Hill shire thought they would buy pinnacle and get into frozen foods and get bigger. A couple weeks later, theyre going to be involved in tyson. A heated hitting were. Bidding war. Have the stronger balance sheet, but they had the stronger will. They did not really chase this is this. Sara lee was part of one big company. They almost bought it been a couple years ago. They have been lusting for the brand for many years. On had a Bad Reputation not a Bad Reputation, but it would back away from meals at the last second. This time, they went through and went a couple of dollars higher than the rival. The next thing will be a formality. Hill shire has to get out of the pinnacle deal. Acquired. Ll not be 163 million termination fee. They will get paid by hilla shire for the deal not getting done. We do not think there are great candidates to buy hill shire. I think they go on doing what theyre trying to do. They are for sale and are on the block if someone wants to take a look. What happens to the company putting up its for sale . It often hurts the company and at the executive level, when you know youre working for a company so clearly on the block. That alld have known along. Your owned by private equity fund. The case of this one wanted, no it. Are steamrolling and speeding toward the 1 trillion month for just this quarter. We have not hit that since 2007. We are heading there right now. Deftly on fire. Thank you for joining me. Today, apple shares will likely drop below 100, a price we have not in nearly seven years. The fourth split in the companys history. The move is intended to open up apple stock to a wider range of investors. Jonathan has been watching this closely. What exactly happened to apple shares . He want the stock, i will take that and give you seven back there nothing really changes area you get the stock adjusted price. You get a record high adjusted for the stock. Here is what it does not do. It does not change the market cap. It is a technical thing. Now because het wants to make it available to investors. Inclusion of the dow. 500 a share. Below 100 this is not a given. It could take one year or two years. A major obstacle to let that happen. Doesnt not make it more investors . For retail if you see a stock, maybe it is a little more affordable. It certainly makes a difference. I thought people were smarter but the psychology still exist. It is a big share buyback. Thank you. Moving and shaking this morning, just motors ceo elon musk launched a righthand driver model of the model s. His hope is around the new market. The u. K. Is likely to be one of our stronger markets. If you get a car now, you only see it in four months. We are putting money into infrastructure. The infrastructure will roll out is quite significant. We will have much more from him a little later in the program. Also, Hillary Clinton. Will she or will she not . Answerl not likely whether she is running for president in the end of this year. Phil mattingly has been watching all of this. Anythingtour, is it more than a campaign . It is not. She has not announced her intention to run for president. The way the rollout occurred, the book has not even come out yet and we have seen excerpts leaked, big news items leaked, primetime set tonight and then she rolls to a fullblown tour, hitting a dozen cities. The big question is, is she going to run. The bigger question is, how many ways will she try to dodge that question. Take a look at the preview of the interview yesterday. I want to get through this year and help in the midterm elections in the fall and then take a deep breath and go through my plus and minus. No nearterm answer. She is going to help out with midterm elections for democrats. That is important and it is a sign. Her operation is sending out. Oney and that means something it does. Sit backns will not quietly and let the clintons take the stage. What are they doing . The Republican Opposition rollout has almost equaled it. The Republican National committee has released a briefing book on the areas where they feel she failed on her state term. An outside super pack also released its own ebook, 100 plus areas where they think she has failed. There is a lot of concern Hillary Clinton has been given a free pass to set her message on what she did. They will try to undercut and undermine that anyway they can. When she decides to pull the outside she has several groups ready to spring into action. That is right. One of the most fascinating things going on in the last couple of months are these groups that of sprung up around her. Activity. Actual talking about a super pack that has been formed. Also correct the record, a Research Firm supposed to push back on republican talking points. She has former clinton aides tightly wound into the organization. They are ready to spring into action. There will be a ready for hillary buss following her to each and every stop. A key thing to keep in mind, it may look weird but every stop they are going to, based they collect information. All of that will turn into a campaign. Thank you. I am looking forward to reading the book. Coming up, we talked to the former u. S. Attorney general about the state of the nsa. It has been a year since Edward Snowden became a household name. Has anything changed in the year . And, is brazil ready for the world cup . We kick off our series of indepth reports in the face of riots and economic strife. It has not been an easy terrain for some of the worlds biggest market. Stay in the loop. One year ago today Edward Snowden became a wanted man and a household name. Documents d kit detailing american secrets were released. He remains in russia and many of the programs he revealed remain in place. Peter cook has much more on this. The fallout since snow sn owden continues. A lot has happened in the interim period. Edward snowden has sparked an international debate. He has put the United States on the defensive in that debate. He also triggered changes in washington proposals from the Obama Administration and from congress to change how the nsa does business. That is a work in progress right now. The Business Impact as well. Companies say they have been overed by the debate american surveillance programs. Hurt their business overseas. It has created a much more adversarial relationship for u. S. Countries. There are also proposals to change surveillance programs. Just proposals right now. No actions. That is right. There has not been concrete change so far but that could change in the next few weeks. Movinge the president forward in january. The big idea there being the