tv Bloomberg Markets Bloomberg July 17, 2015 11:00am-12:01pm EDT
have passed a measure this morning after chancellor angela merkel warned members of the bundestag that there would be chaos in the streets if they did not. brendan: will you have to pay up for paypal? it starts trading on monday but where does that leave ebay? pimm: from paypal to pay less in the air, we will introduce you to a new private passenger airline that offers all you can fly for $2000 a month. all you canu go and fly? we will find out. brendan: good morning. pimm: we are 90 minutes into the trading day in new york so let's take a look at how markets are doing now. there is a little bit of give
back in stocks. not much movement in the s&p 500. you see the gain in the nasal act and that would be a reflection perhaps of what is going on with the google shares today as well as what's going on with netflix stocks because of the earnings. brendan: we will get julie hyman into explain the google shares. pimm: let's take a look at the dollar. -day strength against the dollar. brendan: this is against everything. wondering -- the pound has been strong against euro and has been gaining some strength. brendan: when you look at equity indexes around the world, the consistent and you have seen is that the only good news as u.s. news. pimm: if you are doing everything in oils and oil is $51 per barrel, that is dollars.
brendan: german lawmakers have voted in support of a greek aid package which is a fictional or -- which is a victory for angela merkel. 7 billion euros in bridge loans -- where will it come from? from a 2012l come fund that all 28 member states have contributed to. the u.k. was concerned they would be on the hook if there is default. it looks like they glossed over that. talks will start now on this overall aid package, the $86 billion. it cleared the bundestag a couple of hours ago. out of brussels, the eu commissioner for inter-european relations says he senses a different tone out of athens, more positive tone and he is withng this could be done overall negotiations in a couple of weeks but not any month. that seems to be unlikely
especially when you hear the skepticism from the german parliament. they say it will either be difficult negotiations. angela merkel one with a big majority. if you look at where the public is, it is opposed to voting for this. parliament tog rejected in only 46% said it should pass. these talks will take place in athens as they figure out the details of this aid package. the imf is likely to be involved and the imf want to have debt write-down. hell,n: stock in acronym thank you so much. pimm: and then german politics. brendan: a dramatic surge in construction of apartment holdings is giving a push to housing start numbers. housing starts climbed last month by 9.8% which is a seasonally adjusted rate of 1.2 million homes. biggest jump in 28
years. builders believe a new wave of renters will be coming in. housing starts of risen 10.9% this year. the governments as gasoline prices are driving a slight increase in inflation. the labor department says the consumer price index rose last 1/0 of 1%. the price at the pump rose on top of a 10.4% increase and gasoline prices are rebounding. the latest results from general electric are starting to reflect that companies strategic shift. ge raised the low end of its forecast. it could be one -- it could be 100 -- kobe $1.13 and they topped estimates by three cents per share. the company is moving to an apposite son manufacturing. they are moving quickly to sell out ge capital worth $200
billion. those are your top stories this morning. pimm: coming up in the next hour, one last weekend together split is onpaypal track for monday but will paypal become independent? rudd stars as the most unlikely superhero and why expectations are high for "antman." that is coming up. brendan: germany is backing the greek bailout negotiations but it's only part of the puzzle. christine lagarde warned that the greek creditors must lower their debt heard. pimm: we want to go to desmond imfman used to be a.m. deputy director. is now a resident lol at the american enterprise institute in washington. let's begin with something i think you have already said which is the greek deal is bound
to fail. what do you mean? >> the greek deal is bound to they'll from an economic point of view and a political point of view. from an economic point of view, the whole deal is pretty much the same policies as they have tried before. into policies got grease the equivalent of a great depression we had a 1930's. it is inconceivable how another economy austerity in an that's in deep recession in it euro straitjacket that has a banking crisis is going to grow anytime soon. make muchics do not sense and that will cause the politics to unravel. we have already seen the politics becoming difficult in that 40 members voted against the package. brendan: the economics that were imposed upon greece in part
