Renewed fears of hard landing in china.
A severe slowdown in the world's second largest economy.
Given these two iconic american brands, twinkies return to store shelves today.
They will stay there longer.
Federal express delivers fundamentals.
Dust off the resume.
Linkedin's job is to get influential.
Good morning, everyone.
I'm tom keene.
It is wednesday, july 10. joining me as always -- i'm joined by sara eisen and scarlet fu.
Author of the wonderful book stewardship, it is an important time to speak with john taft.
You are fully invested in your 401(k). i would hope so.
The executive director of linked in is here.
Recruiting big influencers.
Let's get you some original content with your morning briefing.
The latest trade data shows exports and imports declined in june.
More evidence of the economy slowdown.
U.s. economic data, in the next hour, mortgage evocations -- wholesale inventories were made after the markets opened.
In the afternoon, we get minutes from the fed last meeting in june.
Ben bernanke will be speaking at the national bureau of economic research conference and he will take questions as well.
Earnings to give an eye on -- yum brands, pizza hut and taco bell.
Nber -- thi sis a big deal.
The audience is smart.
This is the group that calls recession in the united states and looks of the economy.
He will get tough questions on monetary policy.
Our chief economic correspondent would love to be there but he is on assignment in jackson hole, wyoming, fishing.
Are you kidding?
He is hanging out with fed presidents.
A data check.
Finally, a negative day on futures after the celebration of last week.
Just down a fraction.
The euro was weaker in the last 24 hours.
I would suggest that china did not move the market, but there it is, a significant new bout of hard landing.
Use the reaction in the japanese yen.
It is strengthening against the u.s. dollar and strengthening against the euro.
We will look at the dollar as well.
The dow jones is getting at near record highs.
We will talk about the jack lew dollar.
Do you think you're creating that?
we are inaugurating the jack you -- lew dollar.
An interesting mix.
We want to get right into it with our guest host, john test -- taft.
The author of "stewardship was quot." are they concerned about policy?
They have to look at the trailer for the movie and what is what it happened when interest rates rise.
What they're going to do in the month of june what individual investors are doing -- most of the money is in retirement dimon.
People are moving to retirement.
They are trying to thread the needle and try to generate deals so they can live off cash flow without exposing themselves to much to the kind of economic scenario down the road.
We saw in june what is likely to happen when interest rates rise.
All the yield the investments sold off.
High-yield product, that type of thing.
The question now is, you have seen the trailer and what are you going to do to prepare yourself for when interest rates rise?
It is all about quality.
To the older viewers, the retirees than a bit hammered the last five years, is the financial repression over?
Yes and no.
The era of loose money is over and the era of low interest rates is over.
That is good news and bad news for retirees.
Down the road, they can look forward to higher yields.
Avoiding principal losses as the market becomes volatile.
We will touch on that through these hours.
A busy day.
On our front page is china's economy.
It is growing faster than the market had expected.
We are wondering if there will be a hard landing.
Exports are down in june.
Weakness and imports.
A weak demand domestically and abroad.
If anything, he has shown he is determined to prove to banks how serious he is about rates soaring.
The markdowns yesterday, eight 7% china.
If wall street starts to talk about a six percent gdp, this is a tightly controlled process.
The actual economy.
Italy was a big talking point among economists.
They are in control of the economy.
Yes, social unrest and the qualities are a concern.
This is a managed economy.
Another story making the front pages -- banks, washington is cracking down.
Addressing the firms that are too risky and too big to fail.
We are talking about regulators trying to force banks to become smaller and more conservative . they are trying to double the amount of capital.
John taft, you have written about this extensively.
We have talked to the ceo recently and they estimate a $16 billion cash call for jpmorgan.
If the proposal gets incremented as it has been described.
We are five years after the dodd frank act.
We are still only about half, depending on how you count.
Halfway through implementing the act.
This is another step in doing all of that.
The the last five years, we have been moving ships from the growth side of the equation to the safety and sound or sight of the equation.
The question is, how we got right or are we going too far?
Are we going too far in making banks utilities?
I think we are on the verge of going too far and we are putting too much on safety and stability and going to impact the ability of banks to lend and do other things to stimulate economic growth.
I think we are at that point.
We always get there and with predatory reform.
-- regulatory reform.
It is about creating the animal spirit that allows a small business to do better.
We did not see that yesterday with the survey.
Sir -- small industries are still flat on her back.
Scarlet, what is this about?
It was a fruitful journey.
Some say we are not enough regulation because they cannot agree.
Another story that is making the front pages in our world, the sun valley conference begins.
Leaders in technology make their way to this resort to get smarter and make a deal or two.
Top executives have arrived including tom cook.
It has been a tepid year for mergers and acquisitions.
Media has been on fire.
It is the third most active industry after food.
It is the sun valley of creative destruction.
The flow of content across the internet.
The internet is destroying all of mainstream media foundation, isn't it?
I am not sure if it is empowering it at the same time.
You're seeing leaders having to make new decisions about where to invest their money.
There has never been a time to get people's attention like we have today.
You can reach the right people at the right time with the right headlines.
Doing that is difficult and it is not the same world we used to have.
It is a crowded world.
Where do you perceive we will be in five years?
Will newspapers exist?
I think so.
I think france will continue to exist just like radio -- i think brent will continue to exist -- print will continue to exist.
Google glass -- i want the fongt bigger.
The question is, who will lead the charge?
Our twitter question of the day, who is the king of media?
Too many to choose from.
Tim cook of apple, mark zuckerberg, john malone all gathering in sun valley.
I cannot wait to check in with jon erlichman to talk about who he thinks is the king of all media.
He is in sun valley, right?
Tom keene would like to be the king.