and to bulk collection. No longer with the government collect all those phone records. Instead, he wants the phone companies to hold onto the phone records and let the government search them under court order after the fact. That is where congress is headed right now. There are problems surfacing in the senate. One of the problems is the phone companies do not want this the responsibilities. Is, they do not all say the same thing. Not only may should may be in a format readily usable by the government. Then there is the severity civil liberty issues. Some of the Tech Companies say. T is too broad they do not think it is good enough and that is where the tension is on capitol hill. Class you mentioned Tech Companies. Business impact . China looking at the use of ibm servers that chinese. The Tech Companies say a real impact on their bottom line, and there have been estimates, by 2016, that is what estimate. Some say it could be as much as 180 billion dollars. Were talking about real money here. You can see why were so concerned about the federal government right now and the relationship going over. Class thank you. Joining us now, the former united days attorney general and clinton partner. Issues incritical domestic and international law, including government surveillance. Great to see you this morning. Peter just outlined some of the issues that of, in the years since Edward Snowden and came out there it what have been some of the finer points that have been came out. What are some of the finer points that have come out. Collecting content on americans at all in this room. It has collected metadata domestically, which is the date, time, and number, so they can go back. If they get a suspicious number and find out whether that number has been called by any number in the state. If they get a hit on that, they go a terrorist they can focus in on the number and if there is enough probable cause, they can get a search warrant to listen in. They do not get the content from day one and that is in a big misconception here that a lot of evil, including snowden, for sure, and people who are apologists for him as well as a politicians. As is only, we know it essentially, timestamps being collected and not actual content . What i say is it is up to the people clinging to the content to prove it. I worked with those programs and i know the people involved. I am telling you there is no content. You do not have to take my word for it. You can take the word of every nsa director and cia director involved in these programs. This is a military program and not in the hands of politicians. There have been changes proposed in the house. Are you for the changes . Do you think there should be restrictions . Last i am not for restrictions. I think the changes are helpful. Before, we were not getting cell phone information of that kind because the government was afraid and a private companies were afraid that if they closed the metadata. Get the cell phones. On the new program, the government goes back to get it and they can get cell phone information as well. To that extent, it is an improvement. Keeping it in the hands of ride it companies, they can be held in different ways, plus the private companies themselves do not like the idea of being responsible. Consumers toy for know private Companies Hold that much. Theyre holding that information because that makes up your phone bill. On the done based time you used. They have had that information since they won. That is not a mystery. The notion that somehow, someone 350the spare time to track million Peoples Telephone calls is ridiculous. That is the information that allows us to look out the country and we have no other way other than your luck or if we get the help of foreign partners. Foreign partners do not trust us anymore. Theyre saying it you cannot keep your own secrets, you cannot keep ours. It is hard to get their cooperation. Thank you for joining us. The former u. S. Attorney general. Still ahead, winning the world countrys dream. Hosting it may turn out to be the worst nightmare. We will have more details straight ahead. You are watching in the loop does quote live. Morning. I am betty liu. 27 people were killed in a gunfight in pakistan airport. Security forces killed 10,000 fighters who carried out a latenight attack. Airport airport of airport employees were killed in the attack. The economy grew faster than estimated in the first order. 6. 7 . Rose most economies 5. 9 . Increasednvestment more than originally expected. An increase of 10 according to the company. Surgedt of coffee has more than 55 this year. The worst drought in five decades or lost. A cup of joe will be more its as if. It is 26 minutes past the hour. Lumbar televisions on the market. Matt miller has more. Class it is time for futures and oh. We are also talking about coffee. The price of coffee futures surged earlier this year. Last year, they entered the ball market at 20 . We will look at why coffee futures are living off. At senior commodity broker rj obrien and associates there that start with you. Think about the bear market we entered a week ago . Yes. All of this is because the consensus is that the drought had done a look less damage than brazil. Brazil produced about one third and one half of the world passes are a key growing company. Theyre coming up for a hard this year in june or the and is is they should bear 47 million per bag. Last month, 4245. We are getting a little more than a vested. Ofare at a support level 170. We bounce off there several times in the past three or or weeks. Or fourreak weeks. We should break through their. Trade on coffee, do you sell coffee futures at 170ive enclosed a trade at 160 . That is a prophet of the scene dollars or hundred or hundred pounds. Cost 500 pounds each. That is what a contract is. The total profit is 5,600. 