tv Bloomberg Bottom Line Bloomberg April 24, 2015 2:00pm-3:01pm EDT
mark: from bloomberg world headquarters in new york, i am mark crumpton. this is "bottom line." the intersection of business and commerce with a mean streak perspective --mainstreet perspective. to our viewers in the united states and those of you joining us from around the world welcome. let's get you to the top stories we are following this friday. comcast dropped its $45 billion bid for time warner cable. the deal was announced 14 months ago. in the past week opposition from government regulators took shape.
executives at both companies concluded the merger would not fly. the founder of a technology consulting firm says regulators are out of touch. >> i think the government is old technology and an old point of view. i think the f.c.c. and d.o.j. have shown there are anachronisms when it comes to dealing with new technology and that kind of progress. mark: on wednesday, officials from the federal communications commission told both companies they were opposed saying the deal did not help consumers. they plan to call an administrative hearing which would have dragged the process out for months. the british trader blamed in the flash crash is still in jail. he has not come up with bail which was set at $7.5 million. we are learning more about the trader. in an e-mail last year to british regulators, he defended his rapidfire success has the benefit of a quick mind and that the trade secret we canceled
were simply because he changed his mind not because he was engaging in illegal market manipulation. he has not spoken publicly since his arrest. but his former employer spoke to ryan chilcote in an exclusive interview. ryan filed this report about his conversation with the founder of the trading firm where he once worked. ryan: there are a couple dozen traders still here even though it is friday and late in the day. let me tell you how it works. the traders here pay a fee and a portion of their profits to help the right to avail themselves of the resources here. that is exactly what saroa did. he was working here for the better part of his 20's up until 2008 when he decided he did not want to share any more of his profit. i caught up with the cofounder and he remembers him very well.
he was one of the rock stars here and a guy who stood out. >> if he is found innocent of the allegations he will be the world superstar trader. he will be the most famous trader in the world. ryan: he does not buy the idea that he would have been trading from his family home. it is not possible in the trading environment we have these days to do those kind of volumes from your own home. he must have been somewhere else. second point is he does not believe one man could cause the flash crash. he could have contributed, but he says there would have been lots of contributing factors. finally, i asked, does he think he was cheating. he points out the vendor --
navinder was trading between 2009 and 2014 after he left futex. he says he does not know for sure but he can say this was one guy who was so talented in his trading prowess that he did not need to cheat. ryan chilcote bloomberg in england. mark: that is a look at some of the top stories we are following on this friday. european union finance ministers and greece remain deadlocked on an aid package for the country. the greek finance minister met with his counterparts today. the ministers shut down his attempt to find a shortcut for the release of the bailout money. hans nichols has this report . hans nichols: frustrations world over in the meeting here among finance ministers trying to
figure out and get a status update from the greek government on where they are in committing to the agreement where they said they would commit certain reforms. in some ways, the biggest casualty is time lost. we have heard that again and again from finance ministers coming out. it was a critical conversation taking place. listen to how the head of the eurogroup couched the tops. >> it was a critical discussion. we came to an agreement two months ago. today, we had hopes to hear a possible agreement on which we could take a decision. we are still far from that. hans nichols: according to some in the meeting, mr. varoufakis received a hammering. it was quite tense at several moments. coming out of the meeting, mr. varoufakis said they had made some progress and had constructive talks. he was about the only finance minister to make. throughout, there was a
consistent line that greece needed to do more, more quickly, and implement reforms because time is running short. back to you. mark: the senate is expected to a proven oversight bill that would curb president obama's discretion to waive or terminate sanctions on iran. what impact could this legislation have on talks to reach a final nuclear deal with the run? -- with iran? >> this is a big deal and the timing is interesting because senator bob corker had pledged early next week he will be bringing to the floor his bill which passed through committee easily. this is the iran nuclear agreement oversight bill. that would give congress the right to give a thumbs up or down on the ultimate deal the obama administration and five
other powers may make with iran by the end of june. the timing is also interesting because it is happening at the same time iranian foreign minister will be meeting at the united nations in new york early next week with some of the political directors. he will probably have a meeting with john kerry even though the other foreign ministers are not expected to be in new york for that next week, so talks are continuing. and that bill could have a real impact. mark: does a final deal hands on whether international weapons inspectors are given unfettered access to nuclear facilities? >> that is a big deal because the preliminary accord on april 2 in switzerland said there would be continuous surveillance of all of iran's nuclear facilities and access to any suspicious facilities including possibly military ones as part of the final accord. as we know, the united states has said they want anytime anywhere access to anything iran might be doing that could be suspicious.
