Transcripts For BLOOMBERG Street Smart With Trish Regan And

BLOOMBERG Street Smart With Trish Regan And Adam Johnson April 25, 2014

His new various well on the ferris wheel on the vegas strip. All that and more on coming up on this edition of street smart. The dow 1 down47. Lets head out to julie hyman. The nasdaq is the steepest decline of the big three today. That is due in large part to amazon coming out and really plunging here after its earnings report. The ceo has always been a big spend her. That continues to take its toll. Expenses rose 23 . Is posting an operating loss for the current. Also paying shares is a visa. Thiss revenues that ms. Because a currency fluctuations and a stronger dollar taking it toll. Those shares are also down on earnings all stop to round out our trio earnings, we had ford. It is not just gm contending it saidall cost will this was to wayne for some numbers that missed rejections in addition to a loss in south america. Senators import cut russia to its lowest Investment Grade today, saying further downgrades are possible if Economic Growth declines and if the conflict in ukraine sparks wider sanctions. Look at the ruble but has lost more than 8 this year. It was the second most performing. Bank is central unexpectedly raising borrowing bring hoping to relief to the ruble. President obama is urging european majors to support new sanctions but would it change who in two change course or will he continue to lead his country and a dangerous economic political path . Join me as the president and founder of russian studies at the kennedy institute. Got here . Ur what do you think is actually going to happen . Will we see a russian president that continues this territorial grab . I think it is much more likely that bruton will not be done with the economic problems that will inc. Of russias strategic concerns, particularly in ukraine. In the short time he win shortterm he would not be persuaded to retreat from a crane because of economic problems. I do not think there has been an economist in the room when he has discussed his political and military strategy. About the not care economic consequences. This is a political play. This is a political play. She realizes there will be some economic consequences. He has been confident he can get away with this. Although he seems to the understanding there will be a shortterm hit, it i think he believes he can survive it. The economic train would continue during any sort of local crisis. Were seeing that people are rallying around him. He has been able to gain some political race support of all of this. That is the nexus between these two things. His popularity within russia is higher than it was before. The reason why i believe this unfolded was because the economy in russia was doing so poorly. Growth is virtually zero. 77 inflation stopped in order to maintain his personal popularity have to go out. That is what is the rallying cry. Then he got the base but he lost all the russian voters. I think were in the sweet spot. Ukraine has an election. Lets talk about this debt downgrade. Investors have made the point that they do not actually think russia would default on its debt because that would put Vladimir Putin in the position of not being a the great world leader he aspires us to the. What kind of reputational hit with it actually take to Vladimir Putin himself if in fact they were to default . It would be a huge hit. Is betting this on military strength economic default would be disastrous. Russia is proposing that it is a major role player but it does not have an economy that asked this internationally. Theyre still making money because they have a lot of energy resources. You can still pay his hills. Do we have to worry he might actually default . There are some worries. Credit default swaps have gone up 75 . This is one of the five most expensive countries to secure against the debt default. It is important to note that money is coming in because of oil but it is coming right back out has of outflow. This is 200 billion a year if it continues. With you somee sounds from the president and south korea. A reporter asked him an unusual question about his relationship with Vladimir Putin. Absolutely would say to mr. Putin if you were drowning. I like to think that if anybody is out there drumming am going to save them. Pretty good a swimmer. I grew up in hawaii. A little out of practice. He will save him if he is drowning. ,s we watch this all unfold there has been a lack of angst and worry about Vladimir Putin for years it has now bubbled up. Point. At a new tipping where do you see this going . I do think it will be increasingly hostile. I do not see him throwing president putin a political or economic lifeline. I do not think you will try to. Ave the russian economy i think there will be increased tension. There will be difficult dialogue. Putin is not interested in having a constructive dialogue with the United States at this point. The fact that we keep talking about economic sanctions is actually very worrisome. China is watching carefully. I just came back from a week of thre. All st itt we are doing to isolate just reinforces the chinese feeling they do not want to open them. Clearin has made it very that he sees this eurasia area where he would dominate from russia to china. If we are not careful, you are we run the risk that the balance of power sets . China is not as much of a friend to us as we will like to there is a danger that it becomes powerful together. Russia and china historically have very difficult relations. Some sort ofe increased cooperation. There has been between russia and china will st. Ifre is less of a political they want to swallow russia and have or should be its main supplier of gas and raw materials. Russia is anxious to go into the hands of china because chinas economy is more precious. Russias trying to play with oh china and the United States. It is a difficult game. It is antagonizing as we proceed. You are sticking with me. We have a lot more to talk about. I appreciate it. Coming up next, elon musk at making a big announcement today that could have historic implications. Find out why spacex is making headlines today. Later on we are going to talk china. Putting youroid money to work in the worlds secondlargest economy . We will answer that and more when street smart continues. We will be right back. Welcome back. Earlier, elon musk held a special conference where he rocket. It reusable. Retty significant it is overused. Every reporter in america that covers this kind of thing right ow is using the word stage without knowing what it means. It is part of a rocket. He has launched a rocket which typically a crash down to earth or disintegrate in the atmosphere. They have claimed to have done this although it died after at theeconds will stop same time they released this video. This is about a sales job trying to convince certain people in the government that his company is ready for prime time. Stunt all stop it is pr. When you send out an email to scores of journalists at 11 00 p. M. Saint tomorrow there will be a huge announcement somewhere in washington, that is so germanic that is so dramatic. Why not just say we achieved a small piece of a soft landing . Because youre trying to drum up coverage. Cool. Is i wanted to work out for them but it has not yet will stop you have a lot of private companies now. You have you on must hear it you have richard branson. You have all thesebillionaires putting money of their own into the space exploration. He still wants government money. He wants government work. As a filedig news suit against the u. S. Army. A contract. It is supposed to be as much is 70 billion. He also filed a complaint with the regulatory body that will not allow the civilian companies to get these military contracts. He is not really american. Have not doney the things to get the company certified. They have to have technical reviews of all the components of their process. They are not there yet. He points out that we are currently using for military purposes equipment that is built by the russians. Pay money to Russian Companies to build the stuff and we will not pay money to a guy who lives in college or near in california. You want the business to go whoever is doing the best job acted will stop best job. There have been a lotlunches that have happened in russia. They have a program up and running and nasa does not. Fear. T is the as we talk about russia, there is this concern we are going to the cold war mentality. Not we also whether or are vulnerable to russia if they are going to be pruned to some of our military satellites. You got to be careful of the french. Wine. We the know the u. S. Government has been spying on our partners in europe. We spy on her cells. This is the kind of stuff they will be using. He also said that he will sell more here. Not huge news. Thank you for breaking down the spacex stuff. Coming up, well china continue to be a Global Growth locomotive or is it on pay for a serious slowdown . We will discuss in todays mobile outlook. Ever thought youd see the day when you could bring a gun to church . Can. Ently now you in georgia, anyway. It is time for todays global outlook. This appears to be slowing. China stock fell to their lowest loss in two months is a after the nations weakest liquor maker reported slowing profit growth. Sign thatst another the country which was supposed as theass the u. S. Ha largest economy, is it a sign that may not make it . I know you just got back to a. Rip to china i know you are concerned about pete people putting money to work. When you were there, what were the things that some rice or concerns you most . We had over 25 meetings in three cities. That009 stimulus package china put in place to stabilize its economy after the great anancial crisis has now seen massive policy mistake. There are several reasons for that. 2009 would have been the opportune time for the leadership to do the hard read warms and blame the west for the need to do it. Secondly, this was made even worse i the fact that demand is walling and china will sto. This on theeen cities that are ghost cities that built and they built. For what . High speed train. It is also filled with pollution. Solutions. China has run up against the laws of nature. Theyre going to have to change that. Huge cost to fix their polluting industries. Then you have massive corruption. Much of that came back from 2009 onward. That will really limit the pace of reform. Some people worry that we had 2008 here in the u. S. We have the european debt crisis that followed. It is unlikely. We spent a lot of time looking for the catalyst for that and it is hard to find it. China has many problems. The analogy that came to mind repeatedly was of a juggler trying to judge too many balls. It is fair to say the problems in china are known. Their are Many Solutions the government can use to try to offset the risk. Most of us in the west are worried about robert t in the Financial Sector or as a cause of the crisis. Applying that to china is a mistake. Where the risks are in china are in pollution and corruption. The risk of an environmental. Isaster that casts concerns it is threatening people all the way over to the top of the communist party. Policies solutions may not happen at the time they need to. Point when we. Tell me then about alibaba. They are expected to file for the ipo here in the u. S. Very soon. It will be treated here on u. S. Exchanges. Would you not advised the all too by alibaba given what you just saw in china . He just had a very big ipo of a port company. The ipo had to be cut in half in hong kong. Pricing was very weak. I am not sure itll necessarily transferred to alibaba. Is very wise to pay close attention to a valuation what you are actually paying or. Alibaba has a good reputation in china. It is very interesting. On the whole, my feeling is that stocks and china are probably something to avoid. Thank you for being here. You ever think you would see the day that you could bring a gun to school . Now you can. In georgia. We are to talk about that, the gun debate on street smart next. It was a tough quarter for foreign shares. Here and blame warranty expenses and of course a bad winter. Matt miller is here to break it down. I scoffed at first. Ien all blame bad winters always think it is supposed to snow in december and february. Costsd what the actual were. I thought they meant people were not going into dealerships because of the snow. It fouled up their transportation system. The truck i bought was three weeks late because of the bad weather. It did have a financial effect to the tune of about 200 million. A bigger problem was the warranty and recall charges. 