tv Bloomberg Best Bloomberg August 26, 2017 8:00am-9:00am EDT
♪ julie: coming up on "bloomberg best," the stories that shaped the week in business around the world. president trump gives investors plenty to think about. president trump: our support is not a blank check. >> i don't think this is going to have a big effect on financial markets. julie: and perhaps to worry about. president trump: believe me. if we have to close down our government, we are building that wall. >> plenty of investors are concerned president trump has turned the way things are going. julie: a big deal rocked the energy sector. warren buffett sees a big deal fall apart. samsung gets a good deal of
attention and carl icahn deals a big low to his rival bill ackman. >> it is not the best return o. julie: ireland's prime minister wonders what great britain is looking for in brexit talks. >> what does the united kingdom want with the european union? bankers takel central stage at jackson hole, and we sit down one-on-one with two fed presidents. >> i think you have to be too careful on a point estimate as opposed to the broader trends. >> we should be moving accommodation but it should be done patiently. julie: a roundup of the week's most intriguing earnings report♪ julie: hello and welcome.
i am julie hyman. this is "bloomberg best," your weekly review of business intervie, and important analysis from bloomberg television around the world. let's start the day by looking at the top headlines. the week began with a major deal involving imperative european energy companies. >> another sign that m&a activity in the energy sector is picking up today. a france company agreed to buy the gas ands an oil units, the e a little over $1.9 billion in cost. we were told they were the right suitor for their company. >> we look at very options like ipo and other possibilities from -- to selling the business from other parties and it came down to the offer from total being the most attractive value point of view and also the commitment to how they are making to
develop the business. >> during a conference call with reporters, the fact he was actually acquiring very good operational expertise and this is something you just don't get like that unless you buy it, and this is what he is doing. they were both interested in iran and africa. it looks like a very good deal in that respect for total. >> president trump announcing an open-ended commitment to afghanistan that would put more american troops into the longest lasting conflict. he pledged to keep u.s. forces there as long as it takes to deny terrorists a haven and bring about a political settlement with the taliban. president trump: our commitment is not unlimited and our support is not a blank check. >> he will add about 4000 troops to the already 8600 troops on the ground in afghanistan. this is something he had advocated against on the campaign trail but said he
ultimately went against his instincts and decided on this after carefully studying the situation. >> i don't think this is going to have a big effect on financial markets. this is a very small lift of troops, it is not trillions of dollars as we were spending some years ago. i think it was a good speech and it is a good foreign-policy decision. jonathan: we have gone back to the 1930's according to ray dalio. politics will probably play a greater role in affecting markets then anytime before we have experienced, but in a manner broadly similar to 1937. he says he is tactically reducing risk on concerns of government efficiency. earlier this month, he recommended his firm place 5% to 10% of his assets in gold. >> there is no doubt coming into this year, there was a lot of expectation that we were going to see some sort of tax reform, may r
fiscal spend, and that would be an impulse to the u.s. and global economy. all of that seems to have faded, but the market has shaken it all off. david: president trump was back in campaign mode last night with a fiery speech to thousands in phoenix, arizona, in which he took down everything from the nafta to two republican senators from arizona. what may have got the markets attention was his threat to shut down the government over the wall. president trump: believe me if , we have to close down our government, we are building a wall. david: a lot of people thought it was going to be hard enough to keep the government open without the president weighing in. he is now saying, let's loaded it up with a border wall. >> that is right, he is throwing a wrench into the process that the republicans are preparing to come back to washington with a number of things on their plate, including passing a budget and raising the debt limit and now the president is drawing to a redline saying in order to
keep the government open cast -- open, he has to get funding for a wall. there is no consensus in congress about how to pay r a wall, let alone how to pass a budget and raise the debt limit. this is going to be something difficult for the republicans to do and the president made it harder. >> as far as markets and investors are concerned, they fully understand the president's legislative agenda is stalled, that has already been priced in, but there is also the rising existential risk for the u.s. presidency and many investors that i have spoken to are worried that maybe president trump won't see out his term the way things are going. it is going to be a bumpy ride going through september on the fiscal side, and i think market trumthe debt ceiling "mess" on gop leaders in congress. he tweeted, i requested that mitch and paul tie the debt
ceiling in legislation into the popular v.a. bill for easy approval. they didn't do it so now we have a big deal with dems holding them on debt ceiling approval, which would have been easy but now a mess. >> this is complicated politics right now but there are two storylines to watch. one is what is the president's desire on the debt ceiling? how does he want to proceed? the second one is, what is going on with the infighting in the republican party, particularly the fight the president has been picking with republican leadership? that is not the only tweet this morning. there is also the one in which he said, the only problem i have with mitch mcconnell is that after hearing repeal and replace for seven years, he failed. vonnie: janet yellen just about to speak in jackson hole and let's get the details from bloomberg's michael mccain. -- michael mckee. michael: take your fingers off the trading button, you won't be trading or selling on this one.
