Domestic economy. Dramatic capital outflows everyone is pulling money out of china. It has been going on all summer but the reaction in the market on the losing of Monetary Policy is amazing. Across all Asset Classes, futures up across the board, a gain of 1. 5 on the nasdaq. Everything is gaining. Looking at the 10 year yield, rising as investors sell debt to buy riskier assets. Take a look at european stocks, up across the board. The dax is up 3 . The rest are following up. If you look at commodities, you see gains in copper right now. You see gains in gold right now. You see gains in oil right now and you see movement and currencies as well, the reaction has been global and swift and dramatic and its been across the board. David lets hear the first word vonnie area with begin with american airlines, the company had a better than expected thirdquarter. Earnings Beat Estimates. Says fuel prices helped. Jack dorsey sharing of wealth as he donates 1 3 his stock to employees at 200 million. It may increase morale after the recent job cuts. Jack dorsey tweeted last night saying i would rather have a small part of Something Big in a bigger part of something small i am confident we can make. Twitter big. Welcome, Steve Ballmer. You are one of the biggest investors in twitter, do you support this move . Thats jacks decision. Its incredibly altruistic and shows great faith in the company which i share. I think its a great signal. Stephanie its jacks decision but did he need to do it because the company is in trouble . Twitter is a company that has all kinds of opportunities. There is all caps of things that can be done better and i am impressed without jack has jumped on top of this. It is such a strong underlying aspect, the ability to improve the product, jack is on top of it. The ability to streamline the cost structure which i think i needed it needs to happen, jack is on top of it. Jack is on top of monetization. Stephanie he has been there all the time but he is a cofounder and has been on the board. Why would they not have been doing these things right all the time . Theres a huge difference between being on the board in running the place. I understand that very well. Boards dont run things. Ceos do. To bencredibly different a ceo than just a board member. David when did you take the position on twitter . It was before i knew he would take over. I was glad the board was looking for a new ceo with the resignation of dick costolo. Faith they could have the right guy come in as ceo. Iterated,y have not they have not changed and modify their product like facebook has. Challengert of the and opportunity for them . If they were doing everything perfectly, not sure it would have been a good buy. Everybody was trying to comedic it with the world tells you whether twitter handle it is. Every news show. Its an incredible asset. The fact that maybe they were not doing is good job really points to the opportunity as opposed to sitting there saying that something is not perfect and the company. They have a chance to make great improvements which is where i think shareholder value can get created as an investor. Do you want to be on the board . I dont have a board personality. Yourself do you see in any way as a friendly activist . You see the problems of the company and they can improve. Are you going to have conversations about the problems you see them having and what they should do . Thats a fair thing to do, friendly activist. Fractivist. I will say what i think in the company will do it wants to. I have had a chance to chat with jack once since i started building the position. Mostly we chit chatted. When i was at microsoft, we talked a little bit. We talked about beta testing. I wished him well. David they have a very powerful service but as a consumer, it struck me that its difficult to monetize. They need to grow but they also need to monetize. They start getting too many sponsored tweets. I can get annoyed. Is that a challenge for them . I think they have an inortunity as all people do the internet advertising business of thinking through how to make the ads relevant to balance the number of ads versus the amount of content. I think they also have an opportunity to help people who are not hardcore twitter users have a chance to be readers of tweets and not have to think about themselves as a producer of tweets. Most people say i will not be on twitter and i dont expect it we but people should be reading. David its like a news service. Stephanie everyone we had sitting in your feet is a in your seat is a twitter troll. They most if i follow people. How long before you see this company being profitable . Do you want them to be profitable . Of course, i believe profit is the requirement for sustainable market gaps. Stephanie it doesnt seem to be a requirement in california these days. I still believe in fundamental realities. Profits should drive market cap longterm. There is only so long when investors will put up with not making a profit. That could be a long. Of time and i have been wrong about it before but fundamental economics has to work. Stephanie we have to share our twitter question. We solicited to our audience to what specifically will be the catalyst for a fundamental rerating of the twitter stock. What are the bears missing . I think there will be some potential catalysts. There are ongoing improvements in the product. The opportunity is there. Ideas andlot of good people will wake up and say, wow. In our industry, product drives part of it and the other will be financial improvements in the business. When those show up, they will show up. It could be long or short term but jack is focused on it. I think the company will perform better with a lower cost base but it will also perform better financially with a lower cost base. David most monetization is about cutting costs. Getting focused and cutting costs. Jack highlighted focus in his tweet an investor should pay attention. Know how you clearly to be a cultural leader and we understand where you come from and what you. What have they done wrong . What does it take to lead a company in terms of culture in a positive