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tv   In the Loop With Betty Liu  Bloomberg  June 23, 2014 8:00am-10:01am EDT

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am betty liu. has now wrapped up its biggest acquisition ever. the french government has okayed their $17 billion purchase of alstom's energy asset. john kerry istate now in baghdad. rebel forces have captured more territory. president obama told cbs but the risks we need to focus on now. >> the problem with isis is that they are destabilizing the country. that could spill over into some jordan andes like they are engaged in wars in
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syria, in that vacuum that has been created and they could amass more arms and resources there. >> phil mattingly has been following the administration's response. what was president obama's goal and sending the secretary of state to the middle east? >> the u.s. government and the president look at this as dual track. there is the diplomatic side of things. that is where the secretary of state comes in. he met with the prime minister this morning, the top shiite leader in the country. he is also meeting with the speaker of the parliament, the top sunni leader in iraq. what they are trend to do is push the iraqis to form an inclusive government. take a listen. >> this is a critical moment, where together we must urge
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iraq's leaders to rise above sectarian motivations and form a government that is united in its determination to meet the needs and speak to the demands of all of their people. this morning with the prime minister lasted just under two hours. it was sure to be a bit of a complex meeting to say the least. the u.s. has made very clear that they are not comfortable with the way he is leading the country. the crucial point that secretary is making while he is over there is that somehow, someway, iraq he officials must find a way to include sunnis and kurds and shiites together find some pathway forward to fight the insurgency. >> would've the biggest problems? what is the biggest problem facing the u.s.? >> the thing that is currently -- pretty incredible is that what u.s. officials are hearing are from the regional
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allies. countries that are allied with the u.s., sunni dominated, very concerned about extremist sunni insurgents and how they are moving right now. there is another concern. what role it ron play -- iran plays in this. the u.s. said there may be a place for the two countries to work together. u.s., jordan,the saudi arabia, sunni dominated, very and come to bowl with the shiite led iran gaining broader control over this country. how the u.s. walks a very thin line right now with our allies is probably the most important thing and it is why you have seen secretary kerry make stops throughout the middle east and will continue to do so throughout this trip. >> which and we expect from the president this week on iraq? >> we will say close eyes on what is happening, a big push
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behind the scenes for u.s. to blue medic officials on trying to get the prime minister to form that unified government. areoes not have the seats now to take a majority on his own. how they were coalitions out is very important. i don't know if you will see the president speaking on this every day or any day at all. now that he has made his initial steps forward, see have though subtle and before they -- settle in before they feel like i have to do or say anything more in the coming days. >> we have breaking news on the corporate front. yet another acquisition. -- oracle is buying microsystems for about $4.6 billion in cash. oracle is using some of its cash and putting it to work. software,ms provides technology solutions for the hospitality and retail
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industries. oracle saying it expands this idea of the internet of everything into another market. micros for $4.6 billion. we will keep you updated on this transaction. moving and shaking this hour, the supreme court may decide as aon as this morning if the continue sending streaming content. broadcasters say it could cost them billions of dollars. i spoke with the ceo in washington on the eve of the opening arguments back in april. here is what he said about the main technological difference now, which is why he is so confident they will win. >> i don't think anybody can
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forecast what will happen. it is a fools game to do that. min them because we feel very confident. as a matter of law, we are dead right. but it is the united states supreme court and nobody can predict. >> one of his big investors is billionaire barry diller. he said there is a 50% chance aereo will lose and a 50% chance it will win. the american apparel founder is gearing up for a battle after being ousted as the ceo. julie hyman has been following this story for us. chardy is the single largest shareholder -- charney is the single largest shareholder. not the majority. he would still need support from other shareholders. one of our reporters talk to one of them.
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he runs a company called 5t capital. he owns 13% of the shares. he is not necessarily prepared to support charney. he'd said he does not have all of the facts behind the ouster. timeey could have a tough in this fight against the board. he says that he might sue the board, that his ouster was not proper. there are still a lot of steps to be taken. >> do we know more about what happened? >> we talked on friday about charney's controversial history of various lawsuits, all of which have been dismissed or settled, most filling with sexual harassment of some kind. -- dealing with sexual harassment of some kind. it sounds like there was some investigation into his conduct on the part of charney having to
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do more refinancing. western misappropriation of funds? did he let family members use company paid hotel members -- rooms inappropriately? and there is the question of retaliation. he may have retaliated against one of the women who have sued him by allowing a subordinate or he directly allowing pictures of this woman to be released as a form of retaliation. it seems that that may be the crux of the issue. this is according to someone familiar with the company. they have not come out and disclosed exactly what is going on. american apparel has been struggling to some extent. charney has created this brand around himself, made it edgy basics, if you will. become a like h&m have more formidable competitor. so
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julie hyman, our senior markets correspondent. did you see this game? in neck and neck battle between the u.s. and portugal in the world cup, with the u.s. losing its lead in the final seconds. meansre on what this time to america posturing is, we are joined by eric. that was a crazy game. >> that was a crazy game. with one minute ago, the u.s. had a 98% chance of winning the game. chance ofad a 0% winning and a 2% chance of tying. know wanty you do not to how the results happen, you just want to see the final score. it is more upsetting to know that they could have one. -- won. >> what happened to the u.s. team now? ofnow they have a 77% chance making it into the knockout stage. they still have a good chance of making it to the knockout stage. they have a good shot.