this is the boring janet yellen. her speech largely a recitation of the history of the financial crisis and regulatory failures and how things have improved since then. she admits there is room for improvement in the volcker rule and other tweaks could be made to dodd-frank regulation, but in general, this is a speech about federal reserve and success in regulating the financial system since the crisis and not at all about the economy. >> mario draghi took this occasion not to deliver a policy message, not to signal what the ecb does or does not do next or when, he took this more as an occasion to talk about what the big challenges are globally. he is especily concerned about openness, he is concerned about protectionism. he is concerned about how to make multilateral cooperation sustainable, fair, equitable. when it comes to the currency, what you can take away is that either mario draghi is not concerned about the euro,
because he did explicitly single it out and by not singling it out, you could say he is not worried. on the other hand, you could say mario draghi is going to wait for the next ecb meeting or mario draghi doesn't want to maybe fire up the euro bulls by indicating he will slow them down. julie: still ahead as we review the week on "bloomberg best," ireland's prime minister weighs in on brexit. plus, a size up on mario draghi's assessment on qe and two fed president's share their outlook from jackson hole. coming up, more of the week's top business headlines. samsung unveils its latest galaxy note phone, hoping you -- hoping it can erase members ories of the previous model. >> it has a very large screen, large display. it is the biggest phone yet. julie: this is bloomberg. ♪
♪ julie: this is "bloomberg best," i'm julie hyman. let's continue our global tour of the top business stories with a clash of investment titans. billionaires carl icahn and and bill ackman dowdell on the future of herbalife. david: herbalife, it may be the stock that has the highest ratio of mentions the market cap of any public traded company in the past few years and is back in the news today with an announcement it will i back a good portion of its stock in a reverse dutch auction and the major shareholder carl icahn has agreed to limit his holdings to know more than 50%, unless he wants to buy the whole company. is this carl icahn's victory? >> it is in his fight with bill ackman in the stocks. bill ackman took a short about one billion. david: where was the stock
trading then? >> about 50% lower than now. not the best return on it short -- a short position. >> what does all of this back-and-forth between ichan and thisompany, and the fact private equity deal did not happen, what does this tell you about herbalife right now? >> the fact there is some interest is positive from an equity firm. i believe it might not be the right time. they might go back to their ultimate peak of sales was a few years ago at $5 billion and i think they will inou to grow at the historical rate of 8% and grow to a significant level from there. vonnie: a new player in the energy battle. a is breath -- sempr offering to buy encore offering to buy encore for $9.45 billion after elliott management triggered a public battle for the company by announcing the intention to rival buffet's
bid. is thatnough? >> i think that is probably more to do with paul singer than anything else. vonnie: why? >> as you recall, elliott management owns the bulk of their unsecured debt and didn't agree with the terms of the buffet bid. so they opposed it. now we have obviously got a raised bid that addresses some of the issues they had with unsecured debt and how much they would get paid. it looks like they will get cents oncents to 50 the dollar as opposed to 18 from buffet. mark: the bar for the iphone is set high. investors eagerly await the latest device. the features of the phone as it coincides with the 10th anniversary of the iphone. is the new iphone the superduper version, is it going to be a