included expect haitians of primary surplus of 3.5%. that was based on imf models. has the imf learned is lesson? will it change their expectations? . >> i'm not sure the imf has learned their lesson that tightening in exchange rates were you can't move, that leads to deep recession. this is going to repeat right here. the attainment of that primary surface of 3.5% is just a pie-in-the-sky. as the economy falls, the tax revenues will dry up and they will then be required to do more tightening. i don't think an economy that's already in depression can be given further into the ground without expecting it social and political aberrant, part. -- to come apart. pimm: let's say angela merkel
calls you and says tell me what we need to do. what should you be saying to her? >> i would tell her that she needs to agree with her minister of finance who is proposing that we try to get an orderly exit of greece from the euro. being in the euro has killed that economy and it will not doom it much good. what one needs to do is to try to support an exit and try to make that work is of that does not work, greece as well as well on its way to becoming a failed state. brendan: if that happens, can the remaining members of the eurogroup come up with a treaty change that will make it work politically and economically? >> i'm sure they can find the way of getting greece to leave. ways they plenty of have gotten around the treaty before in this will not be much
different. in thes it is not simply interest of the whole eurogroup but it in the interest of greece. being stuck in this euro has caused the economy to collapse these last years and are unemployment went through the roof. timeout ofou call a being a member of the eurozone? can you get back in after that? >> i'm not sure they would want to go back in. they should not have been in the euro in the first place. tying an economy like greece which has all of its problems tied to a powerhouse like germany and having no exchange rate flexibility was only to invite problems. i'm not sure greece would want to go back in if they came out. they could be like the u.k. or sweden, they could be in the european union without being in the euro straitjacket. pimm: thank you very much. ebay and paypal are
brendan: welcome back to the bloomberg market day. pimm: it is time to go where? brendan: julie hyman will take us through the market. pimm: you said you will talk about technology. brendan: there are two kinds of google shares? julie: that's right. the nasdaq is the outperform or today. it is in large part to google but they are not the only one. facebook is at a record today and so was amazon. we are definitely seeing a big used in google shares on the
back of earnings but these other tech companies are also rallying to record levels. buts a day of technology you could argue it has been a year of technology. look at the three major averages and what we have seen for the year to date. does not matter which line is which. they reach their records back in mid-may but the nasdaq is only at its record now. it's at a record again today and yesterday. if you look at the relative performance, the dow is up 1.3%, up 1.3% and the nasdaq is up 9.6% so there is a dramatic outperformance of the nasdaq composite for the year to date. i want to talk about some of the other movers -- kansas city southern is a railroad company rising today, one of the best reformers in the s&p 500, up 7%.
earnings and sales were down for the company says volume is improving. they improve each month and second quarter and continue to improve in july. brendan: thank you. interesting about google but also the facebook shares moving. brendan: i just here nasdaq at a new high. that was not stock advice, just memory. pimm: sense memory. let's take a look at some of the top headlines -- a federal investigator is trying to learn why a kuwaiti born men suddenly opened fire on u.s. military personnel in tennessee. the shootings yesterday in chattanooga killed former readings, police officer and another servicemember were wounded. investigators are checking social media and questioning friends of the suspected shooter, matt muhammad youssef abdulazeez. he was killed after the rampage in the 24-year-old was born in kuwait but was a naturalized u.s. citizen. hulu is considering an ad free
option. the streaming video provider is trying to become a stronger challenger to netflix. their current service cost $7.99 per month and has advertising breaks an ad free option may cost $12-$14 and i could start later this year. the performance of goldman sachs since it went public 16 years ago now makes lloyd lang find a billionaire. the billion or index shows he has seen his net worth surge to about $1.1 billion. the shares have quadrupled since its initial public offering and stake addsfein's $600 million. those are your top headlines. brendan: paypal may have started as a digital wallet but it's not just for your dad's palmpilot anymore. emily chang explains.