We want to go to company news.
Fedex -- shares are soaring yesterday on speculation apple could take a stake in the company.
The company focused for an investment.
Ubs knocking off bank of america.
Managed assets rose by almost 10%. slightly higher than bank of america.
Wells fargo is coming in at number three.
Citigroup is putting west coast branch is up for sale.
It is looking to sell 90 branches for more than $300 million.
Citigroup host -- hopes to lease back.
Coming up -- walmart is putting out a regional manager with a very powerful op ed, pushing for new legislation out of washington.
What they want next on "bloomberg surveillance" on bloomberg television, streaming on your tablet, your phone, and bloomberg.com.
? this is "bloomberg surveillance." i'm sara eisen.
Bill ackman is at it again.
This time, he may be going after fedex.
Shares are spiking, but it is your situation.
What is the story?
He sent out a spec is talking about his next big investment.
One primary operating business.
He did not name names?
He did not but merrill lynch says a company like fedex fits the description.
This is the market taking off on its own speculation.
We saw shares spiked up.
If you look at what fedex does, it does fit a lot of criteria when you compare it to ups, its biggest rival.
On a dividend scale, fedex only has a .6% yield.
There is a lot of room to make improvements.
The number of shares trading, it was phenomenal.
Six times the average daily.
Any idea what type of stake he would take?
It would be a global to about $1 billion in terms of the amount he would buy.
What is interesting, people are talking about what kind of changes would bill ackman or any type of investor would push for in fedex?
They have been restructuring for the last couple of quarters.
The express unit is the highest revenue generating units but lowest margins.
Copies have been trading down particularly in asia.
Here is a comment from bloomberg asia -- one of the analysts.
David campbell here on fedex.
It is not a simple business, not predictable.
That is a push here.
They have 21 buys and 10 holds.
The bottom line, bill ackman did cite a company with power.
He is trying to keep the fedex bill down.
Every ceo has to deal with this.
I am trying to be digital whenever i can.
The problem is that fedex does not have a contract with amazon.
That has hurt them to gain market share.
Some analysts suggest that is one area bill ackman would want to push fedex towards.
How does fedex work with you?
And what does fedex think of link in?
He can say maybe i will invest in that.
Looking at some of bill ackman's other names that have been in the news, jcpenney, herbalife -- what has worked for mr.
Canadian railway is not as big of a disaster as jcpenney.
Doesn't warren buffett goto sun valley?
He is the new king of all media.
That is the twitter question.
Coming up -- we will take a look inside rupert murdoch's media empire.
What might he by next now that his company is split in two?
On bloomberg television, streaming on your tablet, your phone, and bloomberg.com.
? this is "bloomberg surveillance." top headlines this morning.
Egypt interim prime minister is set to form a cabinet.
Cabinet negotiations will last a few days.
He also said he will offer the muslim brotherhood a place on his political team.
Regulators are cracking down on some debt election practices.
The protection bureau wants to penalize the nation's biggest the banks of they mistreat consumers on they try to money they loan.
Federal law now governs third parties when trying to collect debt.
More details on the asiana airlines flight.
Investigators say two flight attendants were ejected from the plane and ground on the runway upon impact.
Investigators were also told by the pilots they struggled to align the jet for landing while realizing the plane had slowed too much.
Those are your top news headlines.
Investigations are continuing.
You wanted story by story.
My basic take is that the ntsb are doing their job.
Our discussion yesterday with the pilots -- a critique on the big boards.
The new york stock exchange taking over libor.
Handing off the benchmark to owners profit ability depends on the credibility is not a bad idea.
It gives its new owner a billion reasons not to accept the status quo and it just not -- isn't right.
Did we steal libor from the british?
I think it is an important step in the financial markets.
It is the iconic independent index.
More contracts are based on libor than any other.
This gives us a new start.
I think it is a critical step in confidence.
Out of the washington post, an op ed from walmart is writing about new legislation that would require a few large employers like walmart to pay a starting rate is more than five dollars above the minimum wage.
He said that absolutely not and vote against this today.
It is also being taken up in washington where he is planning to expand walmart empire.
He says shopping dollars would stay in suburbs and appointment would remain in double digits.
It would be devastating.
He has threatened that they would not be able to continue expansion.
This is just about the district of columbia.
Those of you internationally, this is about the small region around our nation's capital?
He wants this bill to be shot down and he wants the mayor to come out and veto it.
It makes sense to me.
You can't apply to one region.
He says they have done a lot of research and surveys about what consumers want.
They want low prices and they want jobs.
He threatens that walmart is not going to be able to hire people if they have such an onerous lw aw.
It is an ongoing battle and we had the great jobs report and that we have to wait for the wage increase.
The question has been for a while whether we are getting improvement in the quantity of jobs are not the quality of the jobs.
Coming up -- you want want to miss this.
The 20th coming back.
It will be made -- the twinkies are coming back.
? . . don't miss this interview later on bloomberg television.
Larry fink, blackrock ceo, 10:00 a.m., i will be speaking with them with erik schatzker on "market makers." what are you going to ask them?
I want a preview.
We will ask him about -- larry fink is a genius.
Trillions of dollars in assets.
The question is what do you do with the potential imminent shift in policy from the fed?
I would like to know what he is doing and as from about lower bond rises.
Our guest, john taft, just mentioned that.
They get earnings on friday with this reality, bond prices down, yields up.
You wonder if you were saying any withdraws with these big assets managers.
What you bring us that?
Let's do a data check.
Negative on the equities finally, but still a bang up week.
The vix 14.35. euro-dollar, 1.2817. and crude, this is been a quiet story, putting it on even with tough china economic data, 102,103. intermediate crude, almost to $105 a barrel.