demonstration of the apple philosophy, let's not be first, let's be best? >> you've got it, the sharper , higher contrast screen that shows colors more accurately, bigger screen and the smaller form factor, these are all ideas that have been tried before. we had the essential phone launch lastweek. we had another samsung phone launch earlier this year. this idea they are going to put a really big screen on a really small phone and that is exactly what apple is going to do with this souped-persion of the iphone. they are going to have this 3-d sensor, described as the crown jewel of this iphone 8 model. instead of using your fingerprint to log into the phone, you will be able to scan your face. they will know it is note 8, stp
the fight with apple. the largest samsung phone yet, possibly its most important. >> it is t latest phone since the last one was scrapped after reports of catching on fire. they had a flashy event here in the park armory in midtown manhattan, and they revealed a lot of the details about the phone, which i am holding in my hand. some of the main differences ar it has a large screen, large display, it is the biggest phone yet and another plus is the stylus, which is skinnier and more pressure resistant than before. on top of that, they also ha a dual camera lens in the back, so talking to people here, it seems there is lot of excitement about these improvements but we'e still going to ve to wait and see if they bounce back from the problems of last year. >> british prime minister theresa may wants to take back
control of the country's laws from europe. her government is willing to accept a cooperative relationship with the european court of justice. u.k. is open to a biting -- abiding that bypassed ecj rulings and even referring decisions to it. jonathan: this red line was of huge importance to the brexiteers. said in october, to great applause from the conservative party, that brexit meant leaving the jurisdiction tothe ecj and they're open abiding by past decisions of the ecj and as one of the ministers said this morning, they would keep an eye on it. >> securities and exchange commissions have signaled to financial firms it is working on a fix to allow u.s. brokerages to sell the market analysis to european money managers.
the practices under threat from two regulations that come into effect january the third. >> under new rules in europe, oker-dealers, big wall str register as asset managers. they do not want that. it could be costly, open them to legal risks. what they have been doing is pushing that sec to come up with some way were the rules could be tweed and continuto operate as they still do while complying with european rules. we learned the sec seems to be picking up the pace to come up with something. but the clock is ticking. vonnie: paris or frankfurt? that is the big question buzzing at bank of america. investment bank executives are divided over where the european trading hub should be after
brexit. >> my reporting is showing inside bank of america there are deliberations going on to figure out where should we go after brexit? --re should are trading o our trading headquarters be? what i in hearing from people's we have three cities on the list at this point. there is paris, frankfurt and dublin in the mix. it is a possibility for bank of america to choose multiple locations. some of our reporting was showing they may end up having equities in frankfurt and splitting off fixed income in paris. or you can see parts of fixed income being split amongst those two cities as well. a lot of it is there different debating ideas that have been floated. >> president donald trump has been promising to ease financial regulations in a piece out from bloomberg today, proposals under consideration could raise profits 20% to six of the largest banks, adding $27 billion of gross profit.