emily: we are at whole foods. the braintree technology powers every single apple pay transaction. thank you. andst told my phone here input the passcode and that's it. and there's more -- the paypal technology powers transactions for air bnb, home depot, other apps. you can use your paypal account to order an uber. let me call my car to go home so i can cook dinner. paypal is expected to price later today.
after the separation, emily chang joins us from san francisco. john donahoe is now retiring from ebay. what is he planning to do next? emily: he made it clear that is not going to be the end of the road. we don't know where the road will go. he is staying on the board of paypal as chairman, not the board of ebay. i asked him how he chose it. he said i think i can add more value to paypal. i pushed him and asked him what kind of calls he has been picking up lately. he is probably one of the most desirable and unemployed ceos out there as a this broadcast. not picking up any phone calls that's for sure. i'm too busy focusing and making sure we get the separation done. then i will take some time. i have not taken any time for almost 30 years. months and maybe six then i will figure out what's
next. i'm not retiring. there are a few open jobs out there and twitter comes to mind but i'm not sure that will be the top of his list. i think we will be seeing him again in the tech industry. brendan: john donahoe will take time off and maybe learn to kite surf. can we look back at these two platforms that are definitional for the information age and say anything about his legacy? emily: i asked him if the split would define his legacy and if he saw this as not a success. he quite honestly said he feels like he is leaving the company in a good place. you have to think about the last year for don -- john donahoe. it has been difficult with icon saying these two companies are splitting up. he said he thought about this 10 years ago.
willr whether the split define his legacy in the future, take a listen. >> the question is, did i hand the business off in better shape than i inherited it and i feel good about that. just as meg and about the company to me and stronger shape than she inherited it. as of monday, paypal and ebay official he will be separate companies. dan shulman will lead paypal is a public company and we also talked to him in an exclusive interview about his vision. he is aligning the troops and wants paypal to be a place that makes money more easy to transfer around the world. take a listen to what he is doing. >> what we have been most focused on is setting the vision and the mission of the company going forward. what are we going to focus on? how will he execute against that? those are the things we are mostly focusing on.
how do we satisfy our customers, our consumers, and are merchants? if you look at paypal as a market place -- ebay is a marketplace but paypal is a piece of internet architecture. what challenges does it have going forward? a lot of money is going to looking into bit coin. ily: one of the biggest challenges for paypal is innovation from within. we have seen paypal by a number of companies. which willought zoom help with international money transfer. they are leading on braintree heavily, and $800 billion -- $800 million acquisition. can paypal innovate from within? up, marvel plus "antman" will be the 16th comic
" moviearvel's "antman comes out today which is the 39th movie based off a marvel comic book characters. the reviews have been pretty positive. firstn: when disney purchased marvel, 17 marvel movies have come out which begs the question -- has, look movie fatigue set in yet? leaonard knows more than any of us. 5000 characters in the marvel universe? when will we reach the peak? >> they have had tremendous success of the box office with a man and a metal suit, a super patriot from world war ii -- he
throws around a shield and a north god and a guy that gets really mad and turns green and get strong, the hulk. popular andhulk as i grew up reading this stuff. . i read these, books to my kids growing up. brendan: all the people you have mentioned are somewhere in the popular mind. i did not read a lot of comic books. >> they are now. you are thinking post movies. before the movies, the popular ones or the fantastic four, spiderman, the x-men and they were all taken by other mover studios. marvel did not have them. they have taken all these b-list characters in turn them into a-list characters and now we have a c-list character, and man. brendan: did they know they were buying a universe? >> the people who own marble say
you cannot make -- who own say we have 5000 characters left. it is a universe and antman was one of them. they have been planning this for 10 years. brendan: let's talk briefly about the other universe of disney and the most important historical events in the last six months -- the han solo reboot. will we see that same vast exploration of the star wars universe? >> that's with a hope to do. there are thousands of characters in the star wars universe and i have these spinoffs. they will try to do the same thing. whether it will be successful, i don't know. i would not bet against them. pimm: i thought i saw you in my clip from the movie with the bow and arrow. >> that was hawkeye. e boba fett.
