tv Taking Stock With Pimm Fox Bloomberg April 30, 2014 9:00pm-10:01pm EDT
>> this is "taking stock" for april 30, 2014. i'm pimm fox. oprah winfrey thinks that the clippers may suit her just one day after donald sterling is banned from the nba. oprah winfrey says she is in discussions to make a joint bid for the term. -- the team. plus, meet the man who has designed suits for frank sinatra, clint eastwood, and ringo starr. also, the chief executive gives details behind futuristic suits.
all of that and more in the next hour. first, the headlines with carol massar. >> yelp out with earnings after the close of trading, raising its second and two-year forecast after its stock finished higher in after-hours. metlife reported a 35% increase in first-quarter profit and made derivative gains and international growth. it saw operating profit of $1.37 per share, missing the analyst estimates. twitter saw its stock hit its lowest level since last year's ipo. membership in the first quarter reached 255 million, with year-over-year growth to celebrating. the twitter ceo is focusing on the long-term. >> we are extremely focused on strengthening our core product, twitter and vine. most of the acquisitions to date are about strengthening the core. most of the work we are doing is
about strengthening the core, and that is the focus near-term. >> that is a look at the top headlines at this hour. >> thank you, carol massar. the dow jones industrial average closed at an all-time record high, the fed saying the economy is gaining momentum. we are joined by david levy, the chairman of the jerome levy forecasting center. joining us from portland, oregon, is fred dickson. and from atlanta, josh wright, bloomberg economist and former strategist at the fed reserve of new york, where he advised policymakers in the wake of the financial crisis. josh, tell me, what did you make of today's fomc meeting minutes? >> the fed delivered exactly what they were looking for, $45 billion of asset purchases, and other than that not a lot of
changes. some changes to the outlook of the economy going forward, but for the moment isn't it sweet sweetfed is in this spot where they have made it clear to the market they are a -- are locked in. meantime, they're going to continue to wait for data to come in. they have made it clear that it will take a couple of months to get a cleaner read on what is going on in the economy. in the meantime, they are not being forced to have any greater clarity on when they raise rates in the future. i think they are probably pretty happy with how the market has responded. there was no reaction today, which i'm sure is what they were hoping for, and they put in a lot of effort after the last fomc meeting to talk down the ratings. long-term rates and short-term rates are back to where they were before the march fomc, which i think are the rates they care about the most. even if the rates are more
risen in the middle of the curve. >> fred dickson, at what point will they change interest-rate policies? >> it looks like it will be some time in late 2015, possibly even 2016. the fed at this point still hangs on very tightly to its notion that it wants to see employment gains, as well as an improving economy and moderate inflation. those three factors, put together, probably are not going to cause pressure on the fed to raise rates, the short-term rates until well into 2015 at the earliest. >> david levy, our asset prices -- are asset prices reliant on zero interest rates or almost zero interest rates? >> asset prices in many areas are above and beyond where they should be, given that real rates are not nearly so unusually low because of the lack of inflation. remember when we used to
actually come out of one of these fed meetings and say i think they're going to raise the interest rates hundreds of basis points the next year or cut rates, then we got to tapering, then we got to communicating. well, none of this has any real relevance. the fed will move when the economy changes in a way that makes them feel compelled to move it, and that's not going to happen for a long time. >> what's a long time? >> i don't think we will see any significant move for the rest of this decade. that does not mean i know which way it will go. i think sometime in the next couple years the global economy, it may be possibly at the end of this year, the global economy will fall apart and drag us down. the fed may as well bid for the clippers. >> i think saying that the fed is not relevant is a little bit strong, but i share some of those concerns about the
outlook. certainly there are concerns about what is going on abroad and in china will top to gdp -- and in china. the gdp report this morning, granted, it's the first quarter, so it is not entirely forward-looking, but we saw a slowdown in trade. that will be a drag on growth in the u.s. there are not any signs china is done with a slowdown. i think they are a slow-moving story. i'm not a doom and gloom person were think they have a hard landing, i think it will have a soft landing, but that makes it hard for the u.s. economy to accelerate and it puts the fed in a difficult position. they see inflationary pressures being quite low. they are looking at wage pressures, looking at the housing markets. those are a couple of factors that inform my views. >> fred dickson, i want to give david levy the benefit of the doubt. let's say that interest-rate s stay where they are the rest of the decade. what investments should you be in the rest of the decade?