now as the talks have resumed in vienna, they've started drafting the accord. we know this will be a major sticking point, whether iran will give access to military sites and whether it will be as unfettered as the united states and partners have demanded. mark: the u.s.-israeli dynamic cannot be dismissed. if the nuclear deal between iran and world powers is consummated, will the relationship, that alliance between the united states and israel, will it be broken to the point it cannot be repaired? >> i certainly hope it won't come to that. i think everybody in washington feels that way as well as in tel aviv. there was an interesting bloomberg column by our colleagues that pointed out a pack, the american israel political action group, that they are lobbying against adding amendments that would make this bill tougher, which is
interesting because you have some pro-israel senators on the republican side who want to make this oversight bill tougher. and they are worried that those amendments will get it not passed by democrats were vetoed by the president. interestingly, they want to keep the bill more simple so if the deal is not what israel agrees with, it is something congress at that point could weigh in anti-obama's hands -- and tie obama's hands in july. mark: if a deal is not reached who gets blamed? america iran, israel, or congressional republicans who do not trust the iranians? >> that is an excellent question. i think the blame would go to all four quarters it just depends on what perspective you are looking at it from. it also depends on how it ends. if the united states is forced to walk away or goes against
what allies want, it would get the blame. barring that, i think if the united states and its negotiating partners stand firm together and iran refuses to give in, they would get the blame. the issue is it is more likely than not that we will get some accord at the end of june or beginning of july. the question becomes what happens in congress. at that point, congress might get the blame if it gets scuttled in washington. mark: thank you very much. we have breaking news. charter communications reportedly reaching out to buy time warner cable. let's go to the breaking news desk and scarlet fu. good afternoon. scarlet: good afternoon. we understand charter communications advisers have approached time warner cable on a potential deal. this is not confirmed by the company yet. this is based on our reporting.
they were said to have approached a potential deal. executives have not held discussions but have made the first step toward reaching out and holding conversations. you are seeing an immediate impact on charter communications shares and time warner cable shares. of cable getting a big lift on those headlines, currently up 5.6%. the back story is charter communications has reached out to try to acquire time warner cable and failed because comcast came swooping in and made its own bid, $45 billion, for that company and won the approval of time warner cable. in the end, regulators prevailed and that did not happen. charter is making another run now. charter advisers said to have contacted time warner cable for discussions on a deal. mark: scarlet fu at the breaking
mark: welcome back. let's continue our coverage of the news that broke moments ago. charter has reached out to time warner cable now that comcast has backed out. alex sherman broke the original story yesterday and joins me. that did not take long, did it? alex: sources are telling us charter has reached out to time warner cable at the of pfizer not the executive level yet. but the speed is a surprise. not a surprising content. we have been saying charter is likely to try to make a bid for time warner cable.
what is surprising is the wheels are already in motion. we have learned charter has reached out for financing from banks and are trying to figure out with time warner cable's bankers how much it will take how much cash, stock, the price you are looking for. we heard from one source time warner cable is probably going to ask for a price higher than comcast's price of $159 a share. time warner cable before we broke the news was trading at about $151. we will see how much higher that needs to go. mark: charter, time warner, what do both bring to the table? what do both have to benefit from? alex: the biggest thing they have is the lack of regulatory approval. that is the number one thing going for them to charter is a much smaller cable the less companies and comcast -- charter is a much smaller company than comcast buying a larger company. when you talk to the liberty
media people who own more than a quarter of charter, charter's strength is operations. tom rutledge is known to be one of the best operational managers in cable. the theory goes that charter could run time one of cable better than time warner cable can. that is what time warner cable pushed back against when charter try to go after time warner cable in january of 2014. they said we can do this ourselves. they then sold to comcast. the idea is a time warner cable sold to comcast, all their employees have been operating for the past year plus that they were gets old maybe the writing is the wall and they have to get sold to charter. mark: give a merger collapse because lobbying efforts failed? alex: to some degree absolutely. from a business standpoint, they had a great argument. that is why many analysts thought the deal would go through. the political environment turned against them. in part, that has to be blamed on lobbyists and the p.r.