In terms of gainers and losers, homebuilders are higher.
All have climbed in s&p. darrell horton one of the biggest gainers -- d.r. horton at one of the biggest gainers.
According to bankrate.com, all the indicators are that the housing market continues to be strong.
In terms of quest diagnostics, that was a big loser yesterday, morgan stanley said there are some risks to its reimbursement policy.
That risk increase is certainly bad for earnings overall.
Forget gainers and losers, this matters now.
Wikis's are making a comeback.
July 15, american classic returning with a longer shelflife.
The twinkie has a tough ride.
It is not just the shelflife.
I have got to rip up the script.
There is a mammoth on the cover of the "wall street journal" today.
35,000 years old, they found a twinkie with it.
There was a twinkie with it.
Scarlet, you have been looking into some of the changes at twinkie.
They are making it last longer.
They are, not quite as long as that matt met -- that mamet, but it will last longer, 45 day shelf life and that of 26 days.
Three weeks longer spirit they will not say what specific changes they're making to these snack cake.
But we have heard from the "know your post," for instance -- " new york post," for instance, the y will freeze them in the store will fall them.
That is the difference from when the unionized drivers would do it.
Everybody is sugarcoating this.
Are they bringing back the little strawberry puffy things?
I never liked those.
This is a serious discussion for america.
Dan roth of linkedin, we were what, 15%, 20% union 8 million years ago?
Now i think we are 7% union.
Particularly in the private sector.
In private sector, the world of capital and wage mobility, they are struggling.
This is a new world of the internet.
This is one of the distinguishing features of innovation.
I'd like to use that word, but i use it here.
Freeborn innervation within the internet, you do not have to worry about unions, do you?
When you look at twinkie's, it is less about unions -- it is a lot about unions, but it is figuring out what works and does not spirit looking at data, where are things selling this is a small company now.
It got to be shaped like a small company.
There is still a nostalgia here, and they are selling snack cakes.
You've got to have the right workforce or something like that.
It or come back to the workforce with linkedin, executive editor dan rath -- dan roth.
What are they going to do?
They have a clean state because there is no debt.
There are still some union workers.
Workers that they are hiring back, their pay goes from $15 an hour before to about $11 now with the opportunity to raise it to maybe $40. that is certainly a take up for a lot of those workers.
But the ceo of the new hostess is making a couple of changes.
He has a history of doing this with food companies.
He turned down chef boyardee and sold it back to its original owner.
He also took pabst blue ribbon.
They have got a new marketing slogan as well.
The suite is comeback in the history ever.
They're going to look to expand their distribution.
They're looking to place these twinkies in 100 10,000 convenience stores as opposed to just 50,000 convenience stores previously.
They have got this plan they're going to embark on.
But dan rath said , john taft, how do you sell nostalgia?
You have a bull in a china shop, remember that iconic ad.
Correct i did -- i do not know that it is iconic, but values in competition, price and service, and the financial services industry, that is all about stewardship.
It is all about integrity.
Stewardship, he got that in there.
Two summers ago, my book by charles dickens is almost as good as the book by john taft, "stewardship," every kid beginning to invest should read it.
I want to put closure on the twinkie discussion.
I want to know if they're going to bring back hoe hoes.
They're bringing back other snack cakes, but what they are also doing with twinkies is make them healthier.
I am looking at you when i say that.
A good way to top it off.
Sweet is the history ever.
We will see the works.
Coming up, linkedin influencers.
Are you on its?
President obama is, jamie dimon is, meg whitman is, tom keene is, we will talk more about this with the world's top spot leaders share the professional insights.
He is a thought leader.
I hate that phrase.
That is next on bloomberg "surveillance." this is bloomberg "surveillance to go i am sara eisen.
Here's always with tom keene and scarlet fu.
Chinese exports and imports both fell last month.
Exports tumbled 3.1%, a gain of 3.7% was forecast.
Imports slipped .7%. that was also projected to be a gain.
Top investors soured on breaks.
Capitals from zillow, russia, it india, and china sent a soft one manager -- and currency down together.
Investors withdrawing almost $14 billion from equity mutual funds.
This according to epf are global.
Fed -- federal relators are cracking down on debt collector practices.
They want to penalize the nation's biggest bank if they mistreat customers when they try to collect on money they loaned.
Most of the law now governs third parties who are trying to collect on debts.
Those are your top new headlines.
Here is the single best chart.
It is on what happens when a new ceo takes over a company.
They usually clean house.
We know that.
They want to stock it with their own people.
Harvard business review , when a ceo comes in from outside the firm, the chief human resources officer gets replaced almost half the time.
The chief marketing officer and chief legal officer also get replaced at least a third of the time.
How about when the new ceo is promoted from within the company?
They will change the coo, the chief operating officer, the heads of a joke -- of hr and others will stay blue -- state put.
The cfo and the head of hr the right and left wing of any ceo.
They are the people that the ceo come to trust, and they want their own guys at the job.
The chief legal officer, this is just speculation on my part, but they know where the bodies are buried, see want to bring in your own by each time immediately.
Dan roth of linkedin and with us today, this is to your content focus that link then, but what do you see about a sea change at a larger ration at linkedin?
I think it fits right in with the idea of having communication, maybe trigger talking to the right people.
When a new ceo comes in, who rises above everyone else that the company, who do i need to rely on, and as we think about how you operate in big companies today, it is about making sure that you have your own brand you are known as someone who has good things to say.
That you are -- you can stand above the crowd.
How do you do that?
You write op-ed for the "washington post," you share great stories, you are someone who has great idea that the meetings, and the ceo gets to know you so that when he is looking at the list of people who are about to be cut, he says i need a guy, he is a good bet to stick with theodore know this woman, she is amazing, she shared this great story with me.
