper is going to go. >> china is up 10% and a month. >> allen is bullish here. i want to get our word of the week. explain what that means. >> it is how much copper can move.
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on 25,000 pounds, you are $12,500 for every take. >> thank you for joining us out there. thank you as well for talking copper. >> thank you. the show is underway. kraft is recalling one of its popular products due to a dangerous labeling error. it is not mac & cheese. stay "in the loop ergo ♪
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>> control of the u.s. senate may be the ultimate prize in the 2014 election. immigrants have their eye on some races that may decide something bigger. next stallman of power
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brokers, we go behind the country as they be fast -- beef up efforts in battleground states. for 2016. get ready theore than two years until presidential election, democrats are going local. to unseat theator secretary of state is a push to boost voter enthusiasm and lay the groundwork for 2016. >> secretary of state ken make or break the environment of voting. we need somebody that is going to be a fair operator. republican spec changes to voting laws. organized early and stay to increase voter enthusiasm. these are trending republican in recent years. >> this'll be a turnout
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election. secretary of state races get little attention on the national level. they track tightly with the parties push. >> how big of an impact in the secretary of state have? >> and can make all the difference. they control the levers for elections. staff and resources are sent to battleground states to turnout.he drop in secretaries of state are crucial. they establish election day procedure and oversee election conduct. people like president clinton and vice president joe biden have been raising funds for the effort. >> it is time to stand up and fight back. >> to outside groups focus solely on secretaries of state elections. it is time to fight back and
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flip the switch to go from defense which we have been fighting for a long time on voting rights and go on the offense. we just put up some new research. >> he is one of the and -- backing democratic secretary of state candidates. there are real questions about whether they can raise money to play in the state races, especially when losing the majority of the senate is fearful. toward 16, is that helpful when you talk about that? >> it is secretaries of states who are elected in 2014 will have a massive effect on 2016. people care about these races. >> that is where ohio comes in.
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the outside help matters. her races about state issues. she is keenly aware of what a win could mean. ohio is a swing state. >> phil mattingly joins us from washington. republicans reacting to this? >> in politics, there is a reaction. they are pushing back. piece, he is ahe well-funded incumbent candidate. i spoke with them about what democrats are doing. he said they would be ready for anything they throw at us. they are working to make it easier to vote and harder to cheat. there is a republican super packet is getting involved in these races as well. spend as much as $10 million to try and have an impact as well. there is pushback going on.
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>> what are they planning to do with that money? >> this is the interesting thing. he ran the national field operation for president obama. they are good at digital analytics and research. what they pitch is to donors as they go out and raise money is we know how to do this. we know how to operate in states in iowa and colorado. we did it in 2012. we have the expertise and research behind it. the states and effectively spend money and have an impact on the election. haveey point is if they the money to actually spend it. that is what they're trying to figure out at the moment. >> phil mattingly, thank you so much. coming up, tesla has not begun selling cars in china but elon musk is already talking about making teslas overseas. coachella music festival changed its tune after fans were
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disappointed and let them know about it. ergo --."he loop ♪
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>> nike just unveiled the new
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air jordan. more than a decade after he retired, they are the biggest money makers in the sneaker verse. stephanie ruhle got a look behind the scenes. i like how we are making up words. i can't even get it right. the sneaker culture is massive. edition of theth air jordan. he outsells kobe bryant, lebron of allfour times as much of them combined. sneakers of basketball sold. that is $2.5 billion worth of shoes. the designer has been michael jordan's partner from the beginning. this guy is the messiah of the sneaker culture. he is as hot as jordan is.
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it is massive. as jordan has explained, it is like owning a sports car. >> he described the issue as a for ari. it is all about the technology. basketballn the court and you are running six miles in a game, he is not on the court anymore, he is a perfectionist. they have michael westbrook wearing the shoes. they got them out in time for the nba playoffs. as you can combine his brand with a superstar on the court right now, it is the number one selling shoe. >> thank you so much. they really are popular. the sneaker culture is huge. >> thank you so much.
