Transcripts For BLOOMBERG In The Loop With Betty Liu 20140407

Of true detective. We have hit a milestone in the economy. American companies have shaken off the great recession. Fridays jobs report shows the number of private sector jobs is now higher than the pretty recession peak. The prerecession peak. Mike mckee is joining me, we should be celebrating . The 192,000 jobs we got friday put us 110,000 over recession peak for private sector employment. In january 2008, it has taken us this long and recover. It is only a partial celebration. The economy would have kept growing had we not had the recession and there would be even more jobs. Sequester, the government has been cutting jobs or keeping them at an even pace. Who in the private sector is hiring . Exactly where you would think. The story of the recession so far has been mining and logging. Mining has jumped for 21 . North dakota and those places where they are exploring for oil. Education and Health Care Services hired throughout the recession. Professional services, this is interesting. A lot of companies are still relying on remps relying on temps and may never go back to fulltime employment. The obvious losers are manufacturing and construction. 20 of construction jobs went away. Even with all the construction hiring we have seen over the last year, they are up only 3 over that period. How does this fit into the feds view . Only do not get a surge, 190 2000 jobs. Some things janet yellen said she was looking at, the Participation Rate rose, that is good. The number of job leavers was unchanged, the number of parttime workers rose. They want to see that continue to fall. There are still some bad signs in the economy. Look at the number of people who have jobs and went to college and those who only went to high school, it is a massive difference in terms of the unemployment rate. We still have a problem with unemployment for minorities. The rate for blacks and hispanics is way above the rate for whites. Thank you so much, mike mckee. Despite the signs of life you just talked about in the jobs market, Senate Democrats try again today to pass an extension of emergency jobless benefits. That would affect more than 2 million americans. A handful of republicans are on board, but will this past the house . The details. S they have the votes in the senate. They have the votes. They have been trying to do this since december. You recall the fight to extend the emergency unemployment benefits. Now it looks like they have enough republican votes in the senate to get it done. The question remains what is going to happen in the house of representatives . Could this change in outlook there . This latest proposal is bipartisan, comes from a democrat of nevada and a. Epublican of unemployment high and both of those states. The benefits would be reauthorized through may. Two. 2 million americans could be eligible. About 10 billion and it is being paid for by changes to Company Pension payments. It boosts companys taxable income. Republicans were insisting this be paid for in full. In a procedural vote last thursday, the measured received 61 votes in the senate, a sign it should prevail today and the senate when it comes up for a final vote. Several republicans, in addition for this, voted saying now it is paid for it could be justified. House leadership remains skeptical, specifically john boehner. What about the chance that this passes the house . There is a chance. The question here is does the senate vote put more pressure on the house . John boehner has said it has to be paid for and matched with other provisions that promote jobs. The nevada, republican, says he is hoping to sway the speaker of the house. They have their issues and their prerogatives. I have told my staff get me a meeting with Speaker John Boehner and we will see if we can figure out what would motivate them to move this piece of legislation forward. No words yet on dean heller getting to sit down with the speaker of the house. Is in theon mark house of representatives, it may be a longshot, particularly jobs numbers. The emergency extension is no longer needed according to many republicans. Peter cook, chief washington correspondent. Moving and shaking this hour, speaking about jobs one very big one. Goldman sachs ceos were going fine Goldman Sachs Ceo Lloyd Blankfein will get a 6 million bonus if he meets certain targets. For the second straight year, blankfein was the highestpaid ceo among u. S. Banks. Goldmans stock rose last year with an 11 return on equity. Street,nings on wall how much these guys take him gets more attention. Sallie krawcheck is a top woman on wall street. Former ceo of sanford bernstein, smith barney, city Wealth Management and has been a Top Executive at bank of america. Now the owner of 85 broad, advocating for more women. Are you tired of talking about bank ceo pay . It seems to be a topic of great interest all the time. What annoys you . Hearing it over and over. I would not say annoyed. I think we get caught in the numbers. This guy made this much and that guy made that much. It is only of passing interest. We should be having conversations about the structure and drivers of pay. Bank Senior Executives are really paid around how the shareholder does. In the mythical land of unicorns and fairies and flowers, shareholders hold stock for years and years i have a longterm perspective. In the real world, shareholders are shortterm. We should be asking the question about what the motivation is to drive longterm value, not shortterm value. Do you think we are getting it right with incentives on wall street now . How much further do we have to go . Were very focused on the shareholder. If you were a corner bicycle shop and you made the wrong decisions on your business, shareholders urge you to over leverage and you go out of business and then the ceo of the bicycle shop and a couple bicycle riders are hurt. With banks, if the stakes are made it is not just shareholders, it is the entire economy. Banks have a greater responsibility and power than other businesses. To make the management liable . To make the right decisions. Those decisions are not necessarily what is best for this quarter. We should not get this quarters earnings up. Up pretty fast. With all the stress tests, there is a tension about wanting to reduce equity to get roe up. Bit of change. We just mentioned Lloyd Blankfein and some of the incentives. 