She is a thought leader within the company.
John, you deal with this every day at rbc capital's, the idea of leadership, it's part of stewardship, you just can't clean house.
And you bring in new officers to go -- did you bring a new officers?
Every leadership changes different.
You want to promote continuity, or are you taking over in a situation where dramatic change is required to jumpstart?
I would approach every case differently.
Tom, you need to have a balance.
You need new ideas, but you also have to have institutional memory.
If you lose that, you are addressed.
That's unlike and influencer advice right there.
Let's take a look at photos that are to making news.
We're going to start with quebec, canada, where a worker , that massive training sludge that occurred this past weekend, more than 25,000 gallons of crude oil have been spilled into the river.
At a working a conversation about the safety of trains as a mechanism for oil.
It has become a big deal.
The keystone pipeline takes on a whole new color after this.
Was moved from windows -- from oil to wind.
A wind turbine owned by the meridian energy company, new zealand government excited to raise over 2.4 brand dollars -- $2.4 billion selling part of his company could do they make noise?
I flew over a bunch of them a week ago.
Are they noisy?
I think so.
Their huge, they've got to be.
Our last photo is back here in new york city.
Obviously temperatures have been superhot.
Really high 90's and above.
Here is a shot of a new bar, rub your for coats, is called minus five ice bar.
It opened yesterday.
It is kept at 23 degrees fahrenheit, or -5 degrees celsius.
Only feet -- only 50 people can be in the bar.
Are you serious the echo is this a -- are you serious?
Is this a permanent installation?
It is an actual business.
I have got a treat for you guys for my last first look here.
Tom, you're going to love it.
They have winter coat on.
I'm going to take you to italy now.
Some video i shot while on assignment there.
Paul volker and robert mundell, two of the most famous economists in the world, playing ping-pong come and they're quite good.
Are you keeping score?
Did you have a little tuscany wine?
You are filming this, right?
Eso into it that he took off his blazer.
This is this is a nice little break in between the conversation on regular show and and quantitative easing.
For those of you that he not know this nerd stuff, the guy on the right here is robert mundell, he invented international -- he was the precursor, the professor for many, and a guy named krugman down the princeton, he was the god coming out of world war ii on economics.
It is -- he is also the worst ping-pong player.
It does happen to be the few seconds that i took it.
It is a nice tradition that they gather.
Did you play ping-pong?
I do not care she was filming.
It was a great moment.
Coming up on bloomberg, is linked in the new platform to central bankers?
We heard from japan's prime minister.
He joined the program.
We will talk about this key strategy for linkedin and what it means for the future of their business next on bloomberg "surveillance." this is bloomberg "surveillance yahoo!." joined as always by tom keene and sara eisen.
The treasury department it official.
Aig and general electionric have labeled it systemically important.
Prudential financial was also considered to be systemically important, but it is appealing that proposal.
Meantime, t-mobile breaks a losing streak.
Bloomberg has learned the wireless carrier added hundred customers for the first time in three years.
This return of user growth is six months ahead of schedule.
T-mobile is scheduled to release details of its progress later today.
And hulu has received two bids, each worth about $1 billion.
Bloomberg learned that directv made one of the offers for the online tv service.
The other came from a partnership between at&t and the turning group.
-- an eternity group.
Time warner cable has offered to acquire a stake in the company.
We will be talking more about hulu and media deals in the next hour of bloomberg "surveillance." linkedin, setting itself apart from twitter and facebook of a social media platform for professionals.
A decade and 200 billion users later, it is still an internet rolodex, but is trying to do much more than i feared linkedin has become a media company.
President obama, bill gates, all among more than 300 contributors who have used linkedin's influencers rober appeared the feature allows 225 million of its users to read original content from ceo's. now the new is influencer , john taft, is here.
And tom keene, also and influencer.
What is your experience?
I was really suspect about this.
Dan had to sell me on this.
The first day, i'm sitting there on it, next to barack obama, and i am thinking this is a cool thing.
He had a few more followers than i did.
I met new people off of this influencers.
Dan roth, you are the executive editor at linkedin.
This is somewhat your baby as you try to expand the media and the content reach of linkedin.
Talk about the influencer program.
Our goal is to make sure people are coming to linkedin everyday to get the insights they need to be better at what they do.
We get those insights by talking to people like tom keene, by having the ceo of hp or the cleveland clinic to write about what they're seeing.
The first eight years of linkedin's exist and that was all about connecting people with each other, getting your network types.
For the last two, we have connected people to insights.
That is what this is all about.
Getting some of my john taft to write about what he is seeing in the markets.
What is the most important thing that is going on in his world.
And what you see is people are responding to it.
Every post gets about 100 comments.
No one is anonymous.
When people are commenting, they're commenting with their professional identities.
When a comment, their bosses see it, their employees see it, their business partner cia, so there is no trolling, no flame wars that go on.
People are respectful, they push back, but they are respectful and you know who is saying it.
So that level of engagement is what you are pushing linkedin to become more than just an internet rolodex.
Something that people can log into and stay on the whole day.
We realize people are busy.
If they just come in once a day to check in on linkedin, and then they go read a story on bloomberg.com or the "wall street journal," that is great.
If they come back three or four times a day, that is even better.
I am doing something like this.
Maybe you can run over and see this, i did this yesterday with business insiders, just a bunch of charts.
These are nine charts that i am watching.
Just for you -- i do this.
This is the opinion of a shameless plug.
You have shinzo abe, how did you acquire the influence of a leader of japan?
To see who is already on the network when you have folks like bill gates who are writing, or the president, david cameron -- john taft of rbc -- exactly.
That was the big push for shinzo abe.
