Marissa mayer has wowed investors.
They center a moonshot.
Revenue matters are destroying reports today.
An untested nonprofit will meet with commercial insurance giants.
President obama is gambling billions on an ipo that critics call a bad bet.
We will check with a health cooperative ceo.
A defector from cuba.
Forget the immigration debate.
America's pastime speak spanish.
Good morning everyone, this is bloomberg surveillance.
Joining me as always, sarah.
It is all-star day.
I do not know if she keeps up with the home run derby question mark one of my heroes.
He goes back.
You get it?
Let's rumble and tumble through our morning briefings.
We start with the overnight news.
European european auto sales plummet.
They've reached a two decade global stop the lowest number of registration since 1990. europe does not exist.
Falling off the cliff.
In the auto industry, they're worried about investor confidence.
An unexpected drop.
In term of economic viability, consumer prices are excited to be saw.
We're waiting till 9:15 a.m. to get a read.
Especially in light of the consumer spending slowdown.
In the retail slowdown, would you suggest that deflation is part of the cpi question mark will be watching that.
We expected to be a positive number.
Economists are projecting zero .3%. this is something that the st.
Louis fed is concerned about.
A lack of inflation in a healthy economy.
Coca-cola, goldman sachs, will be watching all this.
Will be watching yahoo.
How much much can marissa mayer around yahoo?
Sanford bernstein and christopher whalen from carrington investments.
Looking forward to equities bonds.
The second day of a row . yawn.
Tepid retail sales.
The euro does better.
There is some weakness.
That is not -- that is a real backdrop to gdp.
You're down of gas is going higher.
You're the struggle with this.
Under 14. record high good feeling.
The indian rupee.
The indians are raising their rates.
They are going the other way.
The economy is so messed up that they have to raise rates to defend the currency.
To get your very first 7:30, 160 160 two.
Scouring the front pages of the newspapers, send me the most important new stores.
The wall street journal.
We're looking at melissa myers at one year mark.
This is in time for yahoo's second quarter report card.
They're up 75%. there also purchases.
They purchased tumbler.
A comeback to revenue.
This is revenue revenue season.
Those purchases are not leading advertisers.
If you look at yahoo's core business.
It fell from a percent.
There is slack.
She has to implement a strategy.
She is one year and.
She is at a point.
The second half is where investors can back her result.
She came in with a lot of promise.
The other story that we're covering is dell.
It is too late for home run derby.
They are not the biggest investors, but they said that they will support the buyout rate for michael dell.
The background is, this is a huge deal.
T. rowe price is iconic in by- side bassman -- investment.
They have a stake.
The other thing that the journal makes clear off is, this vote is too close to call.
It will go down to the wire.
The vote is on the bed.
Not on carl icon's various proposals.
Alum and to regroup.
Our final front-page story has to do with all the dissent and tension in washington.
They're talking about gop threats of retaliation.
There's a meeting in a couple of hours hours that sounds pretty familiar.
They are depending on seven of president obama's nominees.
We are so accustomed to this.
The real issue is that this could make it harder to get the regulatory agencies to make their jobs -- to do their job.
The immigration law and the debt ceiling law.
They are poisoned the waters.
Think about all the big issues.
The debt ceiling, the student loans, everything is built into a deadline.
The new york times is talking about partisan moments.
This is president george bush senior, really elderly.
This is a fascinating video.
There is a video of them pulling george bush senior out of the pacific ocean.
He was the last guy pulled out of midway.
Amazing black and white movie.
Is a great photo, given the filibuster and all of that.
Here on bloomberg it is kind of a mess.
There is a close decision coming up.
It is been a cliffhanger.
We don't know the results of the votes.
If they vote against him, what happens to michael dell?
A huge, crushing blow to his reputation.
In a sense, he does not have the skills to bring it back.
Why do you think he wants his country so badly?
-- this company?
He still thinks there is a chance to retain glory.
Is there a way to revive the pc industry?
Can anyone do it?
It is hard to bring back desktop computers.
The problem is they were slow to move into netbooks and tablets.
They did not do any the stuff -- of this stuff.
I want to use the great scope you have about technology.
The idea of who is moving quickly.
Which company is the anti-dell?
Which is the one that you perceive is moving quickly, fast, across everywhere?
They have made the most progress.
They have been around forever.
Suddenly, they pull out new devices that people love.
They figure out that android is coming and they build devices.
They ride that wave.
Apple starts to slide.
Samsung is an amazing story.
Paul will join us later today on bloomberg surveillance.
We will stick with a tech angle.
The chinese search engine is buying wireless.
91 wireless is the third party store for apps.
The big map -- mac is opening in vietnam.
It follows starbucks and other u.s. chains.
Fab is changing course.
They will no longer send daily e-mails.
It will ask users for departments of interest.
That is today's company news.
This is interesting.
In the next hour, we will speak with one of the market leaders when it comes to/sales.
Fab sells items that say no more flash sales.
They say we will update products as the price comes out.
They will update products based on what has items and designers you like.
Are flash sales dead?
I did not have a sense that they are going away.
They were getting very crowded.
Somebody comes in and makes millions of dollars doing flash sales, everybody joins the market and gets super competitive and everybody starts chopping off like flies.
Is groupon a flash sales website?
with amazon, there is a huge barrier.