6 million over the next three years. It sounds like there is a little bit of an attempt to try and put in some under term targets. The regulators, the Senior Management recognized the need for longterm perspective. The real question is will the banks still lever, even after the progress we have made, where is enough . How safe is safe. The two big issues are regulation and ceo pay. Paychecks on wall street in general. You see people leaving banks. Just the other day, Rafael Ferrera is leaving jpmorgan to go work for green hill. Sachs to me, goldman go work for green hill. It seems to be a flood of talent that continues to lead these wall street banks until you have the paradigm in shape. There has always been movement through the banks. Have neverw was you seen a 70yearold investment banker. It was a Young Persons game because of the Energy Around it and the hours required. The question is if we have tipped too far. And some of these banks it is not a ton of fun anymore. No one feels sorry for them or needs to feel sorry for them. With additional regulation comes additional bureaucracy. There are fewer degrees of freedom. You talk to a lot of young people, do they want jobs at banks . Down at Wharton Business School a few weeks ago, and increasingly the answer is yes. These are young folks who do not have the memories of some of us. Some have not even used blackberries. Banks are hiring, markets are going. What is interesting is you are still seeing more gentlemen going to wall street than the ladies. Is an ageold issue. We will be got to talk more. My guest host for this hour. Coming up, we know how the teams made it to the final four, what about the stuff you need to put on a basketball championship. Who delivers the goods for those guys. Twitter was burning up for the debut of the new season of game of thrones. We are just Getting Started on this monday morning. You are watching in the loop, live on Bloomberg Television, streaming on your tablet, phone, and bloomberg. Com. Michaelg the release of lewis flash boys, highfrequency trading has come under scrutiny. The fbi has launched an investigation. Mohamed elerian is weighing in. I do sit occasionally at the is a ripoff oft the consumer. If you watch the stock and how bid, before 60. 22 you can put an order in, that disappears. They should hold firm for a period of time. Were joined again by Sallie Krawcheck. The former Top Executive at Merrill Lynch and citi Wealth Management. As well as now the owner of 85 broad. Sallie, is it a ripoff . Way Michael Lewis writes, it sounds like it is. He has done a great service, he is a talented individual bringing attention to an arcane area of finance that most people do not understand. He has presented it in an understandable way. Now let the debate rage. The debate is raging. Some companies are getting hit by the accusation. I know you are on the board of motif, an online Brokerage Service as well as other things. Is it fair that this is happening to them . The market will determine that, that is what a markets p ole is. Is this a big deal for the organization, are they going to lose clients ormone money . It is hard to argue against the this being shined on thing. I always used to ask the question what are the things that are going on within the business and within the industry in thee participants industry know about, the regulators and reporters know about. This is opposite. I do not agree with that, everybody knew highfrequency trading was taking place. Everybody knew there were coils of fiber. Dark pools. Sure, i am sure you are talking about this at some point. To really walk people through it and feed on the front of the wall street journal and say how does this sound. These are shades of gray, it is not black and white. The problem isk, that it is to get to the base of is saying. L lewis if you have the technology and are privy tou prices that the rest of the population are not. Elli says,ab youre getting ripped off. You have always had people trading faster than other people. They price is different on another market. If that takes an hour to revert itself versus microseconds, where do you cross that line. Were havingebate today. For a retail investor, and everyday investor, what motive is trying to get out. Isnt that just going to scare them even more away from wanting to be in the market . Is it going to make something even worse of wall street . Also that the markets are rigged against them. T that. Le have though theyre a few different ups and downs we have had is that the market is rigged. And there are trillions of dollars on the sidelines. Although investors are coming back, but individuals are under saved for retirement, need to take on some risks to do it. I am hopeful for those individuals who should be investing that this is not something that is holding them back. They should still be in there. The individual investors should not be trading leg banshees. Like banshees. They should choose a good Asset Allocations, put their money there, and adjust occasionally. What do you tell people . People must, to you and say what do i do about investing . Should i be invested in this market . What would you say . I dont know that we have a lot of individual investor market time. We do not have a lot of Institutional Investor market time. You see the performance of some of the active managers. The answer is there are very few free lunches and investing. Awfully close to 1 is a strong Asset Allocation that works for a reason. It causes you to sell your winners and by your losers, rebalance over time. That is a winning treasury. People look at Warren Buffett and say he has bought holds for so long, the worlds third richest man, maybe i can do that as well. Sallie, thank you, youre going to stay with me. Sallie krawcheck. Formula one is not exactly racing to the internet. What is proving to be a roadblock for formula one. It is captain america to the rescue, record business at the box office. I got dragged by my kids. Stay in the loop. Watching in the loop, live on Bloomberg Television and streaming on your phone and bloomberg. Com. The top headlines. More troubles for general motors, a recall of nearly 7 million vehicles have wiped out more than 3 billion in shareholder value in the last month. Gm shares, which climbed in 2013, have slumped 7. 6 since march 7. Iformation in the Neiman Marcus hack attack, the hackers belong to a Russian Group of cyber thieves. They have stolen more than 160 million credit card numbers from a variety of retailers over seven years. Neiman marcus is their latest target. Captain america said a record at the box office. Millionin more than 96 , a record for april. The epic noah tumble to second place, taking only 70 million in its second weekend. Captain america over the bible. Liberty is on the markets. Alix steel has your look at all the action. Captain america was good. Futures continuing to decline following europeans stocks lower. 1 . Asdaq is off by on friday, it fell to its lowest level since 2012. Gold futures paring some of those games as investors speculate what the feds next move will be after the march jobs report friday. For more on the commodity, greg joins me in new york. Chris, director of Portfolio Management at okemos capital at Alchemist Capital from the cme. Whats driving gold . Interest rates are going up over the last couple days not so fast, we cannot get the 10 year yield over 2. 