among the banks could benefit, jpmorgan chase and morgan stanley. where is this money coming from? banks have complained as they were being implemented. they were being dragged into these things, they always said no, this is going to hurt us, and of course, the earnings and have been muted over the years. but slowly they have in these were alexa tions of-- were relaxa some of the roles, and that would help by more treasuries, by more municipal bonds, all of these kind of things and they make or money because they do't have to hold more cash. the liquidity doesn't have to be as much. these are small tweaks, but when you add them all up, it is good money. >> amazon will start cutting prices at whole foods market on
monday, the same day it's $13.7 billion is set to close. grocery stocks did slip on the news. it seems investors think amazon is going to come in and do something with whole foods and reshape the grocery stage, is it possible? >> we knew they were going to do something, but it is surprising how fast.re saying i don't know what you are talking about. [laughter] they did not even get the message yet. or perhaps a pr gambit here, but it takes time. amazon is going to a sector they have never been in. the 800 billion grocery sector. changing prices and doing that days, weeks for a traditional grocery to do. they are saying, no, we are amazon. we are going to do it the price monday. of chicken, kale, eggs are going to change. they are throwing it at an industry that has never
experienced it before. billionaire's jay y. lee has been sentenced to five years in prison after being found guilty of perjury, embezzlement and bribery. his lawyer has said they will appeal. >> appeal. >> he has been found guilty of embezzlement, perjury and bribery.court, samsung executive founduilty, too. the other two got suspended sentences. the court found him guilty of currying favors, giving money, bribes in order to consolidate his power in samsung. we heard just a few minutes ago from the spokesperson of the current president who said the y hope the samsung ruling would end government business collusion. ♪
♪ julie: welcome back to "bloomberg best." i am julie hyman. as theresa may tries to negotiate the brexit, it has been slow going. economic path forward is not too clear. while visiting canada, the irish prime minister spoke with bloomberg about his frustration with the process. >> you get the sense the eu is pleased with the progress it has seen so far? >> no. i think i would be right to say on behalf of the european government that we are not satisfied with progress made so far. however, we will continue in the ongoing talks. led by michelle barnier, david davis on the british side, we hope for progress can be made and it will be sufficient when we meet in october to allow the talks to continue to the next
phase. but the talks to date, the progress has not been sufficient. in ireland, there has been some progress. we are satisfied we will keep the travel area, british citizens will move freely between the two islands, work , live, access health and education as we do now. and i am reassured with the ongoing commitments to the british government to fund peace building measures in northern ireland, but an area i feel very strongly about is there shouldn't be a trade border and we don't yet have progress on that. >> on that note, let's say the u.k. does not get the trade deal it wants with the eu. how concerned are you they say we put in a hard order between -- hard border between the republic of ireland and northern ireland? >> where we are confused and puzzled at very much the premise of your question. the tradee
suggesting for the last 14 months now, they want have all of the advantages of beig in the eu, but none of the responsibilities and cost. that is not a realistic edition. -- that is not a realistic position, so we are waiting to see what they would like to see. one thing that strikes me being here in canada, the canadian european trade agreement will come into rce when britain leaves the eu, it is not only leavg the european union, it is leaving the trade agreement europe has made with countries like china, japan, south korea. it is not yet clear to us, what are these better deals the british government wants from urope and other countries? i think more clarity in that area would be helpful. julie: coming up on "bloomberg best," more of the week's most compelling conversations. a couple of nobel economists chat about the ecb and the future.
♪ julie: you're watching "bloomberg best," i'm julie beg television about his remarks on monetary policy. >> obviously they have a problem, in the sense that quantitative easing was an experiment in our modern times. quantitative tightening will also be an experiment in our modern times and, that means
that they have to decide what rate and how to reduce the large balance sheet that they currently have. second is how that interplay's with increasing rates. i think at the current time the markets tend to be saying in a sense, let us wait and see and watch them evolve, that process of reducing the balance sheet and increasing rates. my view is that the threat of inflation tends to be muted and that gives them more degrees of freedom to experiment, and to see how to reduce the balance sheet size. and not do it precipitously or with the great threat associated with inflation hanging over our heads. mario draghi's centrist speech, it seemed like the trade and with thet bund trade that played out in the u.s. in the past be months, as