That is our twitter question of the day.
What is the next internet fad to die?
Tweet us at @bsurveillance.
I am using it less and less.
What is the fad that will die?
Snapshot - - snapchat is changing.
The idea is different than the idea of facebook.
They will figure out how to sell ads based on everything we have accumulated.
Facebook is not the next fad that will die.
Snapchat seems more lively and cool.
I am all over snapchat.
Coming up, coca-cola's slogan used to be i would like to buy the world a coke.
It turns out, the world has been buying plenty of coax products -- coke's products.
This is bloomberg surveillance on bloomberg television, streaming on your tablet, your phone, and bloomberg.com.
? good morning, everyone.
Coming up later today on bloomberg television -- at 9 a.m., the managing director, tom steyer.
The train accident in quebec.
The impact on gas prices.
You are seeing it in hydrocarbons.
106.58. 107 a barrel.
Coca cola may be an american classic, but the real growth is an emerging markets.
The company reports earnings in the next hour.
Scarlet has been looking into it for us.
Emerging markets have been a weak spot for consumers lately but this is the hope and promise for coca-cola.
What's the second quarter will be which emerging markets -- the stocks and economy, there are questions.
The growth overseas is still faster than the u.s. nine percent growth in eurasia.
Down the one percent in north america.
It is still about making syrup.
Am i right?
It is about making the classic formula.
To get some perspective, citigroup says there is exposure any merger could.
$.75 of every dollar it makes is from outside the states -- when you look at coke, you have to pair up the valuation of the metrics against pepsi.
Pepsi is a good balance.
It only gets about 49% of its sales from overseas.
It is primarily a play on north america.
This is from bloomberg industries.
Coke is cheaper than pepsi.
It has traded at a premium to pepsi the last few years.
Investors like the clear strategy, investors had been frustrated with pepsi.
The ceo of pe psi says she is revealing options.
Coke has diversified a lot.
It has gone into zero and low- calorie drinks.
It is producing less soda and making other kinds of beverages.
It is not like you said -- snack beverage like the way pepsico is.
Over an hour from now, goldman sachs earnings are out.
The reality of rising interest rates.
It is considered the best trader on wall street.
Will that help earnings?
This is bloomberg surveillance on bloomberg television, streaming on your tablet, your phone, and bloomberg.com.
? this is bloomberg surveillance.
Top headlines -- supporters of the former egyptian president clashed with the country's security forces during protests.
The demonstrations called for morsi's reinstatement.
In europe, car sales went to a low.
Registrations dropped 6.3% in june.
The lowest since 1996. sales were down 6.7%. in sports, the home run derby.
The oakland a's outfielder won the title.
The all-star game will be played tonight.
We will talk about this later in the hour.
He is the first to do that since mark mcgwire in the early 1990s. he just crushed it, seven in a row.
You stayed up and watched it?
It was phenomenal.
It is time for our morning mustrade.
The honeymoon is over.
This is interesting.
Robert norman -- the acquisition strategy is either not especially clever or too clever for me.
I am negative on tumblr.
I don't believe it is truly social.
Nick thompson is with us to help out.
There is a whole back current.
There has been since the very beginning.
Part of it is personality.
There are a lot who don't like her.
Some people think she is buying crazy companies for too much money.
Other people point out that the stock is up.
There is a lot of christian -- criticism of her.
I think she doing a great job.
She is taking a company that did not know what it was and changed it.
Is tumblr social media?
We have the cofounder of blackboard.
Michael chasen joins us.
Does it sound like a good fit for you?
It is a good fit.
She is trying to build yahoo!
To were people are going in the future.
It is the social network -- it does not make money.
Isn't that the point?
It will help yahoo!
By bringing in a new demographic.
I use nothing else now.
It will be 93 in new york.
This is the strategy that she has been pursuing for the last 12 months.
She is made over a dozen acquisitions, both to help, meant the positions and start building up properties.
Tumbler is a great acquisition for that.
You don't recognize where kids are spending their time.
The question is, facebook or tumblr?
Why are you looking at me like that?
I have been on tumblr three times and i don't get it.
We will talk about blackboard.
A brand-new app for wearable technology.
That is next.
? this is bloomberg surveillance"." i'm sara eisen.
Here as always, tom keene in scarlet fu.
10-year yield 10.53. a record high on the v.i.x.. -- 2.53. the euro at 1.31. going the wrong way.
Everyone is piling into the u.s. dollar lately.
The positioning has gone very weak.
Going against the bet on the street.
You wonder where a gallon of gas is going in the next six months.
Taking a look at the big gainers from mr.
Boeing climbed back losses from the previous day.
A lot of questions out of the streamliner -- dreamliner 787. the first p.r. disaster from earlier this year.
For solar gaining 5.5%. home builders continue to have a bullet to ride.
They have been on a slippery slope down.
These other early beneficiaries of the recovering housing market.
An analyst dead on the move reaffirmed good housing stocks.
Not great, not like it was a year-and-a-half ago.
That is another drawback.
We will talk to chris whalen about that in the 7:00 hour.
We will talk about technology.
You know blackboard, the billion dollar educational tool.
Michael chasen started it.
Now he is working on social radar, an app that tells you who was in the room that you walk into.