message that they were not able to frame this in a way where regulators were able to approve. if charter and comcast have worked together to buy time warner cable and charter had sold subscribers off to comcast, new york and los angeles the markets they wanted, eventually the deal would have gone through because the headline would have been charter buys time warner cable and does deal with comcast instead of big bad comcast buys time warner cable and then does a deal with charter. mark: the big winner, is it the internet video industry? alex: they are absolutely a winner to some three. -- some degree. i suppose charter is the other winner if they can pull off the deal. companies like facebook showed they have a lot of clout in the obama administration. mark: to move at time warner cable today -- the mood at time warner cable today, what is it like today? alex: mixed. some people are happy because they still have a job.
if charter were to buy time warner cable, chances they are would be able to keep their jobs because they have blessed -- less redundancy. senior level management had already in their minds spent their severance money. i have heard that from several people at time warner cable. for those people, maybe the mood is not so good. mark: now that comcast has abandoned the bid for time warner cable, how might this affect current and future merger deals? alex: the big want to talk about is bright house. charter may be able to use the bright house acquisition, which is in doubt at this point, as a chip to buy time warner cable. 's charter keeps bright house they will have a larger balance sheet to borrow against. the combined charter-bright house-time warner cable company will have less leverage post-deal because time warner cable wants some cash from the deal. they have a concern with how
indebted the new company will be. if you add bright house, mostly stock deal, you have a larger balance sheet. you have a bigger company with more borrowing capacity. mark: combination of directv and at&t is that going to go through? alex: i think that is an outside thing that does not have to do with a band. from everything we hear, that is on pace to be accepted by regulators. mark: alex sherman, you broke the story yesterday. congratulations, nice job. at 2:20, we will get a check of the top stories. 2:30, the hockey legend joins me to discuss the stanley cup playoffs. at 2:45, the best of the week on "bottom line." we will be right back. ♪
mark: welcome back. breaking news. the statue of liberty is being evacuated. new york police are responding to the report of a suspicious package. the police department said it had votes at the scene along with the national park service. visitors are posting funds online showing hundreds of people being herded toward a ferry landing. tourists said they were taken off boats while trying to leave nearby ellis island. those vessels were used to evacuate liberty island. stay with bloomberg television. we will have more on this breaking news story as soon as we get details. silicon valley has been criticized for lack of diversity. sheryl sandberg says companies have to be convinced it is a worthwhile goal. sandberg spoke to emily chang in an exclusive interview. >> i think what will really motivate business and companies and organizations to take diversity seriously is when they realize not taking diversity
seriously is harming their performance. mark: for more of emily chang's exclusive interview with sheryl sandberg and richard branson tune in tonight for a special balancing act, the conversation on work, family, and life and whether you can have it all. that airs tonight at 8:30 new york time on bloomberg television. let's get to other top stories we are following on this friday. mylan went forward with a hostile bid for fellow drugmaker perigo taking the offer directly to shareholders rather than accepting a separate takeover proposal. it argues it is not as high as it seems because mylan stock has been inflated by teva's takeover offer offering to buy it for $40 billion this week. hsbc says it may move its headquarters out of the u.k. the reason, rising tax and regulatory costs.
hsbc could end up in hong kong, a logical place since the formal title is the hong kong and shanghai banking corporation. politics may be involved as it is less than two weeks before the british election. hsbc might be trying to pressure politicians. john boehner says hillary clinton is a good public servant but she has explaining to do about the way she handled official e-mails as secretary of state. he spoke in an exclusive interview with "all due respect." john boehner: she violated the law and the idea she was going to use her own server and do official business on it has every transparency issue the president likes to tout. mark: speaker boehner also said both clintons need to explain their charitable foundation and donations they received on foreign governments. you can see part two of the
mark: welcome back to the second half-hour of "bottom line" on bloomberg television. i am mark crumpton in new york. let's get to top stories we are following on this friday. we begin with a check of the price of crude oil and the close of floor trading. down about 1% today at $57.14. for the week, crude trading down about .3%. #28 in at this hour. it is down about .25%.