5. Why we have seen the bear market in coffee. People are not drinking less coffee. The definition of a bear market is arbitrary, as ashley in this case, when you have prices above 14 above a moving day average. We still have not taken out the 160 and 170 lotort level from back in in march. We do know what options traders are looking at is still relatively high and we realize volatility is still relatively high. Traders are focused on the indecision about the effective that in the future. There are two in areas that will play out it is not as bad. The drought is not as bad as players may have thought previously. Absolutely. That is what a lot of speculators into the market, the level of speculation, the amount of speculators is still long in the market. The true scenario you can look at his were basically going into some type of a range here or if we break lower, than we are really in the bear market. In a bearreally market at least as far as the traditional measurement of 20 . What are the chances going i think they are quite high. We are seeing a bit of a tale as you talked about. Tosumption is expected increase about two percent this year. I think the pending stockpiles we had from previous years, along with the better than expected crop we will see because of the late harvest rain, it is a high probability that it occurs. We often hear the term, soft commodity. What is the difference between soft money and hard commodity question mark commodity . I have always wondered because oil seems fairly soft as well. Greg bender there from bloomberg trade book. Thank you very much. We are on the markets again in 30 minutes. Yes. They have had seven years to get ready and spent more than 10 billion preparing for the biggest sporting event in the world. Kickoff to the world cup is just days away. Brazil is still not ready. The question on everyones mind is why . We traveled to brazil to get a firsthand look at what is going on. Lets say youre going to brazil for the world cup. Here is what you will see as soon as you step off the plane. Expect traffic on your way to the game. Get there, ally hardhat might come in handy. Take the 365 million stadium. Get itbeen a scramble to finished in time for the opening kickoff on june 12. With just weeks to go, entire sections had no seats and much of the roof was not installed. Outside, this was supposed to be a huge parking lot designed to hold dozens of buses. They were barely able to accommodate a half size crowd. What happens when they try to pack and twice as many people. It could be a security nightmare. Some of the challenges of stadiums, the parking around the we will behere is it able to go or not . It is an uphill battle for all of us who have a responsibility to protect these folks. Cup is the biggest sporting event on the planet. Why is brazil not ready . No planning. Why should we for the world cup . Comp the country is in a difficult situation. 2. 6 billion were spent to build the model stadiums in 12 cities. Only three were delivered on time. Federal and State Government marks 14 billion to improve the ,orinth Core Infrastructure only to encounter more delays. In the terminal overcrowded airport will not be completed until after the world cup is over. The airport renovation is months behind schedule. In the overcrowded airport willeven ra mecca, did little to fix the that lead to epic traffic jams. North in the amazon, there is a city closer to being ready for soccer fans, a jungle boomtown. Here we are, three weeks from the beginning of the world cup. How much work do you have left . He will host one of the biggest matches in the world cup, english england versus italy, on june 14. Everyone knows this is important to us, for everyone in brazil. We are a poor city and we need to have we are able 100,000 people, that we manage great offense. We do trust in our future. That is what is really at stake. Not whether they will come for the world cup, but whether they will come back. Eric schacter is all decked out for the continuing story on brazil. Great to see you this morning. Im ready. It is hard when you go to brazil not to get swept up with the fervor of the national team. At has been pointed out to me several times, i have proved to have divided loyalties. This looks suspiciously like argentina. Look at you. And spears the theories. I take it you got that at the nike store in rio. I did. There is a nike store dedicated to real only. Whati is the most surprising thing you saw . The most surprising thing is the enormous gaps in development. The arena, the stadium, as we showed people there, acres of undeveloped earth just weeks before the world cup kicks off and then you travel to the amazon to a city you would think cannot possibly get its act together for the world cup and yet they are pretty much ready. Why is the zone not already to go . And ask the question. We spent nine days trying to answer it. Wordld have to say, one probably comes closest corruption. Everyone knows brazil is a corrupt country. Tales of corruption are unbelievable. You talk to Business People and the anecdotes they share with you about the conversations they had to have with politicians about getting permits and licenses and being able to operate in the country, are shocking and hard to believe. It is very difficult to quantify, but when you talk to government officials about why certain things are not done, you get a song and dance answer about how, we are a latin american country, things do not move that quickly. Nonsense. They had seven years to get ready. Some things, if you put them in the hands of private industry, do get done quickly. I would put them in terminal three. It is not totally ready for the world cup, but it was built in 14 months. That is extraordinary if you look at thisscale. That is a private concession. Government hands, the case for the world cup, all of the funding came from the state and federal government. And it gets a lot more complicated. Is it likely they will get it done before thursday . People will be able to go the stadiums and see the games, and getting into the stadiums will be hard. When you actually get there, things like signage may not be completed. Some people may Wander Around endlessly trying to euro what is owing on. There are risks in certain places, where the exit from the arena is not well thought out. Real bottleneck. There could be Serious Problems if people decide they are frustrated and drunk, you get foreign soccer hooligans, it could get kind of ugly. The bigger problem is the lack of infrastructure and possibility for domestic protest. Brazilians themselves are not happy about the world cup. So much money was spent on the stadiums and almost none was that on health care, shelter, education, a growing middleclass. We saw some of that in your piece. Much more is coming this week. We explore the question, the eternal question, will it be worth it . So many billions spent will get a return on the investment. Twitter will get fire with perhaps edges of some of the things you just described of unpreparedness. Thank you so much. Stay tuned to Bloomberg Television all week long. Eric will have full coverage. Keep the jacket on throughout. We will show you how Global Business uses the stage to influence billions in commerce. Elon spent will get a return on the investment. Twitter will get fire with