He hails from washington, d.c. i think that is a little bit of a misnomer.
A lot of great technologies in washington, d.c., and a lot of great start-ups as well.
Can you do something about the traffic and ruston?
Togethe there is definitely an app for that.
You tapped into combining education and technology.
What are you focused on for location sharing?
To go with new tech -- we new technology would fundamentally change the way people teach around the world.
It is used by 20,000 institutions, and 30 million people around the world.
You get your course material on line, take losses on line.
Online component to a traditional class or might take an entire course online.
Those classrooms are using technology more than ever before.
All those kids on campus.
95 percent of college kids have this book profiles online.
You want them to walk into a classroom or conference call and be able to check who they know is around.
Picco we border on having that ability today.
Over 80 percent of college students have smart phones in their pockets.
They have the user information online.
No one has cross-referenced reach across-reference that to be able to scan the room to tell you who is in it.
This is what is so important about the technology, you need to be up front and build a high level of security and privacy so you could say i do not want anyone to see me or maybe i want to be anonymous.
Who d.s.l. this information to?
Right now we're focused on getting an application that we think can fundamentally change the way people connect.
-- who do you sell this information to?
Right now we're using this for commerce.
We say here are good, opportunities nearby.
Good people you may want to interact with nearby.
Some do and others take it.
You do it.
What is the mistake all of the entrepreneur hours are making today were trying to aspire to be like michael chasen?
I do not know if i could narrow it down to just one mistake.
A lot of people say blackboard , you took a company public.
That is what i want to do.
Going public is just a financing vehicle.
You need to focus a great company, building a great business.
Tell me about your first meeting with provident capital.
They said we're interested in taking back for private.
It went through a process for who would be the best fit.
A tremendous amount of holdings in the education space.
We decided it made the most sense to work with them to take the company private.
I was reading you are developing this for the android and iphone and google class, where both technology.
-- google glass.
Imagine walking into our room and not looking down at your hands at all but information comes up on the screen, someone you know from college, co- workers nearby.
Giving you the information to quickly locate them or find out additional information on their background or what they have been up to.
To come i get social radar -- greater and easy to connect.
You get information offer for square and twitter and where people have checked in.
People are sharing their location across all of the networks.
Social rhetoric -- greater focus is on mining the data on the networks where people can check and or share locations come aggregating that together to just one place and combining it with the other people that have social radar to let you know who was nearby and how you are connected to them.
Could you have been very successful as blackboard.
-- you have been very successful with blackboard.
The technology is just coming forward were enough people are using this technology and have enough information online that we can tie together that information to make it relevant to you in the people around you.
Michael chasen, thank you for joining us.
The founder of black bart -- blackboard.
The business mandate of affordable health care delayed for a year.
Individuals still be required to buy health insurance.
Some of them will have a brand new option, they are called help cooperatives.
We will speak to the ceo of one of the 24 cooperatives working with the government coming up.
? this is bloomberg "surveillance." i'm sara eisen.
Vladimi putin says he hopes edwards noted will leave the country soon.
"nobody wants to take him" according to putin.
Panama has seized a north korean ship that was carrying military weapons.
The ship's captain tried to commit suicide.
Crewmembers were detained.
American workers can expect an average pay raise of 2.9% next year.
A survey found that is what made in large-sized companies will give employees, slightly better than the 2.8% increase this year.
, is still trying to rev the sleep out of his eyes because he stayed up late.
Tonight we of the all-star game.
And it all takes place at city field in new york city.
The host of "sportfolio" joining us.
." who is this guy?
Had to go through the matching process that baseball set up.
Ended up with the oakland a's. you were at the park last night.
I am greatly india's. a sea change moment.
Immigration debate nationwide.
A chevy pickup truck.
Going nuts about this.
What was a light at the ballpark wall this history was made?
-- what was it like at the ballpark as history was made?
An incredibly amazing event.
$12 billion in tv contracts with major league baseball.
The yankees have had trouble with tv viewership.
What this did was restore some of the iconic aspects of baseball, especially latin america.
Forget about the stereotype of it.
Fluently going into spanish and translating it like it was no big deal.
Fantastic moment for american sports.
An appropriate one for baseball that has been a great mixing ground.
He did not do very well in the home-run derby himself.
New york king cake.
Big poppy of the sidelines.
They are in first place.
Every time i am here we go through this.
The bottom line of all of this was it was an incredible home- run derby.
Very important for baseball.
Now they get into the hole steroid issue.
The problem is today is new york moment.
$200 million of economic impact.
After the last out tonight we shift to what will the lawyers do with this process?
What will the bargaining agreement look like?
It culminates this month, i am afraid, july 27 in cooperstown where for the first time since 1960 there will be no active major-league baseball enshrined in the baseball hall of fame because everyone has best guard . is this keeping a-rod from the hall of fame?
I think so.
A number of players that are eligible but have not been voted in.
Unless we have a resolution, they will not be voted in.
Last night was an iconic moment.
And a con game.
His father was pitching to him.
Take a deeper -- the rap as scores at the end of the second round.
It was amazing.
A magical moment.
Third round everyone was excited again.
You could leave that if you want.
To come how big is the all-star game tonight?
, average price ticket is $800. way higher than last year in kansas city.
