Transcripts For BLOOMBERG Bloomberg Bottom Line 20150302 : v

Iranian sanctions, as highstakes Nuclear Negotiations continue, but first, these are the stores we are following on this first monday in march 2015. A story last night on cbss 60 minutes, reporting that laminate flooring contains high levels of formaldehyde, a cancercausing substance, and they admitted it was cheaper to produce that way, and in a statement, lumbar liquidators said they would fight these attacks on all fronts and they said in proper tests were used improper tests were used and that the Company Provided significant test results to 60 minutes. The nasdaq now a little more than 1 below the peak it hit during the dot com bubble, and the nasdaq is on track to raise for the ninth straight quarter. Hewlettpackard is expanding part of its business, agreeing to a cash purchase of a company that makes Wireless Network infrastructure used by hotels, universities, and shopping malls. It is h. P. s biggest acquisition in years, and they plan to split it. One will focus on corporate customers. Boston scientific is expanding its mens Health Business buying a urology portfolio at a price of about 1. 6 billion. Boston scientific will also have treatments for other conditions and are still considering treatments for women. A takeover in the medical health industry, almost a 2 billion deal with cardiology and endo vascular devices, and shares of Cardinal Health hit a record high last week, up 23 in the last year. Tens of thousands of russians march through the capital honoring the death of the opponent of Vladimir Putin who was gunned down the 11th highprofile killing since mr. Putin took office. The kremlin is promising a vigorous investigation into it. And that is a look at the top stories we are following monday. Israeli Prime Minister Benjamin Netanyahu prepares to call for tougher sections in a speech before congress tomorrow. It is a move that directly challenges the Obama Administration efforts to reach a nuclear deal with iran. My speech is not intended to show any disrespect to president obama or the esteemed office that he holds. I have Great Respect for both. [applause] so just how effective have the sanctions been in the past . Shelby, what stands out the most . Per capita gdp. The gdp has really declined after 2010, when president obama in active the comprehensive sanctions against iran. That has dramatically impacted the quality of life in iran. Prices have gone up. The real has plunged, and this is causing a lot of trouble. In terms of sectors, we have numbers that highlight the impact of the sanctions with a 60 drop in crude oil sales, and oil is really the pinnacle of the iranian economy, and currency reserves are stuck overseas. A 40 decline in auto production, one of the biggest car markets in the mideast, and a 20 unemployment rate, and that is likely to be higher because the 20 is the official rate. Prime minister netanyahu and some of the lawmakers want to toughen sanctions. The Obama Administration was hinting at a deal. It depends which sanctions are used, but the first thing to watch is oil. If the right kind of sanctions are used, we could see a lot of oil flood the market. We could also see manufacturing ramp up to make autos, to make appliances. Iran has an educated workforce, a lot of engineers, so companies have been watching closely. If sanctions are eased, there is money to be made there. They will definitely jump back in. Shelby holliday thank you very much, and i enjoyed by a codirector at the Carnegie Endowment. Welcome back to bottom line. Good to see you. Good afternoon, mark. Good to be back. This includes the lifting of economic sanctions, as shall be just talked about. What about in order to get sanctions relief . There are stories coming out in negotiations that a number of centrifuges will be allowed to operate. It has also been reported that one of the big unknowns i am sorry, one of the big undecideds is the pace that iran demand sanction relief, so the iranian are saying all of the sanctions need to be relieved immediately, the u. S. Saying it has to be a more gradual thing, and if these stories are right, that is one of the things to be discussed. Mr. Acton israel does not trust the iranians, and many members of congress do not trust the iranian either, but what about using the reagan doctrine of trust but verify, like between the united dates and the former soviet union . What i think trust but verify is the strategy they are adopting for this negotiation. Again, a major part of an agreement, should one be reached, would involve inspections of the program that go above and beyond. It is very much part of the Obama Administrations negotiations. The president there is also expecting domestic criticism as he tries to reach a nuclear deal. What is the likelihood that they could see lawmakers there undermine his attempt at diplomacy . Well, it is an interesting possibility. I am not up on iranian politics but there is no question that he has been hit hard from his right. There are people conservatives within the regime who will seek to capitalize on any show of weakness, in large part because there is a series of important iranian elections coming up. I think both leaders are going to have a tough job selling any deal domestically. I guess, sir it raises the question, does iran want improved relations with the west . When you say iran i think it depends on who in iran. They had heterogeneous politics. I think the Supreme Leader probably doesnt want to see improved relations with the west. I think he probably views improved