Transcripts For BLOOMBERG In The Loop With Betty Liu 20150226

Money. Why not simply find it amongst themselves a way to transfer this funding . Betty investors are showing confidence in the reform plan. Almost 8 million done thomas a hundred Million Dollars return to the banks on tuesday. A truce was supposed to start 11 days ago but ukraine says separatists violated it repeatedly. Ukraines currency has fallen more than 50 against the dollar this year. A ban was lifted late yesterday. It is now up to the house to stop the partial shutdown of Homeland Security. The senate struck a deal on the 40 billion budget for the department. They will attempt to block president obamas executive order on immigration. He spoke about that in a town hall meeting in miami. What we said to republicans is instead of trying to hold hostage funding for the department of Homeland Security which is so important for our national security, fund that and let us get on with passing Immigration Reform. Betty some House Republicans say they will not back the senate plan. Home i security will run out of money and midnight tomorrow. A struggling bank gets a new ceo. Bill winters will take over as tender charter at Standard Chartered. Janet yellen may well be relieved to get back to her own desk today. She endured the roughest congressional session of her oneyear tenure. She was accused of being too cozy with democrats and the white house. You are not willing to tell us the answer to a very civil question. You want to tell us i am not getting involved in politics. Two weeks before an election, you are making political statements that are consistent. I am now making a political statement. Republicans have introduced bills that will give more control over the fed for congress. Expect more fireworks out of washington today, just not on capitol hill. The federal Communications Commission instead. The outcome will affect every americans access to the web and every company trying to do business online. Peter cook has more on the vote and the likely fallout. Any doubt in the outcome today . There is no real doubt as to what will happen today. We fully expect tom wheelers plan will move forward based largely on the strength of the democrats on the fcc. This will be a deeply divided fcc. The two republican members of the panel have expressed publicly their opposition to this plan to moving in this direction and forcing these open internet rules into the marketplace. They say they are simple enough necessary. There isnt a need for this kind of Government Intervention in this space. Theyre trying to solve our problems that does not exist. When you have is an fcc moving forward. Tom wheeler is calling on the most aggressive action based at the fcc could entertain to try to protect an open internet. He would reclassify broadband. There would be no paid prioritization and no fast lanes on the internet under these rules. Wireless carriers would be covered for the first time. There would be an effort on the part wheeler says by the fcc to refrain from opposing all of the rules they could impose through reclassification. This will be very controversial. We have heard some opposition already. The fcc commissioner speaking on bloomberg west a couple of days ago talking about his opposition to the plan. That micromanagers virtually every aspect of how the internet operates. It opens a door to billions of dollars on taxes for broadband that consumers will have to pay. It would lead to slower broadband speeds. I wish you could only see this 332 page plan that will become public after the fcc votes on it. That is part of the drama today. We will get the full 332 pages. People will be able to go through and look at the details. There are question marks about what the approach is here and what Companies Might be benefiting the most or impacted the most. It will be a watershed moment for tom wheeler and the president who put him in that job. President obama may have the most to do with today after his big push for Net Neutrality. Betty thank you so much. Certainly a very important day in this debate. Can do to midnight on friday when the funding for the department of Homeland Security runs out. The senate came together on a deal that would pave the way to fund dhs. The pressure is back on the house. Speaker john boehner has made it clear he wants immigration included. I dont think anyone wants to shut down the department of Homeland Security. What we want to do is block the president s executive actions that were beyond the law and be on his ability to do. Betty one man working to bring the two aisles together is congressman bill keenan, a democrat from massachusetts. He now joins us from washington. Congressman, how is Speaker Boehner going to get republicans to support this . I think all he has to do is let it go to the floor for a vote. Let people vote for it. There are enough democrats and republicans i believe that will support this. All it takes is a little democracy and we wont have this problem or showdown. Betty are you sure there are enough votes by republicans to support this clean bill . I feel myself by talking to members across the aisle that there would be enough support. Evidently the leadership on the republican side has not counted too well either. Common sense has rained in the senate. People are now looking at if the house is capable of acting they want the way they are supposed to. Betty are you confident because simply looking at polls right now, if in fact this bill fails 55 of americans will blame the republicans for this failure. I honestly dont care who is to blame for this. This is such a fundamental responsibility that congress has to act on. You had the fbi director yesterday say this active investigation in each and every state of the United States. You had three people come to light in new york and the fbi foiled that plot. You have historic snowstorms. That is part of the agenda as well. Disaster relief for those communities. These are serious frontline issues that are the basic response abilities of government. I think the public through some of this polling is not think it will happen. It doesnt think we are capable of this. Look back 15 months ago at the government shutdown. Betty to have been many reports of what exactly would happen if we past midnight on friday and dhs is unfunded. What exactly would happen . 30,000 employees would be for load and the remaining 200,000 would still be going to work they just would not be working for pay. Let me give you two points. We learn from the shutdown that those support services are important. We saw functions that the administration thought would be protected as necessities in the government shutdown, and they fell apart because they didnt have a support system. The shortterm budget gaps are already hurting our defense as a homeland. Airport security port securities frontline firefighters in so many communities ready to come online will not be coming online to provide basic fire protection. These are the things being hurt with the stopgap budgets. They are being delayed. We dont see the planning that goes on. We studied the tragedy in massachusetts at the boston marathon. There was an 18 million grant. The reason they were able to respond so seamlessly and save so many lives was the training that went into place. That is expensive but worthwhile. We saw the results of that. The training procedures will help. Betty you raised the point earlier talking about the boston bombing. You waste of my earlier of the three men who had been arrested and charged with plotting to join Islamic State in the middle east. You being a member of the Homeland Security committee should congress be paying more attention to this . How can congress be