orders for durable goods rose in march by the most in eight months. they were up 4% after falling more than 1% in january. give credit to a big jump in commercial aircraft orders. if you factor out transportation, durable goods orders were down for the sixth straight month. it was a perfect combination for american airlines. domestic travel demands state high and fuel prices dropped. first-quarter earnings on was tripled from a year ago to a record. still, there are headwinds. a stronger dollar is hurting international sales. american plans to cut capacity on some overseas routes. that is a look at the top stories we are following this hour. the first round of the stanley cup playoffs continue tonight. the ranges are trying to close out their series against the pittsburgh angwin's. rod gilbert retired from the nhl in 1977 and was the first player to have his number retired by the rangers organization. he now works for the community
relations department for the team and is director of special projects and joins me in studio. welcome to "bottom line." it is a pleasure to see you. rod: an exciting time of the year, hockey fever. mark: before we get into the playoffs, let's talk about a medical issue that came up because of the national football league. a federal judge this week approved an agreement. it result thousands of concussion lawsuits by former players. there was a time in the nhl when players like yourself did not wear helmets on the ice. hockey players where so much protective gear right now. is the sport more violent than when you played? rod: not really. there is the same amount of contact. the players are much bigger and faster. i believe the equipment is much harder than the ones we used to wear. because of those reasons,
contact becomes more serious especially hits to the head. they are trying to curb that. it is difficult because it is tough to control all the players and the temper flies. they hired less fighters on each team so they hit each other harder to intimidate. it has always been part of the game. i think it will endure. mark: during your career, was there more respect between players because there was not as much protection as now? that they knew a violent hit could seriously injure someone or end a career? right:od: in my days, we did have more respect because there was such a thing as the third man in. they took that out when i played. it was not established. it was difficult because you had to grab somebody so you would
not join the fight. that resulted into a fight on your own. mark: we remember the series between the rangers and others. free-for-all's. rod: we had a hold on to somebody. if they did not like you, we were going. i did see that in the playoffs in the past. now i saw it this year with vancouver and calgary, they are doing some brawling. i think they are trying to curb that. mark: you are involved with the second annual rangers town hockey house. tell us about it. rod: so exciting the rangers are making the celebration for the fans he for the game. this is open to the public as a matter of fact. it is a big house right next to madison square garden where you can go in there and interact with former players. you interact with -- you can shoot the puck. you have video. you have all of the social media
involved. you will see thousands of hockey fans, whether they are attending the game or not, they can go there all day. i think you have a schedule of it. they can go and meet players and get on the and do a simulation of broadcasting the game. so much fun. this is the interest the rangers are creating. we created so many new fans because of that. mark: no doubt. the rangers are looking to eliminate the penguins tonight and keep going forward. they had the best record at the leak --in the league at the end of the regular season. that does not guarantee success. is it still about having the hottest goaltender going into the playoffs? rod: i think the rangers were surprised by the way pittsburgh -- they went off their game a
little bit. now they are being more aggressive and more physical. the rangers did not expect that. mark: does that make up for a lack of depth? if you don't have the skills, do you try to bully? rod: he tried to break concentration and be more aggressive . this series has been more difficult for the rangers than they expected. they felt the penguins were shorthanded on defense, so they felt they were grown easier with their speed. but they are being interfered with because of the physicality of pittsburgh. that is enough of that. we have lundquist. the rangers know how to win. mark: i would be shocked if he told me you did not think the rangers were going to win the cup because i'm a lifelong ranger fan too. that aside, who is hot? the blackhawks look good and they have a rookie endgoal.