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it is going to be all about what they do against germany. >> what are the odds here? >> they have a 32% chance of winning or tying. if they win, they are in. that is why the could be ideas if it could be corrupt. if they both tie each other, they are in. if the other teams tie, they're both out. it matters how both games turn out. that is why they're going to play at the same time. >> what if the u.s. loses against germany? >> if they lose against germany, there is a chance to get in, but only if portugal or ghana wins their game and they win their game by a big enough score that they can keep the u.s. in the tiebreaker. the u.s. wants the other game to tie. if the other game ties, it does
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not matter what they do against germany. there are a lot of scenarios to play out here. >> did you spend this weekend mapping out the odds of all of these teams? >> i think a lot of people were doing that and a lot of people were getting it wrong. you saw a lot of updates on twitter and a lot of corrections. it is not that easy to figure out right away. >> thank you, eric. to get the latest world cup news, analysis, and predictions, had to world cup --,/rio. see what is coming out of the conference of mayors. life in the fast lane. get ready for a showdown between harley and a rival over electric motorbikes. stay "in the loop." ♪
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>> you are watching "in the loop." live on bloomberg television. all weekend long, mayors from across the country gathered in dallas for the annual u.s. conference of mayors, aim to promote effective urban policies
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and to strengthen ties between cities. the mayors tackled everything from income inequality to racial politics after the donald sterling fiasco. a democratnow is hailing from akron, ohio, who has served as the president of the u.s. conference of mayors before. mayor, thank you for joining us this morning. what did you get out of this weekend so far, mayor? >> we have addressed just about every issue in the united states and one of the things we talked about is that mayors take responsibility in their city. many of us to not have legal authority over the schools, but we know a good education is one of the most fundamental parts of having a good community. we get involved in the schools. we are involved in climate protection, trying to reduce the carbon footprint. there are a lot of issues we are involved in. >> that's right. i imagine there are a lot of
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issues to tackle in almost all of them seem just as important as the other one. how do you figure out, among you mayors, how do you figure out what you are going to tackle in the next three months, six months, what is most urgent? >> we have a resolution process. there is an official policy resolution. we put it in writing. that is the charge to the staff. to lobby on the hill, put it in the white house, to do the necessary things in washington. we're doing things and task forces and committees to address things as they come up. the donald sterling singh, who would have imagined in today's world that that would have hit? -- the donald sterling thing him who would have imagined in today's world at that -- that that would have hit? in sports involved franchises. we have major investments in facilities. those issues that are social, that address issues in our
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society, i think mayors are leaders and it has been a tradition -- this is our 82nd year of meeting and we literally address every issue that affects our citizens. thinks one, especially about kevin johnson played in the nba, great all-star, lived in akron, ohio, when he played for cleveland, there is another crossover, with kevin being the president. >> you mentioned the whole climate change issue and how mayors are signing on to fighting climate change. you know hank paulson, the former treasury secretary wrote an op-ed in the "new york times" and he said, we are staring down a climate bubble that poses enormous risk to both our and firemen and economy. the warning signs are clear and growing, more urgent as the risks go unchecked. to see ae are going climate crash, the way we saw
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one of the financial crisis in 2008. how alarming is that to you? >> it is very alarming. we have been working at this for years, looking at ways in the cities to reduce traffic, reduce the carbon foot rent -- footprint. we have been addressing our local level, lowering our carbon footprint, the amount of carbon that goes in the air to deal with planting more trees, doing things environmentally sound to be able to protect the environment. i happen to think it is a very important issue and i use it like life insurance. >> do you see it as a climate crash? i am not an expert on that, but i believe in experts. all most every legitimate scientist comes down on the side that we are having significant climate changes. if that affects my grandchildren, i am very worried about it. i want to leave a better world
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to my grandchildren. it is something that our generation needs to do and address and a realistic way and we may not absolutely have a crash, but it is like life insurance. we all don't die everyday, but we pay our life insurance premiums. it is something our country in the world has to address. >> did your republican colleagues sign on as well? >> many republicans feel that what is good for the country is not a political issue and that issues are not right-wing and left-wing and all the kinds of things that they get involved and in washington. therewas an old saying, is no republican or democrat way to pick up garbage, we all of responsibility. i think this group works better than any in the country to bring together democrats and republicans to work on issues that we face. >> you know the republicans have been the ones who have blocked any type of remedies that have been proposed on climate change. , i understand that.
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that is what folks in washington are working in a different way than we work here. there are differences. i have differences within my own party on how to proceed on various issues, fighting for jobs, trying to address public safety. i think this group comes together in a nonpartisan way, as much as possible, as much as anyone in our country, to address issues that are not really a republican issue or democratic issue. incomethese are -- inequality, the issues maria shriver talked about yesterday for women, these are not republican or democratic women having problems, they are citizens of the united states. the sooner washington realizes that and listens to mayors, the better off our citizens in countries will be. >> thank you so much. the mayor of akron, ohio. at the mayors conference in dallas. in harley-to-head davidson. a clash of electric motorcycles. anchors away for purdah rico --
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puerto rico. ♪
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>> you are watching "in the loop." live on bloomberg television. good morning. i am betty liu. here is a look at our top headlines. is ousted ceo of sterne agee facing a probe into whether he misused assets. jets, boats, and condominiums may have been misused. nissan and honda are recalling almost 3 million cars together. the japanese automakers recalled the 3 million cars to recall -- repair flaws in airbags.