perhaps edges of some of the things you just described musk l s. Will his electric car take off the u. K. . We will find out. Stay in the loop. At linkedin top headlines. Articles trending on linkedin. The Senior Editor at the professional networking site, john. Such asatisfaction is hot topic on linkedin. One story that got read a lot had to do with the galaxy ceo. He came out and said it is employee Employee Satisfaction is not a priority. Class a lot of places that have the start up, you ask employees if they like that, they will say yes. But it does not actually make them happy in their work and what makes them happy in their work is what is always made people happy in their work. Having a job that is meaningful and a good loss. A good boss rings you along, tells you how are doing you are doing, except your initiative, and things like that. All the free lunch in the world will not replace a good boss. As he described in the article how does that . No. Is is a feedback kind of thing. One of the data points he had was companies with employees that took a week off were often much more engaged and happy in their work than other employees in the same place who took off five days. The reason is they like free stuff or the people working there all the time did not make time. The thirdads into most read article, which comes from a New York Times bestselling author author. It is the same thing. This whole idea of being engaged in your work, and what is true and what is not very yes. Is the point of the analysis that the proxies we use to decide we are successful and happy are terrible. It all comes down to being busy, never saying no, not getting enough sleep. Successful evil tenant to be busy. Not everyone who is busy tends to be successful. His point is to look at the things youre saying yes to, and say no to a lot more and enjoy what youre doing in life, because you will miss out on busy. By keeping too what were one of his biggest myth busters . Saying yes to everything. Youre saying a lot of people do that . Yes. Surely you have met people that say yes to everything. There is no is time to do one more thing, even agreeing to do something and change your mind about doing it. You say, this is dominant does not make sense. Even if you agree to do something, you can reevaluate it and say, it is not worth either of our time so no. Five lies that could be running your career . These are interesting things ourselves,ys telling i do not have a passion for anything. I have to keep doing what im doing because it means something to my family. Five lies you tell yourself exactly. The litmus test by Teresa Sullivan is, if you tell yourself this thing, and you are not happy saying it, it is not true. The truth sets you free and the truth makes you happy. You say, i am very passionate in what im doing or i am not. You should have a visceral feeling about that. Her point is we all go through life saying, i have to do this. She is saying, question that. Ask yourself every once in a while, do you really have be doing something you say you have the do. Class a lot to ponder. About your career and your life. Thank you so much. The linkedin Senior Editor. Out my linkedin page. Coming up, a closer look at the future of virtual reality. Recently bought by facebook, a new competitor. We will tell you what tech giant is expanding its footprint. Elon musk has handed over the keys. The company betting the u. K. Could become a major market for them in the jerk, helping them gain and hold in other countries. Was at the event and has this for her. With the echo of a porch and the strongest batteries on the road, or two years, the tesla model s is been the king of green luxury cars. 25,000 are already on the streets of the u. S. S like youa tesla have never seen it work. For the time ever, the Steering Wheel is on the right side of car. Area inside is all the bells and whistles you would back. A 17 inch this play, a full, i had a vision of google maps, energy and option of the projected range. Click voice control. Voice control. It is a minor tweak for the tesla founder, who is heading britain will be the top founder. The u. K. Is going to be one of our best market. Now, you order a car receive it in four months. We are putting a lot of investment into supercharged infrastructure. The infrastructure rollout is a significant. We will be spending level hands of millions of dollars in the next year on that. Pounds. Starts at 50,000 among the first five new owners, the bestselling author of 50 shades of grey. It is a dream. The right side Steering Wheels will springboard tesla in other countries where people drive on the left that of the road, including india and south africa. Cars there will still be the challenge without infrastructure in place. In britain, the supercharged stations may prove to be the case for tesla. Olivia sterns, bloomberg, london. For more, be sure to watch our special on bloomberg. Com here you can check it out there for free on our app. Did you binge watch orange is the new black . We will discuss what is going on behind the scenes of a redhot streaming media company. We will be back. We are looking at the future of virtual reality. In march, facebook bought it for 2 million. Mark zuckerberg said in a phase post the Technology Opens up the possibility of completely new kinds of experiences. At thed gamers conference last year. This is sonys ps work. Plans to unveil its own headset at the electronic entertainment expo today. Hardware anded the highdefinition audio. Forcehan 7 million u. S. This has to connect through a highpowered pc. We will keep you up dated on that. Bloomberg television is on the markets. Are lower after hitting a record last week. The dow is just shy of 17,000 points. We are on the market again in just 30 minutes. Talk about over, evaluation is huge. The the the recordbreaking evaluation in august. Equity futures are lower on this monday morning. The dow, 17,000. We will watch the markets very closely this morning. Apple shares will fly to 100 evaluation of any returns, but a fourth split in a tech giants history. The netflix Shareholders Meeting today is meeting up with a bank. Thousands stream the new season of orange is the new black this season. A new report out today detailed the outlook. It is week and it estimates it is costing the Global Economy about 450 billion a year and its authors cannot find any where the losses decrease. Megan, where is all of this coming from . This is a nonprofit here in washington. The lead author was orderly with the nsa. Networksponsored by a security company, a reputable group here trying to find this, it has been hard to nail it down. The low end, 375 lane dollars. On the highend, 500 heavy 5 billion. Direct and indirect costs. The costs of securing networks, the loss of intellectual property, a hard number to nail down. Using the information they take similar to insider trading. With some perspective, the number they came up with is more than the National Income of a lot of races. 