As usual, in new york, it is expensive.
The host the portfolio will be aired tuesday.
Coming up, looking at the business many republicans take.
The ceo of a health-care cooperative.
This is part of president obama is health care plan receiving a lot of your tax payer money.
That is next.
? this is bloomberg "surveillance." in today's company news, at&t will start selling smart phones with no contracts.
Under the plan customers can buy some devices for monthly installment with no down payment or activation fee.
They introduced this in march as an effort to cut back on money spent subsidizing smart phones and retain customers.
T. row price will not support the bid.
-- t. rowe price.
Shareholders will vote this thursday on the proposal for michael dell in silver lake.
Baidu grabs a vigorous -- portion of the smart phone market.
Is china's biggest third- party store for smartphone applications.
That is today's company news from the piles of lumberfilse es of bloomberg "west." help cooperatives.
Last month there'll i said, heads the oversight -- house oversight committee call the loans a costly gamble of taxpayer money.
It comes to the polarizing of the signing ceremony.
That the speaker and the president and the rest of it.
Chief executive officer and founder of evergreen house cooperative, one of the 24 in the nation that will serve maryland residents.
I want you to speak to republicans like chairman issa that are so concerned about this.
I think we will be a major competitor in the health-care market, the trout velocity of health care if you will.
We're bringing to bear a lot of innovation to the market.
We're doing patient medical home spirited and evidence-based medicine tied together was something we think will cost less.
The sound bite will say solyndra and all of that.
Are you properly capitalized effects we're quite properly capitalized.
The reason we're there for smell help insure in maryland in 30 years is the solvency loan.
This is a loan, not a grant, so we have to pay it back.
The business model, clearly shows we will be sold sustainable after a year or two.
Aren't you at a disadvantage to compete with the well- established giants?
To get this put us at a little but level -- little bit less of a level playing field.
We have leverage our confidence of investors and baltimore in the state of maryland to get a $5 million program-related investment to allow us to set up a critical system.
We're doing this to run a better health-care system.
Unlike other companies that were confrontational, we are lined with providers.
They are our estimate.
Where is the price incentive if you are lined with providers?
We have a much lower administrative cost.
I drive a versa.
In addition to lower administrative costs, we are co- op.
We are owned by members when we get them.
Because we're able to do health care reform the way it should be done, outpatient medical homes, salary instead of fee-for- service.
You do not sign of doctors as specialists?
To go we have -- we have a ppo of the goal is to launch exclusive provider organization.
Patients enter medical homes, which our actuaries estimate it will come in at lower cost than other insurance.
Will you attract and help the people like a magnet?
Are you going to get me, 70 pounds overweight person?
To go good question.
We ran our program called healthy how word.
Same demographic of those that are currently uninsured.
Working-class folks who otherwise will not be able to afford health care, even with the premium subsidies.
What we found is they were not sicker.
They have higher rates of pre- exposed conditions like high blood pressure, smoking, but we are able to bring them under control quickly and save money in the long run, and, as you probably know, there are risk adjustments in the affordable care act, which allow for if you have sicker patients and bring them in to control better, you get gain sharing.
To go can you bring in the low -- young, healthy people?
To go thing we found from research is the employer mandate an individual mandate are not strong enough.
What is really bringing interest in the product, and we were just that the african-american festival in downtown baltimore, this allows for care to be affordable.
Not the mandates forcing people income of the fact that there is affordable coverage out there that will attract people.
To find affordable.
I think there's a huge mystery for what this will cost people.
What is affordable?
9.5% of your income.
We're finding that is too much.
$68,000 per year.
Take, 58,000. that is $9,000 with a couple of visit to the doctor.
That is too expensive.
Our product will be much lower than that.
That is what we think is a portable.
You have experience because you are doctor yourself.
This is still an untested business model.
How you make the case we're not gambling with taxpayer money?
Not one thing we're doing is unique.
Mario does some of it.
We a put the best practices together into one package, which we feel will be good enough.
What is the worst practice of the health-care industry we generally do not trust?
What is the worst practices were trying to stop doing?
Probably fee-for-service and lack of using evidence-based medicine.
Brand names when you do not need to use them.
Back surgery when you could use and day-inflammatory spirited medicine.
To the doctor's love your hate you?
They love us.
Take your doctor yourself.
Take a bank year.
-- thank you.
We are going to do a forex report right now.
The one everyone is watching is dollar-yen.
Trading below 100. stronger yen by half a percentage point.
Overall, a weak yen that story.
I put in dollar mexico.
The mexican peso is the best- performing currency so far this year.
Writing on the coattails.
There is a lot of investment going south of the border.
It is on the move right now.
It is in part to deal with the currency.
To go a huge financial problem in the currency.
Coming up in the next hour, the ceo of gilt group on the future of flash sales business.
? this is bloomberg "valenc surveillance." goldman sachs report earnings within the hour.
Advertisers, well, it's a different story.
Boeing new dreamliner nightmare.
Probing to see if a safety device is behind the latest fire.
The morning, everyone.
I'm tom keene.
Live from bloomberg road headquarters in new york.
Our guests toast this hour, christopher whalen.
He questions the to talk to ignore or too big to fail banks.
We will see at 7:30. good morning.
It straight to the morning briefing.
European auto sales fell to near two-decade low.