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recalled just over 2 million vehicles including the fit and scrv. the kevin hart comedy "think like a man too" was the big winner at the weekend box office. it took in north america. "2 jump straight" finished -- 22 jump street" finished in second place. bloomberg television is on the markets. julie hyman has more. we're about an hour away from the bell. >> gold futures are in the red after finishing higher for the third straight week on friday. joining the with a look at what is moving the price of gold, bob igeochino. we have seen this snap back in
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gold recently. it is really interesting after the big down year it had last year. bob, what do you think we are seeing here in terms of where we will see gold go from here? some of the impetus comes from what we are seeing in iraq. will the the continued -- will it continue to be a reasonable buy? >> i think so. you are looking at the first back-to-back positive quarters for gold. i think the fundamentals for gold in the medium-term or not that great. we are on the other side of fed easing. in the euro zone, we are getting stages of aggressive easing. other than the dollar, the other currencies are going to be weaker and you will continue to see global demand just a stone that -- just based on that. greg, you are not seeing -- i mean, you are seeing the underlying reasons for gold to
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be week that are still there. not enough counterbalance? you definitely cannot ignore the huge volume search we saw on thursday on the back of the greater than expected cpi number. the etf trading 24 million shares. on the backside of that, you have flows into that etf and open interest on the futures contract still a multiyear lows. until you get real money coming in from the sidelines, i think most traders will be looking to save this move higher. >> bob is not one of them. can you tell us what exactly -- what trade you will be putting on gold right now? >> i am long gold as of early this morning and i will stay long gold until we get to the 1300 level. i think of we test 1300, it will be a bit of a run down. you get almost a 3-1 reward
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risk. i think a lot of people, in the past couple weeks, have been incorrect how dovish the fed is going to be. i think short to medium term, you will see gold fairly easily. >> you would put a stoploss on the gold trade. >> absolutely. a larger fundamental from the gold, we are going to see a move past that 1200 level. short to medium-term term, we are talking about a trade here. >> got you. let's put bob's trade in layman's terms. if you look at gold, it is training around $13-$14 an ounce. gold trades in contracts of 100 ounces. he would make a total profit of per contract in this theoretical situation.
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rolls over. what does that mean? >> all futures contracts expire. the most active contract expires in august. a couple of weeks in july, traders are going to be looking to liquidate their august contract that is going to expire and roll it over into the next act of futures contract, which would be december. >> they liquidate one and use the money from that to buy the next contract out. >> exactly. there is also another component. there is a spread between those could -- two contracts. you have those who just trade the spread itself. >> thanks so much, as always. we appreciate it. we will be on the markets once again in 30 minutes. >> thank you so much. julie hyman, our senior markets reporter. in just a few hours, something exciting for any gearhead. harley davidson will unveil its
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first electric bike, right here on bloomberg television. we will get the first look here. they will not be the only game in town. manufacturerargest of full-sized electric motorbikes. to see how they will take on one of the most famous brands in the world, we are joined by zero motorcycles ceo. think you for joining us. >> you are very welcome. delighted to be here. how do you feel about harley getting in on this? >> we think it is fantastic. when you have the world's most iconic motorcycle brand but a stake in the ground and say that the electric motorcycle is the future, it is very exciting for everybody involved. what it basically says is that electrics are not scooters anymore. they are serious motorcycles. >> has that been your biggest issue and trying to ramp up your company? --electric is not new
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electric is new. it takes time or people to understand that, to get intrigued by it, to go and write it. it. -- ride they have an amazing grin on her face and it is usually accompanied by what our fantastic or unbelievable. >> do they buy the bike? >> i wish they were buying and more volume. that is for sure. it does take time to grow. we are certainly growing at a rapid rate. the market is small. we have are the ground that about 50% of the available market. we are pleased with the growth we have got at this point. >> how many bikes are we selling? the market is a percentage of the worldwide market. when we see our growth, we have already surpassed our 2013 revenue already this year.
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it is easy to see why. when people get on the bikes, it is a very different writing experience -- riding experience. it is a very thrilling ride. is just an experience that you have to experience it to decide you want to buy one. >> the fact that there is no what, i think is probably is preventing some people from buying bikes like yours. >> noise is an interesting factor. you take harley davidson that is world-renowned. doingre saying they are an electric motorcycle. the focus is really on the ridingof the experience. that is what people see and feel when they get on our bikes. you can hearding, the birds around you. it is a different experience. it is free. it is just like everything the motorcyclists like.