dealing with this and not dealing as much with the 5 million undocumented workers that republicans are focused on . I think secretary kerry testified in front of the Foreign Affairs committee yesterday. There are funds that reflect counterterrorism efforts that will be much more effective than we have now. We have to deal at the root causes as well. Many things that have to be done deal with taking the disenfranchised and people that feel left out, particularly young people, that are susceptible to being converted over to radical actions on the internet and reaching out to them. Building bridges. We have to deal from the roots as well as militarily and homeland. In the homeland funds are delayed, that will be slowed as well. Betty it is terrifying. Extremely scary to see those headlines. Thank you so much congressman. While washington is keeping busy with the fcc vote and trying to avoid a shutdown, in maryland, top conservatives are attending what is on his annual gathering of americas Rightwing Party meant to highlight the rising stars. Speakers include Chris Christie ted cruz, and scott walker. He had no trouble singing their partys tune. Because you know i am all about that base, no liberals. I am all about that base, no liberals. I am all about this base, no liberals. I am all about that base, no liberals. Betty here is a look at our top stories this morning. Greece is spending its hopes on a European Central bank. They are counting on the ecb to save them on a payment for the imf in june. He says the ecb owes his country more than 2 billion from a bond program and a things money should be given to the imf. In ukraine, the government says a ceasefire may finally be taking hold. Authorities say there were no attacks overnight by prorussian rebels. The truce was supposed to begin 11 days ago, but ukraine says the rebels violated it repeatedly. The masked Islamic State militant known as jihadi john is from britain and a welltodo family. He is identified as a west london native with a College Degree in computer science. He has appeared in videos beheading several hostages. He was believed to have traveled to syria in 2012. Prosecutors accusing three men for supporting Islamic State. Two of them planned to go to syria and jointly terrorist group. Prosecutors say one suspect wrote on a website that he wanted to strike fear in the hearts of infidels by shooting president obama. Israels Opposition Leader is taking aim at benjamin netanyahu. He says the pm should cancel his upcoming speech because it will cause damage to the u. S. Israeli relationship. John boehner invited netanyahu to address a joint session of Congress Never told the white house he planned on doing it. Those are your latest top stories. We have been hearing about u. S. Companies getting hit by the stronger dollar. The impact is for those that have to do a lot of business overseas. The latest example is hewlettpackard. This chart shows that shares boomed and then went into freefall because of the greenback. Against 90 of its business from outside of the u. S. And has a sales floor of over 3 million people, most of them livingd by the way. I want to bring in the chairman and ceo, ricks going goings. Is the greenback having a big impact on your business in a negative way . It is in translation. In our core business, it really is not. We have multilocal businesses out there and we try to run our businesses in local currency. Where you feel it is when you bring it back home. Betty you do bring it back home right . Yes. That is where you feel it. If you look over 10 years, its long to about 1. 50 negative. Betty this is not shocking to you then. No it isnt. Our Management Team is global. Most of us has worked elsewhere in other places of the world so we are used to managing a global portfolio. You just have to do business and what is necessary in those local countries. Betty i looked a little closer at tupperware. You said this is not your mothers tupperware company. This is very different. You have seven brands under your portfolio. With the stronger dollar, you basically got a 30 discount anywhere you go to buy something overseas. Would you be adding some Global Brands to your portfolio . We have no interest in acquisitions. We have enough to do with our core business. When i say enough to do, i mean enough opportunity with regard to the runway ahead in the emerging markets and the emerging middle class. We add a billion and a half to the middle class and most of them will be women millenials. About 50 of the millenials dont want to have a job. They want to be an entrepreneur. Betty all over the world . All over the world, we are seeing that. Betty what do you hear when you step off the plane and you talk to your sales force and you talk to your clients . I would go back to d avos. Every time i went, i could feel a theme that year. We are deeply engaged in gender parity issues. This year, there is an angst out there. What came out was the report that 1 of the population has 50 of the wealth. I hear in markets people who are under been a worse want who are entrepreneurs want to move themselves up to be empowered. Betty the appeal a resentment among them that the wealth is concentrated . It is an awareness not a resentment. There is clearly a resentment out there. It was only about a week before davos the events in paris. There is a group out there that has been on absorbed. Often it is immigrant populations and you especially see it in europe. Betty absolutely. When there is no path out, this is what happens in many cases. Stay with me. Much more ahead because Patricia Arquette brought it to light at sundays oscars. The gender pay gap and how to wear is on a mission. Hes out there. Theres a guy out there whose making a name for himself in a sport where your name and maybe a number are what define you. Somewhere in that pack is a driver that can intimidate the intimidator. A guy that can take the king 7 and make it 8. Heck. Maybe even 9. Make no mistake about it. Theyre out there. I guarantee it. Welcome to the Nascar Xfinity series. Betty you are watching in the loop. Good morning. Hillary clinton delivered her first speech of the year this week. She urged them to do more to help women in leadership and called for equal pay. Up and down the ladder, many women are paid less for the same work which is why i think we all cheered at Patricia Arquettes speech at the oscars. She is right. It is time to have Wage Equality once and for all. Betty we are joined by someone who has been a longtime advocate for female archer viewership female entrepreneurship. This is very interesting because you do walk the talk here when you say you want to empower women. 40 of your board is women. 