the theme park in china is opening. , thed 1.5 square miles tallest magic kingdom castle, that's a big market? "antman" is on track to make six $2 million this weekend. the trailer did not look that great. he shrinks down. pimm: we will leave it to people's imagination. maybe you will go see it this weekend. brendan: we will walk outside and see it right now. ♪
bloomberg market day. i am pimm fox. the new greek a loud plan -- bailout plan is moving forward. parliament passed the proposal after chancellor angela merkel urged them to do so. that paves the way for talks on specific terms that will have to be worked out between greece and european creditors. with the promise of help from european neighbors, the country's bank will reopen on monday. they were closed 20 days ago. the focus for prime minister shifted froms putting out political fires to real ones. he is checking the emergency response to a pair of fires. one is a brush fire near athens sending clouds of smoke into the capital. those as wellling as fires in the country's south. the jury that quickly found james holmes guilty must now
decide his punishment. convicted of killing 12 people in a colorado movie theater. they rejected his insanity defense. they will decide whether he gets life in prison without the possibility of parole or the death penalty. honeywell international boosted revenues to top analyst estimates and are raising the revenue forecast for the year. honeywell says it is being helped by the rebound in the u.s. commercial construction industry. and good news for basketball junkie is courtesy of abc. next january the network will nba on nbc. night they will now split up those games. -- saturday night nba on abc.
for the latest on europe, let's go to manus cranny in london. ?anus manus: european stocks are just giving back a little bit of their value. this time last week the greeks did not have a deal. that has been agreed to on principle. there is a lifeline of cash being sent to greece. in a row higher for the paris market. still, net, net, up. auto sales the highest in five and a half years. nordic corporate's reported for the day. let's get inside soft. these guys made a killing, the stock up 7%, the most in six years. nice expansion. erickson. they make the years that help
your mobile phone transmit the data. up the most in a year. north america stabilizing. bys penetration will double 2020. our more -- our mail system any united kingdom is under investigation for competitiveness, down just over 3%. little bit like janet yellen, get ready for a lift in rates probably by the end of the year. is the euro declining, starting gaining. this is something you have not seen since 2007 on the euro-starting trade. that is the news from europe. craney,ank you, manus joining us from london. still to come -- you can fly to the hamptons whenever you please. he can and is a taxi service for the sky. chiefl be talking to the
executive. and how about films on your phone? is revitalizing its mobile app, making it easier than ever to edit on the go. and the first deputy managing director spoke to bloomberg. all that and more coming up on the bloomberg market day. germany voted overwhelmingly in favor of the greek bailout, .aving the way for talks many are asking if the eurozone's most indebted country still deserves aid. pozen fromis adam the peterson institute for economics and a former bank of england policymaker. adam, great to have you with us. let's talk about the greek people. what did they get out of this? varoufakiswearing my sympathetic shirt for today.
from thebacking away abyss, as i think david lipton said. they were in very unforeseen territory. they have suffered a lot in the last six months. if you look at where the economy was forecast to be last september versus now, they probably lost 5% of gdp. pensioners hard. it is not a good time to be an average or poor greek person in greece. pimm: is it a good time to be a french or german bank question mark adam: -- is it a good time to be a french or german bank? adam: good question. andas a bad time in 2009 ever since then everything has been about protecting the french and german banks. that was very visible with the bailouts in ireland where the
government was forced to take onto the books essentially add private sector bets from northern europe and that is what is happening in greece. there are other reasons why being a german or french bank may not be ideal, but we are three to five years in and they toe shifted those deals have someone else. they should be very happy with their governments. pimm: describe the role of the european central bank and olive this and what it means for the future? is and what ith means for the future? adam: very good question. there is a lot of controversy about eliminating lending and keeping the bank open in greece. but that was in line with their mandate. they could not just keep putting money in. they have improved what they were doing under tree shea -- earlier in the crisis.
