tv Lunch Money Bloomberg January 23, 2014 12:00pm-1:01pm EST
money"ome to "lunch where we tied together the best interviews and videos. i am matt miller. it is time to break up ebay and paypal, says activist carl icahn. what would you tell your 25 your old self? you will hear what ceos have to say about that. os, how to escape an ambush, if you are a billionaire. and are the billions worth it to nbc with the olympics?
the good, the bad, and the ugly of chicken wing fitness. we kick it off with dominoes, the annual forum in the swiss alps. elbowss a place to rub and make deals. when the leader of the islamic republic of iran showed up, you know he meant business. >> i am here to convey my people's message of friendship, engagement, cooperation, and peaceful coexistence. >> this is the first time and uranian president has come to davos in more than a decade. international sanctions have prohibited it from doing business with other countries, and that shrank the iranian economy by five percent. now they have a deal with the international community to curtail its nuclear program in exchange for $7 billion of sanctions relief, and that means
the iranian president wants investment. >> i hereby announce one of the theoretical and practical pillars of my government is constructive engagement with the world. without international engagement , objectives such as growth, creativity, and quality, are unattainable. >> silly iranians president's first order of business, obviously, oil. companies to come in and get out of the country. he met with 30 executives, most of them from the oil business. n has a good ira business environment and that risk is low. the chairman of italy's largest company believes he has game. >> we have been in the wrong for a long time. we will see. time.n for a long we will see. carlos saysief
that there is no reason to sit down with him. president made some great news, that the process is well engaged. before the conclusion happens, i do not think you can expect anything to happen economically or in terms of investment. >> are you starting to meet with iranian officials? >> i have no meeting at this davos. it depends mainly on the political solutions. >> that does not mean the original rockstar car ceo is not interested. >> the largest market in the middle east. even with all the sanctions, the market represents 800,000 cars, the largest in the middle east.
with the sanctions lifted, i expect this summer we will move up 50%, which in this market can go up to 1.5 million cars. there is a big opportunity here for the iranian consumer and for the carmakers. >> especially with renault. >> french brands have all been been ocular in iran. -- often been popular in iran. with the sanctions, it was popular to do any business. ,> the elephant in the room is is iran serious about curtailing its nuclear program? areccordingly, to those who under the influence of propaganda and still believe iran is seeking to develop nuclear weapons, i strongly and clearly declare that nuclear weapons have no place in our security strategy, and that iran
has no motivation to move in that direction. >> why didn't he say so in the first place? arizona senator john mccain is not buying it. >> mr. rouhani is a great pr guy, but the fact is, when you get down to it, they will insist on the right to enrich. as long as they have the right to enrich, they will move forward to the acquisition of a nuclear weapon. there is no reason for them to want to enrich these materials. if they want a nuclear capability for peaceful purposes, we will provide them with it. >> john mccain says he is a great pr guy, great image? i do not think that is the case. will there be a full nuclear deal by the end of the year? here is british prime minister tony blair. >> it depends on whether iran is prepared to give out nuclear provisions. the previous new gauche nations
-- negotiations gave a space to conclude the real deal but we should not be any doubt at all. they may step back from the threshold. if they do not, the implications are serious for the region. other countries but try the same capabilities and then you have more instability in a region that is already unstable. >> let's get the view from the real root beanie and ian bremmer, speaking to tom keene. >> a lot of people were wondering if it would be appropriate, if you would talk about america as the great satan. if anything, the concerns raised were, did he go too far, push the envelope in a way that may offend the hardliners or cause instability in iran? diverse community, civil society, women are educated. >> this is so good, because,
nouriel, there is such a stereotype of iranians within america and within the western sphere. help us with the stereotype you have of the iranian people. >> i grew up as a jewish iranian. their culture goes back thousands of history. if there was true democracy in iran, the mullahs would have already been kicked out of power. you have a vast middle class. iran,is something about but because there is an elite of mullahs, they will be in control of the country. maybe rouhani will be moving in a more moderate direction. >> secretary kerry will be visiting. he will probably hide as not to
be seen with these elites. how will he respond to what we heard from iran today? >> given that they said nothing about being disappointed to the talks in geneva, that is a nice opening. i expect a meeting with the iranian foreign ministers. nothing has been announced but i think it will happen. one important point, yes, the iranian regime has a problem with the u.s., but the people do not. the saudi regime is close to the united states, but the people do not like us. if you were to ask me which political system the u.s. is more likely to be engaged with, it does not take a rocket scientist or an iranian jew to figure that one out. >> some great perspective there. from a business perspective, blackstone group is the largest alternative asset investment in the world. steve schwarzman, would he invest in iran? >> we are a long way from that.