35 of your units are run by females as well. In basic question to me that if it works for you, why is it not working for others . Why dont others do this . Education. They need to wake up and understand this isnt social service. This is a Business Economic principle. Betty you are not doing this for charity. No. It is nice to do good things and we believe that. We do this because it makes sense. It is leveraging power. We have three group residence in the world and that is our highest level in this corporation. Two of the three are women because they are smart. Betty when you say education that tells me there is a miseducation that women are not good leaders and they are not oriented to being entrepreneurs or becoming ceos. When you say education, what does that mean exactly . It is understanding the reality and fact that men and women are different. Seven years ago, i did my first one in indonesia. The largest Muslim Population in the world. I had all the men who were husbands of our fema distributors come in. I do speak the language, but simultaneous translation and we talked about in an educational entertaining way the difference between men and women starting with the brain. They have more wifi in their bring. That is why they can multitask and men struggle to do one thing sometimes. I saw the lights go on for some men after that discussion. It is our largest market in the world right now, indonesia. It has grown 35 per year and the president of our indonesian business is a woman. It is educating them on facts. Betty he said 10 years ago you are a host at davos. This past year, you had how many sessions . We had 12 sessions. I am now proud to be a trustee of the whole concept of gender parity. It is one of the 10 major points of focus at davo at davos. Betty hadi you know it is not just to make them look good . It starts with talk at then it goes to walk. What will you do with it . Had the secretary of the u. N. For womens issues at sitting at my right side. A program has been created called he for she. We are in this together. That is a lot of sheep for she but we need more he for she. Betty were you surrounded by women growing up . I have three daughters, an older sister, and a younger sister. Betty women have been you down and be in it into you then. On the job front, i read in an article that if you want to be a tupperware salesperson, you can make a good amount of money. You can hold five parties a week, you can make 2000 in sales and that and you 41,000 a year. That sounds like a nice tidy sum. What about when learn how to code when women learn how to code, they can make twice as much . Rick there is a career path. She can be a consultant. Ive often said between behind every successful woman in tupperware is another woman who has mentored her, coached her. We have numerous women in tupperware that make ask figures. We have some that make make six figures. We have some that make seven figures. Betty selling tupperware . Rick and building the organization. We have a young woman in borneo who has a 2 million business excuse me, 20 million business there. She probably makes more than 1 million per year. It is exciting to see. Betty thank you so much for joining me this morning. Great to see you, rick goings chairman and ceo of tupperware brand. Begin about jobs and earning money, we have a bunch of economic numbers out right now. Cpi inflation numbers, durable goods, but also in his also initial jobless claims coming up above that 300000 level. Scarlet fu has the breakdown. Scarlet these numbers are coming out a little bit late because of snow in washington. The unexpectedly bigger gain in jobless claims. It topped 300,000, 313,000. Economists were looking for an increase only to 290,000. The Consumer Price index dropped 7 10 of 1 for the month of january, reflecting the drop in Energy Prices overshadowing the growth in other services. When you back out food and energy costs, prices group grew 2 10 of 1 from the same time in december. On a yearoveryear basis prices dropped 1 10 of 1 . That was in line with what economist had been looking economists had been looking for. Durable goods was an increase of 2. 8 for the month of january, higher than what economist had been economists had been looking for. The previous month number was lower than reported. These are volatile numbers on the durable goods friend, and we are getting that in january with a big durable goods front and we are getting back in january getting that in january. There has been moderation in manufacturing. Surveys have pointed towards a soft patch in business investment. Thats what we are seeing with the durable goods orders if you back out transportation. Betty thank you very much scarlet fu, at the breaking news desk. The greek finance chief says the European Central bank has the money his nation needs to avoid default. Greece must make a payment that month to the international minus five. The International Monetary fund varoufakis says they should hand the money to the imf. Varoufakis they should pay this to the ecb. Why not have the two institutions find it amongst themselves a way of transferring this funding . Betty he says investors are showing confidence in the reform plan. 800 million has returned to greek Bank Accounts on tuesday. The ukraine government says the ceasefire may finally be taking hold. Authorities say there were no overtax overnight by the prorussian no attacks overnight by the prorussian rebels. They violated the ceasefire repeatedly. Ukraines currency has fallen more than 50 against the dollar this year. The central bank banned foreign currency trading earlier this week but lifted it yesterday. Knighted airlines sends stern warning to pilots United Airlines sends a stern warning to pilots. They cited near misses. A jet ran low on fuel after deviating from its fight plan. Those are the its like plan. Those are the top headlines its flight plan. Those are the top headlines. Abercrombie fitch analyst downgrade. More on that as we look at premarket movers. Plus, the story of this undocumented worker who scaled the corporate heights at Goldman Sachs. An incredible story. Betty all right. We are counting down to the opening bell, less than an hour away. Back to our breaking news desk with scarlet fu taking a look at some of the action, including Abercrombie Fitch. Scarlet the take away from janet yellen and her testimony is that they are in no rush to raise Interest Rates, so that is giving investors a goahead. Futures indicate a higher open. S p and dow remain near record highs despite the decline yesterday. The 10 year is on its longest winning streak in six weeks now down to 1. 95 . Gold price is at its highest level in a week, up for a second day as buyers in china return from the Chinese New Year weeklong holiday. Some pentup demand being seen in gold markets. Lets get to the Abercrombie Fitch downgrade from morgan and hanley Morgan Stanley. Analysts are skeptical that the International Business can turn around. Combined with strong dollar headwinds, that means the guidance will be lower than what analysts are looking at right now, at least according to Morgan Stanley. You can express was upgraded at Deutsche Bank American Express was a rated at Deutsche Bank was upgraded at Deutsche Bank. They have exclusive agreements with costco and jetblue. The last upgrade we want to tell you about is tmobile, upgraded to buy at Deutsche Bank because it could be a potential Strategic Partner to multiple companies in multiple forms over the next one year to two years. It remains to be seen how that will play out with regulators. We have some m a to tell you about. A singaporebased chipmaker is buying another company for eight dollars per share in cash. You can see the gain in the premarket. And in the medical device space you have cyberonics teaming up with a Company Based in italy. These aretwo medical are two medical devicemakers. They will cyberonics shareholders will own about 54 of this new company. Betty thank you so much scarlet fu. After a federal court suspended his executive order and in the face of republican intends to defund Immigration Reform president obama was on offense last night, defending his Immigration Reform at town hall style meetings. President obama our country has immigrants who embraced the ideals of america and fought for those ideals, font wars, build companies tfought wars built companies, all the things we take for granted. We are all immigrants. Betty sometimes, these issues have to be told by in individual stories. Bloomberg has uncovered one remarkable story of an undocumented immigrant in the u. S. She scaled the goal corporate heights of Goldman Sachs while she was an undocumented worker. This story was just written. This is an incredible story. Congrats