way . It has been a mess. I am not inside the doors of twitter. I cannot tell you what the culture is like an everyone has to form their own. I think the key thing is you have to be prepared to invest in the right stock, the right product improvement, the right product enhancements. Twitter did not do that. Maybe the culture was messed up. They did not innovate or you can say because they did not prioritize innovation, the culture got messed up. Thats up to the Twitter Management Team to figure out. David turning back to microsoft, specifically xbox and halo five. Its about to be launched. Do you play . I am not a big halo player myself but i have three boys all of whom are revved up for the release of halo five. Stephanie and revved up for the woman who designed it . Yes. David she is on the cover. In the Earnings Release yesterday, microsoft is really moving toward a b t company. O b how important is xbox and halo five to the future of microsoft . I believe microsoft has a muscle thats a consumer muscle and another muscle is a bto b muscle. Depending on the quarter, you will hear more about one or the other. The microsoft transcendence into a Hardware Company is crucial. To b business. We are opening up a brandnew store on fifth avenue that opens monday to show up this incredible innovation. You can use it in business but it is really all about the consumer. And windowsardware but hardware is the leader with some of the Consumer Services and then there is the transition of the cloud for that b to b business. Stephanie how can you create the magic of that store westmark i think about the apple store and every time they come out with a product, there is a line around the block. What are they doing . They want apple. When you open next week, how will get those people lined up . I have a certain responsibility for the stuff in the pipeline coming to market now. I am confident in the people who are there that they will figure that out. Look at the reaction to the new surface pro and service book, it was fantastic. Its based on a new version of windows but its a whole new area of innovation for the company, great people, great town, the stores all of that stuff now is really coming together. We put a lot of money in it. People like to say we lost of money a lot of money. Plan is, i love it when i plan comes together. David lets go to our hardware. Been at the launch of every single iteration of halo. The lines wrap around the block at midnight and multiple Different Stores around manhattan. I have had every xbox since the inception and bought multiple copies for my friends. Pcx revenue, this is windows the xbox revenue climbs until 10 billion. I spend a lot of money buying stuff for halo or buying stuff for call of duty in the store on the hardware platform. How much can you get out of that increasing revenue stream of people who are spending to buy different suits for their commando . Its an interesting question. Best posed to the company. If there is a lot of opportunity, the answer is yes. There is an explosion and everything around gaming. Microsoft bought mine craft. It has some replaces it can be taken. It can be taken to new levels and new worlds you can create. Xbox, talking with some folks yesterday about the new eastport where you pack arenas with people playing league of legends. Think about halo, 18,000 turn them is. Theres more to give the customer than the company can figure out how to monetize. Stephanie the nerds want to play. How big of a role does Virtual Reality play . We look at oculus and how excited the gamers are. How big can it be question mark im enthusiastic about the possibility of virtual and what we call augmented reality. I look at you and through the glasses, i can see your names and your bios in addition to seeing your face. We were are working on a product that microsoft made public called owl lens. As the owner of the l. A. Clippers, we are also asking what can we do with augmented reality. We are sitting there in the building and we dont the goods a great idea to have people sitting and looking down. You want to look out at the game and still be able to see the most important information, what is the freethrow shooting percentage, how many dunks have they laid down, whatever the case may be. Stephanie wearing google glasses looks really cool. We have so much more to cover. You can read more on halo five in this weeks Bloomberg Businessweek. Steve will stick around with us. When we return, we are going deep on some of the Biggest Tech Companies and where they will be one year from now. We will ask steve to weigh in but before we go, lets take a look at Steve Ballmer back in the day at one of his infamous microsoft meetings. Take a look. First developers, developers, developers. Yes stephanie we are here with amanda needs no introduction, Steve Ballmer, owner of the l. A. Clippers. We want to get an understanding of what the future holds. Yahoo tart with what do they look like 12 months from now . Its hard for me to say. Did a partnership with yahoo several years ago. Then,d say mostly since they have swum around the not really found a direction that leads to a future. I wish them well but that is not really happened over the last several years. David is it a freestanding company 1218 months from now . I think its a company that has to find a direction in which you can make progress before you can decide whether its freestanding or likely to be acquired. We looked at acquiring it when i was at microsoft. It wouldve been about 2007 but it had a real surge position and there were real economies discover putting the two companies together. Im not clear where they sit anymore and its not clear who would acquire it. David it would be a lower price tag . It might be. It has to do with the value of the alibaba stake. Stephanie facebook, many people say they simply won the war in terms of mobile. When they went public, that was their achilles heel. How can they convert to mobile but it seems they have crushed it. I think facebook is a great company. Ideatook the germ of an and they continued to build it out. Did not over monetize nor under