Transcripts For BLOOMBERG Market Makers 20140219 : vimarsana

BLOOMBERG Market Makers February 19, 2014

Realtors and builders are building up for the spring home buying season. Will warmer weather offset the recent drop in sales . We will find out. I amme to Market Makers, Stephanie Ruhle. I am matt miller in for Erik Schatzker. He is in a much drier place. There is a lot going on today. Top business stories, another turn in the crisis in the ukraine. In day after 25 people died violence, the western ukrainian region has declared independence from the central government. They want closer ties to the west. The president has been meshing the country closer to Vladimir Putin and russia. The leader of poland says we could see the opening days of the civil war. The owner of jerod and kay and kay jared andlers to buy zale, 3500will operate retailers, all of the jewelers in the whole world may be owned by them. May cost 500,000 people their jobs, but raising the minimum wage will raise people out of poverty. The of obama and the democrats want to raise the rage wage by . 10 per hour and republican say we have a reporter on the ground , helmets strong helmut st the correspondent on the ground in the ukraine. How safe is one Walking Around the streets of kiev . That is a good question. It is quite bizarre. We are less than an hour away from independence square. Quiet. Suspiciously but you really have to walk towards the square, and if you get onto the main road, then you can see the first barricade. Smoke from the black the fires burning on the square. We had reporting of joe biden saying, deescalate. And now the Natural National security adviser says that this is unacceptable and the president may make a statement on this. We have heard from the polish Prime Minister who says we could see the first days of the civil war. Do you get that feeling from people on the streets, are they talking in civil war terms . Walked up so, when i to the square earlier today and talked to a couple of people, they told me that this is a oneway street for us. It is the win this or end and everyone on the square has already accumulated at the present time and there is really no turning back. The latest information is that the Ukraine Security service says that they have started a nationwide antiterrorist operation. Protesters seize guns and ammunition in raids on military bases. The developments are developing things are developing very rapidly. Protesters are also seizing and it doesuildings seem like the country is splitting. Forthere pockets of support klitsko . H and support for russian and western ties . Yes, that is exactly right. The ukraine has always been a divided country. When you go to the eastern parts of the country, people, by majority, will speak russian, and they have very strong business ties. With russia. And you go to the western part of the country near poland, people feel much more strongly associated with western europe, and this is what you can see now, by this region effectively saying, no, we wont take orders anukovych. Om y we are seeing violence in the street and the country splitting apart at the seams. Any reaction from countries like poland and the United States . Vladimirstatement from putin, and reaction from russia . Made ai think he has point of keeping quiet, we know from his spokesman in moscow that he had a telephone kovychsation with yanu last night but the official line is theyre not giving him any advice, we are just listening. We are staying out of this and the European Union should stay the same. They should do the same. Thank you very much for that. There. H stromm on the ground in Eastern Europe. I started working with him 15 years ago in frankfurt. But this is most important story that we will cover. I want to turn the focus to the finance world. Bill ackman he had a tough night. Blockbuster earnings report, profits were up 10 with a doubling of sales in china and the company also boosted their sales. Sanford joins us from atlanta. Break it down for us. What did they report . Basically, they boosted their forecast a good bit for the next year, they say that china will continue to do well, latin theycan will do well, and are piling on more reasons for thestors to think fundamental sales of the company will be strong. To bethere a reason suspect because latin america is doing so well . Venezuela is up Something Like 90 . Does this make sense to you, the countrys economy is in free fall and herbalife, a diet supplement company, would be up that much . They have raised questions about latin american businesses and growth. If you look at mexico, the amount of nutrition clubs are especially higher than anywhere else in the world. He has raise questions about that. Questions about the growth there, as well. Here in the United States and 60 of the business, it is herbalifes own count. Richard says he is suspicious, they may be taking advantage of less sophisticated americans and immigrants who are less likely to speak at what may have been taken advantage of. Thatf those are questions may be reasons why the stock is holding back, when you have groups like the Latino Advocacy group that has been raising more questions about the hispanic market. What questions has bill ackman raised about china . He questioned the Business Practices there and said the numbers might look good but what they are doing there is a legal activity. At the end ofscan september, china was concerned about some of their Business Practices and perhaps distributors were playing outside of the rules in china, which are very different than you find here in the United States. Perhapsany said that distributors did not understand the rules and were doing some things inadvertently and they would try to crack down on that. But the folks who believe that right, they say that this is something to