to you for finding her. Everybody who goes to bloomberg. Com should look up his name and read the story. Tell me how you found her and how she found you. Max some of these stories take a long time. I interviewed her for a small story more than a year ago about young people on wall street who are interested in my profits. In nonprofits. She emailed me to say there was something i did not tell you when we talked and the story emerged. Betty tell us about her story. How did she by false papers in texas she buy false papers in texas and get to the heights of Goldman Sachs . Max she was born in a small town in mexico and moved to texas for good when she was 11. Her parents brought her on a tourist visa. She out stayed it. When she was a teenager, she realized she was an undocumented worker. Betty they bought her false papers . Max she did that when she was in college. She needed a job. She could not get a job with her expired tourist visa. She broke down to a sweet made a suitemate, who was dating a guy who knew a woman. She bought a fake Social Security number and a green card and used those to apply to Goldman Sachs for an internship which she got. She was sort of a perfect Goldman Sachs banker. Betty she had everything. She was a type a personality had great mentors. Goldman sachs has a rigorous screening process, so they never found out . Max so, the story that i report, and i appreciate you everyone you saying everyone should go read it when she applied, she was an intern in 2004 and was hired in 2005 fulltime she supplied them with fake papers but goldman did not necessarily compare them against goldman records, and they do do that now the everify now via everify. It would be harder for her to get a good get a job at Goldman Sachs today. She is no longer an undocumented immigrant. She got married. One of the really extraordinary things about telling her story is when she became legal, she rose from analyst to associate to Vice President , she also became wealthy. She is making more than 200,000 per year. Betty and she is now working for a nonprofit. We have to leave it there. Certainly, read the story on bloomberg. Com. Tune in as well. She will be telling her own story later this morning on market makers. Much more ahead. Dunkins new strategy to get you to drink more of their coffee at home. Betty here is a look at our top stories. Greek is pinning its hopes on the European Central bank counting on you to help stave off counting on it to help stave off default. Yanis varoufakis says the ecb owes this country more than 2 billion. The ceasefire in ukraine is finally taking hold. There were no attacks overnight by prorussian rebels. The ukraine says the separatists violated the ceasefire repeatedly. Janet yellen is finally off the hot seat today. Yesterday, the fed chair said it was the roughest congressional session of her career. There was this exchange with congressman john duffy. Congressman duffy today, you are not willing to tell us the answer to that reasonable question, and you want to tell us im not getting involved in politics. Two weeks before an election you are making a lyrical statements making political statements. Betty republicans have introduced a bill that would curb the feds powers. Bill winters is on tap to be the new ceo to replace peter sands. The banks chairman will leave in 2016. Shares of Standard Chartered fell 29 last year. A masked Islamic State militant is from a welltodo family. He is identified as a west london native with a College Degree in computer science. He has appeared in those videos the heading videos beheading several hostages. Those are your top stories this morning. Back in the u. S. , Dunkin Donuts has a new strategy to get you to drink more of their coffee. They are making it easier for you to brew it at home. The k cups you can only buy in stores now, they will be sold in line online and in grocery markets. If you can run it at home, will you stop running to stores . Joining us is the ceo of dunkin brands, a friend of our program. Great question here right . Are you cannibalizing your own coffee sales if you start letting people grew them at home people brew them at home . When we first launched k cups in our stores, we were concerned with the same thing. We did lots of research. It demonstrated that we would not. Going into retail is more than just grocery. We could potentially see the same. Our franchisees have done independent studies. It tells us that it will in fact boost our traffic to our stores because people will get used to our taste profile which is uniquely dunkin. As the result of that, that will drive traffic back to our stores. We are also looking to incorporate some bounceback programs from grocery back into our stores. I think it will boost our store traffic. Betty let me get this straight nigel. You looked at this year ago when you first introduced the kcup. Nigel three years ago, just over three years ago. And the research was clear. Betty if the research was clear three years ago, then why didnt you do this three years ago . Nigel ok, so, again, a great question. We have worked with our franchisees. The franchisees are our first focus as customers. We have 1200 franchisees in the u. S. We have great relationships. We are very interested for very for business reasons in great franchise marvins margins and we spent some time talking to them about introducing it to grocery. There was concern about cannibalizing store sales. We did this research and showed it would boost sales back to our stores. So, we are doing it now. I guess you could argue we could have done it earlier, but sometimes a great deal takes a long time to come to fruition. We have been discussing this for 15 months. Betty but nigel i will lay it on the table here nigel. You had to listen to your franchisees. They were worried that it was going to take away sales from their stores. Fact of the matter is there were reports of kcup sales in stores not doing well. The franchisees were proved wrong . Nigel the change in kcups has been dramatic. The number of skus in Grocery Stores has gone up eightfold since 2011. It has been a changing scene. I want to come back. Our first and foremost focus is on franchise sales at store level. Thats how people measure our company. You could always argue we were five or six months late. I think we got the timing just about right. Its going to be spectacular news Retail Stores around the country. Its going to be great news for this new unique, probably unprecedented deal with franchisees 50 50 sharing. It is great news for our customers around the country. As you know, we havent got many stores west of the mississippi. It will allow a lot of people to taste dunkin coffee. Betty i say all of this as a fan of your coffee. Nigel travis, ceo of dunkin brands. Betty welcome back to in the loop. We are 30 minutes away from the opening bell. Futures are lower. Half an hour before the start of trade, investors getting word of a jump in oil prices. Greece is counting on the ecb to help it avoid default. It must make a payment next month to the imf. The greek finance minister spoke with bloombergs erik schatzker. Yanis varoufakis says the ecb owes greece more than 2 billion. He says that the ecb should just hand the money to the imf. Yanis varoufakis why not simply have the two institutions find it amongst themselves find it amongst themselves, a way of transferring this funding . Betty varoufakis says investors are showing confidence in the reform plans. The ceasefire may finally be taking hold in ukraine. The government says there were no attacks overnight by the prorussian rebels. Ukraine says the separatists violated the ceasefire repeatedly. Kiev has another problem. Ukraines currency has fallen more