You work the same channels you would normally to explain the power, and he's all the ability to talk to worldwide markets with his -- i'm just wondering why the business decision.
Are you trying to capture ad dollars from facebook and twitter?
This is not about -- this is about getting people to come back.
This is about making sure that we have content and people want to read, and their -- they are engaging with your grace you are curating, scouring what is available and putting it together in a thoughtful way.
We do curate content, we have about one .2 million publishers who feed into linkedin today, which is driven by our rhythms that try to match headlines to the right professionals, but we have original content.
We will reach out to john and say things are blowing up right now -- it is a great business model because he's doing it for you, you are not paying him for it.
If i go to the bloomberg every morning, or i go to whatever news organization every morning, you want me to go to linkedin every morning -- where are you going to be in two years and that project?
Number one, we want to get to check in with us every morning.
Eventually, we want you to check in with us before you show up at a meeting.
The kind of things discussed in the meeting, you will have seen on linkedin.
You will get ideas that you want to bring up before you meet with somebody, before you enter a business deal, you want to check to see what are the topics that are trending on linkedin, what can you learn by what you see here.
Let's do the deal right now.
And we just strain bloomberg "surveillance" breakthrough linkedin?
Let's do it.
I want to know who determines who the influencers are.
Is that your job?
We talk about it everyday.
We try to make sure there is a balance balance of the right kinds of people that we are -- if we have so many ads -- blonde with beautiful rhinestone necklaces.
That is on my top list today.
Black dress with beautiful needlepoint.
We're looking at the data to see what people are reading, what they are responding to.
We know the people are are.
We know what industries they are injured george clooney just broke up with someone.
You could do this.
This would be great.
I do see you doing this.
I could be in influencer on celebrity gossip?
One of the great things is people come here for contents, so we have no solidity, no kardashian have ever shown up and linkedin.
There was my career.
If you wonder about interest rates, we will take you.
Dan roskam exec of acucar -- executive -- dan roth, executive editor of linkedin.
We have don taft -- john taft.
Do i need to be fully invested right now?
You need to be fully invested and water early overweight equities.
Moderately underweight bonds.
You need to look at the defensive and focus on quality in everything -- that is the cool thing.
That is the tweak.
Here need to be in the markets, but offensive.
That is the hardest thing to do this july.
John taft, great to have your here, i've always from rbc.
Coming up on bloomberg "surveillance," bill ackman in the news again.
Why fedex may seem so attractive for the activist investor.
Coming up on bloomberg "surveillance," on bloomberg television, streaming on your tablet, your phone, and bloomberg.com.
Get out the bear repellent.
Moguls and tycoons, they arrive at sun valley.
Some of the biggest deals in media were hatched at the mountain zone powers meeting.
The new phones may be smart, but blackberry pevely's cheat executive officer has decided were flawed.
When it comes to real estate, manhattan is the million-dollar bureau.
A stronger dollar will not put a dent in the world's appetite for america's trophy properties.
Good morning everyone.
This is bloomberg "surveillance ." i'm tom keene.
We're live from our world headquarters and new york.
Turning as always, sara eisen and scarlet fu.
Our guest host this hour, michael wolff, the man who brought us a wonderful book, an interesting book on mr.
Murdoch, the man who owns the news, of course, a columnist at "their duty fair." -- "vanity fair." tycoons meeting in idaho.
Also joining us, the director of research at horizon media.
First, morning briefs.
Latest trade data out of china showing both export and import surprisingly declined in the month of june.
Just more evidence that the economy in china -- this is a big deal.
Not to say normal, moldy data.
It was a surprise.
Economists were looking for a gain on both experts and import spirit experts of course are the engine of the chinese economy.
Data on the calendar for the united states to stop this hour.
Mortgage applications, 10:00 a.m., wholesale inventories.
The biggie -- 2:00 p.m., minutes or notes from the last fed meeting in june.
At four: 10, ben bernanke will be speaking to the national bureau of economic research conference.
He will be taking questions and answers.
Some earnings to keep an eye on.
7:00 a.m. this hour, family dollar.
After the bell, i will be watching yum brands.
They owned pizza hut, taco bell, kfc, and they have been expanding rapidly in china.
It has been a good company proxy for how china's economy is doing.
I will get over to scarlet now with more company news.
We've got to start with fedex.
It may be nexon bill ackman's shopping list.
Shares of the shipping sort -- store -- ackman could the ake a stake in the company.
He was targeting a large cap investment grade company for investment have as much as $1 billion.
Ubs knocks off bank of america.
The swiss bank taking a the number one spot and ranking of the world's biggest wealth managers.
$1.7 trillion at ubs last year.
That was slightly higher than assets at bank of america.
Wells fargo coming in third according to data from research.
Citigroup is putting some west coast branch is up for sale.
They're looking to sell 90 california braces for more than $300 million.
Citigroup hopes to lease the branch is back after the sales.
That is today's company news.
One of the big stories is the sun valley conference out.
It has begun and sun valley, idaho.
It is more excited this year because deal activity in the media and tech word has been hot.
Overall, deals are down.
If you look at companies across the board, not media, media has been an explosion of mergers, acquisitions and spinoffs.
What is great about this is there is a lot of speculation and rumor and all that about media.
Would be nice talk to somebody that actually does a zillion things at media.
Michael is iconic and that recalled -- in that regard.
Why are you in sun valley?
They never invite me.
This is a serious point.
They are afraid of you.
And fairness, there really is no press there.
So the better question is -- why am i not invited to make a deal?
I don't know.
Probably because of all the money i've lost?
That should not stop them from inviting me.
You are one of the rare people that actually knows about eyeballs on the internet.
I assume hulu is front and center out there.