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shots at calling the the second weekend of the coachella music festival. this is coachella, the two weekend festival in the desert that attracts me six biggest stars. jay-z performed last weekend. there was a reunion of outcast. armstrong sat in with the replacements. the audience made it clear what it did not like. fans walked away from outcast. this week they played their big hit early on. killer mike got to their big hits early on. give the fans with a want or you risk them walking out. it is 56 minutes after our. we are on the markets. equity futures are a little bit higher. -- we had aave a
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pretty strong rally. we have some earnings coming out later today. after thell report bell. faring in the face of new competition. what a new offering could be on cable. back a faning favorite. it broke records for the company. is there any appeal for the double down? you are watching "in the loop." ♪
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>> we are 30 minutes away from the opening bell and you are "in the loop." the s&p is coming off its best week since july. the earnings season tix on. it netflix is reporting after the bell this morning -- afternoon. they are planning to spend billions on new programming. kfc is taking advantage of relatively cheap cost of chicken. it is revising a sandwich that uses fried chicken where the bread should be. have you tried the double down? of new stockslion
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have entered the public market this year. been a challenge with recent offerings struggling to price at their marketed range. there has been a recent decline in how much companies are able to raise. what is the problem here? >> we took their expected range. we looked at the midpoint of that range. we took the ipos from last week and looked at the divergence, where they actually priced. we saw a trend of declining pricing relative to expectation. this is a sign to many people. these are big name companies. we looked at kemper -- companies that are trying to go public. they may not get what they are expecting in the current environment. they may hold off on doing an ipo. >> what are some other factors that go into saying we are going
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to ipo? those thingse of that people look at pricing and expected range. you have to look at what the stock market is doing. stocks have been taking a bit of a hit lately. it is not a good sign for companies in that same sector. they look at how companies are performing. at those recent ipos and how they are performing in the secondary market. 96% of tech companies have traded down over the last couple of weeks. these are companies that have priced their ipos in the last couple of years and they are trading down. that may turn some companies offer going public. done poorly?t ipos >> they have. up. pretty much all traded
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that is a decent sign. they were pricing very high. >> they were not get in the price if they wanted. what is in the pipeline now. >> we're looking at companies like an e-commerce company. it is compared to an amazon. raise $1.5king to billion. that would be a huge ipo. some other chinese companies such as cheetah mobile. some thatcertainly have filed to go public. nothing.ch we have there are some small biotech companies looking to go public. >> all of this means what for alibaba? as soon as come april. that timeline is getting closer. they would file their first
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respect is in april but won't start trading for another couple of months. they get revisions from the sec and so forth. for them, that is going to be a huge ipo. they have time for the markets to recover for the ipo window to reopen as we like to say. it is a little too soon to tell. at least they're not doing it this week. that is a good thing for them. leslie, thank you so much. leslie covers ipos for us at bloomberg news. --flix is recording reporting earnings after the closing bell. they will have a chance to remind investors they are becoming a binge watching company. jon erlichman is here with me. torrance in the new black is one other programs? more people
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watching that show that house of cards. their mysterious about their numbers. this crazy run last year. it sold off since the last earnings report. i think the business model centers around subscribers. if they can add people to the universities next flight's -- netflix, they can keep away the naysayers. about 48 million subscribers around the world at the end of this quarter. that was their projection. the majority of those are in the united states. we know the business model is a dollars a month. that is over $1 billion of revenue. they've been growing sales around 20%. on thatcan continue pace, that is going to be some of that investors will get. >> they are on their path. they put millions and billions of dollars into this original
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programming and into these content costs. that?ey able to offset have they been offsetting it? >> it comes down to where can they generate the most revenue. you are right. it is very costly. house of seasons of cards cost $100 million. they cut a new deal with disney and they don't have that content yet, but they will eventually get it. they are getting any discounts. if they get more people that are paying for the service, they have been playing around with pricing. they are in more markets around the world. they are talking about more european nations by the end of 2015. they went to get netflix integrated with other places. they are talking about it coming to cable indirectly. if they can find a way to get in front of more people, then they can generate more revenue.