8 . Now we have the equity market starting to selloff. Fundamentally or sentiment wise there is a bid going into the metal. Are you as optimistic question mark what is your trade when you see gold off by five dollars . I think that gold caught a allon the pullback risk situation last week. We are accumulating around 1300 and setting up a basement level around 12 dollars . 80 around 1280. We think that will revisit march highs around 1350. In real terms, the price of itd is quoted in how much costs to buy an ounce of gold. They trade in context of 100 ounces each. If you buy gold futures and it makeup 100 an ounce, you 1000 for every contract you buy. One negative Chemical Department one negative in the gold department, as we see the stock market around record highs despite the recent selloff, wont that put stake in gold . I think the reason to take a stake in gold is not for that 10 move we are looking for on our trade desk. India and china are still alive, the dragon is still breathing hot fire. Offrowth, maybe that goes 2 of what was years ago. But traders believe that chinas and indias demand, gold is continuing to outflow there and that is a bidding war for traders as far as revisiting the 1400 level in gold. Is demand really going to be responsible for driving gold . We are focusing less on the demand side and more of the price action. We have momentum that was bearish for the last several months shifting up to the bullish side. Shorterterm we are seeing more Speculative Movement coming to that metal. Without physical buying, how fickle my speculative buying be . Traders are looking at shortterm moving averages to look for an early sign that the demand steps away. Time for our futures word of the week charting. What is it and how would you use it for gold . Charting, or price based or Technical Analysis uses data to look at past to figure out what is going to happen in the future. It is popular in the commodity. And Foreign Exchange markets. Timing is key. Charters identify a trend, is gold going up or down, they tie the markets, when do i get in. Then they manage their risk. One is the chart telling me i am wrong . Thank you so much, on the markets again in 30 minutes. Thank you so much, alix steel is on the markets. Speculation and super pac support for Hillary Clinton is running high. She would not confirm or deny anything just yet. Is there any other job you would be interested in . [laughter] [applause] comptroller of the state of illinois . Not right now. Ok, we are back with Sallie Krawcheck. Are you for a hillary run . She does. What a qualified individual. The most anticipated president ial run one of the most. In history . Obamas was pretty this is years in the making. She is obviously very qualified. Whether she would win, who knows. What a great race. What do you hope she does different . But im trying to put you in the seat of a political analyst. What do you hope she does differently this time that she did not do in 2008 that made her less appealing to women voters . I think what she discovered during the course of the campaign was how to really connect with individuals. Particularly with women. Womene learned at this as executives over time. You do not always have to be so buttoned up and on message. There were a few points in the campaign where she really connect with people deeply. She did. You speak with a lot of entrepreneurs, women and men. They talk about in washington these things need to change and there needs to be less gridlock in order for me to create jobs and grow my business. And the whitever house, it is a fresh face, whoever it may be. What do Business People want out of washington . Whereood example of washington can work effectively as the jobs act. The opening up of the markets. The opening up of crowd funding. The enablement, is that a word . The enablement of new abilities stillpital flow while recognizing that there will be flaws and bad people who will try to do bad things. This market that is getting crowd funding and the peer to peer lending, below what the banks more money, easier money . Yes. Who could vote against the jobs act, whether that represented what was is another discussion. That was a Proactive Movement forward. Like lowerut things taxes . Taxes, regulation, immigration, what about those . I do think the issue of immigration on making sure that e,dividuals who come in her partake in our education, and have the ability to stay here and produce for this country is important. Taxes, everybody complains. I have, by conversations with entrepreneurs, i have not heard an individual say i would start facebook except the tax rates are too high. I am not going to do it. You do hear a lot about the talent gap and trying to find highly qualified, super intelligent people to drive these startups. Sallie, stay with a. You are being honored tonight with dana craig. Daniel craig. I want to hear more about this. Youre a big selfie taker. Hot waterobama in over a selfie taken with the red sox slugger david ortiz. This could be the last one we ever see from the commanderinchief. Stay in the loop. My new book work smarts gathers some of the best advice in business. Joining me are two women working to level the Playing Field in the workplace. The founder and director of community network, as well as Sallie Krawcheck of 85 broa ds. Will be honored this evening. Highlighting how crucial it is to network to get ahead in your career. The only thing we talked about is the fact that daniel craig, james bond is going to be there. Hottie. Are you allowed to say that . I dont know, that his opinion, not fact. Jessica, why are you honoring daniel craig . We are honoring daniel craig and his wife because they have made a public commitment to education in new york city. They want to help students get to college. They made a commitment to our organization and we are saying thank you tonight. The whole point of my organization is about networks and giving people access to networks who do not traditionally have it. Men and women . Women, young people. Who better to talk about the importance of that. Sallie . What is the biggest thing you have learned about networking. Do it. When jessica talk to me about what they have built, High School Kids about to start their careers and the importance of networking. It is the number one unwritten rule of success in business. Nobody tells us this. We sort of figured out as we go along. But it really matters for getting ahead. How do High Schoolers network . They are incredibly bright and talented but are still sitting at site of a professional network. Sally likes to say this, it is not the schmoozing at cocktail parties, it is about lifelong relationships. Everybody knows and can think about how networks have impacted their trajectory. You could network your whole life and do all the right things, but you may be in the wrong industry. There was a piece in the New York Times about how women have done all the right things in their careers, they became engineers and moved of the latter intent but they got pushed out in the middle of a careers because they could not survive in a