4. 8 of global income. A lot of companies do not report when they have in half so it could be a lot larger. Out lily. It is incredible to see the numbers. Are we able to break it down at all by country . Are some losing more than others . Lack they took more than that. It is hard to nail down your they look at it as a loss of a percent of gdp. Some of the higher Income Companies are losing the most. The highest hit, netherlands, germany, the u. S. , and china. These may be countries with better and more accurate reporting. Generally, across the board, high Income Countries in europe and north america lost more,. 9 on average. Latin america and africa, developing companies countries were a lot smaller. This was interesting. The lowest among high Income Countries was japan and australia. That is possibly differences in how they calculated for different reporting. But this is somewhat interesting. Officials say it is harder to hack in japan because their language is harder for hackers to understand. Class that make sense. That make sense. What about the threat . Lex the standard hash the standard hack is very tough to estimate. U. S. Companies according to a between report, put it 250 billion and 200 billion. Using stolen the ip can be an immediate hit if it is easy to duplicate. If the product gets to market right away, for some time for some companies, it could be years. The sector separate report, and then third, competent confidential business have noion. Companies idea theyre being hacked and they find out the other side is knowing into that and i mentioned they also warned this is growing market manipulation and hackers are using that for insider trading. That is something to be on the lookout for down the road. A revealing report. Thank you. Megan hughes in on a lighterea note, sir mix a lot, the 1990s rapper. He had a surprising performance. He performed his hit rap song as part of the symphonys sonic evolution project, which featured local popular artist. He is no stranger to the stage, having sold 2. 5 million copies of that single. My eyes are hurting. This is one performance you would not have perspective expected. From the 1990s their theyre all coming back. Subjects, the long and slow grinding recovery has puzzled everyone. Bankalse is not in the that in ourselves. Michael has a real deal on our house of debt. Do we need self reflecting . We do. This was called equity numbers of the year. House of debt by two university of chicago board deaf professors argues everyone looking at the banks to solve our problems is looking in the wrong place. Consumer debt in the last decade destroyed the economy and not the week they alice sheets. We cannot spend because we ran out of money. Mortgages were too high. We cannot spend now because we are still paying it all back here at the government response to the crisis has in all about helping the bank and not the average american there and they suggest that is a big reason we are still struggling. As long as we have a debt, we will have big problems ramping up our spending. On hey a historical basis, we owe a lot, even though we paid off a huge amount of data from the Federal Reserve just out this week. Income and 92 and a heck of a lot higher than the 67 average in the past decade. Five what about the fact all of these people owed a lot of money were given ease and easy money by the banks . Were they not all encouraged by . They were but he was us that took on the debt. It is not just the banks. It is us. Almost too late to do anything about it now because we have gone through so much of the cycle. We are still writing down enormous amounts. We are only to about 2004 levels. But they are up. The biggest problem we have in terms of aim this debt as well is were not making more money to do it. The Median Income for the average household is till 1995 levels and still going down. The latest data for 2012 europeblem you have in is the more they have come the last they can spend. So they do not buy as much stuff from us. It is a problem worldwide. This is a way we can look now from to keep from getting into bubble situations. Follow the household debt. Thank you. Coming up, huber car service. We talked to an early investor and asked what he asked of the company now. Netflix shareholders do not have much to complain about after shares doubles. Are there any complaints right now against netflix . Stay in the loop as we head toward the open. Raised 1. 2 billion in new financing. Atise on demand service about 17 billion, the highest ever for the Silicon Valley startup. For more on the huber valuation, im joined by paul, our bloomberg contributing editor and managing partner at s k adventures. Who e invented in a invested in a lot of highgrowth companies. You have no problem with the valuation at all . I do not really, other than i written wish i were an investor. I ran into travis early on when he was first starting the company, and he told me it was a taxi service and i just laughed at him and, youre kidding. It is an incredible story. From ice and point, what is interesting and makes us less terrifying is this company is doing what these companies do. They either take a large market and shrink it in a way that is destroys the incumbents and those of economics of the or, you findis is, a whole bunch of people who wouldve loved to use a service that never did because it was not available. It is really making you wreaths rethink the why and when you would use remote type services. A lot of evil do not use them for all kinds of archaic reasons. It is destroying income is by changing economics and opening up consumer sir les by having people say, wait a minute, i was willing to spend on this and someone is letting me. Market. Anl a young old market they are breaking into and a new concept. We are now starting to see some of the pushback. We are seeing lawsuits filed by taxi associations. We have video by a group of drivers who are nows doing over huber. They want to put together a Class Action Lawsuit your they say theyre being price gouged by the business model. Do you not think in a few years we will talk about big issues for the company . I think the opposite. Growinge the