this is a forbidden country now. >> maybe for not much longer. >> that is why he is here. >> for americans, nothing will change unless we make some type of arrangement. we tend to be pretty cautious people. aroundough iran has been for a very, very long time, you would have to see if things normalize and get a sense of what is going on. it has been a productive country with a smart alkylation, well- educated -- mark population, well-educated. and lookst come here for interesting places to invest . do you think there is opportunity there or is it not a place you would touch? >> mostly i try to invest in places that i would like to visit twice, as a simple rule. >> that is a good rule, actually.
wherehamas, for example, adam johnson is right now spending the week in -- weekend. hosn and hisrlos g plans for production ramping in china. and the next debts for ebay and paypal. and that is the canadian prime minister, stephen harper, rocking out at a dinner hosted by his israeli counterpart benjamin netanyahu in jerusalem last night.
work today. bill act and got some help from congress in his campaign against herbalife. senator markey calls for a federal investigation into the company of nutritional supplements. shares plunged on the news. >> he has taken on companies in the past and has done damage. the concerns that he lists to regulators stem from complaints from his constituents, including one who lost her entire retirement savings. his concern is that this is a pyramid scheme. other complaints he has heard about, companies pressuring folks to sign up family members, spend money on products, and then herbalife has been targeting low income and vulnerable citizens. sent letters to the sec and ftc, as well as the herbalife ceo. in a statement, he says --
continued -- he is serious. bill ackman is not the only activist making out today. >> this whole business of the divorce between ownership and management, i think it is hurting our economy greatly. to shelf. in the big picture, not micromanaging, we have got a lot of work on ebay p without question, it is a no-brainer that paypal should be spun off. >> carl icahn telling us yesterday that he wants to split up ebay and its electronic payment child paypal. >> there is no reason they should be together at this point. in fact, it would be helped by a
management team that is separate and can go their own way. the multiple would go up dramatically and also the health of the company would be better. >> ebay ceo john donahoe says the company should stay together. he said a unified entity helps their expansions into mobile. the question is, is that a good idea? >> when you have these conglomerates, one person benefits, the ceo. they get to smooth out earnings and diversify, but investors do not need ceos to diversify. they want them losing sleep and want them accountable. spinning off paypal would absolutely be upgraded to shareholders, the right thing to do. it probably will not happen. >> there is no long term value to combining payments and sales, as people move more towards the web for their shopping?
>> there is probably some vertical integration. itsy on, paypal got training wheels from a captive customer in ebay, but there are probably a lot of customers that avoid paypal because of their relationship to the ebay. payments the future's system. you are talking about an unbelievable juggernaut with a higher multiple. donahoe should be responsible for ebay,. . stop.it is -- fell >> ebay disclosed his proposals to spin off paypal before he did it. >> the best thing you can do to silence an activist investor is to put him on your board. you are a big owner, you are supposed to be fiduciary for shareholders. you do not want to be on the board and wake up in the morning
and see your logo next to carl icahn's picture. he is mean, smart, and well resourced. he is the elvis presley of the activist movement, if you will. >> are there other investors like him? >> one of the more tone deaf moves this year was dan low suggesting that sony would spin off their motion picture unit. man telling an iconic japanese company what to do. sometimes these men miss it, but it is good for companies to go after. the elvis presley of activist investors still has his sights on apple. he has been calling on the tech giant to give some of its massive cash hoard back out. he announced he was building more leverage in that push, boosting his stake to $3 billion.