watch and now there are questions about whether or not the Chinese Government will bring in new rules for mlms. China is going to be the new frontier for mlms like newskin, people are watching closely to see what comes of that. Last november when i sat down with bill, he was talking about andge soros and carl icahn this market has shrunk quite a bit at this point. You have some of the smaller players that took their profits and moved on. Sorosis still there, trimmed his stake at the end of the year when the stock was up 60 , it was up significantly since he purchased it. They are thinking that maybe he is taking some profits off the table. He is still invested in the stock but with china and the hispanic question, some people are still trying to figure out what exactly to make of this stock, especially given the fact that you had nothing from regulators in the United States. Bill ackmans case is based on regulatory action bringing the company down. If you can sleep tonight with a regulatory short on, you are a braver man than i. Back, stocks to the dive last month in housing, bad weather is getting the blame. We will have more on that in a moment. It is the winter. It is cold out. It is snowing. That happened when i was a kid. Another billionaire putting his money where his mouth is, and this time the issue is bad weather. Climate change and Global Cooling that we are seeing. His is Market Makers streaming on your iphone and tablet and on the net as well, you can watch this as well on bloomberg tv. First, bloomberg. Welcome back. I am Stephanie Ruhle, joined by matt miller. The weather maybe stopping the housing recovery in its tracks, at least temporarily. U. S. Housing stocks fell 16 in january, the biggest drop in three years, this may be the result of the coldest winter in years. Estimates showed a sharp decline. Jerry joins us now, he runs the National Association of homebuilders and he joins us from washington. Is the reason we saw this simply because of the weather, people are out there ready to build but it is just because of the weather that they are stuck at home. The evidence of that is in the numbers if you analyze more deeply you can see that the midwest, housing stocks were down 60 and in the far west, where this is not as dramatic and it is very dry out there, stocks are actually up out there. In one fully functional of the worst winters in years. I can understand why stocks are down, if it snows this much, it is hard to get into the ground and get to the site. But why is confidence down for the buyers later in the year, eight months out . Dont we still expect people will need houses regardless of how much that it snowed in january . People sittinge in their houses they look at the various different factors and they get a little bit nervous. There are issues out there, no question. We saw the storm that devastated and showed how fractured it was during the downturn, realtors are having a hard time eating appraisals and that is something that each state has to look at independently. There is a serious problem not only do a lot of people leave the industry during the downturn but now the whole debate over immigration has the industry, which is largely reliant on immigrant labor, wondering if we can even get the workforce in place for the demand. And you have a very serious problem with the capital system. The availability of Capital Capital to builders is an issue. I find it ironic that the newly legalized Marijuana Industry had regulation for their capital flow in less than a year and the area hasor housing an waiting for five years. Evidently we need this more than we need homes. They are scrambling to it work done in the next couple of months. Once things warm and they can get on the ground, will they have to pay the laborers overtime to get those projects finished in the next month or so . Builders have to be careful so they can meet their margins. Most builders are in this as a business. They will try to meet their contract deadlines and get the job done, but whether or not they will pay over time is a function of each contract that they may or may not have. They will not sacrifice for that hold on, is it fair to say that across the board, builders are not going to sacrifice quality . There are a ton of builders out there who cut corners. Builders are not going to cut corners to the point that customers are dissatisfied. How do you know that . I have met a lot of bad contractors in my life, that is a rough statement. This is a statement i believe as the son of a builder, who has represented them a long time. I am not saying this is optimistic, it does not make Financial Sense to cut back on the quality because then the owner comes back and you have to fix that. It costs money and damages the reputation of what are legitimately Small Business people who work in their towns and their communities for their entire lifetimes and they can afford a bad reputation. I dont think that this is too broad. A iwatch of that show where man goes in and fixes all the mistake builders have made. Let me ask you about the price. If you have issues getting the workers to the site, issues getting financing even before that, with the demand rise in relation to the supply, and have iseffect on this, which still 35 below the peak in 2006 . That is something we are monitoring closely because i believe in the next two or three years when prices are back to equilibrium, the next bubble in be parting crisis will of the artificially inflated demand and this is a real issue we have to monitor closely. Yesterday,s al the debt is at a record 1. 