Registrations at the lowest level since 1996. investor confidence surprisingly dropped.
In the united states big reports to watch, consumer price index, the nation inflation, lack of inflation you could say.
The industrial sector of the economy after retail spending slowed yesterday.
Utilities noisy, too.
You wonder if the heat wave will play into it.
Whether always factors into it.
If you earnings before the bell, coca-cola earnings and goldman sachs.
Johnson and johnson also out.
After the bell, the biggy will be yeahoo!. everyone wondering whether marrissa mayer can engineered the turnaround.
Fedex saying it made in never in shipments to iranian embassies.
It is working with the treasury department and the investigation of the shipments.
Fedex says the consolidator violated -- violated a written agreement.
We will continue to follow this.
Big mac going to be an on next year.
They become the 38 asian country in which they operate.
The fast-food chain follows starbucks and other fast-food chains to grow up -- to profit from the growing middle class.
Emergency beacon made by honeywell nt in the investigation of the fire aboard the boeing 787 dreamliner last week.
U.k. regulators looking at the emergency transmitter located near the rear of the aircraft.
It just does not end.
It does not.
That is why we of george ferguson with us.
He covers aviation for bloomberg industries.
You watch them very closely.
This comes as they are trying to restore its reputation for the 787 that had to be grounded earlier this year.
It is a mess.
It does not look like it is related to the battery problem previously.
This emergency transmitter locator has a battery on a of its own.
Maybe that is the problem.
I think more interesting will be the repair to the composite all.
We've not seen a composite of all repair.
This is creating a composite halt.
We used aluminum before.
They say it will be relatively easy to fix.
Previously they have said the come possible should be easy to fix.
Now we will get a chance to see how easy.
You get it and take a piece out.
What do you do with the composite?
I believe there is presence.
The fact of the matter is any new aircraft will have a lot of pickups and mechanical bugs.
This is not any different.
This is related to the battery box problem.
This is very separate from boeing.
This can be used and a lot of different aircraft.
Honeywell has spoken out, writing that this emergency beacon has been certified for use since 2005 without a single reported issue.
What do you do if there is a fire on board or low-level smoking even?
What do they do on an airplane at 35,000 feet when there is smoke in the cabin?
They get down as quickly as possible.
Fire is a terrible thing in an airplane.
Can you strap everyone in and open a window to let air in?
At that altitude you will not want to open any doors.
I do not think you could open the door, to be honest with you.
There is fire suppressant technology to put it out.
Talk about how critical this is for the strategy going forward.
As we watch the program developed about what we are concerned about is bowling is projecting a low single-digit number for this unit.
They have only sold 1100. the most successful programs, 747 and triple seven.
Those are 1500 unit programs.
They are telling me they have spent 6-$10 billion but a living in error -- airplay now that i will get a low single-digit returns on.
They have to find a way to make this airplane faster so they could put more efficiencies in it, create more margin and find derivatives.
Not to mention some of the pr headaches.
George ferguson, good to check in with you.
Analyst for bloomberg industries who covers aviation.
Goldman sachs and half an hour.
Christopher whalen, executive vice president of skepticism.
Guest host this hour.
You have been a skeptic this entire hour.
I think it is a matter presentation.
If you look at the bank earnings we have flat, ok revenues.
A lot of cost savings bill.
We're still releasing reserves.
In terms of our run rate, think about the reserve releases out.
To some charles peabody stunned when he said fortress is wrong.
Is it fortress' diamond?
The bank has plenty of capital.
The question is how will they generate revenue going forward?
Morgan just guided down for the second half of mortgage production, quite a headline.
Most of the media did not pick up on it.
They basically doubled the industry expectations for volume increases -- volume decreases.
It talked about quality versus quantity.
They may refuse to lower the bar to keep the volume up.
Wells on the other hand is still soft.
The mortgage perspective, the most important business is that the party is over.
The biggest part of the bank business now teams -- seems to be cost cutting.
Like boeing, a single-digit returns.
This is a big deal.
To come book value is a fair value for a bank that does not have issues.
They have issues, but are working through them.
It sounds like they have been able to weather that.
Take a they have.
Morgan did much better than expectations.
He did not know what happened inside.
I wrote the report guessing what the gross losses might be.
You do not know what you're going to get here yet to come . charles peabody extremely critical.
Book value only went up 50 cents or so.
Isn't that all i need to know?
It looks like an electric utility.
People were joking if we went down the road to class people, the bank would be very put out.
Brad hintz will join us as goldman sachs comes out.
Scarlet will go beneath the headline data in the reporting.
A data check very quickly.
Flat on futures.
They somehow find a way to o'clock to go higher.
The v.i.x. 13.79. a good number.
Euro-$1.31. confounding the stronger dollar.
Hydrocarbons 1 06 0.48 on nymex.
Brandt won a 9.39. gasoline going up.
-- brent 109.39. a great debt a check -- data check.
To come pick of 40% -- 40% is the number for you.
Talking flash daily deals site.
Gilt ceo next.
? good morning, everyone.
Hi'm tom keene.
What does christopher whalen say?
He knows that jpmorgan already sees a declining mortgage-making spirit.
That is what matters.
Jumbo loan rates is cheap.
Bouncing off each other with in the market space.