well. is it the smartest way to go in into friday's speech? >> not really, in my opinion. i think that basically after the trump election, united states, there was a great belief in the changes in policy for capital investment. and deregulation changed and tax rules, infrastructure spending, growth impetus for the market. maybe then, a steady increase in rates, and obviously, we have seen over the lastof u.s. might be in a weaker position than is europe. so that the market tends to be signaling strength in euro and yen and a weakness in the dollar at the same time, thinking there could be an increase in rates
, the real rates, within the euro to a greater extent than in the u.s. it is really more so, that it will be a headwind for equities but not necessarily a huge downdraft at this particular time. >> there has been a lot of conversation, in the u.s. in particular, about passing the baton from monetary policy to fiscal policy, and we have seen that handoff fumble a bit here in the last few months. how do you ensure it happens most efficaciously? >> i think it is very difficult. it is a little hard to understand why the reaction of politicians and even the public, to a crisis tends to be fiscal contraction and concern about deficits. when in fact, the appropriate response would be fiscal expansion when our inflation rate is too low. i think what has to -- we really
need to have a willingness on the part of policymakers and even central bankers to talk about the extent to which their ability to control inflation depends on cooperation from fiscal authorities. >> what did you make of the comments that president draghi made this morning about forward guidance and the way that central banks communicate and with how what they intend to do ? how much of the deficit do you feel as to the way the central banks communicate their thinking? >> i think it is true. they have, they tried to communicate their willingness to keep interest rates low for a long time, and one of the ways that unconventional monetary policy had some effect was by demonstrating that they really had a commitment to expansion. that helped to back up their assertions about long periods of low interest rates. i think that communication did
work, and did have some good effects. bloomberg's michael mckee was there and he sat down for interviews with two top federal reserve officials. starting with kansas city fed president esther george. esther: so when i think about inflation, i think about our mandate which is price d the stability. relative to an economy that is growing at 2% and adding jobs, i think you are in a pretty good place and we still have very accommodative monetary policies. that tells me we should begin to, as indicated, gradually removing that accommodation. as long as the outlook supports that we are moving in the right direction, and i think we are. michael: so that suggests you are in favor of yet another rate move this year? esther: that was my last forecast and each time we put
those together is a new opportunity to look at the data. i will be looking at the data in the next few weeks as we get ready for the september meeting and see whether it makes sense. based on what i have seen today, i think there is still an opportunity to do that. michael: so by the end of the year? not necessarily in september? esther: no, not necessarily -- i do not pick a meeting or consider the rate path a commitment. michael: to what extent is inflation a lagging indicator, something that fed officials have argued for a long time? in other words, is the phillips curve broken, or lower than it has been in the past, what has happened to inflation? esther: i don't know if i have a good answer for you there, many people are studying that very issue. things i look at when i look at inflation, the price of goods, that has been falling. maybe that is due to technology. there are a number of factors i think have been pressing down. when you look at services, which is 2/3 of the economy, you see
those rates have been saying at 2% and higher. in the context of the economy we have today, i think you have to be careful getting too focused on point estimates as opposed to the broader trends that you see and the expectations out there. >> i have been a strong advocate that we raise the fed fund rates twice this year, and that gets us to on hundred to 125. my only judgment is that we are making progress on reaching full employment, gdp should grow an extra 2% this year. we are obviously not meeting our inflation target, but the bigger thing i would say is, we are a little bit closer to the neutral rate then people might think. 10 years ago i might have said that the neutral rate, the rate at which were neither accommodative or restrictive, would be at 4% door 5%. today, i think that number is closer to the mid-two's. maybe 2% or 3% range. that means that 100 20 to 25, we
are accommodative, but not quite as accommodative as people would think. i think there are structural forces in the economy creating a muting effect on inflation so i think we should be removing accommodation and it should be done gradually and patiently. i think we look forward to do it gradually and patiently which is all i have been advocating. i want to be patient and see how these forces unfold regarding inflation and i think we can afford to be patient. and does not mean we might not raise it one more time this year but i would like to see more data that we are making progress on our inflation mandate. i think we have the ability to do that. michael: if inflation stays above where it is, does that roll out december for you? >> i still believe that the cyclical forces, as we are removing slack from the labor force, more people employed, we are creating some wage pressure. we are likely to great some lag with price pressure, not the way we have seen historically. i do not think it will be as binary as inflation is moving, i