than 50 against the dollar this year. The central bank banned foreign currency trading late last week but lifted it late yesterday. There could be a partial shutdown of Homeland Security if the house does not pass funding. The senate struck a deal on the budget that separates homeland from the bloc. The president spoke about it at a town hall meeting in miami. President obama what we said to republicans is instead of trying to hold hostage funding for the department of Homeland Security, which is so important for our national security, fund that and lets get on with actual passing a comprehensive Immigration Reforms passing of comprehensive Immigration Reforms. Betty janet yellen may be very happy to be back at her own desk. She said it was the toughest congressional questioning of her tenure yesterday. House republicans accused her of being too cozy with democrats. Those are your top headlines. We are under 30 minutes away from the start of trade. We have the top tech headlines hitting on radar before the bell. Joining me is julie hyman the top 10 headlines hitting the radar before the bell. Joining me is julie hyman. Our guest heads of his own Digital Media site. He is the ceo and chief content curator. Lets start with number 10. The battle lines are being drawn over the mobile web. Net neutrality. For the first time, u. S. Regulators weighing rules about how they deliver online services. At t and verizon are up in arms about Net Neutrality. Whose side are you on . It is a big decision today. A lot of people have been fighting for Net Neutrality for quite some time. This is the concept that all traffic is created equal and people wont be blocked betty if you are a big player you should not be allowed to pay for preferential treatment. Jason thats what half of the argument is. Others are saying that will hamper that it their investment in their networks and they need the ability to split and divide and charge people. Betty the Cable Operators and at t and others look it has been working already. Why mess with it . Consumers arent paying more already. Why are you going to mess with it . Jason it is the fear of what could happen. I tend to be on the side of hopefully it is created neutral. I do have some compassion for the carriers. If you have someone like netflix someone using so much bandwidth, there are financial considerations. Betty number nine, regulators warning banks of a possible armageddon cyber attack on banks that would devastate the u. S. Financial markets. Ben has been on our program several times about this. He is the head of the new yorks department of financial services. He says the attacks could happen over the next decade and he dubbed it cyber9 11. Julie he talked about the idea of potential regulation to help increase cyber security. Here is the problem, and we have talked about this before is the problem lack of will, lack of spending, or that the technology does not really exist to stop this from happening . He brought up twofactor authentication, which is great another layer of security but it is not completely preventive. Its a great idea for companies to spend more and do more to keep this from happening betty but its not just about spending more money. Julie whats the magic pill . Jason the rate of change at which people are being hacked is so quick he would have to revise everything you would have to revise everything betty exactly. Number eight anheuserbusch plans a buyback of 1 billion of shares after fourthquarter earnings missed estimates. It also said the Beer Industry volume in the u. S. , its largest market, is going to continue to improve this year after several orders of slides in sales. It seems that people maybe it is the young ends the y ounguns. They are not drinking bud. Julie if you look at bud market share, it fell last year to around 9 . It was 14 in 2005. They have spent a lot on marketing to try and seem like those craft beers are you dont want to drink them. Jason i hang out with a lot of hipsters from brooklyn. They would see craft beer from budweiser as disingenuous. Betty it is not just about the beer. The liquor and spirits industry have seen a revival. If you are not drinking liquor and beer you might be drinking coffee. Why have a donut with your coffee when you could have a cookie coffee cup . Kfc is now serving a level serving edible coffee cups made from a wafer like this get fr om a waferlike biscuit. Julie its only available in the u. K. Jason when they make crazy movies in hollywood, i always say how did this get green lit . It is one step forward for throwing away less paper, and maybe one step back with debit with diabetes. Someone is bored with r d over there. Betty when i look at kfc, im not thinking coffee, nor wafer like biscuits lined in white chocolate. We just had nigel traffic nigel travis from dunkin brands. They are selling their kcups at home. Number six, blackberry teaming up with google, allowing android to run on its devices. Who got hit by that story . It was apple. Shares fell about 3 yesterday after blackberry and google announced their partnership. Someone said, look, this is a shot across the bow to apple. Jason apple has done well in business. This is a great thing for android. People are starting to use google for work all the time google apps gmail. They have their own branded systems. Betty do you use it . Jason my staff has been begging me to move over to gmail. We use google drive. We use all the apps. A decade ago, it would have been microsoft. The partnership with blackberry makes sense. The key thing about this is the configuration of the system. You can be as open or as closed as you want to be. Julie at the same time, there is still a security issue. Apple can closely managed the iphones and security on the iphones. With android, you have a lot of different devices. Betty google is creating the ecosystem that apple has really cornered in the market. We will be back with more in a few moments. The opening bell in about 20 minutes. Betty we continue our countdown to the opening bell. We are halfway through. It is time for our deep dive with number five googles youtube. The online video site has become a cultural phenomenon under the leadership of google, attracting more than one billion users each month. It is still having trouble making money. The wall street journal says people familiar with the financials it is not yet in a black. I want to bring back Jason Hirschhorn. He is optimistic of youtube and Multichannel Networks. He believes youtube can take on hollywood. Jason is the ceo and chief content curator at redef. I want to disclose the bloomberg has a relationship with you as well. Our vc arm has invested in redef. Jason they are very smart. Betty my kids are on youtube all the time. I have 10yearold boys. They love watching videos. Isnt that the problem . Youtube has become a repository that are great for teens and tweens and kids, but it is not a great place were really highend content place for really highend content. Jason i disagree. Youtube is a lot of things for a lot of people. Their new Multichannel Network there isnt really a problem at youtube, it is more some issues they have to deal with culturally and business why. The rumors are revenue is around 5 billion. We are talking about 5 billion on one of the biggest sites on the internet that wasnt here almost a decade ago. That is pretty impressive. Youtube is not really a front door site. You go there because you sent me a link or because they are the First Destination you search for something that is videorelated. You could find highquality news, movies to buy, Television Shows to watch. The reality is this idea of high Quality Content is in the eyes of the consumer. The kids today, talking