How bad is it?
It is not bad.
Relatively low volumes.
If you take the disappearance for distress out of the numbers come a mid-single digit year over year.
Is there a place where the mortgage industry stops, the housing industry stops?
What i think everyone is hoping for is to see slow growth that is more or less in line with the economy and population growth, which is sustainable.
If we do that, we will not have a bust.
To go i see so many e-mails that say i cannot get a mortgage.
This is very friendly to consumers.
It is protecting them from getting a mortgage.
The bottom third in terms of credit quality is pretty much frozen out.
What is the future of the job industry?
A lot of people that affect.
Do all of the jobs go away?
I did not think they have to go away, but we have to figure out how to restore come -- some kind of mortgage sector.
Today virtually all the underwriting is government guaranteed.
If the risk is priced correctly, you do not need a government guarantee.
There is an opportunity here.
Can you agree with michelle meier of bank of america merrill lynch at double-digit house price increase?
I think she is right but will probably hit the number by the middle of the year.
The question is what happens in the back half of the year?
I think we're seeing a surge this year.
Next year is half of the share.
Cosco of 16, 17, 18 in her model, it is down.
What are you looking at in goldman sachs earnings?
I do not write research on goldman sachs.
I think they will do fine given the environment.
Probably the most nimble and flexible investment bank.
Given what we saw with j.p. morgan, i would expect goldman sachs to have done pretty well.
Goldman sachs earnings out at 7:30. this is bloomberg "surveillance." ? the morning, everyone.
An important interview.
-- good morning, everyone.
Bein stein, actor/writer.
Always interesting, always significant.
-- ben stein.
Every time he opens his mouth, i learned something.
Pop culture references.
In the meantime, i am sarah eisen here with tom and scarlett.
Guest host, chris whalen.
It can eye on the banking system.
How about american shoppers?
Retail sales numbers yesterday weaker than predicted.
The gilt consumer has not disappointed.
They have seen some success on mobile.
Here with us is the ceo of gilt group.
Formerly at citigroup.
All of a sudden we get news last night that fab.com is not going to do flash sales anymore.
Is the model challenge?
The model is not at all challenge.
We've seen the strongest growth in the past few months we have seen in a while.
At the end of the day, people love a great deal.
They love luxury goods at a discount.
They will try to slow the pace of daily sales e-mails.
I think they're making a play towards personalization.
Some say there is a bubble out there.
Our share of it is still quite small.
A lot of competition for sure.
That keeps as passionate and focused on being the best we can be every day.
You are experiencing -- experimenting with brick and mortar.
Explain how this fits into this strategy.
We of the distribution center in louisville.
We decided to open a pop-up store.
We of great brands -- friends and employees.
It is doing well.
What have you learned?
The market is very large for people who want great deals.
We of surpassed expectations.
We will see.
Is the basic concept that they are not in new york city and you were bringing barney's fifth floor to them?
That is exactly it.
Everyone wants a great deal.
That market is very large.
We mentioned the number 40%. 40 percent of overall revenue comes from mobile.
I think that really goes to gopacte gilt he gilt promise.
You want something now and want something interesting.
This is really different.
We do not try to take the website and put it on the mobile device.
We do mobile-only sales.
Mobil is closest.
We do different times of day.
We let you try it on.
Features that work for the customer.
Hard to believe but ecommerce is now 20 years old.
What is it going to look like five years from now?
The pace of innovation has not slowed.
When you think about whether it is mobile and how people shop mobile or personalization, the pace of change will accelerate.
You came from a great job as citigroup.
What is the best practice you have brought to the internet from a firm like citigroup?
I have always been in the digital space.
It is that passion and spirit of entrepreneurship, and also massive scaling.
How we scale internationally.
20 percent if you consider japan are the sales that are international.
We continue to scale and grow and achieve profitability.
That is a big deal for us.
The scale and grow into an i.p.o.? we will see.
We have been told by many that we are other candidates.
We will see.
I think the nice thing is we do not need the cash.
You say an ipo is a likely outcome.
A distinction between doing an ipo in selling to a private equity group?
We just spoke to michael chasen.
Why do you need to go with an ugly, visible, i.p.o.? i think they both have pros and cons.
We will figure out what is very good for gilt.
We're starting to be a place where we are generating cash.
We do not need the infusion of cash to pursue.
What is the most expensive thing someone has bought on their mobile phone?
We sold $24,000 rolexes.
That was on sale.
My favorite was a volkswagen jet and 0.2 seconds on a mobile phone.
Why does no one smile and fashion magazines?
Everyone is like this.
To come it is true.
An interesting comment.
Always good to see you.
Great to see you guys.
Checking in on the flash sales business.
Twitter question of the day, what is the next internet fab to die?
This is bloomberg "surveillance." i'm sara eisen here with tom keene and scarlet fu.
We need a data check.
Stocks keep pushing higher.
What ever it is, very constructive.
Euro stronger, dollar weaker.
One of 6.66 -- one of 6.68. hydrocarbons up by 0.3%. if there is one thing we're watching, that indian rupee.
We do not look at it too often, but a big deal.
Efforts to help it after it has been weakening, raising interest rates try to protect the economy.
Filing for an ipo.
Dan loeb is a founding shareholder.
It will expand underwriting and increase investment.