rod: everything has to take shape for a team to go all the way. the rangers learned last year. i remember when i played. we started making the playoffs. we got better every year. you got more confident, and the new improved. they were short three games last year. they know how difficult it is. i know they are going to work each and every one, every shift. they are going to accomplish. but first of all, i feel cliché one game -- like the old cliché one game at a time. we have to send crosby and his friends to play golf. mark: hockey legend rod gilbert joining me now working in community relations for the rangers. rod: let's go, rangers. mark: next, the approach to the bull market. details live from mexico city
mark: welcome back. it is time for today's latin america report. let's go to our bloomberg partner in mexico city. jose joins us live. good afternoon. jose: good to see you again. the brazilian market is getting a vote of confidence to investors. they approached a bull market in são paulo this morning raising -- rising 1.9% on news brazil will be able to avoid a downgrade from credit agencies. she told bloomberg in an interview last month she would do whatever it takes to meet goals. along with her finance minister she is leading an effort to boost revenue.
now to argentina where flights to buenos aires have been canceled because of wind carrying ash from the eruption of the volcano in chile. delta airlines called off two flights. air france and air canada canceled one each. the ash cloud is from the volcano in the southern lakes region of chile. erupted for the first time in 42 years wednesday and the ash cloud has not reached the buenos aires airport but is heading in that direction. airlines are taking preventative measures because the ash can damage jet engines. these are top stories making headlines in the region. now back to you in new york. have a great weekend and we will see you again on monday. mark: right back at you, jose. next encore, your guide to the biggest newsmakers of the week on "bottom line." we will be right back. ♪
a live event. you are looking at the outgoing u.s. attorney general eric holder making his way through the crowd after saying his goodbyes at the justice department after six years as the nation's top law enforcement official. holder is a former judge and use attorney who took the job in 2009. he is the third longest serving attorney general in u.s. history. his successor is loretta lynch, who was confirmed by the senate yesterday. she will be sworn in monday at the white house as the nation's first african american e-mail u.s. attorney general. let's get to some of the top stories we are following on this friday. advisors for chartered indications have reached out to time warner cable to begin acquisition talks. charter's goal is to buy time warner quickly according to people familiar with the matter. charter has also pushed banks about financing. they have not yet discussed price in the details of the acquisition.
eurozone finance ministers hurled abuse at the greek colleague. people familiar with the matter say they called him a time waster, a gambler, and an amateur. they have been waiting for greece to come up with a plan for economic reform. that has to happen before greece can get the last of the bailout money and avert default. varoufakis did not seem shaken about the experience. >> we have not had full convergence yet because otherwise we would have had white smoke coming out of the chimney. but we are confident it will happen. in any case it is our view we have no right not to achieve this agreement. mark: now there is speculation the greeks will not present a plan until june. that is a look at the top stories we are following. coming up at 2:55, scarlet fu has more on the nasdaq record. later on "street smart," you
know his work by listening to his catchphrase, the man behind --i won't say it like he does -- will talk about his career. did this friday so we bring you a look back at the most notable newsmakers from this past week on "bottom line." >> we are getting into the endgame phase. you just heard it on the trailer before. the government is looking at all corners and in all barrels to find liquidity to make the payments coming due over the next couple of weeks. we are running out of time relatively quickly, so that is coming to a head. >> the strategy is not the most coherent this administration has come up with. he started the segment with this american effort to block an iranian vessel that would transport arms to rebels. not far from yemen united states is involved in a major operation against isil.
i'm afraid there's not much coherence in the strategy itself. but you know the priority has always been to make sure groups like isis would not be an imminent threat to the homeland itself. >> broadly speaking, the political obstacle is no one really believes the claims that if we amnesty today's illegal aliens that we will enforce the law tomorrow to make sure we are not in the same situation 10 years from now. that is the key issue. will this be the last chapter the amnesty, we tie up the loose in's and go forward with a tight properly enforced immigration system or not? we tried this in 1986. the same deal. they turned out to be a trick. we have twice as many illegals now as when the previous amnesty 25 years ago was passed. so that is the issue. will enforcement happen? >> for this administration and
previous occupants of the white house, they voice consistently argued trade deals are not the place to settle allegations of currency manipulation. there has been approached by senior democrats to include strong, binding currency language into the bill. thus far, they have been unsuccessful. i would imagine that will continue as the process goes forward. mark: gold heads for its biggest tumble in seven weeks. alix steel joins me now. investors are running away from it like kryptonite. alix steel: not that bad, we are only off a few dollars. [laughter] i think the story is the are still dealing with an asset looking for directions like many other assets we have seen. it is very much tied to the federal reserve. higher interest rates are bad for gold. lower interest rates are better for gold. we have had confusing data over the last few weeks that has pushed a lot of money into equities. some of that money is coming out
of gold and going into stocks. that said, there is some physical demand supporting the market. we did have about 223 tons coming out of switzerland going to companies like india and china. the physical market is adding some support. mark: i was giving the update about new york crude. why is loyal following today? alix steel: it is falling from the record of 2015. rates were cut again today on the rigs number. but overall the market is still oversupplied. between 1.5 million and 2.5 billion a day depending on what analyst you talk to. they are saying that recount is not enough to significantly reduce the existing oversupply. it will still take an active opec meeting bigger production cuts. the rally this week was interesting. we forgot this on the side. we had saudi arabia wrapping up airstrikes in yemen.