with a 13yearold girl, they dont need explosions and meryl streep. They want makeup tips. Betty they want to watch video games. Jason young men who are talents on youtube who, if they tweet they will be on 42nd and 7th 5000 girls will show up in a second. It is a juggernaut. Betty im reminded of one company that used to hold kidsimaginations, viacom kids imaginations, viacom. Used to work there you used to work there. If there was ever a company that should have capitalized on all this digital video content toward kids, it would be viacom, right . What happened with viacom . Jason when i was there, we had a pretty good roll at it. Betty you hadjac betty you had jackass. Betty i am not jason i am not close to the new management. Ultimately, i think they have focused on managing costs and cutting back and getting in deeper with some of the relationships with the Cable Companies and also going to the amazons and netflix of the world. I have not seen them take a big step in digital. This is a company that has been part of the youth zeitgeist and has reinvented itself multiple times, yet in digital, it has really taken a backseat. Ultimately, i think that may be a decision of the viacom executives rather than the people of the individual networks betty who are creating the content. Jason if you look at a tablet you dont see viacom apps. I think that is something they need to concentrate on. Betty we will be back with Jason Hirschhorn ceo of redef. Our countdown continues. United warns its pilots after a series of safety errors. We will be back. Scarlet i am scarlet fu at the breaking news desk. Barnes noble will split up its education unit, its College Business, from its retail operation. Thats enough would be distributed that spin off would be distributed taxfree to shareholders. It will result in two public we traded companies. Two publicly traded companies. Investors have been pushing for a split because nook is losing money and is dragging down barnes noble results. Investors have been clamoring for this split. It will result in two separately publicly traded companies. Betty thank you for that breaking news. Lets get back to bring you some of the most important stories you need to know before the bell. Running us is julie hyman joining us is julie hyman and Jason Hirschhorn ceo of Jason Hirschhorn, ceo of redef. United airlines is sending a warning to its pilots. They sent out a memo citing safety events, asking them to cut down on disastrous mistakes. Jason i thought that was included in the ticket price. Julie it is really unusual they would send out a warning like this. Pilots come back and say, well you need to help us be safe. You dont require us to fly too many hours, we have enough training etc. Betty you never know who is flying your plane to your point, how many hours they have slipped slept. Should airlines be more transparent about this . Jason i dont know how much i want to knowl. It seems a little combative, a stern warning, but i hope the pilots got that memo. Betty and abide by it. Jason im big on safety first in traveling. Betty number three, the day after investors paid germany to borrow their money for five years they are now agreeing to buy the countrys debt. Investors are paying the government to borrow your money. I will lend you money. Instead of me getting paid for it, i will pay you. What world are we living in . Julie one that does not make a lot of sense. There are a lot of investors who said they would rather by spanish or italian debt rather buy spanish or italian debt, but there is enough demand for it that this is what is going on. Thats why the yield is negative, because people want safety. Even if it is a negative yield. Betty they may not get a return. They may be paying a little bit. But at least they are not going to lose 10 , 20 , 30 of their money. Jason my best friend is laughing right now. Betty the only advice i think that is recommended is dont do it. Number two, president barack Obama Holding his ground on immigration. He said neither a judges ruling or a standoff with congress would derail his plan to ease deportation of undocumented immigrants. Jason i sympathize with obama here. I think there should be some sort of prioritization. I think his comment was, so that we dont support your mom, or even the piece we saw earlier on Goldman Sachs, someone who has really contributed to our society was on that list. I get it. Julie with Homeland Security partially shut down, a lot of its functionality is up and running. It is deemed essential services. One of the things that is shut down if you are employer and you want to screen your employee you cannot right now. In theory, it would make it easier for an undocumented immigrant to get a job during this period of time. Betty it is scary we are fighting over funding Homeland Security. We just heard the news in brooklyn of two men arrested for wanting to join Islamic State. Where are our priorities . As we near the opening bell lets get a check of where futures are settled. Just slightly lower. Our top story on the opening bell is next. Welcome back to in the loop. Joining us today is julie hyman and Jason Hirschhorn the ceo of redef. We have to talk janet yellen. Day two from yesterdays testimony, likely to be relieved to get out of Congress Today after she entered the roughest congressional session of her oneyear tenure. House republicans accused her of being too cozy with democrats in the white house. I loved how she was just getting hillary for being too close to the white house and yet congress once to have more control over the fed. They want to be the politics was to be a part of the fed. She definitely fought back. She basically said to the congressman, you are wrong. Considering she was in a political venue, she was not did not seem to be playing politics at all. She was not trying to sugarcoat what she was saying. Not at all. What she outlined overall was the conditions are here in the economy that eventually we will see an Interest Rate rise. Jobs are being created, inflation seems like it may be ticking up. Jason, what do you see right now in your business . I think it our business, we are given a little more will leeway and we dont need to make money right away. We have good investments. The ad markets are good. The Business Model i am looking at is more subscriptionbased so it is a little more risky. Are people spending . People are spending and buying. Content sales are up. I am bullish on the internet. If anything, i was reading a piece by bill gurley, it is not a bubble we are seeing, it is more of a risk bubble. Theres a lot of investment out there. Theyre not going to all make it, even the good ones. Jason, thank you so much. The ceo at redef. As you just heard, that is the opening bell. I want to bring in crack hodges craig hodges. Could be damaging to the middle class . How is that . Good morning. I think rates are going to stay low for probably a pretty good extended time. Theres is one problem out there that i see is that the disparaging between the middle class in the 1 keeps getting larger and larger. So you really do need a good long recovery in the economy to help the middle class. You go in there and start raising rates to quit, that is when a make it even worse. Raising rates too quickly, that is going to make it even worse. This has been going on for so long. We have been talking about them raising rates for two years. At hodges capital, we dont really obsess over the Interest Rates. We Research Companies and look for opportunities, and there are plenty out there. Quickly, craig i want to bring in our bloomberg stocks editor. Julie, you have something. Craig im surprised to hear you say that you are concerned the fed might raise rates too