>> we remain bullish on stocks. we will be starting to look at international investing, probably at about six months to a year. i just came back from a five-city tour of china and got a lot of great input from southeast asia. equities first, adjustable rates, fixed income instruments, anticipating the longer-term rates slowly go up will be the second choice. and we probably continue to avoid the hard comedies. -- hard metal commodities. we love the dividend growth stocks. we like companies that have broad exposure, have the ability to maintain profit margins, and are in position to be able to take and meet global mega trend demand, whether food, water, cyber security, health care, energy, many outstanding opportunities on thematic-based investing.
>> emerging markets outside of the united states, something may go wrong? >> if we look at the many different countries, if we aggregate them together, leaving china outside or put china in, same story, they built their success of recent years on an export growth that was just soaring and a massive investment, which is a critical function in the creation of profit in the economy and the export sectors. what happened, they were shooting up in exports. exports got knocked down in the recession. they started to recover. meanwhile, the investments kept going and the exports leveled out. instead of being way up here, they are lower and going at a much flatter pace. suddenly, the overcapacity is massive. according to the imf, china went from 90% capacity to 60%, less
than we had in 2009 in 2009 by 2011, and it's only gotten worse. they cannot simply adjust to domestic demand. it requires much more of the financial system, it requires all kinds of confidence and situations you cannot replicate that experiment we have had the last years. things will have a rough landing. it's just a question of how fast. >> maybe the l.a. clippers are a good investment. thank you for joining us, david levy, our thanks to fred dickson, in bloomberg economist economistomberg josh wright from atlanta. coming up, oprah winfrey is discussing a joint bid for the los angeles clippers. we will look at how this could change the team, next. ♪
more than 1500 mobile and other developers gathering in san francisco to learn more about how to use facebook to build, grow, and make money with applications. chief executive mark zuckerberg spoke about the future of facebook. >> our goal at facebook is to build the cross-platform platform and provide all of the different pools that you need to bridge these worlds. we all want identity across platforms and app installs and even monetization. >> platforms. all right, joining us from the conference is "bloomberg west" senior correspondent jon erlichman. platforms, is that the big story of the conference today? >> if you tie it with other stuff, it makes more sense. he highlighted being the cross-platform platform. they took a shot at apple, google, and microsoft being
these worlds where you buy a phone and live in that world. if you're an android phone user, use the apps that are android. you connect with apple if you own the iphone and the apps there, maybe not as well as you like. facebook has positioned itself very much for the future, airy ofvery much for the world smartphones by saying, hey, developers, work with us, we will help you develop your apps, we will market them in the world of facebook of one point 2 -- of 1.2 billion users, and hopefully with your tie and you will make more advertising money, we will make more money, and your experience and the money you generate will exceed what you would be able to do if you lived in the world of only apple or google, without saying it directly in those words. >> jon erlichman, do these developers pursue exclusive relationships? why wouldn't they make their products available on all these different platforms, whether microsoft or apple or even
facebook? >> i think facebook is going to position itself as a world where people have to choose different platforms and that being time that is wasted as its opportunity to say, look, we don't know what you're going to end up doing, if you are living in the apple or google world when it comes to creating the app, but if you work for us, there is a great opportunity for that app to live in a bunch of different places. facebook needs these players to help its business. mobile advertising, mobile advertising did not exist for facebook a couple years ago. now it generates the majority of its advertising revenue. they have to keep growing that pie and reach out to these different app developers who have advertising on some of their apps and say, hey, let us