maledominated atmosphere. There was a statistic that was quoted in the article saying that 56 of women in tech leave in the middle of their careers. Not know what the. Umbers are but we know there are fewer women at the top of these companies. The verses he needs to better leads to diversity better results. Particularly when we have a lack of talent. For all the new start ups and businesses out there. Article put this well, the startup culture in tech might be one reason women get sidelined. There is no hr manager to say that is not appropriate. On wall street, there is a jar all over the place. It is organized and women still feel like they have a voice still do not feel like they have a voice. Aboutare worrying teaching our students to navigate an unfamiliar environment. It is like mars. It is important to remember that you are missing out if you do not support these women. Uniform this talent, there is so much untapped talent. If you can figure out a way to help women create networks and have mentors. Ruth at Morgan Stanley was at a conference speaking in japan. She said it was an embarrassment. The lack of women that are running businesses, not just on wall street, but in general. Gonell street has backwards. The industry overall has gone sideways. What i fret about is that Sheryl Sandbergs terrific book the in has gotten still down to here is what you should do. You should ask for a raise. The book is much broader and more nuanced than that. The benefit of diversity is diversity, it is not everybody being the same. Sharp Companies Getting results but this can be a little theoretical. Then you have areata huffington, who was on tom keenes show. Thrive, the Book Business is doing well. Sallie krawcheck and Jessica Pliska as well of opportunity network, honoring sallie tonight. Thank you for joining me. Back in two minutes. It is time for todays gate how many94,213 tweets the top character in game of thrones saw. He beat everybody else by at least 100,000 tweets. So many viewers tuned in to watch the show on hbo so that the site crash for a second time in less than a month, prompting hbo to release a tweet of its own. They have got some work cut out for them. In washington, the 2014 and why kickedaign sessions have into high gear. Phil mattingly will be doing feature stories in power. behind the scenes into goi ng behind the scenes into the leader of the elections. We go inside the Republican Party headquarters and look at the rncs digital operation. Post election headlines told the story of obamas tech victory. Republican officials and donors wasted little time demanding the resources and talent to match democrats tech savvy and avoid the repeat. Enter chuck. Behind me is the team. We have the people who work with do data, aggregate it and quality control. We have data scientists, people who build models off that data. National the rncs headquarters, chuck defeo is streamlining voter data. Working with 70 million and more than 40 fulltime staffers in washington and silicon valley. The recruiting has reached top engineering schools in the country. The rightmaking investments to make sure they have the data and the analytics they need. Eos team is building a platform to streamline information from social media and consumer data. They plan to utilize apps that can be sent to the field to target voters and donors. Whomeet chief data officer, points to david jollys election in florida as a positive indicator for the direction. We are taking what we did in florida and expanding it on a national scale. Betallys victory was a test for the platform. Operatives had access to Realtime Data, including information from your home or car purchases. We can observe the data passively at a low cost. They can matchks the obama 2012 data Mining Systems and improve. How do you gauge the numbers, what you have done . It goes back to the question on the wall, does this drive data and dollars . Is this helping us put people on a path to vote for our candidate . Republicans are relieved not to have to take obamas team head on. Thehen you no longer have imperative of getting a republican of getting in incumbent reelected there is less urgency. Joining ustingly is now. Clearly big data is a goal. How they are using it. What are republicans doing with all that data . Great point. Republicans are building the tools to utilize that to get in the field. They have always been able to get data. It is the efficiency once they get it to pass it on. They are creating multiple eacon, theyynamo, b can interface with campaigns and candidates. They are going to try and share data from these programs with workers in the field. The key thing is what obamas 2012 team is, they made sure everyone had a Realtime Data as quickly as possible. Republicans are trying to match that an improved for 2014. Theyre are trying to match what they believe has been a lead among democrats in the white house, using technology. Techies, i might have backfired. Did you hear the story about the president and the selfie with ortiz at the white house . Now they are saying that maybe theyre going to stop self is altogether with the president . All ofe good news for us. A top adviser for the Obama Administration said that because of this selfie controversy, maybe this will lead to the end of selfies for all time. We might be approaching jumping that shark. White house lawyers are involved, samsung needs to watch out. We are all getting a little sick of selfies. Thank you so much, phil mattingly. We will be back in two minutes. Stay in the loop. Time for this versus that. Something you rarely hear about a top Business Executive who does not want a stronger presence on the web. The ceo of formula one. About . 5 billion a year in revenue. Bernie ecclestone limits the amount of content that appears online. Formula one. Com is only the 49th most popular website for sports, it cannot even beat out a site devoted to egyptian soccer. Investors among the pushing ecclestone to enter the computer age. It is 56 minutes past the hour, bloomberg is on the markets. Lower,futures slightly starting to earnings season again. Bank earnings out starting friday. On the markets again in 30 minutes. Coming up, gm begins to recall a lot of cars today. A week following mary barras testimony before congress. What is next for gm and its media besieged ceo. Nasa makes a fashion statement. Astronauts americas will look the next time they return from the space. You are watching in the loop, live on Bloomberg Television, streaming on your tablet and bloomberg. Com. Workflow 30 minutes away from the opening bell on this monday. You are a little bang you are in the loop. Overseas selloff in tech stocks likely to spread to the nasdaq. We will look at the logistics behind march madness. We could see a wave of sanctions against the private equity industry. The majority of private equity firms charge or unjustified fees to companies they invest in. To fix recalled cars today. According to the wall street journal, mary barra seeks to repair her companys reputation after recalling more than 7 million cars. Matt miller was down in washington as mary barra testified before congress. These fixes, how much will they repair the reputation . It will be a long, uphill battle but mary barra seems ready to fight this. Use all congressmen and Women Holding up the faulty ignition switches as political props during the testimony. Those are arriving at dealers today. General motors is going to start sending letters to owners of these cars, 2. 