natural pains of a disruptive business. It is no different than the arrival of the automobiles in yourely century area going to have the exact same kind of growing pains, which will be horrible and nasty and painful, because many of the income its are deeply connected , and it turns out he is fighting a political fight and did not know it. Fight,ll be a difficult but there is only one market where they have been forced to withdraw their services there it everywhere else, they have been able to continue operating. This is the natural growing pains of a disruptive business. Qwest is the fact they have a 17 billion valuation, does that change the outlook at all for the ipo . Does. In a good way. As we saw with facebook and twitter, when you put yourself at these prices come you only need one option open, and that is an ipo. You probably have to get out of a significant uptick of evaluation to actually provide investors with a reasonable return. You do. You price yourself in a corner. Any hiccup in the business whatsoever is a train wreck. Nevertheless, from what we see in the numbers doubling every six months, in terms of route traffic, these are the kinds of numbers that support that kind of growth. You mentioned when you saw you laughed at, his idea. Why . There is a long history of wacky tax the ideas in the venture business. Think back to the early days of Companies Like qualcomm. A lot of people start there and then go somewhere else. Equipment Companies Start in fact these and then goes and where else theres a lot of evil run headon into a tickle and regulatory problems. I thought, here we go again. It turns out this one was the right time. Thank you for joining us. Managing partner at s j ventures. High speaking about valuations. Releasing the entire Second Season of orange is the new black lows of which had a huge year. What is the new buzz . And, the Largest Sporting event in the world has benefits and headaches. We look at some of bucksonsors spending big in rio this month. Netflix shares doubled this past year after producing big the newe orange is black. Joning us for more is erlichman. Are any shareholders unhappy or is it smooth sailing for netflix . It can be a mixed. Sentiment has definitely changed with netflix since this time last year. Gone are the naysayers and the shortsellers who do not take subscribers could continue to climb. They did. There is a new set of obstacles. You talked about the show. The cost of these original programs are not cheap. They are not cheap to expand internationally. It is also not cheap to make sure netflix customers can get smooth sailing or good service during the rob and hours. We have seen them cut deals with comcast and then embark on public battles with comcast and verizon over what the they should be forced to pay for good service at the hours. Taken altogether and i think a lot of shareholders have the same question, which is, you are dealing with that tough. Can you continue to grow the prescriber numbers . Can, then feels it shareholders will feel the same way. What will determine if this program is a success . It is a fun show. I was watching more los angeles things this weekend, but if you look at what netflix said, they claim this is the mostwatched original they have done your they do not get specific on it, but it means they show their heavily invested in it. Lions gate produces the show and said each episode costs several Million Dollars to produce heard your talk about an upward upwards of 60 million in production costs. Then there is the marketing costs. Netflix is still trying to figure out how many additional prescribers they can sign up from one of these shows. I would not they they are exactly clear on how many they get yet. They just continue to go along the path. One of the things the shareholders will vote on today, theres living the role of shareholder and ceo. Will that gain any traction . It has in the last year or so. This is also a person who had a lot of flexibility to focus on leading the company. All right. Thank you so much. Were a few moments away from the open. We will watch shares of netflix. The top 10 trades you do not want to miss right after the break. Welcome back. It is 26 minutes past the hour, which means Bloomberg Television is on the markets. Matt miller has the latest on futures ready for the open. Seeing something different. But yes, not a lot of movement. All the color is red, and of course, this coming after getting new world time in oversold records last week. Are 194650. Not a lot of earnings news out today. Moving some of those players around, tyson foods for example, down on a deal we will talk about today. Family Dollar Stores actually up premarket. And we will talk about that as well. This comes after a weekend of elation, for people at least two or on the markets. We are on the markets again in 30 minutes. Thank you. Lets count down to the top 10 will stop these are the only trait you need to know about today. Alix steel joined in as well. Lets talk start at number 10, credit suisse. Credit suisse generated 1. 7 billion in fixed income trading. Headquartered down 25 from last year. Number nine, sony, which is the company attempting to build a virtualation into reality powerhouse. Sonys new device will rival virtual maker bought by facebook. And number eight, seeking to spin off the oilfield separations into a separate publicly traded company for chesapeake. And number seven, mcdonalds, posting higher than estimated global sales after a gain in april ed to cushion a prolonged slump in the u. S. Sales had a marginal gain of 0. 10 . Six, analog will pay 78 per share for hit site. Hittite. Radioshacker five, will launch a nationwide fix it here program for damaged phones and tablets. They will offer sameday select service in certain markets. And carl icahn is still at work here in family dollar. The billionaire investor announced a 9. 4 stake in the discount retailer. He will talk to the company and board about ways to boost shareholder value. Family dollar rose as much as 12 on the news. Five, and ecommerce giant will start managing subscriptions and startups for other companies. It probably wouldnt it brought in amazons role as a thirdparty seller. Buying 24. 