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>> what would be considered must see tv on netflix? >> what they have learned is that they have these original shows that have a lot of buzz, people will come back for it. --is tough to necessarily the majority of people are still coming to these services for the stuff we are not talking about. if you are using it consistently, you are looking for stuff. you binge watch one show and then you want to know what is next. a they can do the same marketing approach that hbo has with all their programs over the years, that is a competitive advantage if they can make the math work. the shows not too expensive. they can bring in new subscribers as a result of the buzz. >> has anybody ever talk to you about why programming on netflix? >> they are interested in live and sports and news and reality.
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i don't think that is their priority right now. never say never. they don't see themselves -- they see themselves as film and television. that has been their sweet spot. they have talked about producing movies. they have been working on the possibility of original shows. have they found their "house of cards" as an original movie? >> a netflix movie studio. jon erlichman, thank you so much. >> pope francis kicked off what is likely to be a record-breaking week at the vatican by celebrating easter mass at st. peter's basilica. 3 million people may show up this week as the church prepares to canonize two popes. john xiii, of pope
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they skipped the miracle. hip to be it may be square, it is not profitable yet. the mobile payment system is bleeding cash. they may sell itself to whom? google may be able to put those issues of away. stay "in the loop." >> don't miss street smart in
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the weeds. we will examine the growth of marijuana.
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from pot to slackers, don't they go hand-in-hand, unemployment is coming down. we are seeing jobless claims plunge. why isn't anybody making any money? mike mckee has a theory about why not making much of a raise these days. you are no slacker. yellen thethe janet kind of slacker. people are not getting a raise these days. this is an important new study that suggests why this has implications for the fed. 40 years ago, you see this big decline. the yellow line in average wages goes way down at the same time the him -- participation rate is going up. then were moving into workplace. in recent years, the participation rate is gunned down and people are not getting raises. the other one is not going up.
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they have looked at this. they look to the reasons why people think this is happening. the reasons are leaving the workforce to have children. people are retiring. none of that seems to make sense. those are not falling. they think this is a large pool of unemployed people who are out there and available to come back into the labor force. employers know that. they're not giving you a raise because we still have a lot of people we can call on so no need to give you a raise. this is important for the fed. instead of focusing on the unemployment rate, look at wages. rise, then youto may have an inflation problem down the road and you think about raising interest rates. many don't really know how of the workers are out there? >> we know how many people are in the long-term unemployed.
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that raises and answers in question. the number of people who are them -- unemployed for a short time is going down. krueger looked at this with a couple of colleagues at princeton. they found the long-term unemployed rate that is driving this decline in wages. short-term workers are getting raises and they're spending less time on the unemployment rolls. the long term these days are not able to come back and to the labor force. that is something we have not seen before. janet yellen was asked about this last week. she said she is not sure if it is true or not. long-term unemployed have always come back in the fast. right, maybe wages don't rise. that pool of workers is not really out there. they are not going to be coming back. >> theory interesting. that is intriguing.
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mike mckee, our economics editor. kraft hotdog recall. recalling 100 thousand pounds of cheese hotdogs because of an issue with the cheese. the bacon down on monstrosity that has been a fan favorite. a calorie buster. "in the loop." stay"in the loop. ♪
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>> a judge dismissed a shareholder claim against lululemon. the yogator claim that wear maker misled them over quality control issues that
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resulted in that recall of yoga pants that were too sheer. 96,000 poundsling of possibly mislabeled cheese dogs. kraft alert the regulator that cheese dogs may be packaged under the oscar meyer wiener's label. in china, volkswagen is expected to outsell the foreign automakers. tois forecasting deliveries rise 10% from last year. food costs are rising. chicken is still relatively toap. the demand is expected be the highest in three years. kfc is bringing back the double down. it is a sandwich with fried chicken where there should be a
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bun. julie hyman has the low down on the double down. >> it sounds so appetizing and wonderful. this first came out in 2010. they sold 10 million in the first month. there is a demand for this thing. i know your hands don't get greasy while you are eating it. >> that is part of the thrill of it. >> there is fried chicken on the outside. it will only be sold through may 25. this is capitalizing on the growing demand for chicken. we are seeing other chains do it. burger king came out with a big cane chicken version. domino's is selling chicken with pizza toppings on top of them. >> chicken with a pizza topping? ok. >> chicken is the hot proteins. why is that? we are seeing food costs rise
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across the board. is, even though they have risen for chicken, we are still seeing sell at about half the price of beef. that is the difference. pound for pound, it is still much less expensive. this is a longer-term trend. poultry consumption is on the rise in part because of the cost. this is continuing. if you talk to tyson or big chicken companies, they are talking about the hot year for chicken. if you look at chicken versus beef or hogs, it takes less time to raise a chicken. they are more nimble when it comes to responding to demand. more restrained in terms of increasing their output. that has kept the prices going up.