5 9 million postop time to start bringing your cars in. Is going tot part be the time that the customer gets to spend with the dealer. Gm is hoping that that time, it takes about 45 minutes to fix one of these, and that time the dealer is going to be able to talk to the customer. Maybe help repair the image and restore some of that trust. A carb the dealer does on is going to go a long way towards that. Towards their feelings. You are going to sit there and talk to the guy and say i cannot believe it, i felt scared. The dealer is going to say it was not that bad, dont worry. They hope to have them all done by october. It will take a long time. Wow. Get some chance to points back. What is this about a recall at mazda . Mazda has recalled about 40,000 miles of 6s because of spiders. What . Yellow sac spiders climb into the fuel line and weave webs. Disgusting. They are attracted to the carbon gasoline scent. Wow. They weave a web, that limits the air that can come out. Mazda is working on fixes. I i dont care about the air, care about spiders in my car, that is disgusting. 40,000 cars, wow. No wonder you were smiling. Is a lot less serious than the gm recall. Auto expert. R, our even if you never get the chance to fly to outer space, you can take a look at those who will. S the chancewing u. S to choose from three space suit designs. They are designed by philadelphia universitys goal of design and engineering and il c dover. This marks milestones for nasa, laser scano use 3d and 3d printed hardware and its development. Moving and shaking this hour. Microsofts Satya Nadella is going to hollywood. The Software Giant has enlisted seth green and Sarah Silverman to create some robots some content. They are involved in shows that xbox studios will roll out in june. Companywill have some in hollywood with yahoo s Marissa Mayer. Yahoo is close to ordering four web series, halfhour, these. Up tois willing to spend 1 million an episode for that. The wall street journal says Marissa Mayer is focused on shows that need little development. But certainly they will cost a lot of money. A race for content. Private equity firms may be facing sanctions after the securities and Exchange Commission found that a majority of them charge inflated fees and expenses. Cristina alesci has been following this story closely and joins us with details. This is interesting, maybe not surprising but interesting. Private equity would be overcharging. You are right. As a result. Frank legislation in 2012 as a result of. F dodd frank in 2012. The sec one out and required smaller firms to register with them. It was dubbed a get to know you phase, making some firms uncomfortable. In this phase, they are getting into the weeds of the business. 50 were0 firms, over not charging the right level of fees or disclosing how they were charging these fees. Private equity firms charge two party fees. Ofestor fees and fees portfolio companies, their holdings. For what . For advising the company, for restructuring it. Like a banker would charge. A little different. Weird. It does seem we are. You are buying the company, why are you charging the money . Just another way of extracting value from the company. They found they improperly companythe portfolio for fees and sometimes did not disclose it to investors. How long have they been able to get away with this echo it has been a longtime. The reason there has not been additional scrutiny in the past is because private equity is making so much money for investors. Investors really did not care how they did business. They got the check at the end of the day. Investors are becoming more keen on expenses and you have these kinds of injuries. It is always amazing when the tide goes out, what gets exposed. Cristina alesci, thank you. Coming up, Russian Hackers being blamed for breaking into Neiman Marcus credit cards. Why are retailers so susceptible to these attacks . After a month of madness, it all comes down to one final game. Three teams, kentucky, connecticut, and ups. The Package Delivery company. It all started with 68 teams vying for College Basketballs biggest prize. Eighthseeded kentucky and seventhseeded university of connecticut are competing tonight. Helping to make it all happen is the Worlds Largest Package Delivery company, ups. Massar is here with more on this and their role. Ups has a big role. You know them for their brown trucks, they also have a growing logistics business. For Something Like the ncaa, they handle a lot more than just packages. Two weeks ago, this was a football stadium. Feet, 63 truck routes full, and 10,000 square feet of floor, waiting 33 times. Making its way to the at t stadium outside dallas for the ncaa final four via ups. Anything not nailed down to the stadium has been delivered by ups. Has been working with ncaa since 2010. Delivering its floor. Salt lake citybased connor sport makes the court. Logistically, we have entrusted our baby to them totally. Logisticss official provider. Ups is responsible for the four, balls, and hoops. Logistics means ups is more of a deliveryor, not a service. I can include warehousing and inventory management. Ups is ramping up services for scar ands like masna live nation. Will there be a day when logistics is important as packages . We think so. It is very important. It could be 5050 . It could be, or greater. A reminder that the bulk of upss business is Package Delivery. It is a reminder that Logistics Supply Chain Management is a priority at the company. Is not just sports and entertainment. No, in fact i was at their hub in louisin at their in louisville, kentucky. They handle warehousing and distribution and transportation medications globally. And a bunch of other Pharma Companies as well. If you buy a phone with sprint as your carrier, it is likely that some got shipped from there hub in louisville. They do 17 million packages every day. The logistics and supply Chain Management is important. Growing. Thank you so much, carol massar. Our chief national correspondent. After tonights game, we know what comes next. Your office pools commissioner has to plead with you and your coworkers to pay the money you promised. Butlate for march madness, maybe for fantasy baseball season they will try the online Payment System that connects your Fantasy Sports and credit card accounts. Paul is the founder and he joins us now. Great to have you here. This is big. Here or 50 is 20 bucks there, this is a lot of money that