Are they going to destroy hulu as we move from a content- driven hulu of the world you are into, scarlet held here.
At&t am a time warner cable and others would buy this.
Does hulu even exist in two years?
I have been wondering this.
There are a couple of -- the plays -- depending on the buyer, the plates are different here.
If it is a directv play, that is a consolidation.
That strengthens their position, if it is a chairman play -- a chernon play, that is i want to be involved.
I assume that a deal will be, if not completed at sun valley, it will come to close to a resolution.
It has happened before, back in 1999, time warner-aol merger, that was hatched at sun valley gekko.
Scarlet, you have got breaking news.
It is great to have michael wolff here because we have news from "tribune" that it is splitting of its publishing unit from its broadcast unit, taking a page out of what news corp.
The publishing unit will hold assets like the "l.a. times," the baltimore sun logo and its broadcasting unit will include the new tv stations it has acquired.
Announces not going to sell.
It is going to split your they said they're going to spit out the publishing assets into a new company.
. i think the play there is still they are looking for a buyer of that company.
Or of the assets -- rupert murdoch the buyer?
Murdoch is one of the buyers.
There are some pe guys looking at it.
And then he koch brothers.
The goal is to maximize shareholder value.
This is the fashionable thing to do.
It seems to increase your holder value.
Nobody wants newspapers.
It is that simple.
Newspapers not only getting rid of them, not only gets a depressing thing off of your books, but it raises your share price.
You essentially creates a company, a free company for yourself because your share price goes up on other companies.
We could literally spend the whole hour, to me this is iconic, standing on the shores of the chicago river 10 days ago, and there is the wrigley building, you go from the iconic "tribune" building in the wrigley building next to it and now we are jettisoning this off.
Q to one of our other top stories.
Bill ackman at it again.
You might be going after fedex.
The shares spiking on august speculation.
We're going to check in with the limbeck are -- it is a market that is taking off on the speculation.
Do you believe that this is a good fit for bill ackman to pursue a stake in fedex and make the changes he is known for making?
I think that has been a story with fedex.
The company is in the middle of an improvement program to cut 1.7 billion out of cost.
Most of the investment community believes that a bunch of investors could cut costs that the current management team cannot necessarily do it and get over the finish line.
So i think that is what i have heard in marketing in the past six or eight weeks.
That people are hoping they be inactive as investors stepped up.
Helane, i want to clear up the mess triggered bill ackman says the company is looking at simple, principal, free cash flow generated at high barriers to entry, high customer switching cost, and substantial pricing power.
You know fedex and that.
Does it fit that bill gekko?
Some but not all.
It is not generate much in terms of free cash flow.
It could, but they've got a $4 billion program this year.
We estimate $400 million in free cash flow.
You cut that back, and they would generate free classical -- free cash flow.
What about fred smith, the founder, ceo, and chairman.
He would be a formidable opponent for mr.
Rmb member the mandatory retirement age is 72, and fred is 69. so he would love to say at the company and get it turned around and get back on its growth path, it may be gross wth is not the watchword for fedex and ups anymore.
It is possible they will grow them i'm with gdp rather than exceeds gdp growth.
That goes to the heart of the matter.
Is this a utility business now you go?
That is a great question.
That is what i am thinking and seeing more and more with respect to -- there's been a secular change in this business.
Remember, fedex what started as a post office replacement company.
With e-mail you not really need the overnight letter anymore.
It has moved more into packages.
It is not that important to get the packets there at at 8:30 anymore as that was maybe when they first started.
There has definitely been a change.
Helane becker, thank you for your insight.
Let's look at the insights . not as much of a market move up to china news, but futures finally pull back negative two, 10 year yield, 2.63%. euro turns, 1.2823. talking about a weaker euro, stronger dollar.
Hydrocarbons, this is the back story of early july.
Oil suddenly expensive.
$105 on west texas intermediate.
We let the media prose here at bloomberg "surveillance echo coming up, rupert murdoch letting his -- splitting his prank of spirit of and a profitable move.
We will discuss his next move.
Bloomberg "surveillance," on bloomberg television, streaming on your tablet, your phone, and bloomberg.com.
Good morning, everyone.
Bloomberg "surveillance." i'm tom.
We just learned the "tribune" was leopard we have the right guests to speak about this potential transaction.
Michael wolff, his book on rupert murdoch, and of course a multifaceted view of what is going on in the media.
Michael, tribune is going -- " tribune" has been a train wreck.
What is the company stand?
It has come out of bankruptcy, sort of a new beginning of sorts.
They have the "tribune " company with two legs, a broadcast leg, a newspaper leg, i getting rid of newspapers, pushing them out, the broadcast leg is immediately stronger.
Share price will go up, everything looks rosy -- as we have seen with fox.
Newspapers are depressive.
They are depressive on share price, and they are depressive because they take up on a norma's amount of attention.
Warren buffett it's not agree with what you just said.
He is acquiring his a preferred what is the dissension?
In the of newspapers he is requiring -- acquiring.
Very few newspapers, they're really not relevant to berkshire.
It is favors he has acquired are in -- they're not big city is favors here they are monopoly papers with good, strong advertising.
"l.a. times" is strong.
In five years, if the paper business collapses, can a big city newspapers survive as a digital property?
We have not seen it yet, so possibly.
Everybody is trying.
That is the holy grail out there.
Has anyone gotten their gekko nore?
the price of these papers, they make money, they don't make a lot of money, but they do make money.
The question is, how can you manage these things?
You are essentially managing shrink but -- shrinking businesses.
Murdoch by the "l.a. times." he has a licensing problem on that, assuming he can get over that.
It is certainly something that i think he would be interested in.
Probably would like to do.