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the can be responsive as year goes on. >> thank you so much, julie. we are just a few minutes away from the opening bell. we have top 10 trajan don't want to miss. ♪
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>> welcome back. you are "in the loop." we are on the market. julie hyman has a look at the futures. >> there is a slightly positive tone to the futures. there is not a lot of change. we are coming off a very strong week for the s&p 500. they were up 2.7%. that is the best week since july. this is on the back of a higher earnings report. that is what investors are going to be watching. >> let's count down to the open. these are the only trajan need to know about.
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mike mckee joins us as well. let's start with number 10. producer of kleenex said it is on track to make its projections for the year. number nine is halliburton. they provide fracking services. they beat analyst estimates. they are growing at 25%. we will give it a twofer at number eight. .fizer takeover. possible this is be one of the largest ever. seven, electronic health record systems. they missed wall street estimates.
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their positioning the company to continue its growth trajectory. number six is hasbro. they topped estimates. there was a 21% growth in the girls toy category. posted all loss. >> it is a lawsuit channel. selling --ia is suing for copyright infringement. pandora says it is confident in its legal position and looking forward to a quick resolution. number four is tesla motors. it they will deliver the model s sedan in china. musk added that tesla is building a big network of battery charging stations in china. >> number three is new skin enterprises.
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they will move some of its operation. this is following a review of sales and promotional practices. >> number two is advanced micro devices. they had a stronger than estimated quarterly profit. by results are driven divisions of sony playstation. is the world's biggest gold mining company. they still have interest in getting a deal done. gold had a 28% plunge. that was the most in three decades. it is not so far this year. now to the colmer markets. i want to bring in pat dorsey. his call is on gold. if you're worried about
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inflation, do not buy the yellow stuff. buy stocks of companies with pricing power. buying gold as an inflationary hedge is a bad idea. let's not mince words. goldman -- gold is interesting. its value depends on other people's opinion. you have an income stream you can value. gold has no value other than what people want to pay for it. if you feel you're good at guessing what other people will pay for something, go ahead and buy gold. if you don't think you have a shownt that, history has stocks were a better inflation hedge than gold. >> would you agree with some strategies? like buying a mining company? gold etf is the same as
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buying gold bullion on. there is no difference. a mining company, if you are a i can see some, ways to make money there. pure gold is just a bet on other people's opinion. >> a bad idea. a good idea is to buy emerging markets. julie has been looking into that. >> there are a lot of people who have been getting back into emerging markets. for theook at the index year to date, it had a terrible first quarter. over concerns about ukraine. we saw a lot of selling in that particular etf. in april we saw a boost. investors were coming back into emerging markets. they view them is relatively cheap if you look at some of the other global markets.
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barrens was pointing out some of the pitfalls. this fund turns over every 13 days. there is a high level of skittishness about geopolitical elements and the affect they have on these emerging markets. markets so long as you have an iron stomach. >> and iron stomach and don't buy the index. verily -- very heavily weighted in samsung and companies that make minerals all over the world. they are commodity companies or global companies. you want to buy funds that focus on smaller companies that are tied to the domestic economy. that is where you're going to get more consumer and industrial exposure. of the the rising power middle class.
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that is a long-term theme in emerging markets. so than tryingre to figure out where iron ore is going to go. smallare a couple of companies. i would look at active management because it is a very inefficient asset class. -- pena percent can add value over that index. back home in the u.s., we are watching the earnings season. mike, you been looking at earnings. at the moment, we have been seeing very little change in the way earnings breakdown. there is a tepid bottom-line growth. companies are still taking the money and putting it into shareholders as opposed to going into their employees and labor at this point.