relations as a way of undermining a regime that has fundamentally and built on opposition to the west. I think there are others, and i suspect both the foreign minister and the president , who suspect that improved relations with the west are compatible with the continuation of the islamic republic. Mr. Acton benjamin that yahoo will address, congress Benjamin Netanyahu will address congress tomorrow. Any deal is a threat to israels survival and he is expected to say as much tomorrow. What has his opposition to a deal done it to the relationship . Think it is seriously undermining the u. S. Israel relations. I want to make this point, which is critical. Policy is about making choices, and the choice that ace is not whether and the choice that faces us is not about iran having Nuclear Weapons. The question is what is the best way of achieving that goal, and the idea that just putting more sanctions on the Iranian Regime is going to lead them to back down or that a military strike is more likely to stop the Iranian Regime Getting Nuclear Weapons i think is divorced from reality. Diplomacy is not guaranteed to succeed, but it is, to my mind the most likely way to prevent iran from getting a bomb. Mr. Acton, we have about 30 seconds. The Prime Minister was suggesting that president obama did not and could not understand how concerned israel is about i possibly obtaining Nuclear Weaponsmaking capability. Sharp rhetoric aside, does he have a point . No, he does not have a point. The difference is not whether the ultimate goal is whether to stop iran Getting Nuclear Weapons. The Obama Administration firmly believes iran should not be allowed to get Nuclear Weapons. The question is how to prevent that from happening, and mr. Netanyahus proposal is completely divorced from reality in terms of some items. From the Carnegie Endowment for International Peace in washington, mr. Acton, thank you for your time. Thank you for having me. Coming up, Lumber Liquidators to hit hard by a report on 60 minutes using products made with formaldehyde. That is later. Lets get you to some of the top stories. Senator Barbara Mikulski is retiring. The move could set off a race among candidates to replace her, including Chris Van Hollen and former governor Martin Omalley who is also can do during a bid. Another sign that the drop in gas prices is helping to boost consumer spending. Adjusted for inflation, an increase in january after falling the month before and a drop in costs pushed down a fed measure by 5 10 of 1 . Meantime, incomes grew. The settlers are bank in philadelphia picked a new president who is currently the fed bank in philadelphia picked a new president , Patrick Harker and they will vote on the federal open Market Committee in 2017. Visa and citigroup have won that battle to succeed American Express at costco. They will become the exclusive issuer of the costco cobranded credit cards. Costco and amex decided to end their relationship after failing to come to terms on a new agreement. That arrangement accounted for about 10 of American Expresss cards. And a takeover at the Worlds Largest fast chain, and the new leader will speak to suppliers and they may reveal changes to mcdonalds ingredients or two a switch to antibiotic free antibioticfree meats. You can find a streaming for free, on bloomberg. Com, on your phone and on your tablet. Not all is pictureperfect at getty images. That when bottom line continues in just a moment. Welcome back, this is bottom line on television and streaming online, on your phone, and on bloomberg. Com. A kiss in times square, during the vietnam war, the fall of the berlin wall, and a remarkable touchdown catch, but the company that owns these images, getty images, is facing a very outlook. Our bloomberg corresponded joins us in the studio with more. Thanks for your time. What is going on with gettys cash . Their cash has gone down. They burned through one third of their cash by the end of last year about 27 million, and this was because of their operations. What they are in trouble with is part of their business where they sell stock photos taken by amateur photographers or lowerpaid photographers. Their earnings and cash falling rapidly. Does getty have any options to access more money . They have revolving credit lines, like a credit card, where you can borrow for a shortterm loan. They actually lost 120 million of borrowing ability, and that is an issue. It is really quite tight. Ok, so what are their options at this point . They have to do better operationally. They have to bring up their earnings. Getty has been working with a private equity firm for two years. How has the company been doing since that private Equity Company took over . Not much better. October 2012. It just has not gone that way. Falling to his store close to historic lows. You have other companies and all of these social Media Companies where photographers, amateurs professionals can sell their photos for a price. How has that competition changed everything . That has really hurt getty and you touched on a real point there. That is really an issue for them. Talked about be subscription. There is the Subscription Service and the paying per ph oto. A customer used today a specific charge, but because these other competitors started charging for subscriptions to get access to x amount of photos getty started doing that also. Are the photos too expensive . It is more the clients in terms of the subscription rate. They overlap with some other competitors. They actually charge less money. Ok, with gettys falling price at this point, what are