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>> and the fun. but richard, ok, another problem people may have is the same problem i have with electric cars, which is how my going to fill it up? oh my going to recharge it? where are the recharge stations? first of all, if you have the ability to plug it in at home, you can just do that. and that sense, the infrastructure is pervasive. but you are right. it is not when you are going to easily be able to across the country on. but it is one you can enjoy. array of customers. people who are returning riders. people who stop for it period of time. bike topeople who had a an existing stable of motorcycles. then we have the people who use them for practical purposes, ,eaning commuting and anything
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any local errands you want to do. it is important that you understand how you are going to be using the motorcycle to make sure it has the range to be able to get you there and back. >> what is your range on your bikes on average? >> the standard bike is 137 miles around the town. if you want to add an additional module, it can take it up to 171. you get half of that range on the freeway speed. is hardly going into this segment, your segment, is that going to have to make you change what market you are targeting, who you're targeting? >> not at all. we are a small company. we are ready and prepared to compete. we are thrilled that harley has made this announcement. for us, we have a range of motorcycles, probably the broadest range that is available today. we also have specialist vehicles
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that we sell to police application and into the military. we're working very hard to develop our police business, community based policing, city-based policing. we do not do california highway patrol policing. that would not be the best use of our vehicle. >> thank you so much for joining us. the ceo of zero motorcycles. tune into market makers for the unveiling of harley davidson's new electric bike with the ceo keith wandel. take it towe will puerto rico for a look at how the redevelopment of the u.s. naval base could make or break the commonwealth. popeye's just paid millions of dollars for a fright you can recipe. companies will not notice anything different. fried chicken recipe. companies will not notice anything different. ♪
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years, the u.s. navy southern command was located in puerto rico. the navy moved out a decade ago, costing the island thousands of jobs and millions of dollars in revenue. the site has set mostly idle until now when the redevelopment of roosevelt roads seems finely poised to get off the ground. stephanie ruhle took a closer look. and abundantds coastline, highways, hangers, and houses. it is easy to see the development potential for roosevelt roads. >> there is not a place with the infrastructure that the navy created in this hemisphere that they created on that 8000 acre property. on the ground, it is a ghost town. place,e navy abandon the $300 million per year vanished. community hasg
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been devastated. lost the base, we lost many people who pay taxes. that debilitated the economy. the state was not awarding the municipality and up money to keep up the city. >> the puerto rican government feels it has the formula to revive roosevelt roads. >> we want a world-class developer to do something with order, with a plan. the new master plan for site features zones for hotels and entertainment, sports and recreation, commerce and ecotourism. the local authority begins taking proposals from developers to fill out this blank canvas. one group has their proposal ready to go. >> the vision is a city like compound with an entertainment at its core. >> it will be a total redevelopment, primarily around the courts. then we will try to get to manufacturing, some
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universities, and then we will try to start breathing life into it. site's infrastructure and location make it a convenient hub for aviation destinations near and far. the possibilities for commercial space travel have drawn interest from richard branson who recently toured roosevelt roads. the government is not shy about touting the site to world investors. >> it is the only place in the world the can have cruise ships, , and have the land to develop theme parks. >> acres for intriguing goals. but the challenge is the same it has been for decades. selecting the plan, attracting capital, and moving the plan from opportunity to reality. are you ready to make this happen? >> yes. "market makers" anchor
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stephanie ruhle joins us with more. about $300 million disappear from around the area. what did you find? ,> when the naval base closed the seven airport, thousands of people lived there. over the last 10 years, that economy is decimated. the whole island, unemployment is around 14%. in this region, it is significantly higher than that. if the government does not have a plan for a major product -- project, they are never going to get out from under it. we heard from local developers right there. richard branson has been down there. it could be a great opportunity. >> is a going to help the puerto rico economy overall? >> puerto rico need something major. tourism only accounts for 10% of the gdp. if you compare the to the rest of the caribbean, it is significantly lower. this area is a u.s. territory. couldave an airstrip that
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bring in commercial planes. this could be a huge boon for them if it happens. to attractnew laws hedge funds down here, john paulson has a lot of -- but a lot of real estate dollars to work in terms of hotels. this could be significantly bigger than that. digg about what atlantis is to the bahamas. >> what about richard brandes -- richard branson's interest. >> he is looking for spaces to focus his commercial spacecraft plans. this seems like an opportunity to do this. that has a -- this has the u.s. rule of law. that is positive. he likes what he saw. this is the week where the bids come in. we could see some richard branson. who knows? >> thank you so much. tune into "market makers" for our puerto rico: island of debt coverage. , this hollywood artist
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is making a living painting special effects contact lenses for hollywood's biggest stars. popeye's chicken may be louisiana fast, but it is super expensive to keep a hold on it secret recipe. details ahead. ♪
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>> in hollywood, special effects in movies usually involve more than meets the eye. teeny tiny canvas, a contact lens. her work can be seen in over 300 films and television shows. bloomberg gets a behind the scenes look. ♪ >> there was a long line of artists in my family. i started drawing when i was a little kid. i would pick up a pencil and a draft -- brush and started
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doodling. i kept with it as i got older. people, i sayndom i paint contact lenses for film and television. they say, somebody does that? i say, yes, somebody has to. it was a complete fluke. i was working with a makeup artist that would occasionally go to set and put contact lenses in, a lens technician. i tried it out and i was hooked. it is a very small canvas. tiny, tiny canvas. i have to use very fine, fine brushes, a few hairs basically. it is a process. it takes a few hours, sometimes a few days to complete -- depending on what the design is. size, covering the pupil in the iris. the ones that cover the white of the eye, those are called
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clairol contact lenses. the reason why we use scleral contact lenses is where the whole i is yellow or bloodshot or hemorrhage. i worked on a few johnny depp films, "alice in wonderland," "pirates of the caribbean. " i have worked with angelina jolie. ficent."g "male her makeup artist showed me a rock. i try to incorporate all of the colors in the rock into that lens. there is competition. there are only a few of us, a handful, less than 10, i think. there are some in the things i love about this job. i get to paint. i am an artist.
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i get to paint for a living. to see them finish their makeup and put in the contact lenses, everything just comes together with the finishing touch. it is the cherry on top. >> wow. that must be an interesting job in hollywood. today, bloomberg's big number is $43 million. that is how much money popeye's is paying for some chicken recipes. they are owned by a louisiana-based seasoning company. they're the same recipes the chain has been using for years. not only that, but the seasoning company that is selling the recipes is owned by the late founder of popeye's. the chain had been paying about $3 million in royalty fees every year and was scheduled to do so through 2029. now, popeye's officially owns those finger licking good recipes. you don't have to pay anybody. staying on food, it is fitting up to one million students on week and has big-name backers.