help be part of that process by selling advertising space. we have done a good job of it with ourselves. we can help you get premium ad prices, which is a way of helping grow their revenue, which ties in with the wall street story of beating estimates, missing estimates, how fast the advertising revenue is growing. >> we will talk about premium prices for something else in a moment. thank you, senior west coast reporter jon erlichman. who is going to own the los angeles clippers? the current owner, donald sterling, has been banned for life from the nba, and media mogul oprah winfrey has confirmed she is in discussions with the larry ellison of oracle and david geffen to buy the team. joining me now is robert phyllis, the founder of inner circle sports, representing a management company in the purchase of the philadelphia 76ers. rob, thank you for being here. where are we in the various
stages of the potential sale of the clippers? >> we are still in the early stages. the process needs to unfold. the commissioner needs to hold a board of governors meeting to get the required three quarters vote in order to have the league take membership from the clippers. i think that process will unfold over time. >> how long does something like that take? >> i would say they would probably schedule a special board meeting for that. i would say in the next 30 days you will see the board come together. >> then what happens? >> if the board votes to revoke that interest and there is no opposition, they would take the team back, put their own management and to continue to run the team operations on a day-to-day basis in order to sell the team. >> and how long would that take, new management and a sale? >> hard to say, based on what the league did in new orleans, where they took over the franchise, and a different circumstance, i would say six months timeframe or longer
potentially. >> is it possible the l.a. clippers would have a new owner by the end of 2014? >> i think that would be the goal, and with an accelerated timeframe of having somebody come in october when the season starts if they could achieve that. >> what about the actual price of the clippers? >> we just advise the new ownership of the milwaukee bucks, and they set an nba record of that value of $550 million. i think this will be potentially far in excess of that, given the amount of demand, given that it is los angeles both from an international and national appeal. >> what kind of appeal would oprah winfrey be as a part owner of an nba franchise? >> i think there would be a lot of interest in having oprah be part of the league. that is a very strong group people are talking about, but i think there'll be others that will emerge, given the fact it
is los angeles, a very strong team, strong coach, strong players. it's attractive in a fairly robust situation. >> david geffen? >> i think he has been looking at other teams in the past. there are other names that are out there, people who i think will continue to look, from the world of private equity, real estate. it will be a broad, broad auction. >> donald sterling, what happens to him? does he get the money from the sale of the team? >> that will be subject to the nba and their lawyers and their ability to work out an agreement with him. >> thank you very much, rob. coming up, looking for a new tailored suit? i will introduce you to a gentleman who has made suits for michael jackson, elton john, and mick jagger. also, a suit that offers hope to people who want to walk again. you will hear from the maker of
>> yes, the theme is suits. are you in the market for a new suit, but perhaps off the rack is not going to cut it? how about the same tailors whoever dressed frank sinatra, jack nicholson, ringo starr? terry haste and stephen lachter are here from kent, haste, and lachter. how is it you got into making suits?
>> i got into because i loved it. it's a passion. >> you started out working for other bigger stores and retailers? >> all three of us within our partnership started in london. it was a small, very exclusive tailor, and we all started there together. >> you started there together. terry, let's talk about the cost of tailoring. people want to know what they need to spend to get the top-notch suit. >> about 3000 pounds, which is about $5,000 i think. depending on the fabric. but that gives you a good start, good price. >> you guys are so reticent. we talked about some celebrities. frank sinatra, for example. let's start there.
did you do frank sinatra's collar size? >> i did. >> small, large, chest and waist? >> it was very good. >> what kind of shirts did he order? >> mainly plain white and some casual shirts. >> look at that, there i am. somehow -- i am not next to frank sinatra and bing crosby for nothing. how old were you when you made your first suit? >> i think i was 15. i joined the tailor apprenticeship at 15. it was my last year that i could join. i was about 16. >> and you always wanted to be in the fabric business? >> always, always. >> do you remember the duke of edinburgh? >> a long time ago, about 30 years ago.