Michael wolff, thank you so much.
Our twitter question of the day --who is the "king of all media" now?
My vote is michael wolff.
You can tweet us @bsurveillance.
We have that much more for you in this hour on the media, particularly looking at the markets ahead.
This is bloomberg "surveillance." good morning, everyone.
Bloomberg "surveillance." on bloomberg television this morning, 10:00 a.m., this is an important conversation.
Ivan, shatner, with lawrence think.
-- with larry fink.
I'llmarkets on the move . larry fink on the bond market and what we have seen with prices now, yields up.
And ben bernanke -- you want us to talk about the washington stuff.
I want to what they say in the bond markets.
Meanwhile, in top headlines , a surprising slowdown in trade in china.
X werth and imports both fell.
X were stubbled -- exports and imports both fell.
X ports tumbled 3.1%. imports slipped .7%. economists projecting again for him points.
-- four imports.
Russia, india, and china has said stock bonds and currencies to those nations all lowered to gathers for the first time since 2006. investors withdrew almost $14 billion from equity mutual funds invested in these countries, all of these according to etf are global.
More on the ag on a siana crash.
Two of the flight attendants were ejected from the plane and thrown down the runway upon impact.
Investigators were also told by the pilots that they struggled to align the jets for landing while realizing the plane had slowed to much beer does your top news headlines.
That is a miracle of the week.
We sought unraveling on twitter and the social media, michael wolff covering it as well.
This terrific lane accident.
Can you imagine the tail of the plane comes off, and his two flight attendants just -- i cannot imagine.
We are still uncertain on their condition.
And on the why.
But the condition of the two flight attendants is front and center.
We will make a turn and talk about media because we have a dynamic media duo here.
We're going to talk about rupert murdoch.
Fall back to a lead in parliament over the phone hacking scandal.
Meanwhile, speculation on wall street is heating up about his next move.
Scarlet fu has more on that . what is interesting is that everybody is looking toward the new news corp.. they certainly are.
You mentioned that being recalled to testify, specifically over comments he made to the staff of the "son." -- the "sun." it is an example of the headaches in the print business that continue to plague of rupert murdoch.
He split up the company for so that he could shareholder value, freeze up 21st century fox, as for news corp.
Itself, it has a new lifeline.
$2 billion in cash, no debt, a lot of questions over what kind of acquisitions rupert murdoch could make next.
His last big acquisition with the "wall street journal" for more than five point $5 million.
Michael wolff with us to talk about this.
Also brad adgate joins the feared brad, as you know, media is all about creating revenue.
Candace weber's capture revenue?
-- can newspapers capture revenue gekko?
I think there is a digital extension.
I think what is interesting is he talks about the "new york post" about making in another buzz feed.
Here is the "new york post" this morning.
Michael, this is a buzz feed, is it?
The idea that rupert is going to create another buzz feed, that he even knows what buzz feed is.
Rupert is always doing this.
There was a time when page six, he was going to turn that into gawker, i think.
There is not a chance.
Let's go for.
The real issue is -- will rupert close the "new york post." he has to.
It is history.
This is $110 million blackhole in a publicly traded discrete company.
He said last year, the publishing branch lost $2 billion last year.
That lights out all the debt- free money that the company has.
You've got to wonder how much longer he is going to be able to sustain this.
If he is really going to run his company, the thing they asked do, the first thing of of the imperative is he has to bring costs into line.
That means the "new year to -- "new york post congo the "times ," goners, goners.
Together that is almost $250 million a year down the hole.
Lifted it with the headlines we got about the "tribune" company.
There was discussion that perhaps rupert murdoch might be interested in buying the "l.a. times." does it look like he will do that would display?
I don't think so.
He is going to have to get a waiver from the fcc, or he is going to have to change.
You cannot own to newspapers or two tv stations and newspaper in the same market.
He does in new york, he has a waiver.
There are some issues with the sec.
There could be some traders -- some changes.
Can i jump in here?
Something i have written about, there is something here.
They get a lot of money from fox in the division, $2.4 billion.
But certainly what i am hearing is that there will be a foreign corrupt practices act settlement with the company, and part of that money, a key part of that money, as much as $1 billion, will go for that settlement.
Michael wolff with us, brad adgate, interesting time for mainstream media.
Coming up, we will introduce you to a brazilian billionaire, little-known billionaire who is actually profiting off the gentleness spending going on in brazil in anticipation of the world cup.
Vila bigs is also creating tension on the streets.
The protests are there.
We will introduce you to him next on bloomberg "surveillance ." this is bloomberg "surveillance." i am sara eisen, here is always with tom keene and scarlet fu.
A little weakness when you look at the u.s. equity market.
China is the big story overnight.
Week traded data, changing story about a hard landing in china.
It really does drive the markets this morning.
Futures negative three, euro- dollar, 1.2824. west texas, 105.12 is becoming the story rather quickly.
We are having a spirited discussion on the breaking news this morning.
Tribune and the iconic set of papers, the "baltimore son." "l.a. times." we're talking with michael wolff and brad adgate about this.
I love this line of questioning.
I was looking at the management structure of 21st century fox, the news unit that houses the entertainment business, the movie business.
Prefer century fox has rupert murdoch as chairman and ceo, but news corp., the publishing unit, only has rupert murdoch as chairman.
All the talk about rupert murdoch is what is he going to -- you can just flip this around.
He is really chairman of 21st century fox and really ceo of the new news corp.
That is what he really cares about.
The actual ceo of the new news corp., robert thompson, is a newspaper editor.
He has never run a company, has no financial experience.
He is not a credible manager except if he actually is just a lieutenant of rupert murdoch, who for the newspaper business is the most credible manager in the world.