some for job about that . Getty has put some other smaller outfits out of business, and they really have not liked the way that he have not like the way that getty has paid them. Greg there were millions there were millions of photos that getty was allowing access to for free . Yes. Quite some of the iconic photographs, the soldier kissing in times square, and the photo of the police in miami, and they were going to take elian gonzalez. This is something these other competitors cannot match, but the real issue is how can they move forward, and if they are doing good in both businesses great, but how can they make this work . With the stock photos, if they cannot make that work, it is hard to justify the other parts of the business. This story is on bloomberg. Com and on the bloomberg terminal. Triggering a price war. My guest, laura keller thank you. Tonight on charlie rose, Lindsey Graham and john chambers. Most recent Quarterly Earnings revealed. That is at 7 00 p. M. And 10 00 p. M. Right here on bloomberg television. Coming up, the worlds Biggest Telecom trade show is underway in barcelona. We will have that when bottom line continues in just a moment. 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. Welcome back to the second halfhour of bottom line on bloomberg television. I am Mark Crumpton in new york. Thank you so much for staying with us. Lets get to some of the stories we are following, floor trading on the screen, you see crude down about one third of 1 ending the day at 49. 57. In boston, it is almost a winter for the record books, and now boston is within four inches of this becoming these know he is the snowiest winter on record, and more snow is forecast for tomorrow. Samsung unveiling their new smartphones, the new 26 s6 and the s6 edge, and the edge has a screen that extends on the sides, and they are compatible with almost all card readers. Samsung is trying to reverse losses to apple. That is a look at the top stories we are following. Tech executives from all over the world are in barcelona for the World Congress trade show. The worlds biggest mobile companies are there to showcase their newest gadgets and bloomberg is there, as well, and brad stone joins us. What were some of todays highlights . Hi, mark. You mentioned the new samsung phone. It is the show and tell of the mobile industry. All of the companies basically bring out their flagships for the year, and it is about premium devices. We are not hearing a lot from the moderate ones. It is about the premium wines. Htc has a phone. Brad, you talk about challenging apples supremacy. Has that been an undercurrent of this years gathering, that it is time for people to start changing the way that they think if they are able to compete with or, perhaps, some day take over apple . Yes, i think so. I think the android ecosystem really got clobbered by the iphone 6 and they look as expensive as they are, and like the galaxy s6 it has got a beautiful aluminum back and the same for the phone from htc. They are trying to compete. It has really moved to be bar forward like with the camera and the quality of photos you can take. Any sense brad, that people around the world are getting cell phone the teague . Cell phone fatigue . Sometimes people just want to make a phone call. Mark you are sounding very oldfashioned. I can agree with that sentiment. They love the next new thing. This is an industry that is accelerating, and half of the world still does not have a smart phone, so there is a lot of runway left for these companies. Facebook founder mark zuckerberg, what did he tell the audience . Mark zuckerberg was here for the second time in two years to talk about the initiative to work with mobile operators to spread the internet in developing countries. Have a listen to what he said today. The internet, it is expensive , and building the infrastructure costs a lot of money, and the only way we can accelerate that is if we can grow the operator dismisses faster. Operator businesses faster. Ok, and tomorrow, we have got a great day, and we have tom wheeler from the fcc and more. We will see you tomorrow. All right, brad stone Bloomberg Businessweek at the trade show in barcelona, thanks. Up next, john boehner is in a tight spot as members deal with a oneweek extension for the funding of homeland security. Bloombergs washington correspondent peter cook has more when bottom line continues in a moment. Welcome back. It is time now for the latin america report. We spoke to a chief operating officer about the outlook of a company at the conference in barcelona for telefonica. The share of the market for the telefonica group, we are expecting significant growth. And that is your latin america report for this monday. It is deja vu all over again on capitol hill, leaders begetting the week in the same position that they were in last week with just days to avoid a partial shutdown with no funding solution insight. The man on the hot seat again is this bigger of the house of representatives, Ohio Republican john boehner. Washington correspondent peter cook is following this story. And he signed this week will be easier for Speaker Boehner any sign this week will be easier for Speaker Boehner . We saw over 50 fellow republicans torpedo his plan because it did not have language rolling back the president S Immigration proposal. Boehner tried to twist arms and kept it open, and they averted a crisis at dhs, but it was a major embarrassment for the speaker and the republicancontrolled congress. The fact that the president had to sign a sevenday extension does not just ref