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we are telling all about the company that is on the front lines to make children healthier. , sports and beer belonged together. universities of seem to agree. stay "in the loop." ♪
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>> more college sports teams are kicking back and letting fans drink a beer during games. simple.s seem pretty no alcohol sales in on-campus stadiums and arenas. slowly, that is changing because that is beer and colleges are finding it hard to pass on additional revenue from selling it. selling beer began at for ballgames three years ago and it has seen $500,000 in profit. the test may eventually expand to football. the southeastern conference still has a ban in place. schools are facing increased
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expenses from new player benefits. the money from beer sales is starting to look like a slamdunk or a touchdown. concerning whichever one you want. it is 56 minutes past the hour. bloomberg television is on the markets. equity futures are mixed. we just had breaking news moments ago about oracle by micros. buying m&a is still there. we are on the markets again in 30 minutes. coming up, secretary of state john kerry is in baghdad meeting with prime minister maliki just militants take over a town on the iraqi-jordanian border. details next. you are watching "in the loop." ♪
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away from30 minutes the opening bell on this monday morning. here is what we are working on. stocks will open little changed. the s&p and the dow start the day at record highs. oracle. larry ellison is spending billions of dollars to get the company going again. oracle has agreed to buy micros. in iraq, rebels have captured border crossings near syria. amongof nervousness investors. secretary of state john kerry is in baghdad meeting with nuri all milky -- nouri al-maliki.
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as the white house weighs its options, barack obama has given a series of interviews over the weekend. here is what he told cnn. >> part of the task now is to i leaders areraq appeared rise above sectarian together,s, come compromise. if they cannot, there is not going to be a military solution to this problem. there is no amount of american firepower that is going to be able to hold the country together, and i made that very clear to mr. maliki. >> our white house correspondent back with me. are we at the point where the maliki government is too far gone, it cannot succeed? >> that is the big concern from u.s. officials. look, they are aware of what is happened over the last five
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years is a key component of what is happening right now in iraq. it is a key component of what has driven the militants to this point. the biggest concern -- i have heard this from a number of u.s. officials -- and speaking with moderate officials throughout the country, their point is this -- we will step in, but you need to remove maliki. i do not think the u.s. ever want to be in a position where they take personal responsibility for taking up the prime minister of another country, but i think they need concrete steps forward for maliki to unify the government. thinky don't see that, i there is going to be a big push behind the scenes to try and figure out some way to replace him if there is a leader in waiting. that is another big concern. they do not see one yet. >> now, the militants we saw the last few days, they seized two border towns yesterday. that is raising concerns about a spillover effect. concerns -- u.s.'s
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protecting baghdad are keeping this contained? >> we have heard a shift over the last five days. baghdad, when the president spoke last week, as we have seen with this bead with which these militants have moved, baghdad was a major concern particular for the u.s. embassy. it has shifted. it is now those border towns, the allies, and jordan, saudi arabia. it is less of a concern that there will be some type of infiltration of baghdad than there is that these border towns which have been taken over by the sunni insurgents will become a gateway into bigger issues briniging allies in a major way. that is the big u.s. concern., are -- is the concerned here about being back to a repeat of the sectarian strife we saw back in 2006? >> i think that is absolutely a concern. i do not think there to that point yet. we saw a big show of force this
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past weekend. shii militias out marching. daunting pictures of individual saying that they are walking around with bombs strapped to their chests during these marches. the u.s. looks at that is an effort to intimidate these sunni unni militants on trying to attack frontal on baghdad. one key thing officials are warning about, they tell us they are seeing intelligence. i ae is a mosq that was trigger in 2006. if there is any kind of attack on that mosque, they will start an offensive of their own. watching very closely. we are not close to the point of 2006, but that could be a trigger once again. >> thank you so much. the crisis in iraq is pushing oil prices higher.
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when does the pain begin for u.s. drivers? mike mckee has the real deal on the real impact on us. >> it has become something of a habit in recent years. you get a crisis, oil prices go up. but so far the good news is the relationship thisn't holding. so far iraq is more of a concern for speculators than for american drivers. the price of gasoline futures has gone up quite a bit, but the price at the pump has not. that particularly considering this is the summer driving season. two things could change that. if we have a long crisis, and if we have an actual supply interruption. the bad guys are still nowhere close to control of the main iraqi oil fields. so far it is a what if crisis. oil inventories, higher than average. refinery operations are normal. even oil prices are not all that
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much in comparison higher. $10 increase in the price of brent crude pushes gas prices up $.25 a gallon. crisis, we are only up six dollars a barrel. if prices doy says not move much more than that, there will be no effect. >> how high do the prices have to go before we really see, before we start hurting? >> it is not how high, but how long they are higher. per barrelet a $10 increase in the price of oil for 4year, morit could shave percentage points off of gdp growth. as american drivers and spending, research shows that americans do not start paying attention to until gas crosses the highest point had been previously which would be $4.00 a gallon.