that means he owns one percent of the company. >> there is nothing wrong with the management of apple. i cannot necessarily say that with ebay, but i will with apple. i just think the board is wrong in not taking advantage of a very undervalued situation and not using their capital to help the smaller shareholders. >> looking out for the smaller shareholder, that is very noble. >> thing god carl is looking out for the smaller shareholder. [laughter] in both instances, the level of cash they have is a little over the top. return 100ans to billion dollars to shareholders in the form of dividends and buybacks, but it is not bound to that, not a promise. toyou can go back and talk your 25-year-old self, what would you say? we will hear what some of the biggest names in the business
are saying to themselves. and how much are the olympics worth? nbc's multibillion dollar endeavor. and snow, will it be a problem for the super bowl? the nfl and metlife officials are using this week's winter storm has something of a dress reversal to see how quickly they can clean up the 80,000-seat facility. hopefully they do a better job in new york city. ♪
>> this is "lunch money." you can also watch us streaming on your tablet, phone, and on bloomberg.com. leadership.ed on betty liu is out with a new book "work smarts." the biggest names in business answer a different question each day. today's question is what would you tell your 25-year-old self? what i would say is relax and do not be so driven. enjoy the journey more. find what you love and do that. chances. every time i took a chance and moved on to the next that,
whether it was moving moving fromly, houston to japan, it turned out to be one of the best of spirits is in my personal and professional life. >> hang in there. keep doing the things that matter. it will pay off in the long run. >> lose some weight. relax a little bit. not too much. you are 25. take a chance. you go to school and you bury yourself in debt. there is nothing wrong with taking a chance and starting a business. inches, a fewmore more pounds, and try to make it in the nfl. >> take advantage of new opportunities and never look back. all this week we will have more from betty liu's interviews from global leaders on how to get ahead. every 25-year-old would want this next experience, driving an in switzerland on an ice
lake. and less words, more eating. ihop is getting you to order more pancakes. ♪ >> it is 26 minutes past the hour which means bloomberg television is on the markets. up to be aaping relatively ugly day for stocks. the s&p is down one percent, the dow jones as well. to mide to go back august to find the s&p down one percent in the first 90 minutes of trading. , andears are in charge 1892 needs to be defended. i want to highlight nokia,
>> this is "lunch money." you can also watch us streaming on your tablet, phone, and on bloomberg.com. today is moving pictures, where the video is the story. opposition leaders in ukraine are meeting with the country's president today, the antigovernment leaders want an election to vote for a new president. they also demand new protest laws be overturned and stop calling the country. ukraine. to astrators have agreed truce with the right believes in kiev this evening as they await the outcome of the meeting. ate than 70,000 workers
south africa's three biggest platinum mines went on strike today. lockoutaders say the will continue until wages for the lowest paid entry-level workers are doubled. labor leaders and representatives of the south african government will meet tomorrow to end the strike. the pop singing duo are getting a divorce after 39 years of marriage. and daryl dragon had a string of hits in the 1970s. the pair sold more than 23 million albums worldwide. the grammy award winners announced the news. focus on cars continues. nissan is the second largest carmaker in japan. makeher, those companies one in 10 cars worldwide.