they are doing quantitative easing. to greece again. second, they are no longer trying to directly threaten governments. and someals in greece have determined that the ecb was helping them, but it really wasn't. the ecb was trying to stay out of it. i think it was a positive move on their part as opposed to a few years ago when they were seen as attacking berlusconi. i am no fan of berlusconi, but the european central bank has no business getting into politics like that. pimm: talk about the issue of trust in the eurozone. trust is getting to be very much eroded here. again, we can all look at stories from your reporters and those who talk in the room about how ill-prepared and combative
various representatives were, but when you look at the numerous of the northern european representatives, the mood over the last week was so angry, so self important and demanding over what is supposed to be a sovereign fellow nation -- it is hard to imagine that because of the difficulties in europe, groups work together easily. much more importantly going forward, how do you build be as theunion in europe treaty says when you're trying to take on these divisions in europe and how do you deal with things like ukraine, russia's advances, or the mediterranean crisis where everyone has to take their share, or migrants in a world where everyone is beating up on each other? that is not good. pimm: adam, is it good for britain? another good point.
it is hard to say. i believe and i think we all believe that though britain is right to stay out of the euro, they are also right to stay in the european union. the question is, is there anyone them andhe euro beside is the euro going to be dominated by the euro countries? i think the answer now is, there will be more countries are waiting to get to the euro and holding off or at least sympathetic to the idea there should be eu membership without the euro. that is good. i thinkhe other hand, it shows the way the french and the germans are driving decisions in the euro area. the only way the euro area survives long-term is centralizing more. i am not sure if this works for britain, at least lyrically, in the near term. this work for the international monetary fund and
christine lagarde? : i believe the international monetary fund should be looking at ways to get out of this. they should get the payment of the money they are due, return the payment to their members and be ready for the next crisis. they should not be doing long-term monitoring of greece, partly because this really is about settlement of debts within the euro area. partly because the amounts of money involved, well necessary for greece, are very large, so it is sort of unfair to other members of the imf. and partly because the euro area has been almost treating the imf is a junior partner. the leadership of the imf has tried very hard to fight back, given that the euro area against 's expertise and they will be scapegoated when they implement things to review will see this in the greek popular press. they blame the imf whereas the imf has made the most moderate
assessment of greece recently. it shows how they are being politically used by the europeans. pimm: thank you for spending time for us. is president of the peterson institute. much appreciated. still ahead -- we will introduce you to the netflix of private aviation, looking to get you flying through the northeast with unlimited access for $2000 a month. we will bring you the details. ♪
pimm: all right. welcome back to the bloomberg market day. in pimm fox. at least 64 people are dead bomberspair of suicide in nigeria. it is one of the deadliest attacks yet by the islamic militant group called boko haram. the family that controls samsung -- shareholders narrowly approved a merger of two samsung affiliates. this gives more power to the family. elliott associates could challenge the merger in court. and hacking pays, if you are on the right side. two hackers who hunt for security flaws in the united airline system are each getting one million frequent flyer
miles. that is enough for several first-class roundtrips to asia. the united states makes up roughly half of the worldwide market for jets. begin is looking at getting -- beacon is looking at getting a bythold in the market becoming the netflix of aviation. joining me to discuss this serial aviation concept, the chief executive and cofounder of beacon. thank you for being here. give us the details. what is beacon offering? netflix.ink of it like we get that comparison a lot. passes.for boarding you can fly as often as you want. where can you go?