50two, per share. And number one is tyson foods. Youll sure farms has made tyson will acquire joe wilshire at 52 per share. [opening bell] now to the call in the markets. I want to bring in stephen brown. Call, bond market signal the u. S. Is in a slow recovery. How do i know you are not just talking your book up . The book is doing a lot of talking itself. It is of 18 this year. It has done well this year for a couple of reasons. One is, fundamentals, but also support from the bond market. Sides number one, the fundamentals are good. They are not great. Arent get why reit ripping. I think fundamentals are better than good. We have a lack of supply goes up we have less than one percent growth of new growth. May be getting better, but we have a supply and demand growth of less than two, Real Estate Fundamentals are very good. Supply and demand is excellent. And that is exactly right, though. The bond markets are saying that the economy is ok. It is a recovery, but not a strong recovery. That is ok for you, because Interest Rates on like they will go up anytime soon. In thee has been a rally first five months of this year. It has increased the level of demand for income producing assets such as real estate. What the bond market is saying is, Economic Growth may be closer to two percent than three percent. My that while that may be at pretty invest that what that may be disappointing for equity investors, it is attractive for real estate. There are several reasons you have put them in your portfolio. One of them focuses on california. Been looking at kilroy. Wonder ifs me everyone learned lessons from the last real estate bubble. They are spending a lot of money. They just spent mended 5 million spent 95 million in one area. If you look at commercial rent, this is sort of to your point. They have gone up and up and up. But at some point theyve got to come down. You cannot move in a Straight Line for ever. Ratioave a debttoequity of about 100 . Incomee making operating of about 1. 4 times that. A drop in the market and the Tech Industry does not forever go on paying on paying more and more money for rent in san francisco, are they ready for that . With kilroy, they are based in l. A. And have a Big Development pipeline in greater san francisco. Is supposed to come online and start generating rent, lets say, june 30 of this year, through all of 2015. It is about 1. 5 billion in real estate as you mentioned. We expect the Interest Rates to be about 1. 70 . That is very good. The risk is pretty much out of the story. Ed a lot ofreleas their product. It will start coming online very soon. Here is thece capital. Both the debt and equity markets are wide open for a company like kilroy. Ed, when you say preleas that might be good for now or the next year or so. Is there some sort of bubble that may be forming, as matt points out, that could be there night couple of years be there in a couple of years . That is missing question. The tech sector has shot up a lot in the last three years. The leases are longterm leases. How long . Five to seven years. Ok. And they have to have cash on their balance sheet. I dont know or stock prices are going to go to will stop i do know the leases are longterm and their credit tenants. More demandll much than supply in real estate in california. And you also like hotel groups. Marriott is one of those groups. Alix steel, you have more on marriott. The biggest concern right now is the weakening trend of rent part growth, that is, revenue per available room. That has concern over the cycle, and the key would be declined. Over in china, austerity may curb the luxury market. There are a lot of what its there. Marriott has done well this year. What is going on is two things. Part israel store is still strong. The marriott story, what we are seeing from the big operators and particularly grouptt is a recovery of events, business events, tradeshows, etc. Group revenues are up four percent to six percent. That is exciting. In terms of exposure to china or overseas, marriott is a major operator of hotels, but they are active. They dont own that many hotels, but they have the right to manage and franchise them. They have very little capital in these hotels overseas. They just pick up management and franchise fees. Stephen brown, Portfolio Manager at American CenturyReal Estate Fund on the call. Coming up, details about allegations of foul play in the bid to hostqatars the 2022 world cup. As theing up next, bloomberg summit kicks off, we take a look at what the future looks like living with thrones. With thrones. Drones but heres a look at the top tech stories. Sony and adidas have joined overcola in the argument bid was byrld cup improper means. And tony is also looking to take in the headset market. It is set to debut its morpheus headset today at the electronic entertainment expo. Sony is seeking a commanding lead over other gaming consoles. California, entrepreneurs and investors are gathering for the bloomberg next weeks summit. Ands about the future of design of industries that will reshape your life. Johnson, tell me more about how drones are going to take over the world. It looks like we dont have corys audio on. We will try to bring that back in a moment. Way, we have the next big summit happening out in california. Catch cory on a special edition of bloomberg west at 1 p. M. And 6 p. M. We will be back in two minutes. Time for global outlook. Sony andfrom coke to anheuserbusch have invested hundreds of millions of dollars to link their plan brand to the worlds mostwatched sporting event. Will sponsoring an event be a win or lose for these companies . Years more on why this world cup sponsorship is far trickier than the past. The last one in 2010. Why is that, duane . Cocacola has been a sponsor of the world cup for a long time now. This year, brazil will cause a bit of a problem, because you have people in the streets who are really concerned about everything from jobs to just social services and public services. And they are wondering why the country spending 11 billion to prepare for the games when there are so many issues on the ground that perhaps that money could go toward. And coke already has had to deal with some tricky moment, right . In the test event last year, there were protests on the street. Coke had to end up covering one of their large installations, a big coke bottle, with black plastic to avoid being a target. And in setting up for the current world cup, coke sponsors the trophy ceremony. It is a big event for coke. Was shot by a a native of brazil with an arrow who was protesting. It is a tricky thing for them to balance. But how will they handle it . How will they handle it . One of the things is they cheapecided they needed contingencies for any outcome. One of the things you will have to do is balance this whole happiness tone their slogan is world cup and we are all one. They will have to balance that with activity on the streets. They will