400 million. They said these are all publicly announced recalls. No secret that have been lingering since 2004. Asideof the money was set in case they have issues going forward. Maybe this is a kitchen sink quarter were they are taking all sothe losses and writedowns that a new ceo, should they appoint one have a clear path going forward. For one thing, bob shanks said it is not a agency quarter. That is not what we are doing. That would imply they were massaging the numbers. I asked him, you are set up well for when mark field take over as ceo. Said we are set up really well. Kind of a trick question. We are not announcing anything today. Know what is taking so long. They know that mark fields is going to take over as ceo. They have been talking about it for a while now. This is the last google as he goes up to the podium. I think Everybody Knows it. They should come out with this sooner than later. Theyre probably trying to tie up some loose ends. The most interesting piece of news will what he does after. Every Company Wants them. Itll be interesting to see what position he actually takes. He mentioned theyre setting aside some money to deal with some of these more key issues. They are going to improve . For sure. They say theyre going to have lower earnings this year than they did last year. Theyre going to have tighter margins of this year than last year. Introducinghey are 23 models. They are introducing a new ford f1 50. Had to close down their factories for 13 weeks in order to retool them for this new truck. That hurts them financially. In 2015 everybody is going to want this truck. Newre going to see the models. It costs money. You are investing in your future. You need the new products to start driving demand otherwise people, it is likely talking about with apple. You need the products. Ford has some brandnew products. \ there are still motor vehicles. Ofd is expecting growth 2. 53 here in the u. S. Gdp era to be arerope gangbusters in china. They expect to grow in every one of those markets. Most of them faster than the gdp. It looks like mark field is coming into something good. Phones in. P, tech for Major Companies all making mobile moves. I will explain when street smart continues. Georgia is Guns Everywhere bill. Should you be able to carry firearms to a bar . We will discuss that when next. It is called the safe carry protection act. Critics are calling it the Guns Everywhere bill. We are licensed gun owners can take their firearms. Under one of the most permissive gun laws in the country, you can soon bring guns into bars, churches, schools, and even government buildings. I am joined right now by jerry henry, executive director of who is one ofrg the big supporters of these bill. Robin thomas is an executive director for the loss center to prevent gun violence welcome to both. I will begin with you. You lobbied very heavily to get this through. You pleased with the outcome of this . What do you say to critics who say it is really not a good idea to mix liquor and guns. Off, i appreciate you having me here. Thank you. That is something that is always already allowed in the state of georgia. You can go into a bar if you have permission from the owner. The only thing it changes as you dont have to have permission to go in there anymore. It has been the law for the last four years. We have not had massive shootouts that everybody claims we are going to have. That is a minor change in the law. Owner stillproperty has a right to deny you access to his property. If youre carrying a gun. For any reason. Yes, if you are carrying a gun. They can deny you Access Property regardless. You have been pretty proactive in terms of trying to prevent more whites read the ability for people to widespread ability for people to carry guns. What concerns you most about this new law . Thank you for having me on. When you look at this bill, what is important is to take a step back and look at it in context. You have all of these permit holders. Georgia does not require any firearms safety training. You have thousands of permit owners who can take guns and all kinds of places. It creates a risk of having so many guns in so many places. On top of that, the bill disempowers lawenforcement from checking to make sure people do have permits unless they have other reasons to check that person. Your groundhe stand balls. Now somebody he even has a gun without a permit who uses it in selfdefense and claims stand your ground will be able to use that defense. You take this expansion of places you can have guns like bars and churches and you include the expansion up stand your ground protection. Now you restrict lawenforcement and are creating a situation where there is more risk and danger. Be more people that carry guns, the more chance you have of being in a pretty unpleasant situation or one of the guns goes off. That is fundamentally what people are worried about. Wewe hear that every time obtained more of our freedoms back. The thing is that never happens. There ares it happens no accidents for those that do not require training. Seems to me that logically the more guns you have in a society, the more risk you are putting into society. Absolutely. When you look at the numbers in states that have very weak gun regulations versus the states that have very strong gun regulations, you can see very clearly that states like georgia that have weak gun regulations have much higher rates of gun violence and gun deaths in states with a stronger regulations. If you want to look purely at the numbers, the numbers show that weakening gun regulations does not actually make you safer. Youmight feel safer because think you have a gun on you and that makes you safer. In truth, and does not make our communities safer. Let me ask you. We have seen examples of how the Business Community has come to be able to basically billsagainst particular it would have allow people not to serve days in arizona. When you look at atlanta, you are looking at the Big Companies that are there. Dont you think that they companies in some way might be you are allowed to now bring guns onto

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