monetize. Its a super Impressive Company with a clear direction. The success of facebook mean that twitter will always be far behind question mark i think facebook and twitter are two different beasts. Facebook is a social network. You can say that twitter is much more of a news and communication network. Thats one of the things that check dorsey will work on is to clarify their real position. I think they are more apples and oranges. Is it too late for ibm to win with the cloud . They are kind of late into the game. Its too late in my opinion. David that does not say much for their strategy. I dont know their strategy very well but i think there is a lot of momentum with microsoft and amazon in terms of core infrastructure. Google is doing a good job and some consumer stuff but they will try on the b to b side. These companies have amazing Cloud Infrastructure and distorted data centers. It would take years for ibm to catch up and they dont have killer apps like search or office or the amazon store. Without a killer app, its not clear how you drive that investment. I think they will struggle in the cloud. Stephanie what is the ibm value . Some say watson is special but what is it really . Companyas been a superb that has a great cash flow. How they choose to rechannel that, maybe they will be more successful in the cloud. Companies can be very resilient. We started the rebirth of microsoft from a Software Company to a Hardware Company and a services company. Nadella came up with that. David alphabet, it does it start with more than g . I dont know. I dont know what else of that is. I know what up that is. Know what you had to grade a separate corporate structure. I dont understand the alphabetting of google. Will google be effective in the hardware business . Thats a theyre talking about with cars or nets. They have to make a sustained commitment and they have not shown a willingness to do that yet. Stephanie lets talk amazon. In a recent article, he did not want amazon to become a country club but amazon became like microsoft and we would die. Thats a quotation from jeff bezos. I dont think of you as a country club guy. What you think of this . The microsoft culture is very strong, hard driving, people are really focused on changing the world, people work very hard. I believe the same is true at amazon but there is intense competition between microsoft and amazon. Intenses but there is competition just in the city of seattle over talent. I think they are a place that people dont want to work. Anybody who ever let microsoft can count on them coming back. We can count on them coming back within a year or two because its not a great place to work to do innovative stuff as an engineer. Stephanie so people who would lead to go to amazon, you would say that the doors open and they were back . Many people did around trip. Not everyone but many people. Its probably fair to see you see movement between the two companies. Its not Silicon Valley where everyone is moving between every company all this time. In seattle, there are some startups that mostly the two big employers are microsoft and amazon. Stephanie you do the interviews at starbucks so they went . Thats right. Stephanie capital they apple. They have done a great job. Back to 1997 when steve came back and they were almost bankrupt, we made an investment in apple as part of settling a lawsuit. Microsoft made an investment. In a way, a you say that mightve been the craziest thing we ever did but they have taken the foundation of great innovation, some cash, entered into the most valuable company in the world. Microsoft gave them a good run for their money and nobody else is tried to compete with them seriously in hardware. Who is really going after the mass . Who is going after the ipad . You can basically say microsoft and samsung. One that is the only has a software and hardware capability. If there is going to be cop as competition for apple, it will come from microsoft i believe in that. Stephanie do you have to take market share from apple or is the pie getting bigger . Nobody had a tablet two years ago. It looked like every kid in central park had a device. You dont have to take from the other guy but you got to at least take the new innovations that are coming. Imac ore book is not an an ipad but its a new category. Its an innovative category. Who was going to get to those categories first . Companieshe only two that have that Software Hardware skills. David we are both from michigan and is apple going to be a car company in tenures . You have to ask apple. Its a much bigger leap to do cars than it is most of the things they have tried. Isolate tesla but its still relatively small. Will other people be able to put intelligence in their cars . Yes, but maybe apple gets there. Uber, love it or hate it . Its Great Service so i love it and no market cap comments because i dont understand the economics very well. David Steve Ballmer will stick with us. We will come back and have two former spurs players next on bloomberg go. Buddy nice place, nice car what happened . Well, it all started with my free credit score from credit sesame. Com. They gave me so much more than a free credit score. Credit sesames Money Management tools and personalized offers saved me tons of money and helped me reach my goals. I just signed up with their free app. Whats my credit score . Your credit score is 650. Thats magic no, thats credit sesame. Com you get so much more than a free credit score so do more with your score at credit sesame. Com stephanie welcome back to bloomberg , here with Steve Ballmer. Joining us center for the spurs and cofounder of admiral capital group, david robertson. Welcome. What a morning. A big morning. Lets art with matt miller. Tell us what is going on with the markets. Matt i cannot wait to see what with the admiral have to say. China has massive youth. Lowering its reserve are minced by half a racist point. This is the loosening we have been waiting or. It reverberated across the market. Check out futures. We were already positive because of the great earnings from microsoft, google, and amazon yesterday. Big sp