have to monitor social media closely so they can keep their conversation in keeping with what happens on the ground. May scale back in some venues in order to not be a target. Expert Sports Marketing says they definitely have a war room and they are planning for every eventuality. How important is this sponsorship for cocacola . Brazil has been a very Important Company country for many consumer products, not just coke. As 2010, 11 sales growth volume. It has tapered off a little bit since then. They were negative this past year. Is world cup sponsorship going to be important this year. He expects brazil to start bouncing back. A big part of that will be how they handle this world cup and how sales come along as a result. They are marketing this platform in 170 five countries around the world. If they dont get a pop, that is not good news. And talking a little but about how they handle the only big sponsorship in brazil . The sports sponsorships are a learning situation. You have Companies Like cocacola who also sponsor the olympics, including the tour of the torch like they do the trophy here. Those companies will look at, what did we do right, what did we do wrong, and what can we do better . And there are other sponsors will be watching closely to decide how to handle certain situations. The expectation is that you have to repeat some of the same protesting then. Thank you so much for joining us. Cup, theof the world new soccer ball for this years world cup features a six Panel Structure and rough micro texture. How will this hightech design affect the balls performance the balls performance in the end . We talk to and aerodynamics expert to find out. Aerodynamics is basically the study of fluid flow around small objects. Business nasa is in the business of testing them. It is very easy to get young kids interested in our field by showing them something they can relate to. What we have here is a wind tunnel, which is basically a chamber through which air flows. When it comes to soccer balls, what were looking at is the flight of the football through the air. Surface, the behavior of that player, which recall the boundary mayor, is critical to the performance of the ball. The aerodynamics, it is the structure of the outside of the , that is the roughness what affects the aerodynamics of the ball. Knuckling is when the ball flies erratically through the air, or it may change directions as it is flying through the air. By using these bounds with increased. It, it has what were looking at with the smoke patterns, where does that smoke leave the ball . At what point on the surface . When that location changes, then that is the speed at which the ball will not hold the most. L knuckle the most. I think you see less of this knuckling a fact. I think the players will be happier. Featuring this all week as we make our way down to the road to rio. How theye showing you use this as a stage to fill in ecommerce. I will be joined by david morgan, the cbo ceo of cyber morgan. He will be here to tell us why television is a platform that is here to stay. Also jerry kent, the chairman and cto of sudden lane. And one of the founders of charter communications. That is all tomorrow, at 8 00 a. M. Eastern time. We will be back in two minutes with on the markets. It is 56 past the hour, which means Bloomberg Television is on the market. Im matt miller. Lets get you caught up quickly on where stocks are trading. A bit of a slow day as far as corporate earnings are concerned. Although we do have some dealnews today that seems to be. Riving markets up the s p 500 at 1951. The dow jones at 1600 940. 16,940. He eurobond just up slightly on prices are moving lower as yield prices bond prices moving lower as yield prices move higher. The same is true on the 10 year. Take my word for it. I have a guess here who can prove it. Look at whatth a is behind this resurgence is Bloomberg News lisa brummel wants. Not just walking about debt. It just highlights how much of a global bond market this has really become. The Federal Reserve is stepping away, or sort of reducing the pace of its stimulus. The ecb is going full speed ahead. They are actually accelerating their stimulus. They are considering a quantitative easing program. The negative in the first major institutes. Amazing. You have to pay them for holding reserve in the brick in the bank. You are being penalized for not holding risk. Where do people go yeah they see bonds are really crowded. Yields are at record lows. Prices are high. The tooth. Ng in it feels a bit long in the tooth. Lets go into emerging markets. They will be supported by the same global stimulus that is supporting all of the risk assets. And if you are into risky mother is a great place to look. Traditionally much riskier in emerging markets than in europe or here. Absolutely, because if there is a problem, any dislocation, anything that has derailed this rally that some people say does not make any sense anymore, but they are getting squeezed out of then they can put money into the emerging markets. We saw this in may and june of last year. The dollar lost nine percent in two months. Who has got the courage, to put it nicely, to step into these markets . Pretty much everyone. Have mutual fund markets, pimconce companies, even recommended that people go into emerging markets and pick up the extra yield. Everyone is going. It is outperforming as a result. The need for yield has people forgetting about i mean, we just talked about a nine percent drop in two months and in previous years you have seen huge disappointment. This is a market that can move fast, and down. Heres the conundrum of 2014. You can say, look, it is risky. Everyone is saying junk bonds are risky. Emerging markets are risky. But where else will you go for a real rate of return . Otherwise, you will get negative returns. If you do not go and actually take risk, you will be penalized. Central banks globally are telling you, you know, if you dont, we will continue penalizing you, because we need growth. We need to ignite growth. Joining thank you for us. On the markets again in 30 minutes. Stay with us. Market makers is next. Live from bloomberg headquarters in new york, this is market makers, with Erik Schatzker and stephanie ruhle. Ipo loser. Wall street celebrates the boom in public offerings, but how much longer can the good times last . We will ask Morgan StanleysCapital Market king. A good time ahead. The biggest magazine publisher spins off from time warner today, we will ask the ceo why investors want this. The tech boom created new tech valley Silicon Valley