Transcripts For BLOOMBERG In The Loop With Betty Liu 2014100

BLOOMBERG In The Loop With Betty Liu October 1, 2014

Doctors are headed to texas, looking for anyone who might have come into contact with with the first person diagnosed with ebola in the u. S. Prodemocracy protesters jeered leaders. The tests are the protests are in their 60 day demanding free elections. Mary barraors ceo will lay out her strategy with Investment Investors and analysts. Gm has been hampered by record recalls so far this year. Industry, the auto chrysler numbers are out for the month of september. Scarlet fu has more on the sales, up about 19 . Up about 19 . An consensus was for increase of 16 , so this is a better than estimated increase for chrysler. Previous to this announcement, analysts had been looking for General Motors to post the highest increase, 18 . Ford is expected to show a 2. 4 drop. Were still waiting for gm and ford numbers. Reiterate, chrysler reporting u. S. Auto sales for the month of september coming in with an increase of 19 , higher than what analysts had been looking for. We will be waiting for the auto numbers. Thank you, scarlet fu. One of the deadliest diseases on earth hitting u. S. Shores yesterday. Officials say they are confident the ebola virus will not spread. It is certainly possible that someone who had contact with this individual a family member, or another individual, could develop ebola in the coming weeks, there is no doubt in my mind that we will stop it here. Washington correspondent peter cook joins me now with more. The cdc director seems very confident about that. Why is that . He does seem confident. He is confident for two reasons the Public Infrastructure is excellent. It is prepared for the situation. Dallas is a big city with an excellent Public Health system. This is a hospital trained for this scenario. They had discussed this one week earlier. The other big reason, the individual himself came into contact with, according to the cdc, just a handful of people after he showed symptoms and that is significant because he came to the notice states from liberia on the 19th, arrived in dallas, 20th, and did not show symptoms until the 24th. It is from that point forward that there are concerns he might have exposed someone to the virus, so it is a limited period of time. Peter, why wasnt he isolated when he first went into the hospital . That is one of the big question marks in all of this. He went in on the 26, walked into the emergency room, complaining of not feeling well. Based on what the hospital set news conference, nobody asked him if he had come from west africa. He did not have clear signs of ebola. He came back two days later in an ambulance. It is one of the question marks here. Dr. Say it could have looked like the flu or another virus, certainly not ebola in the initial stage. Case, hereabout that in new york, you get nervous enough, but what about in dallas . What is a situation that . Is a huge concern, but you do not get a sense of any real hysteria. That is one reason the cdc director was strong in his comments, trying to contain concerns about a panic and one reason why people in dallas might have a better bradley, g, cap kent bradley came down with the disease, he was treated and released. It is from the dallas area and the story was covered slowly. Dallas hasse of that a better sense of what the issues are. Thank you very much for that. Peter cook, our washington correspondent. Moving and shaking this hour, Hedge Fund Manager bill ackman. One of the funds he manages raised 2. 7 billion in amsterdam. Thanunds market cap, more 6 billion. One of the advantages bill ackman has in taking this public is he has a source of capital that is not at the whim of investment, but other factors. Pershing capital has 14 billion in assets. Citigroup will review its contract after Goldman Sachs barred seven employees from trading individual stocks and bonds. Erik schatzker is here now with more. Interesting timing why these banks are reviewing these policies now. Betty, it is because of the secret goldman tapes. Dont you love the way that sounds . The secret goldman tapes. , as oneay rice tapes investor said. They have turned a spotlight on the contracts and found them to be wanting. They reviewed a controversial role in a merger and concluded that goldman really did not have a conflict of interest policy in place. One goldman partner who worked on the deal owned 340,000 of Kinder Morgan stock. Analyst claimed she was fired after coming to the conclusion, being pressured to change and refusing. Npr, were made public by and goldman drew a bright line, bahrain Investment Bankers from investmentbarring bankers from trading individual stocks. See are required to approval to buy or sell other stocks. You know what i am surprised by there were not stricter policies in the first place where bankers could buy and sell individual stocks. Once that openly are in conflict that arer own ones openly in conflict with their own business. You and me both. If you talk to people like lloyd blankfein, you are led to believe that working on wall street is like giving your life to the church. If it were rarely about working for the client were really about working for the client, every bank would have these bright policies about not being able to own individual stocks and bonds. A conflict of interest. The whole point is to prevent employees from doing things for personal benefit that injure the company or its clients. Now, that sounds great, unless, of course, you are the banker, and you are thinking about your Economic Opportunity. Why should my employer deny me the Economic Opportunity of being able to sell stocks, bonds, or derivatives . The point is banks, having gone to the financial crisis, have sustained image damage and need to do rehabilitation. It sounds like a great idea to me. Absolutely. Thank you. Certainly an ongoing story. Up, he looked at the markets to the prism of doom, gloom, dr. Marc faber. We will talk to him. Mary barra wants to change the storyline instead of talking about recalls, she wants you to check out gms plan for the future. Joining us from zurich is someone that has been warning of. Demise in the u. S. Economy he is of course, none other than mark farber, the editor and publisher of the gloom, doom, and boom report. We might be jittery, but i have to say, market have gone in the complete opposite direction of what you called for almost one year ago. What gives, marc . [laughter] well, we have to clarify the statement. I was expecting a correction for. Ow, two years we have gone up in a Straight Line since october, 2011 to hear. We here. We did not have more than a 10 correction. This year has been irregular. Some indices like the s p are up a modest 6 . The russell 2000 is down 4 . 