>> was he impressed with it? >> or was the duke impressed with his. >> yes. >> i did not ask. >> shirts, what are some of the trends? >> in england, much more casual. we still do a lot of formal stuff, but more casual. buttoned-downs are very popular because people are wearing ties. >> how many suits are you making in a year? >> about 1000 suits per year. >> and they all have the purple stripe with a purple tie? [laughter] >> we have one english guy who has the most unbelievable cloths, the boldest that you can get. >> orange? >> orange, pink. it is all matched, several colors in one garment.
>> this is "taking stock" on bloomberg. i'm pimm fox. sprint is trying to push forward with a bid for t-mobile. joining us on the television -- the telephone from los angeles is alex sherman. what do we know so far, alex, about sprint and t-mobile? >> we know there was a meeting earlier this month, the first week of april, where the sprint cfo and their treasurer met with
six different banks, including goldman sachs, deutsche bank, bank of america, citigroup, to plan out various different structures for a deal for t-mobile. basically, sprint said we are not ready to announce something yet, but if and when we are, you guys need to be ready with a financing. that was sort of the general topic outline of the meeting. >> alex sherman, what has been some of the specific challenges for sprint mounting a deal for t-mobile? >> the biggest one is regulatory. they have spent the last several months talking to regulators. he was in washington for a decent stretch of time, trying to plead his case to allow this deal. so the fcc and the department of justice would basically look at this and say we are going from
four large wireless players to three, why should we do it? it could be anticompetitive for diminishing competition. the biggest challenge for the ceo who owns 80% of sprint is to convince regulators they are looking at this wrong, the wireless industry is really a just at&t and verizon that dominate and long-term sprint and t-mobile have no way to compete and the only way we can be consumer friendly is to have three strong players rather than two strong ones and two weak ones. that is the biggest hurdle to the deal, and there's nothing out there to indicate he has been successful in convincing regulators of this argument. nevertheless, what we're hearing is he plans on pushing forward with the deal, putting something in front of regulator so they have to decide. >> alex, what about value? is there a number being talked about?
>> t-mobile trading at about $30 per share. from what i have heard, the ceo is looking at offering perhaps a little more, a higher premium, maybe in the high 30's for a deal, pushing down the termination fee, reverse termination fee if he can. that would be the structure that he would eventually like to pursue. for people who follow this industry, at&t paid about $6 billion in reverse fees when they tried to buy t-mobile back in 2011. that was a windfall for t-mobile when regulators rejected the deal. what mayoshi is concerned about concerned about is if the fee is too high, it may incentivize regulators to reject the deal because by doing so they would strengthen t-mobile and therefore generate more competition. that is really what happened
with the at&t deal. he wants to make sure he does not follow the same footsteps. >> thank you very much for shedding light on this story, alex sherman of bloomberg news, joining us on the telephone from los angeles. continuing to shed light, 1.6 billion people in the world do not have access to electricity. there is a device called little sun that is changing all that. little sun it is a solar powered lamp about the size of your hand. charging it for five hours can provide more than three hours of light. olafur eliasson is the artist to obsessedims to be with light. he is also an artist with light and one of the developers of little sun. olafur, thank you very much for being here. i noticed that you were wearing the light to attest to the value and likeness of the product. how did you come up with this idea? >> thank you, pimm. i sat down with a friend of mine
who was a solar engineer, and he talked about the price of solar panels coming down, efficiency going up, and i said let's start really small and talk about the people who do not have access to energy. we came up with this idea. you put this outside in your garden, use it in the evening when you want to do your work a little longer. >> the countries in which the little sun is currently available, that is also part of the value of the light. it's not just a toy, it is to change people's lives. >> as we know, if you don't have clean and healthy light, you're probably using kerosene, which is very toxic and expensive. right now, we are in eight sub-saharan african countries bringing it to the market. we are leaving some of the profit locally. the profit goes to delivering
the light to african neighborhoods where there was also local sales, street vendors, women's associations. they are doing a great job of bringing the light out and making a little bit of profit from doing so. >> you are an artist that not just plays with light that also -- but also plays with the perception that people have of the power of art, the actual experience. you have described this is as almost driving a wedge into a difficult economic system. i wonder if you could describe that. >> energy is abstract, right. affecting the climate is not as easy as one would think. one of the things about making things tangible or something artists always work with. taking something relatively abstract and make it perceivable. here you have something if a