new york, westchester airport, boston, and then seasonally we go other places. pimm: what kind of equipment do you use? .uest: a variety of equipment our destinations are about an hour away. we fly the aircraft that will be most efficient on this route. pimm: let's start with the keying airport. the maximum number of passengers is eight? a maximumlike to set at 10. above that, you get regulations. they will be greeted by concierge, welcome to the plane and take off. about the on plane experience? a lot of people are looking for things like electronic hookups. guest: very different from what you're used to flying commercial or on a shuttle from new york to boston. the experience flying the private plane is an intimate
experience. club seating. for people facing each other, which is very different than when you get on the shuttle and you put on headphones and do not talk to the guy next to you. you spend that time quite productively. pimm: the planes -- do you own them or leased them? we hire a company to operate the aircraft for us. it is similar to the model delta has with sky west. we become the sales and service company. we handle everything about the interaction from when you book the flight to when you get where you're going. as a glee the aircraft and the pilots are run by the other aviation company. must him up.ally there is a $500 initiation fee, just so we know that you are real. for sharing the
cameo smartphone app. they can now edit videos shot on their iphone devices. they are betting that the camera that filmmakers carry 99% of the time is your smartphone. let's find out more for my colleague that he lived. we talked about periscope, on twitter -- betty: i know. this will be a more upscale version because they want filmmakers, right? betty: this is all the vimeo platform -- pimm: no ads. no ads -- betty: no ads. vimeo gets 60 million unique viewers a month. now they want to turn more to servicing the viewers, the consumers of content, not just the producers. it makes perfect sense to have this act.
now they are really going into the description model. pay-per-view. will you pay two dollars, three dollars to watch a product on video? the believe that this is sweet spot that will differentiate itself from youtube, the big gun of online videos. theirw youtube powering revenue at google. youtube is not worried about cameo. they are worried about facebook grade facebook with their one point 4 billion users. they now announced they are going to allow ad sharing of online video. facebook, 55% to the content creator. will takemuch vimeo from the producers? pimm: tell us. betty: 10%. pimm: what else is coming up, because we will be together in just a moment?
betty: oh, we are. we will also talk about what has been going on around the world. greece and europe and also in china. -- he your favorite guest is going to be joining us. he has been a big china bowl for quite some time. if he hasill find out been riding the ups and downs of the chinese stock market. stanley, theygan said earlier if there was going to be any disruption, it would be in china. pimm: thank you very much, betty liu. now it is time for the options inside. julie hyman. thank you. we are seeing a mixed picture with the doubt. google's shares are helping lift to a record.gher joining me, dan from kk investments.isor
he is from chicago, encase i did not mention. we are seeing a mixed picture today. interesting the nasdaq is the outperform or, indeed has been the outperform or this year. anything particular options wise you notice? guest: we have seen activity with the larger tech names. even going into next year we tech names.me big definitely there has been some call buying ahead of this recent move, but also positioning long going into next year. julie: something you highlighted in your note to me was the so-called wall of vol. what is the take away from that? guest: basically you are seeing implosion.
the vicks hit its peak intraday last week. so, that's what i'm talking about, you are seeing the implied level here really moving significantly. right now, with the stabilization in the market, there is the perception the maintain these levels. julie: dan, i want to get to your trade. talk me through it. on the xle, on the etf, tell me what the trade is? guest: sure. there,look at a charter xle down around that 72, 70 2.5 area. at the if you look positive areas, you see them jump on the bounceback.
the energy sector still lagging. xle.is why i am looking at sony 5, 80 to call spread. i think that gives you a nice risk reward. 80buying the january 75, call spread. julie: any concern about catching a falling knife here? guest: that is why you are using the call spread here. potentially, yeah, it could go lower. but i think even the expected value in this trade, i think it looks good moving into next year. soie: all right, thanks much, dan. stay with us. the bloomberg market day will be coming right back. ♪
francisco, noon here in new york. betty: a deal to keep greece a float and avert a threat of immediate default. shares of google jumped to a record high as they top analyst estimates and real and spending. alexander hamilton created the building block of the u.s. economy. now his life is the subject of a hip-hop musical on broadway. wyatt has the attentional to be a block -- why it has the potential to be a blockbuster. pimm: good afternoon. i am pimm fox. betty: and i am betty liu. let's look at how the markets are trading. it is the end of a pretty crazy trading week, pimm. the