soon. There arent too many people at this point i think who are concerned in increase in rates is going to choke off this economic recovery. How big of a risk is that . I dont think that will raise it too soon, im saying the opposite. I dont think theyre going to raise it very soon. We have says over it and talk about it all day long, but i dont think youre going to see much at all. They may have some verbiage to see what the markets would do if they start hinting toward that, but im in the camp that for a long extended period of time, i think were going to see low, low Interest Rates. You are a bottoms up stock picker. You run over 3 billion in assets and nothing that janet yellen said yesterday or the day before really affects how where you are putting our money for stock is that right . That is correct. We make about 3000 Company Contacts a year. We are talking to Companies Looking at industries. There are a lot of things in the good old usa that are booming that have great balance sheets. So to worry about when theyre going to raise Interest Rates, would really get us nowhere. Where are you putting your money . At hodges capital what we really look at is industries that have high barriers to entry. When we went to the last boom in 2007 2008, or excuse me, the last bust, and a lot of copies when out of business. Theres been a lot of consolidation. A lot of industries have lost competitors. There are very high barriers of entry and sings things like cement and steel. The paper companies. Energy, there are some areas there we like. Even the airlines. I think the airlines are a business that has a high barrier of entry. We have gone from eight big airlines seven or eight years ago to really now we have three and some regionals. These are the interest trees we look at. When demand comes back with your predators, you will see margins go up dramatically in these companies. Those are the areas we are looking for. We avoid over competitive areas. That is where you get burned. Every mistake that made in this business over the last 30 years has been getting a two industries where there is too much competition and their cutting price. This cement business is one youre seeing price increases going on, yet no one is talking about those. I want to ask about one of your specialties, small caps. The common wisdom has been that small caps would tend to outperform during a period of dollar strength, but it hasnt really come to fruition. Is there a reason for that . Not so much the dollar strength. Most small caps are not affected by the International Currency issues that you are seeing a lot of the multinationals now do. That is actually an advantage for small caps. We mostly look domestic and most of the companies we are talking to, that is not that much of an issue to them. That is an advantage for small caps. We think that is going to continue for quite a while. I was looking over some of your top holdings lost up i noticed the russell 2000 is about 1 4 waited to financials. You dont have a lot of financials. Mostly consumer, airlines, that sort of thing. Wisdom tree being the exception. Is there a reason to avoid smallcap financials and alike wisdom tree . Is it something specific to that company . We dont really want to be in an industry where we are not really highly convicted. The one part of the financial interest we are highly convicted in is the Money Management part especially the etfs. We dont do that type of investing, but you cannot deny that is a phenomenal. The etf business has grown 30 a year for the last 10 years. It is behemoth. When you see Interest Rates eventually start going up, i think youll see money come out of bonds and naturally, i think well go to the cap etfs. As a stock picker, it becomes easier to pick stocks would have a very correlated investment world like we have. If everything is indexed, Companies Like ours that are doing individual stock picking, i think you have quite an advantage and i think that is what were seeing right now. Craig thank you for joining us, craig hodges. They can also to julie hyman and mike reagan for joining us at the opening bell. We are staying all over the markets this morning. We will keep you what is updated updated on what is moving. Stay in the loop. Breaking news on barnes noble. Shares climbing to a sixyear high on news that it is breaking up its business. It is when a separate its education business from the retail and the ereader business called nook spinoff the College Business to taxfree publicly traded companies. Investors pushed for spinoff of nook so it would be separated from the more probable College Business. In terms of earnings news, salesforce. Com trading at a record high after raising its revenue forecast for the coming fiscal year. Billings in the last quarter rose 32 , topping analysts estimates. Seaworld down, the biggest drop after posting a bigger fourthquarter loss than expected. Seaworld is still in search of a new ceo. In the thick of earnings season with rbs receipts down almost 7 . For your loss over at the bank. A trifecta of new ratings for Morgan Stanley, particularly social media companies, yelp up 1. 5 . Linkedin gaining for Third Straight day after Morgan Stanley rated it a new overweight and expedia trading at a record high as well, even as Morgan Stanley rated it a new underweight. Morgan stanley says expedia is seen as riskier than its larger rival priceline as competition increases. Maybe start booking your hotel rooms. That is a nice morning. Thank you, scarlet fu. We are also watching some other shares, comcast, Time Warner Cable and at t. Stocks may move after the federal Communications Commission votes on chairman wheelers plan to adopt the toughest roles yet on internet providers post up the vote is less than an hour away. It has been months and months in the making. The fcc had to go back to the drawing board about a year after a federal court tossed out the agencys last attempt at setting rules to protect the open internet. Will the internet be saved today . Joining us now is Brendan Greeley, who once said in very deep and very conference of article, keep your terror of off my internet. Down with comcast. Scott bilton a group that strongly opposes the plan to reclassify internet as utility, once to get on your internet. I mean you write a thing any year later, you find yourself defending it on television. I think people will pay for high internet traffic to matter what. With this rule, at least that payment is going to be transparent. Few think about comcast and most Cable Providers, they havent the fact of monopoly in the areas have a effect of monopoly in the area or they have customers. If they have the ability to force netflix to pay them to get to the customers, it is like putting up a barrier to trade. Either you pay for that through netflix as it raises its prices, or pay more for comcast to upgrade its network. So it is like a cartel. Yes, maybe. It is similar to a cartel. Theres a dire lack of competition in internet providing in america, and i suspect our guest will disagree. Scott, defend your industry. What chairman wheelers plan to do is apply title ii, rules established in 1934 for nominally monopoly industry. I dont think the industry opposes competition. The problem is, this is a trojan horse. The fcc may apply a light touch and it may forbear, for now, but there we have no cant you what will happen in the future. When theres a different and administration, we could come to a situation where there are price controls. All of this is going to lead to uncertainty. The uncertainty is going to affect the investment in the infrastructure. The infrastructure is what makes up the internet and that is what worries me. You say this is an old rule its early