think inflationary pressures are moving, i just think they are moving gradually and the fed can afford to remove accommodation , therefore, gradually and patiently. michael: if you leave the rates where they are, is that actually going to help bring inflation up? >> i think the key judgment you make when you're talking about if we are accommodative, i think we clearly are. today, for example, it is in the mid-2s, and we are 125, we are still accommodative. i think that is where we are, all things being equal, and i think that the performance of the economy is consistent with that view. ♪ best,"mberg
but investors still have plenty of quarterly results this week , including from the commodity sector. onreporting a miss underlying profit, coming in at and a dividend of 83 cents per share. the headline grabber though, was the company's plan to sell its u.s. shale unit. what is your preferred strategy to make a clean exit? >> for now our prepared strategy is to make a small number of trade sales. we are keeping other options so that we can proceed with a reasonable amount of pace but for now, we think a trade sale would work best. >> how quickly are you planning to complete an exit? >> it is too hard to say, we have to be patient, we know what our businesses are worth. we will continue to add to their value through our technology and some modest investment. but on the other hand, we don't want to lack urgency which is
why we have other options in the wings if trade sales are too complicated and too difficult to execute in a reasonable time. >> it is the world's fourth biggest iron ore exporter and it is out with its annual reports. profit more than double, they are trying to slash costs. talk us through the numbers. we had -- >> we had 170.4 million tons of product shipped. that is an all-time record for fortescue, one million tons over last year, because we have been focused on creating growth and value for our customers and the company. costs are down a further 7%, and in cost terms, that is following our focus on productivity and efficiency to make sure that we have long term costs across the business. we paid down a further $2.7
billion worth of debt with the cash flows we have been generating. as you mentioned, we have more than doubled net profit after tax to $2.1 billion. that has followed on with a dividend of 25 cents, a final dividend of the year. anna: antofagasta in the mining sector, numbers coming in at 1.8 u.s..08 billion, and dollars, and corporate production is up, and the outlook is positive. flesh that out for us a little bit. >> we are very positive on the market and i think the strength of the company, on the back of the first half, also talks to a good outlook in terms of performance. we had a very good high quality set of results in the first half of the year and production is up 7%, sales up 14%, costs down 2%. this has enabled us to capture a
n increasing copper price which we had in the first half of the year. manus: are the prices sustainable and do you see a deficit in 2018 and 2019? >> in the copper space, i think the outlook in the emerging markets, especially in china is much more favorable. we are seeing sustained growth in copper demand, and this is linked to urbanization and the move extra in is doing to the consumer economy is much more intensive in copper when it comes to electronics and the likes. we are also seeing a very significant change or disruption technology wise with electric vehicles in the space of clean energy and clean transport. which is amazing. >> south32 reported earnings that jumped eightfold, the underlying profit rose to $1.15 billion in the 12 month of june. how much of it was because of the recovery we have seen in commodity prices? >> a very large part of it can be attributed to that, betty. very good results from south32. billion --s of 1.1 5
1.15 billion, a little bit closer to 1.18 billion but that is not had. it was about the recovery in the coal price, important to south32 and manganese, south32 the world's largest producer of south manganese. >> commodity prices continue to hold strong, and i think that is predominately fueled by what we see in china. economic development has been stronger than expected and this has led to dramatic shift in the next 12 months. >> salesforce reporting that are better than expected second quarter earnings. they raised their revenue forecast for the fiscal year but shares are falling in extended trading, down about 2% right now. competition is ramping up from companies like microsoft, oracle and cloud services. what is the main take away when you look at the numbers now? >> overall a very good quarter, you will see that overall all divisions did very well, even
the large division sales. i think there is some confusion about billing guidance for next it,ter, but you look at this quarter, it came to around 27 or 28% and i think next quarter it is not as strong. but if you look at a company like salesforce, there's a lot more seasonality in business, like any large software company. a lot more deals close in the fourth quarter with larger clients, and i think you will see a shift in revenue, which is what you are seeing here. >> the chinese delivery giant zto reported earnings that missed estimates. as well as third-quarter revenue forecast, even below analyst 's lowest predictions. what do you do about getting yourself weaned off of one company, and i am talking about alibaba. 75% of your parcel volume is from that company. how do you diversify from that? >> that is a good question. we have been a very long-term and very strategic partner with alibaba.