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that is forecast to change. rising see sales growth much more significantly as the mess -- next couple of quarters go on. let change your strategy? >> that would be wonderful if we see it. that is been the achilles' heel of recovering corporate earnings. that has been wonderful for the past three or four years of the recovery. eventually, you need topline growth to keep earnings growth going. topline growth, i would love to see it go up. >> pat, thank you so much. up, rumors of a square sail after a tough year for the mobile payment company. which tech giant might be given
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up square? captain america is a his knee hero for disney over the weekend. we are a few minutes in the session, stay "in the loop." ♪
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>> here are the talk -- top tech stories. the today show is expanding to radio. they will simulcast the complete show on sirius satellite radio beginning in june. they hope the move will help to people who are on the way to work but can't watch tv. captain america came to the rescue for disney. they had sales of $27 million over the weekend. that gave many people an extra day to sit around and go to the
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movie theater. 3300 social networking site have been deleted and a breakdown -- crackdown on internet pornography. latest in tech and media on "bloomberg west." square has been plowing through money. in 2013, they lost $100 million. -- twitteroking for has acquired a data service. for more, i want to welcome back jon erlichman and nick thompson. net, let's start with you. was this the promise that did not quite deliver?
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>> we don't know yet. everybody has invested in this. a lot of people are getting money. square is still worth billions of dollars. we saw this bad news coming out of square. they are losing money faster than we thought. they are thinking about being bought, which is not a good sign. -- it is a good sign if people want to buy square. if square is saying who wants to bias, that is a different thing. they have also almost gone belly up. there been some bad times coming .rom the sector q >> the numbers tell us this is a race within margin business right now. it may change. they are trying not to charge small businesses a lot of money for processing payments. they have spent a lot of money hiring people.
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they are broadening into brick and mortar to tell people to get rid of a cash register and just use their system and ipad. doing that costs money to roll out. their hope is long-term. they can introduce more services. you can keep better tabs on how people are spending. they could generate more revenue that way. in the meantime, they are losing money. and now we all know about it. >> you need to get users. accepthas been able to zero gross margins in order to get users. twitter,siness like the cloud gets cheaper to use, that is ok. and a business for you have to build things and work into a complex payment system and work with players that are arty out there, you can run out of money. this into a big
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messy industry. it may yet work. it may work out to be massively successful. >> that is why they need to be sold to a google. they have money. >> yes, they have money. they have users. square has a lot of businesses who work with it, but they don't have a ton of users. google has google wallet. it is a good pairing. google would pay lots of money. it seems like square might be willing to take their price right now. google could have conversation so they have a better presence in stores. that is been more challenging than paypal in rolling out into a lot of cook -- locations. powerful. >> jack dorsey should call a friend at facebook. isy should say that facebook thinking of buying it. >> what about twitter?
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you say this is an interesting acquisition. company toan outside analyze data. >> they opened up a twitter firehose. all the partners started to make a lot of money. then twitter decided to buy one of the partners. couldn't they have just done themselves from the beginning? they allowed access to all of the twitter stream of all people of all time. they open up to companies who pay them and sell the data to other people. that is clearly a very valuable business and a lot of people want access. there is a lot you can get out of it. about $70 million that they got from this kind of stuff. that is not a ton. there is an open area for them to say look what else we can do.
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there is a lot of conversation inside twitter about the business story ahead. one story is how you keep people engaged. if you're not a celebrity or a journalist, once someone starts an account, how do you keep them there all the time? that way the advertisers are still interested long-term. about,u are talking let's license everything that is on there and make some money you ony. >> i am with that. i know that when i came back from asia, people said to me that they don't use twitter. twitter is not present overseas at all. >> this is a very entrusting thing. new york media, everybody is on twitter. it seems like everything is coming from twitter. of people coming into twitter. they are coming in from facebook.