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a priceld require $126, a barrel of oil. >> a lot has changed in the last several years, including fracking. much more of that in the u.s. is that going to help keep prices down? >> it helps keep prices down but not a whole lot. the story is we have more oil, yes, and demand is down. has addeding is done a little bit to the supply in the world. is priced globally and global demand is higher than the amount we are adding to the supply. we would be in worse shape without it, but it is not really going to help us. because of the global pricing, it does not mean we get to be energy independent. >> mike mckee. saleg up, the recent $102 should have been a car or rich are getting richer. over record-breaking
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millions for real estate. richer.etting stay "in the loop" ♪
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>> first lady michelle obama has been on a mission to make america's schools a healthier place. one company is doing that. revolution foods which feeds one million meals a week to mostlchildren in the underserved communities. earlier this month, revolution 30 millionived a $ investment from steve case. we are joined by the cofounder and cto of revolution foods. thanks so much for joining us. how much of a deal as it to get steve case to invest in your company? >> it was an exciting next step for us in terms of expanding the
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reach of our meals. we are serving one million meals a week. with investment, we hope to have more impact. >> in what way? can you give us some numbers? >> sure. we have grown at 100% compound annual growth rate. it has been rapid growth all demand for healthy, affordable, delicious meals. we are in 26 cities and hoping to grow rapidly from here. so accelerate that growth from one million meals per week to several million meals per week in the coming years. >> why is it so hard to get healthy food into america's schools? tell me. >> i think we have a really unique solution. we have been working at it for a decade. part of our secret is that we really listen to our students and we listen to our families. we design our meals accordingly. important is that
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revolution believes that great nutrition for kids is both the quality of ingredients you are including in your meals but also making sure your meals are delicious. >> right. but are your meals more expensive than what traditionally schools will offer they kids, which is why a, are not feeding their children healthier food, but b, you are not in those schools? >> we are now serving over 1000 schools. i do think there is a certain scale and volume that you need to be serving. revolution foods has become affordable over the years. i am pleased to say that 80% of the students we serve qualified for the federal reimbursement rates. right now we are accessing the students who rely on school meals as their primary source of nutrition. our meals are all within the reimbursement system. so all affordable. >> steve case has mentioned
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about your company, i see it as a $100 million company going to a $1 billion. he sees the opportunity as huge. you know this organization called fed up. haveare on this mission to kids eat healthier foods, and they as students from all over the country to submit photos of their school lunches which are these terrible, these photos of terrible meals. french fries, corn, hot dogs. so are you, as part of your company's mission, are you trying to shed light on the poor nutrition that schools are giving to their kids? >> we are more focused on providing a solution for better food. we are focused on complement in the districts and the schools we serve to make sure that kids have the best quality food on their plates. i am proud to say we serve
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750,000 servings of vegetables a week and 1 million pieces of fresh fruit. we're focused on making sure that not only is the food nutritious, but that it's beautiful, it is appealing to kids, and that it is driving consumption every single day. >> thank you so much. of cofounder and ceo revolution foods which is one of the many startups steve case is looking to grow. case hits the road for a bus tour called rise of the -- he will be meeting with governors, investors and startups in four cities to spur the start of culture in middle america. i will be with him. i will hop on the bus with them starting in detroit tomorrow. we will bring you an exclusive interview all week long. coming up, when the debt hit record highs last week, some of the richest people in the world got richer. we will tell you which ones. after losing a big bet on wireless, a hedge fund billionaire is looking towards
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pet supplies. ♪
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>> movie and shaking this hour, phil falcon. he tried to take over the world of spectrum. now he's going big into pet supplies. according to "wall street preparingis group is to make an offer for central garden and pet. a lot of harbinger's investors have pulled out. falcone made a big bet on light squared that is now in legacy. falcone resigned from life sq uare's board.
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other billionaires are celebrating after the world's wealthiest added $15 billion to its pocket. matt, a lot of that has to do with the stock market. >> it with economic expansion. the anticipation that the economy will continue to grow in a faster clip. at the beginning of the year, when we pulled billionaires that davos, they said much richer this year. so far that is proving true. >> there are some standouts? >> elon musk made more than$1 billion last week. with this huge surge in tesla. musk was barely a billionaire couple years ago and now he is worth $11 billion. >> it is staggering. bill gates who is still the world's richest. $83ill gates is now worth
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billion. a monster number when he is considering what he is getting out of microsoft. other investments through cascade are what are benefiting. bill gates is a very diversified billionaire. >> did anybody lose money? >> so far this year, jeff bezos is the biggest loser. >> $7 billion. have we seen, with the rise in stock market, seen any new billionaires? >> there are so many deals going on and a lot of m&a. you will see a lot of new billionaires. we have seen a lot of people to $1.1m $800 bilmillion billion. you'll see a lot of those happen this summer. >> great to see you this morning. we are just a few moments away from the opening bell. we have got the top 10 stocks you do not want to miss. keep it here on "in the loop." ♪
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>> welcome back. i am betty liu. it is 26 minutes past the hour which means bloomberg television is on the markets. julie hyman has more. looks like an undecided day. >> it does. futures little changed. a little up, a little down. remember the s&p 500 closed at a record friday. that is the context in which we are going into this week. it is market pmi day. measure of manufacturing and various countries. we will get the u.s. reading at 9:45. that is the june parliamentary numbers. then we will get existing home
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sales figure in. eurozone. particularly in france. more on the markets in 30 minutes. >> let's count down to the open with the top 10, the only trade you need to know today. let's start with number 10 bnp paribas. the bank close to a deal to plead guilty to pay up to $9 billion for allegations of violating sanctions. an agreement is said to have been reached. >> number nine, starbucks. it is attracting a lunch crowd. starbucks will start selling handmade sodas as well as revamping its sandwich offering. >> number eight, central garden
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and pet. it is being targeted by harbinger group. the firm made a bid to buy central. >> number seven is oracle. the company is by micros forems, a provider of i.t. retail industries for $5 billion. it marks the biggest deal for oracle since 2010 when it acquired sun microsystems. >> number six, american apparel. the board has rejected a plea to meet with the x ceo and has again refused to reinstate his position. hisexecutive has also lost support of american apparel's biggest shareholders. >> number five, wisconsin energy. they agreed to by an energy group for $5.7 billion to double its number of customers and increase revenue. the deal is expected to close next summer.