days back to medieval england. This idea of common carriage that if you possess access to a customer, you cant be discriminatory on who can get to that customer because it is a restraint to trade. It is an ancient principle were talking about. Im curious about this idea of investment. How is investment in infrastructure will drop when already were seeing things like verizon has reeled its realized it is cutting back on its investment . How will it affect investment . A couple of ways. First of all, we saw after 2010 that investment in the infrastructure increased by 60 over the next four years. That is when for rise in built out fios. With the uncertainty, we heard from at t and verizon that they are slowing down on their investment until they have greater certainty and a note they can get a return on that investment. As i talked to my Members Around the country and it totally, they are scaling back anecdotally, there are scaling back. Theyve seen orders slow down. I dont know how it is across the entire industry, but ive got very good anecdotal information that investment is slowing down. If investment slows down the in service to the customer slows down, and that is the problem. That is the consumer problem. Rendon, you mentioned monopoly. All of this would not have arisen if it were not for this issue of, are these broadband providers monopolies . How do think theyre monopolies when you see so much competition with at t and verizon and google and others . It depends on area by area. And all most all area, theres a local Cable Provider which can provide highspeed internet. For about 75 of america, that is the only viable option for broadband. Yet some, edition from dsl competition from dsl, but it can keep up for highspeed broadband. When you talk about fios verizon has rolled out fiber in richer areas, denser areas, but for huge chunks of america, youre really talking about just one provider maybe two. Trade theory basically says you need four or more providers to get price competition. That is one of the frustrations about this market in the u. S. You dont have good, solid price competition like other, more competitive markets like you see in europe. We have to leave it there. Thank you, Brendan Greeley and scott belcher. Still ahead, ultraluxury cars girls Royce Bloomberg any are selling faster than normal cars. More on this bizarre but very interesting and luxurious trend. We will be back. Ultra luxury cars like rollsroyce, bentley lamborghini are selling faster now than normal cars. Over the past five years, global registration of the seven largest premium car brands have surged by 154 percent, far outpacing the 36 gain in overall car sales worldwide. A resident car expert, matt miller. What is going on with this trend . This has been going past four or five years, since the financial recession, the great recession, you have seen luxury cars bounce back a lock stronger than the sale of regular cars. Kyle stock a Senior Editor at Bloomberg Businessweek written a story about it this week and he shows, for example just Premium Brands alone, including cars that sell about 100,000 range, the growth in those brands is up 25 yearoveryear and the growth in all car brands is only up about 4 . That is basically what were looking at the past three or four years. The ultraluxury cars like the super bloomberg anys, the rollsroyces, the cars that cost 400,000, 500,000, they are soaring. The ultra luxury car business cant and wont make them fast enough because theres so many more millionaires. 211,000 people and they want to buy them. Honest one lane people have more than 10 trillion. Almost one lead people have more than 10 million. You see a lot of Car Manufacturers. Alan mulally did his best to get rid of all other brands besides ford. She wanted to focus only on ford, but they could not let go of lincoln kassig needed to have one luxury brand. General motors is doing its best to revive and boost sales of cadillac. Most luxury Car Manufacturers are trying their hardest nissan is totally focused on infinity even if theyre losing money. Thank you so much, we will talk about it on market makers. Thank you so much, matt miller. So much ahead, including baseball. We have a report into the trade of cuban Baseball Players. Cuban diplomats travel to washington tomorrow for the latest run of normalization talks with u. S. Officials. One topic that may not behind on agenda is baseball. In a week with the Boston Red Sox and nearly 60 million in a 19 year old cuban player, the business of bringing young cubans to play ball in the u. S. Is thriving. It is the National Pastime in a nation that feels stuck in the past. On the field in havana, kids dream about a future that is often centered on their list famous team, the new york yankees of cuba. Ticket prices may be lower than at yankee stadium, but the fans compete when it comes to passion and some players can compete when it comes to talent. They want to show how good they are and play baseball at a higher level. That is the reason i think. The other reasons are financial. The manager understands all too well why many players here, including his 15 antonio, they want to play in the u. S. Government attempts to keep these players in cuba have created an underground industry for human smuggling. Major league baseballs own roles have provided the financial incentives that find it. It is that the more than stealing talent from cuban baseball. I believe we are spending tons of money on these Young Players in the traffickers are taking them to the United States to play baseball. The precise details of this passage to america often remains shrouded in secrecy. Cuban Baseball Players dont talk. The smugglers are as they are talking. The agents who Contract Negotiation are not talking. s attorney, represents a cuban center fielder, traveled to the u. S. Via mexico because cuban nationals, to qualify as International Free agents that can sign these huge contracts, must first establish residency in a third country. These are the Golding Deese the guys that are going to bring them significant amounts of money. Just because you get out of cuba, doesnt guarantee youll ever make your way into america or make your weight onto a Major League Baseball team. Highprofile cuban signings like these players who do make it to a Major League Team are often on the hook to pay off the smugglers that helped them get their. He paid his smugglers over 1 million. That is a lot of money. When it comes to money, teams can hardly compete. The best young player is a 21yearold second baseman who could be worth as much as 80 million or 90 million if you ever signed as a free agent to Major League Team. His Current Base Salary is less than 38 a month. When one of your friends leaves to go play in america what do you think about that . It is always encouraged to play in the best leak and it is not a secret it is the u. S. You are always encourage a friend, because ultimately, they are a friend and you wish them the best. In a statecontrolled sport, but the players who leave and the smugglers who assist them are equally considered enemies of the revolution. And even as the two countries slowly inch closer, a vast gulf remains between a multibilliondollar business and this islands national sport. That does it for today on in the loop. Tomorrow, politics behind the Homeland Security vote. Ethan allens ceo on the new american dream. That is all tomorrow at 8 00 a. M. Eastern time right here on in the loop. Erik today at the fcc, it is nothing but net. Regulators prepare for a landmark vote on Net Neutrality. The incredibly shrinking retailer sears is not losing as much money as it was. The undocumented immigrant who became a star at Goldman Sachs in the u. S