It is interesting also that both the "sun"s are sitting on the boards of both companies.
I really think that chase perry is going to be running the entertainment vision of the company.
And he is running it.
Has been for quite a number of years.
He is a very credible guy.
The murdoch but dodge brothers have been hit by the scandal going on.
They're in a position, but i do not think they are heir apparent.
Lachlan has no interest in leaving australia, and nobody has interest and james.
The victory lap known as share price.
This is fox, and the moon shot straight up, the fact is mr.
Murdoch with all of its soap opera, mrs.
Murdoch, and that's, it is minted money.
20% or fox, yeah.
That is a gold mine.
He is launching to cable networks within the next two months.
He is got the best station group in the country.
He owns 27 stations in 18 major markets.
I just want to know how he is going to be able to face british parliament again without wendy there . greg from his point of view, he is grateful for the chance of doing it without wendy because when she did that, that was sort of the beginning of the end because it made him look like an old man.
The beginning of the end of their marriage yes.
That is fascinating.
He was furious about that.
Why do i like kelly and michael right now?
This is fascinating.
This is one of the great stories.
He is free from his marriage now -- also, here is a man who is 82 years old.
He just got out of his marriage.
What does that tell you?
It tells you for wanting that he thinks he has a long time to go.
It does do that he is an eligible bachelor.
Everything i understand is that rupert is a happy man right now.
He is looking forward to a new life.
Will be be the future of these properties?
Whether it is these companies, fox, tribune, other newspapers around the world, is it just a creative destruction?
Does he have another purchase left in him?
He does not have another vanity purchase because he cannot afford it on that side of the company.
His whole growth about buying the next ms.
Weber state abide -- his whole career was about buying the best news they receive goodbye.
He may have an opportunity now, the cheapest newspapers.
The price may have gone down so low on newspapers, and rupert is such a talented publisher, that he could make a business out of this.
A business for the future, no, but a business for his future, yes.
Company news, there is a little going on.
There is a lot going on.
Let's start with fedex, it may be next on the lachman's shopping list.
Shares soared on speculation that ackman's firm could take a stake in the company.
Attention focused on fedex after ackman told investors he was targeting a large cap investment-grade company for investment of as much as $1 billion.
Treasury makes it official -- aig and general action -- general election ric have been named systematically important.
These are important designations, certainly as we discussed to be to fail for the entire inking sector.
Tom, back over to you.
Good morning, everyone.
Bloomberg "surveillance." we are on bloomberg television, streaming on your tablet, your phone, and bloomberg.com.
With all of our interviews , most interesting digital platform.
I am tom keene, as always here with sara eisen and scarlet fu.
This is an interesting story.
You remember when we were all sitting here watching those pictures and videos, millions pouring in to the streets last month, violent protest across brazil.
Their anger and that the government for the decision to finance arenas for the world cup over the 2016 olympics, at the expense of people and taxpayers.
Cesar mata pires , alex joins us now from sa o paulo.
There are several leaders in brazil.
This is certainly one we have not heard of.
Tell us a little bit about this man.
Well, you have not heard of him because he has never been written about before as a billionaire.
He is extremely low row file, most of the country that he gets for his company, oas, our government contracts for infrastructure work.
So he does not want to draw attention to his wealth.
The name of his company, oas, i was actually at a protest of about 30,000 people on sa o paulo's police avenue, and i saw the name of his company on a sign, and the sign said -- the money for education went to oas, and this is basically interesting the feeling that by offering government financing, subsidized loans to build stadiums, the government was neglecting public services such as education, healthcare, public reservation, -- public transportation, which are shaky in brazil.
It is a real problem, and we heard it as they common thread throughout the protests.
That is the inequality gaps.
How many people are becoming rich and billionaires like this man off of the spending that is going on on the arena?
12 stadiums just for the olympics?
That is right.
There are 12 stadiums.
His company is was possible for two of them.
Actually all of brazil pose the largest construction firms are closely held, family-owned companies.
So there are a lot of people getting rich off of this.
In cesar mata pires 's case, the wealth is especially concentrated because he founded the company.
The other big construction firms are kind of these old, dynastic companies, so it is split up.
What do you presume -- where will they be in five years?
Willis to be a a concentration of 35 or 350 retrieval at the top, or dennis prolapse to a great oher middle class echo ? -- will it be a concentration of 35 or 300 -- or 350 rich people at the top, or can it spread out to a greater middle-class?
It does ring one of the most unequal countries in the world, and far more unequal in the u.s. the fact is that even if protesters complain about this business model that rewards people who are well connected to the government, that is the only business model in town.
The government needs these guys to build their large-scale infrastructure projects.
I think you are unlikely to see a big change in the short term.
How many bodyguards does he have to have around him right now echo?
I do not know, but there are few publicly available photos of him.
He is not a recognizable figure.
He is exact opposite, for example, of batista, formerly brazil pose the richest man, who was very flashy and his face was constantly on magazine covers.
Thank you for bringing us the billionaire, introducing us to have.
Alex wilder's cuadros in brazil.
The billionaire is cesar mata pires, and it is a microcosm about what is going on in brazil and why people are so angry about the spending and inequality.
To remind you, the focus is on the world cup and the preparation for the olympics.
Their spending $40 billion on each project.
They are not screwing this up.
There is no talk that that will be put off.
That is happening they will get this done.
Well, coming up, titans of media technology andin sun valley.
Who is the "king of all media" now?
Tweet us at @bsurveillance.
Good morning, everyone.
Joining us right now "in the loop" anker betty liu.
-- ancho betty liu.
When the bears are out, -- the grizzly bears are out.
Like i would be scared stiff.
I was out there last year.
Steve case is on with us.
He is stil