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ie,and number four is abv bidding to buy shire. it cited positive data from its experimental pipeline. and two oncology programs and final stage testing on a multiple sclerosis drug. >> number three is lululemon. they said they are focused on further strengthening the company's products engine and innovating to drive global expansion. this is after you "wall street journal" reported that they hired goldman sachs to explore private equity sale. >> number two, coach. the handbag maker downgraded to underperform or. er. they cut its price. ended last week as the lowest since july, 2010. >> watch number one, g.e. deal.truck a $17 billion
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to buy asltom. there goes the bell on this monday morning which means we are heading straight to the call. i want to bring in michael purvis, the chief global strategist at wheaton. an inflation jolt that will upset this equity rally. he's focused on transports. so i guess the question is who is going to win here? >> generally what we have seen over the last couple months is still in play. certainly through the end of the quarter. >> what is still in play? >> transports leading the dow. we are having a slow-motion melt up, a performance chase. july should get some more volatility. the pressure hanging over fund
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managers. as we get into the second quarter's earnings in july, i would not be surprised to see companies come with pretty strong numbers in. this rally will continue. >> but what will be of setting the applecart is inflation? >> i am not predicting an inflation jump. when you look at systemic volatility suppression, which is across commodities. treasuries, equities. currencies. you have this very unique condition of this conversion of all of the central banks around the world with very similar strategies now. the one thing that undermines that is should we get in olt, that will get things started. transports side, it sounds like that will continue to be in this equity rally.
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julie has been looking into transport. >> the big obvious risk would be related to inflation and would have to do with oil prices, because we have seen oil prices ande up because of iraq the underlying picture is one of a tight supply and demand. when you introduce supply disruption, you see oil go high er. nymex crude, wti pushing closer towards $110 a barrel. if you're looking at some of the rail companies, the rails have been transporting a lot of crude. this could squeeze their margins. for companies like fedex and ups, it would have an effect. the backdrop for transport has been very strong. this group has done very well and has underpinned some of the gains we have seen in the overall markets. it is up 11% for the year to date. >> what about that risk?
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>> it is very relevant. the question is, we have been complacent on the geopolitical risk in crude prices. right? spillhe mess in iraq down south? >> does that make a difference. >> on iraq? it is too early to call. we understand it is manageable. if the problem spill into southern iraq and cause a major disruption to supply, absolutely. all of that is going to be an issue for the transports and for many assets around the world. >> you have got a call on a few starts. -- few stocks. you say by yahoo! yahoo!
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>> why should focus on the core fundamentals, you wonder how many of the 21 buy recommendations will disappear. yahoo! is struggling to gain market share against google. 6%.ks fell to warned that a turnaround of yahoo! will take multiple years. >> when you have 21 analysts with a buy recommendation, isn't that a red flag? >> it is. if you assume the low end of the range for alibaba, you're looking at a cheap value, pretty cheap ebitda. it is not a great business right now. cheapu're getting it for prices at $35. it produces very significant, substantial free cash flow every year.
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again, there is a big eye can see a big play later in the summer when our car comes calling. alibiab comes calling. >> we will tell you how you technology from intel have animators bring dragons to life. ♪
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>> here is a look at the top tech stories. russia says twitter has agreed to block accounts hosting extremist contents like those from ukrainian groups. kremlinpland -- the to
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one of many.s mu the attack stole data. computer networks that banks and hedge funds on law firms have been infiltrated by eastern european hackers. on a lighter note, "how to train your dragon 2" brought in $25 million at the box office this weekend. while the film rings that familiar characters, dreamworks take a -- took a slightly different approach to the sequ il. we went to check out some technology that jeffrey katzenberg has called game changing. >> i saunter down to breakfast and i get -- son, we need to talk. >> this is the main character in "how to train your dragon." when he came to life in the first movie, they used a software called emo, but making
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changes to time and rendering changes took more time. dreamworksns 2, rolled out new software called apollo. rendering happens in real time. >> we have built the software so it is never -- it is always up to speed. the latest and greatest. >> dreamworks is known from approach. tech savvy the company's aging software was not keeping up with computing power. apollo was created in partnership with intel. the chief technology officer says animators are more agile, and the studio can reduce production costs. >> we can play those games, and we are with concerns with the budget as well as the quality of the movies which you can see in "how to train your dragon 2.:" 2" required 90 million hours worth of work to
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be rendered. it required 398 terabytes of storage, equivalent to 25,000 mobile phones with 16 gigs of storage. all of that technology shows up and complicated characters. >> the size of that creature. and my director going, can you change this? it which is something that would take me a couple of days to do prior. >> intel's engineers walk away from the project with a boatload of information. >> we can take it back and understand how in our own long-term plans about -- we can actually make them better. using apollo on films, dreamworks may make the technology available to other industries. >> other business sectors create images. they also designed product individual way. all of those processes are set
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up by apollo. >> hold on! baby! cool to see the technology behind these movies. jon erlichman joining us now. how much of this movie is about competition at the box office? that is a big part of it. we have been spoiled to a certain degree with animated movies and cgi. we go with great expectations. you can only take a film as far as the technology you've got will take you. that was one of the challenges to rework had. we now live in a world where you can take advantage of the cloud. when they were able to make this transition, it was not quick. five years. now there is this ability to them -- for them to make quick changes, make it more interesting to the filmgoer. obviously, they have been doing fairly well with this movie at the box office. >> you mentioned that dreamworks
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is pushing into new businesses, correct? >> yeah. i think for people like jeffrey katzenberg, they are taking about where they're on itss a0-- their audiences are going. they are spending more time on youtube at netflix. we have seen dreamworks make a big push recently in those are as. the films are important in driving other areas. you can come up with new spinoff characters or themes to fuel youtube or netflix. so ultimately, it all ties together. >> jon, thank you so much. jon erlichman. everythe latest in tech weekday at 1:00 and 6:00 p.m. on "bloomberg west." british airways thinks it has found a way to keep passengers from being bored out of their minds.