Fedex says it made in a certain shipments int -- in a burd adver deant shipments to iran.
An emergency beacon made by honeywell under scrutiny in the investigation of a fire on board as a boeing 787 last week.
And u.k. regulators are looking at the emergency translator -- transmitter now located near the rear of the aircraft.
Goldman sachs out with earnings in a moment.
They come out a little regulated -- a regular.
Brad hintz joins us.
Goldman sachs come out.
They continue to achieve by building up revenue.
This is not a bank, is it?
What is goldman sachs?
If we were to think back in history, probably closer to a banker's trust.
It has a deposit but not strong deposit base.
It is the legacy of the old investment banks now an investment form.
Why are they more nimble than the other banks?
Is that a cultural thing?
It is the partnership.
We can make fun of that, but that is part of their core culture.
To come they are smaller in willing to rip up the script and change it.
When the opportunity is gone, they move their resources quickly.
U.s. american volume of little challenge.
To go a little challenge.
Overall earnings per share matching consensus.
Revenue $12.75 billion.
A looks like a little bit like.
Analyst looking for almost 13 billion.
The stock moving in the pre- market right now.
Trading at $40.20 per-share closing above $41 yesterday.
While we wait for goldman sachs earnings, the other distinction is that it is on top in this merger and acquisition resurgence we have been seeing.
That is right.
If we think of equity markets forward-looking, rising rates, ultimately the short end will go up and end up with a flattening yield curve.
What an equity analyst is interested in is will we have a handoff to the merger and acquisition cycle?
Here is chart.
What has not happened is superior shareholder return like some of these other banks.
Why is that?
Lack of confidence about the persistence the of earnings?
To go because of the reliance on the trading side.
There is uncertainty about what volcker will do.
-- because of the reliance on the trading side.
It is more a case of you cannot predict the investment banking results.
You do have a discount for that.
The plain vanilla mortgage business you could argue is more predictable, but maybe not.
Do this seasonality still apply in such a volatile market?
To go exactly.
I have a new employee in my office, and i was talking to him about december.
It is always a weak income environment.
Because once the bonuses are determined, they take their hands of the wheel and wait.
Let's all go to the hamptons.
Awaiting goldman sachs earnings.
To go looking at stocks that are trading.
Goldman sachs shares are trading higher in the pre-market right now as we await their earnings.
Coca-cola trading down right now more than 2%. some of the big gainers yesterday were home builders with lennar falling more than 4%. good morning, everyone.
We're on bloomberg television, radio, ipad and on the iphone and on and dry.
Samsung galaxy, all that.
We are on the goldman sachs watch with christopher whalen a carrington investment services.
We're thrilled to see bradley hintz with us as well.
What was it like being cfo of lehman brothers?
Do you lean over a desk all day?
I remember -- i was brought in by a guy that was president of lehman brothers.
I was brought in to add financial discipline.
I needed a whip in the chair down on fixed income.
They had a pinata down on the trading floor.
Do we know what the trading desks?
That historically been the chief problem, you were not ever quite sure about the risks that were being taken.
Bear stearns is a classic case in point.
They have a hedge fund that failed.
They start buying collateral again.
I am not sure the board or anyone do that.
The systems in control are better.
But does that get rid of all the risk?
We have earnings out.
Scarlet fu taking the first look.
To me, a substantial beat a pretty much on target.
I have to look to see if there is one-time items.
Earnings per share $3.70. that tops the average estimate of 2.89. the highest analyst's estimate $3.72. analysts have been ratcheting down expectations.
I know you were talking about how when we look at the brokerage-type businesses, this is the metric you want to pay attention to in terms of how they are managing expenses.
Pretty much in line.
The book value of 2%. that is pretty much what we have seen from the other banks.
In terms of what you are hoping, you are hoping goldman sachs keeps bringing that down.
They have been working on it.
This was a difficult environment.
2.4 6 billion.
Analysts looking for $2.5 billion.
That looks to be a little bit like.
We were at 2.4. we have interviewed late -- lloyd blankfein many times.
They're all watching this environment very closely.
To go on the fixed income side, this was a difficult environment.
Almost instantaneous move on the yield curve.
I want to show everyone the real world.
Those of you and radio worldwide in television, this is 11 pages of minutia.
What scarlet fu does is -- j.p. morgan, goldman sachs.
If you are listening, we love you.
Make it a little bit cleaner is what we would say.
Within this, i want to go to this.
You predicted job reductions as we go to labor day on wall street?
You will see it in certain areas.
What we saw with wells fargo is expense initiative.
That would make the argument that certain parts of the banks will be slow week.
That is where you would cut.
Where you would not cut at this point is investment-banking.
With luck what we will get is a recovering economy.
We have rtc and the cuts.
-- have already seen teh cuts.
-- the cuts.
Lloyd blankfein 00 -- body count down 300 during the quarter.
Lloyd blankfein says operating marquez some notable signs of improvement.
Good news for too big to fail.
We will continue to talk about goldman sachs shares up 1.5% in the pre-market.
? good morning, everyone.
Bloomberg "surveillance." this morning tom steyer will join us at 9:00 this morning.
Here as always with tom and scarlett, i'm sara eisen.
Hewlett-packard adding new board members.
They have three new members.