50 of the shares on nasdaq are down 20 or more from their recent highs. Like we had market had markets like the philippines, indonesia, india, pakistan, thailand, they are all 28 . Clean 20 and right. So when people tell me the s p is a great place to be, i have to laugh because the emerging market in asia at least have done fantastically well. Relatively speaking, yes, they have not performed as well as some of those of the markets you are talking about, marc. [laughter] and by the way, last fall i was interviewed and i said treasury notes yielding 3 would be an interesting investment, to that yield has fallen 2. 5 , and the dollar has been strong, so i do not know what you are complaining about . What do you mean that you do not know what im complaining about . You make it sound like i was wrong about everything i projected. Hang on. Adpave breaking news jobs at port of spain the u. S. Added 213,000 jobs in september. Saying the report u. S. Added to it thousand jobs in september leading up to the friday jobs report. That thesaid before economy, you believe, is sliding. The Global Economy is sliding into a recession, and we have not seen that. We have seen you come down. We have not seen gold rally to the points that you have mentioned before, marc. Peoplei always said that should own physical gold and store it outside of the united states. This is an insurance policy that will pay off one time big in the future. I do not know when. I do not care when. It is a safe investment. It is insurance and part of a total portfolio that consists of cash, realonds, estate, and precious metals. Number two, concerning the Global Economy, i was talking in particular about the emerging economies and the chinese economy, and i was saying one year ago already that in my view the chinese economy has slowed. Own to a gross rate of 4 recently, the Economic Statistics that were released electricity consumption down year on year. Railroad tracks it down year on year. The shanghai government reported Industrial Production down year on year. Exports down year on year. The other asian economies to which i travel are mostly flat, no more growth. There is one country i went to recently that is a boom town. It is cambodia. That is a boom town because it has become a huge laundry shop. And you are saying, of course, the shine taken off of the market in china in light of these hong kong protests, but i want to get back to the u. S. Market here, which you just said a few moments ago, we have not gone that correction in the u. S. Market that you were looking for. Yes. That it has underperformed the market overseas, but it is still in the fifth year of a run. Run bull at some point, do you expect that will end as you predicted in november . [laughter] yes, that is correct. I think that most people have not made that much money in u. S. Stocks this year. Some hedge funds have made some money, and others have lost some money. It has been, for many hedge funds, a difficult environment. Usually, when you have u. S. Dollar strength, it means it is a sign or a symptom of tightening Global Economy liquidity, which is not been particularly good for u. S. Stocks. If i look around the world, u. S. Stocks are very pricey compared to other stocks around the world. Navy they will go up a little more like in 1987 maybe they will go up a little more like in 1987 or march, 2000, but in general, if you take the view of years youeven to 10 will make more money in the american economy, but all markets are vulnerable. All of them. Wasou said that facebook pricey, twitter, tesla in fact, they have not been good shorts. They all, with the exception of twitter, have risen even more, to record highs. Yes. Correct. You are right. [laughter] so, what happened there . Do you think they are better value now that they are up . At the time i thought they were already overpriced. If we had this interview in march, 2000, and you would tell december 1999 you said tech stocks were expensive and here they are up another 30 . I would tell you yes, they are up another 30 and they will drop 70 . What are the investors missing . I recommend to you as a friend go and buy facebook and. Pple and netflix and twitter and then i will lose my shirt, is that what you are saying . See howhen you will much money you have made. I love you. Thank you, mark haber. Well be back in two minutes with more. You are watching in the loop live on Bloomberg Television and streaming on mobile and bloomberg. Com. I am betty liu. The u. S. Dollar rally continues. The greenback extending its longest winning streak in more than two years, rising against all of its major peers on that speculation the improving economy will give the fed more reasons to raise rates. Elizabeth murdoch is leaving her Fathers Company for the second time in her career. She is expected to step down from the shine group, the Television Production business she founded and sold to 20th century fox. Her departure will come after shine merges with core media. The company is behind the brother and american idol. T hasl news site reddi raised money that they will use for staffing and to expand mobile and advertising out. And it is 26 minutes past the hour. Bloomberg tv is on the markets. Equity futures, you can see, are lower, takenghtly down a bit by the continuing selloff you are seeing overseas, particularly in