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if you like seven-hour films, you will be plastered to your seat. more on that when we return. stay "in the loop." ♪
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>> time for the global outlook. bnp paribas close to an agreement to respond to allegations that violated u.s. sanctions. it will play -- pay close to $9 billion. $30 billion dollars in transactions that violated. sanctions against iran and iraq. and british airways is checking out a new type of in-flight entertainment called slow tv. the airline will screen a seven-hour film showing a rail journey through norway and real-time. the marathon film has a similar appeal to plane maps. when are we going to get there?
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that is what you are thinking about. it's the deal that finally got done. general electric cleared the last hurdle to clinch its biggest acquisition, the $17 billion purchase of alstom's. stephen engle caught up exclusively with the former prime minister of france in beijing. the choice that has been made is a good choice for france and a good choice for the company. agenda very high in the is the question of jobs. this has been quite well taken into account. and we can keep some of the capacity in france. and that is also a good decision. s> that held that -- it goe back to the state. >> absolutely. i believe it is important for the french to keep strong
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leverage in this company because of the importance of strategic -- the to judith importance of different capacities -- the strategic importance of different capacities. >> you were prime minister when they came in about another company. is this similar? >> i think so. i was the first one to consider some kind of a patriotic attitude towards the economy was something good. and i believe we should keep on this line. it is important for every country to take into account its own needs and own necessities. >> and u.s. investigators are debating whether to blame going's jet liner design for helping to cause last year's aseana airlines crash that killed three chinese teenagers. we are covering the faa. allen, what are we looking for as they wrap up this investigation? >> well, basically, we know already that this was caused by a series of very significant
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real mistakes, but the question and debate going on right now is whether other factors, including the design of this airplane, may also have contributed to the accident. >> cockpit automation is one focus of this investigation. what is the issue here? >> well, the experts who study this call it creeping complexity. this plane has a very sophisticated autopilot an an automatic speed control. it makes it almost idiot proof. it prevents you from getting to o slow, but there is one mode where you can turn those protections off. the pilot in this case accidentally got into that mode. he did not realize it, so he allowed the plane to get too slow, and lost altitude. >> do they know why or how he accidentally got into that mode? when they interviewed him, he
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said i assumed the plane would keep the speed i wanted. understandid not what happened. >> alan, what could it mean for boeing if the design of the airplane is cited in this? >> we need to keep the context in mind. the 777 is one of the most successful planes in history. and this does not change that. but it is important from a public perception standpoint. and as lawsuits go forward, i think sometimes the ntsb's findings are a roadmap for the legal proceedings. boeing isd mean that going to be more liable down the road. >> alan, thank you so much for joining us. alan levin on the investigation into the asiana crash last year.
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that does it for today on "in the loop." hewlett-packard -- the list of companies in transition goes on. tomorrow, we will talk with our turnaround expert and the former ceo who wentmer to his own transition. greg rayburn joining us at 8:00 a.m. eastern time right here on "in the loop." ♪
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50 six past the hour. bloomberg television is on the markets. i am julie hyman. let's look at where stocks are trading. we just had a few moments ago and manufacturing number that came in well ahead of estimates. the pmi number coming from market for manufacturing.
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estimated,etter than showing manufacturing expanding more than estimated. it did not make much a difference --much of a difference for stock investors. take a look at the fix. n-- the vix. not surprising that you see a takeoff and volatility. still at there he historically low levels. bill gross is betting that volatility will remain at -- low. companies have been selling volatility, not just in fixed income but where there is historic expertise. joining me with a look at how pimco has been doing it is mary childs. so this sort of goes along with the new normal. it does not just mean abnormally low anemic economic growth. >> that is exactly right. in there new outlook in may, they said for the next three to five years they will have low volatility.
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lamer. will be >> i like that. how do you sell volatility? >> they are doing it in a bunch of different asset classes. one of the legs of the trade is an s&p options. they have been selling a strangle. they have a june expiration. they have been doing it for two months. they were betting that stocks would be in this range. that has been borne out in the markets. you have seen that for 45 days, not moving more than 1%. >> it has been a successful trade for them. so this must be sort of anice offset. theoryh -- so is the from pimco that it will last a long time? >> that has been at the top of mind for them.
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they are watching central banks. you are saying, ok, might have an outlier. that will cause a spike in volatility. that canary in the coal mine, they are sticking with it. >> are there any broader implications of the traits they are making? -- the trades they are making? are their implications for the rest of the market? >> i think so. you have such a big player. people react knowing that. these markets are very liquid. in s&p options and interest rates. i come from derivatives where i am paranoid about cdf's. >> what's also interesting about this is that, although other investors seem to have bought the idea of economic growth remaining low for a while, a lot of investors are more than -- traderx have been saying recenty
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that volatility will pick ups. they seem to be going a little counter to the prevailing market sentiment. >> that is definitely a risk. you have to look at the vix being the lowest since february, 2007. when you are selling insurance at that level, are you getting compensated for the risk? you are on the edge. >> mary childs. talking to us about pimco's low volatility strategy. "market makers" is next. ♪
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>> live from bloomberg headquarters in new york, this is "market makers," with erik schatzker and stephanie ruhle. business waits on the supreme court. a week left in the term and justices have crucial cases. versus tvm is aereo networks. >> ousted american apparel ceo says the company's board is acting illegally, trying to be reinstated. >> the tie that feels like a to usaortugal's stun with a final goal. what are the odds of america making it to the next round of the world cup? it is


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