about a 24% increase in trade in the straight off of yemen last year so that area becoming much more important for global supply, about 4.7 billion barrels of oil a day. will you take $85? a note today saying it hit $85 in the second quarter. it does expect a pullback later in the year saying production has plateaued and is expecting a decline perhaps in may. mark: what is on "street smart"? are you going to fight someone else? alix steel: i have a bruise from yesterday, so i'm not in the fighting mood. i will talk to michael buffer let's get ready to rumble. also, the former ambassador to china jon huntsman, will be on the show talking about the relationship between the companies and a film he is in. mark: alix steel with "street
vanquished a ghost. that record stood for 15 years, an eternity in market time. the first chart, the bars track the number of times the nasdaq closed a record highs since it launched in 1971. the higher the bar, the more record highs in a year. the first year more than 30 instances of new nasdaq closing high. that picked up in the second year and then went down to single digits in 1973. there was nothing for five years. the late 1970's through the early 1980's featured new records, so did the mid-80's. the 1990's were the real glory days. in 1991, the nasdaq closed at multiple record highs through 2000. mark: 1999 to 2000 what? scarlet: march of 2000 was the last time we had a high. after that, markets reverted to the mean. look how long it took before we got anything else, 15 years.
finally, yesterday, the first closing record of the year. we had to market with a circle because it is so hard to see. mark: what is the difference this time? scarlet: bulls will point to the fact that companies have real sales. they are not using price to earnings growth. we have a chart that shows this. the p/e's went bananas because companies went under. that is above 500 in 2001. now it is much calmer. we did get a blip in 2014. it looks like some numbers were askew. that accounts for the little blip, but nothing like what we saw back during the dot com boom . mark: we are talking about a differentiation between real sales and made up forecasts. scarlet: you are absolutely right.
the fundamentals are distinct we different from then and now. technically, there are big differences as well. i spoke with chris earlier. he said there are two main issues. there's little evidence of euphoria this time. investors aren't gnostic toward stocks -- are agnostic toward stocks. there is anxiety marking the advance. everyone questions if this is financial engineering because of share buyback. then you have the internals. in march of 2004, four were in an uptrend. today, seven out of 10 are. the picture is much from her now. mark: what about when you adjust for inflation? scarlet: bearish markets like to pull that out. one of our strategists created an adjusted nasdaq chart. it shows we are still 23% shy of matching the bubble record high, but we have been climbing. graber colts -- barry michael -- barry did explain revenue and
earnings are impacted the inflation -- by inflation and adjustments. if you just the s&p 500 for inflation, we did reach a record high earlier this year. mark: get the latest headlines at the top of the hour on bloomberg radio and on bloomberg.com. that does it for this edition of "bottom line" on bloomberg television. i am mark crumpton reporting from new york. thanks for joining us. have a great weekend. "street smart" is next. i will see you on monday. ♪
alix steel: welcome to the most important hour of the session. a bloomberg exclusive. charter advisers have reached out to time warner cable for talks after the comcast deal fell apart more on every twist and turn in the consolidation saga. so much for a greek deal. talks between the european finance ministers descended into name-calling. the target of the frustration? greece's finance minister. i will be speaking to the former ambassador to china jon huntsman about the documentary premiering at the t