just received the green light to build its first renault factory in china. we asked the ceo carlos gomez about the company's five-year plan. >> china is the largest market in the world. we represent nothing in china today. in a 20mported cars million car market. our milestone is to reach in china as fast as possible the market share we have globally, 3.5%. million, this20 represents 700,000. milestone in first this direction. >> who do you consider your arrival? renault nissan sells
8.3 million cars a year. toyota.y, we are behind our ambition is to close the gap with the three manufacturers. we do not have one rival because we are special. or two.one has a rival >> in our case, we have benchmarks that we follow strictly. in terms of marketing and technology. arethree companies which our rivals. hans nichols got some specialist training on how those drivers would handle and ic and bush. >> when you are driving, you are
safe. you are not safe when you are standing still. when you're in an armored car, you are always safe. power. there is a roadblock in front of us, somebody with a gun. we do not wait for this. we go. full power. it is very aggressive. >> how is your insurance, pretty good? >> no. tomorrow, goldman sachs ceo lloyd blankfein, as well as ecb
over twoia, we are now weeks away from the 2014 winter olympics. nbc is set to deliver a record 1539 hours of programming. we spoke to the two producers in charge. the firstill be winter olympics ever were all competitions will be streamed live. we did that in london as well. we found that people were engaged in olympic content whether it was streaming or
online or on apps and then they were likely to watch television, whether prime time or the afternoon. for us, live streaming, the ability to take it vantage of that capacity, has been a success on all fronts. >> in this world of social media, how can you decide what will be shown live? through thesend last few olympics as we had circulated and more -- made more content available, is that it simply galvanizes and circulates more communications and chatter around the olympics come a more excitement. we have seen our primetime audiences continue to grow. >> it is not a traditional sports audience that want to know who won or lost, because the result may know in advance means that people will turn away. in london, we saw the opposite was true. you are talking about a anderent event, sports
athletes that most people do not know. by being able to put it on on a time delay, in a polished presentation, where families can gather around to watch, it is one of the things that makes the olympics unique. >> what are the sports that people are watching the most? >> one of the great example of the winter olympics is the in statement -- excitement of the speed and acrobatics you will ee in advance like half pipe, snowboarding, shaun white will be competing. probably the most recognizable team member of usa. a number of sports in sochi that are noteworthy, designed to appeal to a younger audience. we think we have already seen success with that. they have added some of these sochi isd i think --
getting so big, that before the opening ceremony, we have coverage, which is atypical. >> nbc paid 775 million dollars to air the olympics. >> certainly expensive but it is a trademark for them. they have an extremely good sports organization, which benefits greatly from their exposure to that and it carries channel, nbc sports golf, a lot of activities they do. i would guess they are pleased by it. they know going into this, the russian winter olympics, someplace that nobody has heard of, would not be first on your mind. nbc has control over what can be streamed. they had to have that as part of their deal, otherwise it would be shredded. >> these sponsors who are not
official sponsors tried to get some of the glory. >> they probably wish they had china. >> the cost of these big sporting events, have they gotten out of hand? >> truly astronomical. >> what would something like that cost now compared to what you when you were doing it. >> about double. what was a billion dollars is probably $1.5 billion. >> how about the nfl? >> the nfl is the most successful television business ever. the nfl generates more money on television right than anybody else, any programming company, studio, anybody. most unusual development over the last number of years that any of us have seen. >> the sochi winter olympics begins on february 7, in case you are planning on watching. spicy chicken a
mcdonald's posted weak fourth-quarter profit and falling sales, but that is not the only problem the company has. ronald mcdonald has 10 million pounds of chicken wings he does not know what to do with. >> mcdonald's cannot find that home run product and we saw that with mighty wings. cost 10 million pounds about $130 million, so they have a couple of options. throw it out and risk the money they've bought the wings for.
others believe that they will sell them at the super bowl. they will do some promotions around the big game. after all, americans will be eating one billion chicken wings during the game. are not that they big of a deal, but it shows the fact that they cannot find his home run product. ps fizzled, the premium quarter pounder did not do well. salads have not delivered either. forhere is a high cost cheap chicken, the name for a consumer reports study published in december. the results were not very positive. mosten could have the disease causing bacteria, more than any other foods that we commonly eat. >> we found about 14% of all samples had salmonella, which is not good odds. every six or seven times you
have chicken, you will find salmonella. worse than that, just about every piece of chicken you by will have something in it that could make you sick. >> what are those other things? coli, other bacteria -- we check for six disease causing bacteria in total. >> and more than half of the samples have something? >> more than 90% have something. half of those bugs qualify as superbugs. >> what is a superbug? >> something that is resistant to more than three classes of antibiotics. if it makes you sit, it will be hard to find a cure. the usda has far from a zero- tolerance on chicken. in fact, it is perfectly legal. in chicken parts, there is not even any standard at all.