child goes out in the day, been reading the bedtime story by night, that child is more likely when they grow what to make a decision based on renewable energy once they have to choose energy for their life. i think sometimes it has the ability to link thinking and doing or making something explicit. making something that's abstract and making it understandable. as an artist, i find great satisfaction in showing ways of taking thinking and turning it into doing. >> what has been the reception in berlin, where you're based, and in europe? >> we've been very successful. we are using the language of what do we share, what is the same thing in the northern part
of the world and the southern hemisphere. typically in the northern one, and the western one, and the southern hemisphere like rural africa. the language we are using and the perception has been based on sameness. this is about having access to energy. it's about having access to power. it's something everybody wants. it's not just africa. everybody wants to be a little more happy, have a beautiful design in your house, have something when your friends come over, they say, this is a cool thing, i want one too. that way there is really not much difference between europe and rural africa. i think that is kind of a business point that is very important to focus on, what do we share, instead of focusing on what's different. >> not only have you produced this light, but you have also produced light that comes through water, with waterfalls, changes in light. talk a little about some of your other projects.
>> i was lucky to seven years ago, or possibly six, in new york with collaboration with the city, this is a great project for me. waterfalls are more than just falling water. when you look at it, you see how far away it is, which means it's also a way of measuring the space. we know that you stand in front of a landscape and you say, oh, i wonder if that mountain is an hour or a day away. then you see the waterfall and realize the water is falling very slow. now you see falling water, so it must be very high, it's a high mountain, it must be a day away. a waterfall can indicate what is the space in front of you. that is how i came to the waterfall in new york, giving this space back to the city. these are the things i work with in my work. i work architecturally,
spatially with perception. i work very much with the people, public space, what we can do in the street, what we can share, and what does "public" mean? is it just what is left when the private sector has taken the nice chunks? it's the values of society. i find that very rewarding when we are talking about our creativity. what does creativity have to offer on streets, out of which this grew as well. what can art do when it is outside of the traditional art institutions? >> thank you very much for shedding light on all of this. thank you to the artist and the developer of the little sun, olafur eliasson. coming up, "taking stock" shows a lesson in shaq-onomics. how he is making more money off the court then when he was on it. and tomorrow, "inside pepsi" -- an exclusive interview with the
>> first, he won four nba championships, dunked over 2000 times, and at 7'1" was the biggest player in the game. since retiring from basketball, shaquille o'neal makes more money than when he was playing. bloomberg spent a day with shaq, and we got some insight into what makes him successful. >> what saved me as a youngster was annuities. at 45, that is the only dream i need. -- revenue stream i need.
what keeps me successful is i don't always have monetary ambition. you can't mess with perfection, but you can moisturize it. i have seen and tried most every product in america. if i'm not familiar with the product, if i don't believe in the product, i won't endorse it. i started investing when i was in college. $.99, you can get a lot of liquid. we're off to a macy's appearance. i'm coming out with an affordable suit line. big guys only have a couple places to go. i want to be able to go in there. this is every day. this is anytime i go through the mall.
>> yeah! >> you've got to have the shaq, baby. the greatest leaders are the ones smart enough to hire leaders smarter than them. >> they're great! >> i love frosted flakes. i would love to be on the cover of that cereal. but the only call i get is wheaties. i don't eat wheaties. you give me a box, i will give $10 million. do due diligence, ok, are they still in, or are we going green now? you have to look at the monetary aspect of it. i cannot just tell a guy to invest.
i think for me that's the best thing to do. >> shaquille o'neal, a success story. another success story, jyoti bansal, who came to the united states from india. he had just $200 in his pocket. he is now the chief executive of appdynamics, that helps companies find and fix the problems that their web and mobile applications present to customers. jyoti, thank you for being here. how do you describe appdynamics? >> it is helping businesses build applications to provide the right experience. applications are very complicated. you think about them every time you click on a mobile app or from your computer, it's millions and millions of lines of software code that gets triggered. there are thousands of computers that are getting used.