asia given the protests prodemocracy in hong kong that is railed the chinese leadership. We are on the markets again in 30 minutes. Back here in the u. S. , u. S. Automakers are in focus. September Sales Numbers just out from chrysler in the meeting expectation beating expectations. Ford and gm will be out in the next hour. The big three have been focused on breathing new life into their brand. Especially barra is under pressure to shift gears. Much of her time with the automaker has been embroiled in the faulty switch scandal and since taking the helm shares have fallen nearly 20 . Mary barra is looking to change the conversation with a new multiyear plan she is expected running. Later this we are joined by Michelle Krebs, Senior Analyst at auto trader. Com. Are,lle, first off, people kind of, giving mary a hard time because they feel like she has not laid out a strategy and she has not acting fast enough on gm. Will we see anything change today . Well, i think so, and i hope some. I think we should see a tougher mary barra. She has been dealing with this retail crisis since she started, and now we need to see her focus on the business now and going forward. I think we need to see her draws, lines in the sand in terms of accountability for people inside of the company. What will those lines in the . And look like well, you north america, we have had these we will get to a certain margin by a vague date. We need hard numbers. There has been vague reference as to when europe will turn around. We need to see some firmness in those dates. They have changed their strategy a lot there, so they need to be clear what that strategy is. Yes. We need to see what they are going to do russia is a mess. South america is challenged. We need to see what gm is going to do in those places as well. The other thing i think she will talk about probably is cadillac and a longterm strategy because dabse have been dibs and coming out the last few weeks about cadillac. There have been. I know there are changes with cadillac. We had a screenshot with mary barra and some of things you mentioned about the profit margin and i did not hear you mention this, 39 billion they have in cash and what they will do about that. What will they do about all of that money that they have . Well, i do not know, personally, but i think we should get some detail on that. You know, how much do the shareholders get . How much it goes to investment in the product . Those are the kinds of things we need definition on today. The Profit Margins we have heard gm, have we not, say they plan to achieve a 10 pretax profit margin . Michelle, is part of the vagueness that they are not outlining clearly how they will get to that 10 margin . How theyre going to get there, when they are going to get there it has just been a little fuzzy. I think there needs to be some firmness so that there is a goal they get to and we can be assured that they get to it. On the recalls, you know, michelle, we spoke to ken feinberg, who is administering the Victims Compensation fund on these faulty ignition switch problems on these gm cars. I want to play for you, michelle, what he said so far about his relationship with gm and how this process is going. I am finding that legitimate claims, claims where people have a legitimate right to file and to spend compensation, those claimants and their lawyers are very effective in gathering together the circumstantial evidence needed to demonstrate a link between the defect in the ignition switch and the accident resulting in death or physical injury. And, of course, were still early in this process, michelle, but do you think it has been a big distraction for mary barra and her managers . Oh, undoubtedly. This is not how she was going to start her tenure as ceo. Yes, it has been a distraction, but there may be some good that comes out of it because, again, there are lines in the sand of what they will accept in terms of safety. Clear, made that pretty that that is a priority for every employee. So, if anything good comes out of a bad situation, that should be it. A distraction to the point that maybe that is why they have not acted as quickly as shareholders would have liked . Which is why the stock is down 20 . That is it that we still do not know. There is a that is it. We still do not know. There is a fuzziness to the numbers and we should get clarity on that today. I hope that is what we will get. We will get that in about two hours time. Thank you, Michelle Krebs with auto trader. Com. Victoryhn scored a big when ebay announced they will spin off paypal. We will look at how influential activist investors have been this year. And one year after its ipo, we will check in on the reit that most the historic Empire State Building among its properties, and check out how they do it at the empire state really for halloween. Callwho are you going to ghostbusters there is Something Weird and it dont look good lori when a call who are you going to call ghostbusters well, it has been about one year since the iconic Empire State Building was basically sold off to the public in a reit put together by the malkin family. They have gone through renovation to attract more companies and become more Energy Efficient. A few months ago i took an exclusive tour of the new york city landmark that you cannot buy tickets for. It is one of the worlds most famous skyscrapers, soaring 103 stories above midtown manhattan. The empire state doping is a staple of the new york city skyline and a building in transition. Ceore state realty trust Anthony Malkin has put one half of a billion dollars into energy improvement, all to make this a hightech hub for Companies Like a clothing distributor. I said to the head of the operation, you are offending me if you will not come and look at the building. They came, they looked, and they really liked it. Usa is your largest tenant here . They are our largest in the portfolio. Famous to tourists for its sweeping views of manhattan, it is what most people never see that i

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