people owe. It is a lot of money. One of the big hassles for people who run the pools is trying to shake down your friends. You multiply that across a 10 person league or a 200 person march madness league. Leaguesafe automates that process. How . By email. You do not have to be the one hounding your friends and having that job. We send with increasing regularity email reminding people. You are basically a Payment Service . We are. People pay in the preseason, we for an entireds fantasy season. The day the season ends, in this case, march madness, we release funds to the winners. They get paid out same day. That is a problem with a lot of fantasy leagues and office pools. Getting paid when youve won. And payake the money in it out. You are sort of a competitor to paypal, which you have been a partner with. They decided not to stay with you. We offered paypal as a Payment Option for our customers. Gottually our volume big enough that paypal recognized us as a threat. They felt our business was too closely aligned to their own as a payment processor and provider. Unfortunately, paypal is not an option. We would like to do business with paypal. A threat . Processing payments for other kinds of activities . Leaguesafe is a great reminder for fantasy leagues and march madness, most of our engine does not really even know what a sport is. We are considering spinning off into the Group Payment space. Paypal may have recognized that. Sounds like they have. Founder of leaguesafe. Tech valuations taking a hit as the nasdaq sees a big end of week selloff. Why everybody is so jumpy. Last week was tough for tech as Major Companies like google, facebook, and netflix bore the brunt. 2 . Aq down over heading into the open, a look into the selloff. Nobody really knows what the cause has been. Is a of analysts think it correction and stocks that ran up to far, too fast. The names that soul of the most on friday facebook, netflix. Some of the biggest winners of the bull rally. The 10 worst performing nasdaq stocks rallied 134 in 2013. Sounds like a healthy correction. Value actions violations on the massacre still double the timesf the market, 31. 8 earnings, almost twice the ratio for s p. The biggest winners are losing a little bit of steam. No clear trigger in this selloff. Is it shortterm or something bigger . Names like tesla and twitter, they have seen a pretty big correction since they have fallen from their peak. Twitter off more than 40 , linkedin down 35 . One way to gauge the mood of the market is to look at what the Options Market is telling us. Friday we saw a surge in bearish puts on a nasdaq etf. Boumost bearish puts were ght on the qs since the flash crash in 2010. More than 2 million options contracts traded hands, the most since lehman went bankrupt. That suggests a lot of anxiety. There are still buyers, seven out of 10 of the most active buyers. Thank you so much, olivia sterns. Away from the opening bell. The top ten trades you do not want to miss right after this break. Keep it here on in the loop. Welcome back, you are looping. 26 minutes past the hour, bloomberg is on the markets. Alix steel joins in. Looking at stocks, futures declined following european sto cks falling from a sixyear high today. The nasdaq continues to be the index hit the hardest. Friday, the nasdaq fell to its lowest level since may 12. Falling below its 100 day moving average. Internet stocks are picking up from the downside this morning. On the markets again in 30 minutes. Lets countdown with the es you neednly trad to know about. Topkrock expanding leadership in a reorganization that will result in new roles for at least 10 Senior Executives. Ocksmarks black r biggest move since 2012. Losing 3al motors million in shareholder value stock hasweeks, fallen 7. 5 since march 7. The Company Expanding the recall and the Justice Department probe. Glaxosmithkline investigating allegations of Improper Conduct in iraq that month after china began probing the drugmakers local operations. Iraqharma operations in employ fewer than 60 people. Microsoft going hollywood, the xbox tv studio plans to roll out new shows engine. The cast includes Sarah Silverman and robots. Six, a canadian fertilizer producer announcing the ceo bill doyle will step down after almost 15 years. He will be released in july, staying with potash as an advisor. Positive results in a trial involving and experimental Breast Cancer drug that stopped truumor growth for twice as long. Lifted after the online game maker was added to the best ideas list, expecting the company to meet our breed its prior First Quarter guidance. Zynga will report earnings on april 23. Mankind shares plunging as much as 22 . Pared those losses somewhat after the diabetes drugmaker said the fda extended the review date of its inhaled insulin treatment after three months. Less than a week after a panel backed the drug, causing the stock to double. Questcor pharmaceuticals. Formpany agreed to buy them 5. 6 billion in cash and stock. A u. S. Company moving offshore to take it vantage of irelands lower tax rate. Sears. The retailer completed the spinoff of its lands end unit, which will begin trading on nasdaq today under the ticker le. Other assetshing like its auto business, saying it unlocks value for shareholders. Time for the call, i bring and founder of san i want to bring in the manager of the san franciscobased hedge fund and a chess player. 50 million of it is peter thiels money. His call she has several of them is number one, buy stocks with less exposure to china. You are quite bearish, are you not, on chinas growth story. Yes, i am, absolutely. Ok, so tell me why. A lot of people think china has an inevitable growth path. What has happened over the past 10 to 15 years has been a lending boom. Think there is going to be a correction. Even worse than that, after that happens, i dont think without further reforms china is going to be growing faster than the rest of the world. What about those who said and i was just in asia recently speaking with several people who are very focused on china, money invested their they say there is a capital cushion in the economy, that it can withstand any type of correction that you are talking about, patrick. Im sorry, you are cutting in and out there for a minute. To be quite honest, i dont think china is as rich as people think. I think china has been missed a locating misallocated capital for a long time. The Economic Activity has been making them poor in many ways. I know that you as i mentioned, you are a former chess champion. Yes. You have used a lot of what you have learned awise learned strategywise in chest to your investment strategies. ,ou go to Berkshire Hathaway the shareholders meeting, and you play there as well. I know that bolivia has been looking further into Warren Buffett olivia has been looking further into Warren Buffett and how he has actually underperformed the markets in the past few years but i wanted here what she has to say about