0 18. Will this affect young people possibility to buy new homes . This market is reliable on solid credit, and if buyers coming to the market, with this on their books it will impact and could delay entry into the home buying market. Lookingsomething we are into. Seeing that the country is struggling with unemployment and underemployment, why is it that we have a tough time finding laborers . Building a home is a series of different skilled laborers together, with framing carpet carpenters and bricklayers those people are not necessarily trained to do all of that. We have several programs that help train people to go into the building trades. Right now there is a real shortage of skilled laborers. Jerry, thank you so much for joining us. The ceo of the National Organization of homebuilders. He only knows good contractors who do great work. Ones he worked with the ones that you work with are not like that. Making the grade, the company that developed the game candy crush prepares for an ipo. Their expectations are seriously high. This is next on Market Makers. Welcome back to Market Makers. Stephanie, guess what. We are approaching 26 past the hour and it is time for bloomberg on the markets. Look at where we are in our into trading. The s p 500 is up by one third of one percent, the dow jones is up by half of one percent, not a bad day for equities. The nasdaq is down, after the big gains that they saw yesterday. I want to talk about a specific name that means a lot to matt miller. He has one of their items. They hit their highest level since 2008 after posting betterthanexpected fourthquarter results. System,r of the gps with their marine segments to offset their floundering automotive and mobile business. Why is the automotive business floundering . No mention of the motorcycle business which is fantastic. I am a fan of the product and we will talk about the motorcycle programs you can use with other projects. I cant wait to talk about it. Naked bikes. Willen we come back matt talk about his favorite thing, motorcycles. I will talk about my favorite thing, billionaire hageman and yours stocks, billionaire tom dyer environmental activist and into his in doozies, techno manager from san francisco, why use building fifth spending 50 million this year to help political candidates. He has been putting his money behind them. Sh as betting on candy cru Risky Business . The company is going public and we will talk to the ceo of the company, grade securities. We will ask him if this is a safe bet. We are streaming on your iphone and tablet and also on the web onbloomberg. Com and we are apple tv, everywhere. We will add to the millions of people on candy crush and we will download it. Get on it. Maybe pay for it with bitcoin. They are free. Our producer spent two dollars yesterday. Alive from bloomberg headquarters in new york, this with erik makers schatzker and Stephanie Ruhle. Another billionaire will spend a huge sum of money in the political debate. This is from the liberal side, about 2. 5s worth billion, he will use 50 million of that for a new super pack that will be for clients who focus on Climate Change. He has spent to fortune as one of the top opponents of the Keystone Pipeline. Covers washington and chief correspondent peter cook joins us from new york. Julie, let me ask you. Microsoft will, give 140 million per year to congressman, ford and gm, 58 million. Will give another 50 million. Can you give an unlimited amount of money to political ties . You can after the post Citizens United era of super you can write a check for however much you like, putting it into a super pac and they can spin than on any political cause or candidate as isg as the super pack i not cordoning with the candidate. Was few years ago, steyer in as a Hedge Fund Manager and a legit guy, how the go from a Hedge Fund Manager to contribute in 50 million in go he has joined the fray and he is late to the party. Lastd a lot of republicans election and a lot of democrats introducing as well and now tom this issue, Climate Change and will contribute his personal wealth towards this issue because he feels so strongly about it. The titans of industry who have given how much this 50 million look like . , we sawis real money what Sheldon Adelson did last year, we saw so many people stepping in to give to the Barack Obama Campaign in 2008 but also Hillary Clinton coming around in 2016. This is real money and in individual giving real money, you cannot do this before in american politics. Citizens united has changed the game and is allowing individuals from both political persuasions to have a direct impact and the question is, is this a good thing and does anyone think about changing it . How can this money be used . Worked against the Keystone Pipeline and thinks it could create environmental problems but he also has backed candidates including a gubernatorial candidate. Money and ang his lot of different ways. He will keep pounding away at keystone, he will take that issue and try to elect candidates who are opposed to keystone and favor other environmental causes like controlling greenhouse gases. We could see him involved in all sorts of different races, from senate races and gubernatorial elections, he has done a little bit of everything to test out what he can do, and it looks like this is the year that we will see a lot of action from him and a lot of different ways. Can you put this in perspective . This is 50 million and that is a real number, but the republicans and tea party guys have given way more. It is difficult for us to know how much of the coke others Koch Brothers have given because they have a Nonprofit Organization who do not have to disclose their donors. They have been involved in politics for many years, setting up a huge apparatus of political giving, and sort of pumping money into politics that way. So while we dont have a total dollar amount that they have given, we do know that they have the experience and the apparatus behind them, and people like tom st

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