standard of 7.5% for whole chickens, but for breasts and legs, it is just fine too have -- to have salmonella as long as you are operating the plant along basic sanitary rules. >> of course, the chicken industry was not pleased with that interview. their defense. >> the u.s. chicken industry takes the safety of their product as a top priority. it is bad business to produce a bad product. we treat that as our top priority. not only is it bad business sense, but our families eat the same chicken as yours. we want to produce the safest and most affordable and wholesome products. is salmonella action plans put together by the usda.
there have been critics of this plan that say they focus too non-human indicated pathogens from salmonella. they focus on generic salmonella incidents. does the regulation need to change? is no legislation or regulation out there that will magically make salmonella disappear or any bacteria disappear for that matter. it is a naturally occurring organism. what will make it disappear is to break it at every chain of the production process, from the breeder farms, all the way to win the product leaves the processing plant. one thing that we agree with consumer reports on is that we need consumers to be partners and to be that final step in the kitchen when they are preparing chicken. they are the final kill step. we do it everything possible to reduce salmonella and other
bacteria as much as possible before it leaves the plant, but really the home cook is the final step. of course, most farms torture those chickens from birth until death, but if you want food safety, here are some tips. use different cutting boards for your different meats. cook chicken at 160 degrees minimum to kill everything left. for those of you that do not want chicken anymore, how about pancakes? ihop has a new way to get you to eat more of those. >> are you ready for a mind trick involving pancakes? ihop has a new menu designed to get you to order more food. customers did not like the old menu. there were too many choices and too much text, and apparently you do not like to read. they hired a menu design expert to figure out what to do, and here's what they came up with. rule number one, more pictures.
as it turns out, people want to see pictures of what they will eat. found it was a way to break up page while promoting new items. rule number two, boxes and more boxes. they are using them to remind you that you can order sides. care for a bowl of seasonal fruit? rule number three, colors. color-coded categories help customers navigate the menu. orange foreakfast, on the lips, and green for those 55 and older. all of that browsing means that you may find something in the middle or the back of the menu that you may not have found otherwise. but all of this does translate into real dollars. if you notice your bill is a little higher , it is not by accident. >> you will not find today's mystery meat on the ihop menu. a giant squid measuring nearly
are in negative territory, dragged down by financials, materials, and energy. hsbc said it was a first contraction in six months. you also had existing home sales here in the u.s. disappointing for december. for more on how the day is shaping up, let's go to a trader who is watching all of the action from the cboe. if you go back to mid august, that is when you would have found the s&p down by over one percent in the first 90 minutes of trading. how do you handle this selloff? the like to see not how market acts, but how it reacts. how does it get through the next couple of days? tomorrow is very important. to put it in perspective, one percent is not catastrophic. percentto see three moves with a lot of volatility, so i see this as just a pullback
and an opportunity. we were only two points from the all-time highs in the s&p yesterday. the nasdaq hitting its highest level since 2000. put it in perspective, just some profit taking. points away from the 50-day moving average. how important might these levels be? >> i have been following the distances of the selloffs. every time we see it snapped back and go to market highs. it will do that until it does not, but it has been doing it for about that for you are years now. in the s and p. we will see if that holds and how we snap back. next week will be important. >> you are an options guy. i want your take on any unusual option activity that you see. you have arm holdings. >> someone is bullish on this stock.
they are selling the 48 put. they sold about 8000 of those february 48 votes. they get to keep their premium or they are buying at a lower base is level. that is a bullish strategy positioning for the february option, 30 days until expiration. >> another stock you are watching is chemical maker huntsman. the money $20 calls. pointock is trading at 20 $25. someone thinks they have some insight and direction. the stock has been trading between 22 and 24 since october, so looking forward to move up to those highs for some time. they have spiked up because of people recognizing the opportunity, unusual activity, about 8000 options. >> i am curious as to the msci emerging-market etf.
>> live from peer 3 in san francisco, welcome to the early edition of "bloomberg west" where we cover the global technologies and media companies reshaping our world. i'm emily chang. our focus is on innovation and the future of business. there's been a massive internet outage in china. perhaps the biggest in the country's history, affecting hundreds of millions of users. what we can tell so far is that dot-com addresses went down across the country, including ome of the biggest websites, and dot-cn addresses were not