that. Frienden buffett, a good of yours there was a new analysis tracking his performance and it shows that the oracle of omaha, while he has beaten the market by a very wide margin over his 49year career in investing, his record at Berkshire Hathaway for 4 of last 5 years come he is doing worse than the typical fund that tracks the s p. Hefett has said since focuses on the additional funds death of the report concludes by comparing him to Michael Jordan the author of the report concludes by comparing him to Michael Jordan. In the later years he just wasnt a superstar anymore. Patrick, what do you think about that . Is that an affliction you see among other managers as well . First of all, i dont think Warren Buffett needs me to defend him one way or the other. It iswill say that yeah, true that in the last year, year and half, you have seen some speculative stocks run apart. When youre seeing now is a correction in those kinds of stocks. Like the tech stocks . Not just tech. Companies where there is no earnings come where it is a story about anything in the future and nothing today. Sounds like tech to me. I know you have a few stock picks. Kraft is one of them and alix is Digging Deeper into kraft. Food Companies Across the board have one really big problem, rising food costs. World food prices rose about 2 in march that that is the highest level since 2013. It is across the board, which would make it so staggering sugar is rising on supply worries in brazil and thailand. Cereal,ve serial with hurting wheat crops in particular. Sales are expected to fall slightly in the First Quarter. Higher food costs are going to hit kraft. What is the bull case for the company . Everything you just described is pretty temporary. In the end people eat but they want to eat, as much as they want to eat. Kraft is the alternative for people hitting him, the cheapest, most economic way for people to eat. Higher food costs will get passed through and over time it tends to wash out an. Kraft is a safe stock that i dont think it is going to choose your portfolio of. But for a safety stock with a longterm franchise, you have got an interesting story going on with new management reinvigorating the company, cutting costs, trying to come up with new product development. In the long run you have an interesting story and it is very u. S. Focused. It is a safe place to hide out. Patrick, thank you so much for joining us. We have been telling you, microsoft and xbox seek to create original content for the television screen. We will talk about the companys new venture, xbox Entertainment Studios. And Neiman Marcus is the latest retailer to be hit by sophisticated Russian Hackers. We are just a few minutes in the session. Stay in the loop. Here is a look at the top tech stories on our radar. Losses for this taiwanese smartphone maker were 62 million. The Company Expects the number is to improve later this year when it releases new smartphones into the u. S. Market. At t Ceo Randall Stephenson has companyped to show a how to increase customer spending with bottled media packages. Telecom italias ceo made the decision after a weeklong trip to the u. S. Last month, where he met with executives from qualcomm, microsoft, and amazon. Samsung has been chosen by swift federal railways to supply markets and tablets for its ticketing and facility checkup circuses services. No word on how much the deal is worth to samsung but they are sure inking deals left and right. We heard about netflix and amazon producing their own television shows, but now Microsofts Xbox unit is doing the same thing through unit called x box and in him and studios. A unitichman through called xbox Entertainment Studios. Jon erlichman has a closer look. Microsoft is putting its tv future and it is tied to this. Xbox Entertainment Studios is a unit of xbox created to make original tv shows. This is a startup with the help of microsoft. Led by a longtime hollywood executive, is developing all sorts of shows could a steven spielbergproduced halo ser ies, live coverage of the bonnaroo music festival. Will fire up your xbox and if you are one of a 40 million members of the Online Entertainment network xbox live, you might be able to stream xbox originals the same way you watch netflix or by interactive video games. Microsoft may have a partnership deals to distribute it shows outside of xbox it and shows will be interactive. You will be able to do funky stuff gamers like to do that is different from lying on her couch watching cable. Microsoft is doing this to keep users happy but also to broaden its reach but each xbox sold is worth 1000 of purchases to microsoft, a number that will climb if this tv is a success. It also fulfills microsofts goal of making xbox one the anchor of its Home Entertainment network. Traditional tv places they write on the wall . Totally tech. Officeng to that tech become a pingpong table, will staff lunchroom we commemorate all of our successes by bringing this bill. Let the games make that tv shows begin. Let theu say, jon, games begin. This is been a strategy at microsoft for years in the making, right . That is definitely true. If you think of more than a decade ago, what bill gates was saying about to make a living, xbox has turned into one of the centerpieces of the microsoft strategy. Earlier hted theres the competitive threat out there. You have the Sony Playstation they announced they are trying too. T into original shows, as we highlighted, microsoft has been very busy over the last year and a half. They have live event coverage planned. A thriller, a comedy sketch show that involves Sarah Silverman that they have lined up. Series,e dealing with limited series, what i used to call miniseries, featurelength projects, halfhour projects, short for projects, animation, live events, sports, news. We across all genres. The bottom line is that exactly where you can find it is through xbox live. How do we measure if this is going to work . I think at the end of the are betty, if more xboxes sold, this will be seen as a Winning Strategy for microsoft. It is hard to measure when and if that happens. For somebody like nancy tellem, that focuses on creating hits the same way it would have been in her previous job at cbs evening when you have amc, netflix, traditional networks, all thinking of making hit shows, maybe the Business Model around it is different but you are still looking to get people building buzz around a particular show and paying attention to what youre doing. There is an old formula on that. Create a hit show, created content. Content. Hit on that front, the wall street journal reports that yahoos running its own is planning its own programming push is this a big gamble former samir four Marissa Mayer . Yes is the answer. Yahoo has tried original shows for some time. Maybe we will see how this plays out maybe the dollar figures attached to this part of the strategy are different in the past. Of the originals show strategy has been mixed