actually, our exposure to alibaba platform has been declining over time. last year it was about 75% and now it has declined to about 71% or 72% this year. we think we share a common goal with alibaba, because our common goal is to improve the service quality that we provide to the many merchants and consumers at the alibaba platform. so that we can attract more merchants doing business through the alibaba platform and also attract a lot more consumers to spend on the alibaba platform. everyone will benefit from that process. >> the shares in wpp has plunged this morning, after the company -- the world's largest revenue company cut its market spending particularly in the consumer goods sector. >> there have been concerns and there is real confirmation
that the pressures people feared, such as cutting back on spending on its biggest clients. that is starting to hurt wpp. mark: the ad market has been hit recently because of brexit, but you whether that. >> the u.k. is one of your strongest performing regions in the last quarter. how are you weathering that? >> well, i think that may have something to do with more the micro level and we had a strong market share, a lot of good people, doing a very good job. that is one thing, maybe the other thing is -- and this is just a hypothesis, that with the answer to around, fixed -- uncertainty around, fixed capital investment, there is a lot of pressure. there are signs indicating that it is under pressure and the brand innovation, in the context of this uncertain environment, as we may or may not go through a transition period in brexit after march, that could be putting more pressure on and people could be taken the other route to invariable investment
in marketing. julie: bringing fresh produce from rural farms to urban tables can be a challenge. but it has also crated opportunity in the growing industry of urban farming. gotham greens builds and operates greenhouses on rooftops in major cities, using technology to make it possible to grow food year-round. the cofounder and ceo tells us his story in our latest edition of "small to big." ♪ >> gotham greens is an urban scale high-tech greenhouse facilities for fresh vegetable production in the city. i was working in the field of sustainability and environmental engineering and i became fascinated with the technology that was available to be able to grow crops using a small fraction of the resources compared to conventional farming. at the same time i started to recognize the growing trend in the marketplace for consumers wanting more local and regionally sourced foods. that is really when the
lightbulb moments went off. we cobbled together some funding and built a 15,000 square food rooftop greenhouse in the greenpoint neighborhood of brooklyn. in 2011, we started pitching market chains, restaurants, inviting chefs into greenhouse facilities and within three months we were completely sold out of produce. that is when we realized we were onto something and could probably expand. then a really compelling partnership opportunity came on with whole foods markets, which has been our largest customer. we crafted an idea to design and build a commercial scale greenhouse in the roofs of one of their new supermarkets in brooklyn, new york, that was almost double the size of the first one and provided our brand with a lot of visibility. lo and behold, within a few short months of opening the second greenhouse facility, we were yet again sold out of the produce. so we started to look at chicago, which is also a city with a thriving food culture and consumer base demanding
high-quality fresh produce and that facility is our largest to date, about 80,000 square feet, about two acres, the equivalent of about 50 acres of farming. this form of farming known as controlled environment agriculture is a combination of horticultural science as well as environmental engineering. it was a challenge finding people with a very unique skill set. we conceived of an idea to establish an in-house training program we now call gotham greens university. we are able to take young graduates from university who focus on science and biology and train them to design facilities and operate them. our company has built four greenhouse facilities across two cities and we have about 150 employees. we have experienced about a 20 x growth rate since inception. in our first year of operations , we grew about 500,000 heads of lettuce and leafy greens. last year, we grew over 20 million heads of lettuce and leafy greens.
i believe the future will have us expanding to other cities across the united states, expanding in new product and new product development. our motto is to be able to harvest and deliver within 24 hours, to be able to provide consumers with the freshest possible product and the best tasting product. ♪
♪ >> i am looking at a chart of an intraday california solar production. this is the last three days, try to spot the moment when the sun was blotted out by the moon. actually, i highlighted it, it is cheating. julie: there are about 30,000 functions on the bloomberg, and we enjoy showing you our favorites on bloomberg television. maybe they will become your favorites. here is another you will find useful, quic go which leads you to our quick takes. you can get important context and fast insights into timely topics. here is a quick take from this week. ♪
♪ david: at one point, your father left your mother. ginni: it was sudden, and my mother found herself with four kids and no money. david: talk about ibm. ginni: we are the champions for business. david: when you meet with a president, are they willing to say -- are you willing to say, mr. president, that is not a good idea? ginni: people are respectfully honest. david: do you feel a certain responsibility for a role model? ginni: women do need role models. david: in the stay fit category. ginni: the difference is he does not get to hit me. >> would you fix your tie, please?