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it is a valuable platform and it is a great news feed. i love it. it is important to companies. ande are barriers to entry they stay on because it can be confusing. they need to change that and figure out if they're going to make it. they bought one of the companies that they contracted with to give them their data. >> i have not seen a good answer to that. i'm sure there are saying they will continue to license it. it was also getting data from foursquare and linkedin other companies. or those rivals to twitter? secondly, the other companies that had access to the twitter firehose is owned by apple. will twitter cut them off? what will happen? >> i come back to that question, what do they do with the data? is it useful to the company or advertisers? >> we were talking about mobile payments. say you are square.
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say you want to generate some kind of cool stats board on everything that people were saying about your business on twitter. thisant to measure intangible world of what people think about your brand. this is the kind of stuff you can work off to do that. the acquiring one of players that has worked with him closely allows them to go to that next step of handling it themselves and growing up the business. this is a sign that they feel this can get larger as twitter gets larger. is a story about kraft. .hey hired a company they are going to help them analyze photos that are being shared about their products. is tons of information about kraft products all over social media. they can't find it just by putting the word craft into a search engine. they want somebody who go
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through and say look there is arebody who saying -- saying they had a lovely lunch. maybe that person likes kraft. >> i had a lovely lunch of mac & cheese. >> i said that just the other day. they can find influential people who are saying positive things. if they are saying negative things, they can learn to interact with them. >> here are 20 new boxes. we are sorry you had a problem with the last mac & cheese. >> thank you so much. erlichman, thank you. >> the beijing auto show is getting underway. we will tell you how the german automaker is faring in china. ♪
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>> they're still trying to
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recover bodies from the ferry in south korea. full flag and is signaling they will be, china's biggest foreign automaker. tessa will says start building electric cars in china. about to start selling the model s sedan in china. that does it for us on "in the loop." tomorrow we will be in china and we will have an interview with the ceo of aereo. ♪
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>> it is time to go on the market. i am julie hyman. 30 minutes into the trading day, arise of u.s. stocks. people are watching earnings and a potential big deal among the
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gold miners. that is on the agenda this morning. if you look in the treasury market, we still have some concerns over the situation in ukraine. we are not seen a big gain. there is a little bit of buying and yields coming down. wall street banks are definitely feeling the bond trading blues. trading is down and revenues are dropping. it is getting riskier to gamble on the bond markets. jenny to explain what is going on is lisa a brahma what's. -- people have been predicting for a long time that yields will come down. .t hasn't been happening this is that the trajectory that people were wanting. a bunch of issues. you have the trading volume coming down a lot.
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even as the volume of debt increases dramatically. you have that yields have come down. they're not getting as much margin. you also have this third element which is how do they position their inventory, their own books that they use to make markets. if they get caught on the side of the trade that they are long, if yields rise a lot, they could be stuck with a bunch of losses. seen the biggest wall street dealers pull back their inventories. they were net bearish on the month. it seemed like this was the right that. they were saying that yields were going to rise 3.4% on average. it could be as high as four percent. it doesn't make much to be long on treasuries. bonds rallied. they are stuck on the other side saying look at this. we are short.
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this is going to be a drag on our returns. they have already been low. the issue is that these inventories used to act as hedges against their holdings of riskier debt. it was not as imperative that they get the exact timing right. they can balance the portfolio more. they had more flexibility. their holdings on some level they could fine tune across their holdings. they don't have that ability now. you have the fed cutting back on quantitative easing. what does that throw into the equation? >> you would think on one hand it is negative. yields are rising. they stand to lose. they have been waiting for this
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to happen. it is not good or bad. means yous rise, that can earn a bigger profit between trades. more from loans up to have out there. the benchmarks are rising. how can they maneuver the intermarry -- intermediary time? >> thank you so much lisa. "market makers" is next. . .
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is "market makers" with erik schatzker and stephanie ruhle. >> risky business. a country that could be on the verge of silver war. an investor who has been buying ukrainian debt. >> y 100 billion dollar acquisitions fell apart and what it would take for both countries to resume negotiations. totwo guys who teamed up bring you the best-selling singers of all time, the air jordan. good morning. numeral watching "market makers"

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