if something goes wrong, it's hard to figure out. the analyzer is like the human body. the human body is a complex machine with tens of millions of moving parts. if something is not will week -- well with your body, it's hard to figure out what's wrong. think of appdynamics as our technology is a 24/7 m.r.i. that sees everything in the body. if there are something wrong , you can see what is happening. you don't have to guess. you can fix it on a matter of minutes. >> you have over a thousand customers, companies such as stub hub, john deere, the nfl, union pacific railroad. what would happen if you were a customer of stub hub and wanted to buy tickets for your favorite show and something went wrong and you had to report a problem. would that eventually make its way to appdynamics? >> yes. what happens if you are a customer of something like stub
hub, you don't even have to report something that does not work. if something doesn't work, appdynamics will automatically reported to stub hub and tell -- report it to stub hub and tell them, this did not work because of this, let's fix it. they can be fixed in a matter of minutes. >> so far you have raised over $85 million from venture capitalists such as kleiner perkins, caulfield. what is the next that for appdynamics? how big do you want to be? >> we are in a category of applications that is in a transformational category. it is estimated to be somewhere in the $30 billion, $14 billion or year of i.t. spending. it is a large space for us, and we are very happy to be part of it. it's a big space, and we will continue to go and help more and more businesses, but i want to build a billion-dollar revenue.
>> billion-dollar revenue? >> that's what we are building it for. >> thank you very much. we will check in with you before that, but much appreciated. jyoti bansal, the founder and chief executive of appdynamics. read more about shaquille o'neal and shaq-onomics in the current issue of "bloomberg businessweek." coming up, technology that is helping people walk again. i will introduce you to the ekso bionic suit. and nasa has chosen its next-generation z-2 spacesuit design. the public voted and the uniform is cool technology, a gray uniform with glowing patches of turquoise. the z-2 is the first suit to be tested in a full vacuum, and 3-d hardware will be used to develop parts. the suit will be built in november. put your orders in now.
>> there are approximately 7 million stroke survivors in the united states. there are approximately 1.2 million spinal cord injury survivors. often these patients need help learning how to be mobile or walk again. new technology is making that possible. in 2005, nathan harding founded ekso bionics that mixed the wearable suit. -- that makes the wearable suit. nathan joins me now. nathan, i saw the video of the ekso, and i'm seeing the real thing. i have to begin by putting it to you, this is like the bionic world come to life, isn't it? >> we think it is. we think we are at the forefront. it's starting with things like
this. you will see people running faster, jumping higher. >> describe the ekso suit to somebody who does not know about this kind of stuff. >> this is called the human exoskeleton. it is essentially a wearable robot. we are all about augmenting strength and endurance. to do that, you have to wrap the machine around the person. this particular wearable robot is for rehabilitation. it replaces the strength of your hips and knees with these two motors for your hips and these two motors for the knees. it is set up so that i can be adjustmented with quick adjustments here and here. the batteries can be changed very fast. i can get from one patient to another in a short time. >> what is the next step for ekso? what would you like to accomplish in the next 12 months? >> when we set our goals in 2014, we wanted to make a couple of big hires in sales and marketing. we have done that. we wanted to get a couple of big contracts into the ekso labs
group that does research to pay for the human exoskeleton, and we got the talos program now from special operations. that is the first contractor in the world to get a contract from that program. it's fantastic. we have one more to do on that one. we also want to get another licensing partner. we have a great one with lockheed martin right now, and we want another big name. and then we want to get 10 million steps with the ekso. >> are you up to 3 million now? >> we are actually approaching 8 million steps. if you go to one of our demos, you will see that each step is kind of like a magic moment for a lot of people. multiply that by 10 million, it's really cool. >> thank you very much. nathan harding, ekso bionics. he is the cofounder and chief executive. thanks for "taking stock." i'm pimm fox. have a good night and good evening. ♪