today. In the case of xbox, nit about selling more xboxes. In the case of document is about getting Digital Advertising dollars or attempting to take the traditional tv ad bucks. Yahoo is dealing with competition from facebook and aol and youtube and twitter, and adding to that that push to get tv ad dollars, she is saying lets get some big shows onto. Jon erlichman, senior west coast correspondent in l. A. You can check him out at 1 00 and 6 00 eastern time only on bloomberg west. The Neiman Marcus credit cards to him being blamed on a group of Russian Hackers grab stolen 160 million credit cards over the past 7 years. We will have details on the incredible break and next. Time for the global outlook. A Sophisticated Group of Russian Hackers was likely responsible for gaming gaining access to credit cards at Neiman Marcus. The fbi says they are some of the best hackers in the world and were responsible for stealing 160 million credit cards from various retailers. What we know about these Russian Hackers. For hackers we actually know quite a bit about them, in part because they have been a top priority for the fbi and secret service for years. They have broken into more than 100 companies, any major retailer you can name. This has happened since 2005 and they have hit things like citibank, nasdaq, jcpenney, 7eleven. The latest is Neiman Marcus, which means that they, despite being a top target, dont seem to be slowing in their activity. How is that . Why is this . A lot of these hackers operate from what some people refer to as cyber sanctuary that these are countries like russia, ukraine, other places in Eastern Europe where there is a lot of corruption at the local level and in some cases the federal level. It just allows them to basically go on making payments or being protected, and there is really much the fbi can do about it. In the case of russia, there was no extradition treaty with the u. S. Despite highlevel contacts between Law Enforcement in the u. S. And in russia over a period of years, they have not been able to make any headway in getting the russians to arrest these guys. So far what we know about what they have done at Neiman Marcus . Pretty much the same thing they have been at other retailers . Yeah, they have a very clear recipe for how they do this. There are teams of guys, some of them specialize in certain things and breaking into networks, harvesting data once they are in the network, getting the data out, and then selling the data, to a machine that has been well oiled for a number of years. The game can change and morph the little bit that there is a core of them that have shown up and hack after hack ever hack. Neiman marcus is the latest. Emm as we know from the big cover story in bloomberg businessweek, in targets, the systems were up and running but it was human error that did not catch the hack attack in time and allow the data to be stolen. What do we know about Neiman Marcus and could they have prevented this . Are the hackers sophisticated or traditional in the way they hack into these companies . Hindsight is always 2020 but the report on the Neiman Marcus hack that looked at some of the mistakes found that the these kers set up more than 60 set off more than 60,000 alarms. These are pretty low level alarms, so it is not as a people who control security for these big networks will cite their kind of tailored they are kind of deluged with these alums, but it shut off 60,000 over a period of weeks, they should have looked into what was going on. Mike, thank you so much for joining us. Mike riley of Bloomberg News on the latest hack attacks on Neiman Marcus. Will return tomorrow starting at 8 00 a. M. Eastern time. Thanks for watching. Past the hour and that means a television is on the markets. I am alix steel. We are looking at stocks continuing their down slide in early trading pit i want to point out that the nasdaq is below its 50day and 100day moving average. Tradersless, some coming out saying that it is dip could this will be a busy week for the markets. Earnings season begins in. Arnest at the end of the week heres a look at what analysts are expecting. Here is michael reagan. Thanks for being here. Appreciate it. What are we seeing . Pretty much a flat quarter. One percent earnings growth, obviously pretty weak. They were looking at 6. 6 wow, huge remission down. The obvious commission will suspect is the weather. This brought out a lot of estimates higher 10 year yields are creeping in the background. What is interesting is that in earnings season everyone pays attention to the outlooks for future quarters. This will be a bigger theme this year. Quarter, looking for about 9. 9 earnings growth. People will be on the edge of their seats to see these forecasts if we were going to find growth in the First Quarter, where would investors be looking right now . The real standout is Industrial Companies manufacturers like ge, wroteillar, 3m, forecast earnings by 13 . A fantastic growth for this quarter especially. Obviously, people are expecting a big rebound in capital spending. And companyestors executives did not take the economic rebound seriously over the last few years and were very cautious with their cash. Now that you look forward, estimates of about 2. 7 gdp growth, three percent next year. The speculation and expectations are that companies will start taking this account start taking this economy seriously and make the investments they need to. Im looking at caterpillar here. 1200 billion dollars of revenue from asia last year and that is where emerging markets are getting hammered. We also have Industrial Metals have really been laggard as well. Curious as to why now these industrial stocks would be a good bet. Asia is always a question mark for these companies. Europe was in a recession for 2 years. We are looking at this year for europe to break out. China is always a multiple celebrities and sort of arrest any downtrend. Do we think this is a longerterm fundamentals for just a quick fix pentup demand . They expect it to be a gradual recovery in capital spending. Are we seeing any money rotate out of a certain sector . It seems we are not seeing the same thing with high data trade. Obviously, like you mentioned him high data, biotech, those steps are almost in a freak those socks are almost in a freefall right now. That is the story with industrials, too. About 600 million last year, the spider etf. That is the most it has ever attracted since it was created in the 1990s. Fascinating could appreciate you shining a light on earnings season. Market makers is up next. Live from bloomberg headquarters in new york if this with erik makers schatzker and stephanie ruhle. Tech selloff. Some of the nasdaq said he gives names. What has them so concerned . The saturdayt night live treatment. The lawsuits are piling up. On the vine. The 19 old College Freshman with millions of followers. Companies like pepsi and eight you are hiring him to help their brands go viral. Yo