Lumber contributing editor and joins us now.
Author of "in such as gree fectious greed blog." -- bloomberg contributing editor joins us now.
My single biggest issue would be that we're getting to the point where we're now at around 12 or 13 board members, which is about average for an s&p 500 company, but very large for a technology company.
Historically they may be had seven or eight board members for obvious reasons to give flexibility and ease of defense -- ease of decision making.
Contrary to what you might expect.
I am puzzled with the size of what is happening.
Broad consumer distribution worldwide.
And our burger-flipping friends.
The overall size is a bit of a surprise.
I would not be surprised to see terrific people leave as a result of bringing on these new folks.
One of the biggest criticisms house to do with acquisitions.
This board still needs a german.
Is that right?
Yes, it does.
Unwillingness to take responsibility for the board at this point.
Right now we have this large, sprawling group.
What i am expecting is to things that once.
A few of the folks that had time to exit, a significant number of folks who did come and at the same time some of this group will become the new board chairman.
I would not put too much stock in that.
Quite honestly this is still meg whitman's show.
But it is something that has to happen, at least procedurally.
Is this enough to appease the shareholder that kicked out directors?
This is something that had to happen.
A checklist item that has now happened.
Good for them.
We will see.
Trying to strengthen the board.
Turnaround plan for hewlett- packard.
Coming up, we will talk about yahooo!
Reports at the bell.
What is the strategy and will the acquisitions really pay off?
-- talk about yahoo!
? good morning, everyone.
Starting with to gro rowe price.
Shareholder set to vote on the $24.4 billion proposal.
At&t will start selling smartphone without contracts.
Under the plan customers can buy them for a monthly installment with no down payment or activation fee.
They introduce this back in march as an effort to cut back on money spent subsidizing smart phones and retain customers.
Baidu grabs a bigger slice of the market.
It is the third biggest -- the biggest third-party company.
That is the latest company news.
To go johnson and johnson.
Revenue become earnings beat.
Positive forward you.
To come-- view.
Beat from goldman sachs, johnson & johnson.
Another chance for investors to grade marissa mayer's performance.
She is now been at the helm of for one year.
She has certainly brought a lot of star power to the company.
And a lot of star power to the stock.
Look at how shares have performed.
A lot of it boils down to the perception that she is really turning things around.
There is also the strategy she has implemented.
She has been on this frenzy of a buying spree.
16-17 acquisitions this year?
We lost count.
Analysts like brian beazer said the stock performance, the moonshot would look up earlier has as much to do with holdings in alibaba and japan and increased value over time.
Losing share in display advertisements, the biggest moneymaker.
Will all of these different changes, acquisition, profile hires lead to better financial performance in the second half of the year?
Far more people using it in general?
That is something investors will look to to justify the rally.
The whole idea is company from a different time.
Paul kedrosky with us.
Is there even room here for yahoo1 to succeed?
O! to succeed?
Where it lay there is.
Not because it is a fabulous growth stock.
The huge appetite for technology stocks that have significant cash flow and pays the dividend or a stock buyback.
I saw a statistic yesterday talking about the s&p sector with the largest growth in dividend-paying stocks is technology.
That is not a reflection of tech getting wise to the wonders of dividends.
That is really what is happening is investors are saying this is an interesting potential high- cash flow stock if people would step off the gas pedal.
The code -- beautifully explained.
The she wants to grow up the sperm and the adults or will it still be by this, by this, hope hope hope?
-- buy this, buy, this, hop, e, hope, hope?
I think that is some of that.
Ed is a reflection of the hollowing out of the company were many of the best and brightest have abandoned ship and got other places.
This is in a sense having people go people go up the birth canal.
It is done through the acquisition of signal, which in technology is a very common strategy.
It was to swap dna with people outside.
I think the mistake is to look at it and say which one of these acquisitions will produce the revenue boost to turn this back into a growth company.
That is not happening.
Or display advertisements is what it all boils down to.
They're losing momentum.
Does it matter?
It does matter.
They are losing share in the market itself is having structural issues in the transition to mobile.
Again, i do not think it means the company goes into any spiralled decline, it just means you cannot look good bet for turning it into a growth stock.
Are the managing for growth investors for investors that were in early?
Tech and silicon valley in general is that entirely.
Look at the skepticism year-ago about what was happening at yahoo!
And people miss that entirely.
To bring this back to hewlett-packard and board changes.
I wonder if david packard would even know technology on the west coast now?
It seems like they're struggling to find a new future after the blowups of the recent years.
There is no question.
An example of what he created was an opportunity that no longer exists.
It is a family of tools for market sector that has since matured and moved on.
This is a great example of a large cap tech company fishing around for its own destiny, and as a result, you end up looking very confused.
The reality is another stock that will be managed for value investors.
The wrong place to look for the silicon valley.
The right place is robotics.
Than do so much for getting up early from san diego, california.
-- thank you so much.
Foreign money is using high- and real estate.
In manhattan, take a guess what the average residents is selling for right now?
1.4 $5 million in the last quarter.
-- $1. 45 45 million.
She served in the israeli army.
Good preparation for the market.
International buyers come to you.
They want to buy in manhattan.
How much of a driving force is that in manhattan?
To go." huge.
People think foreigners are only buying $100 million.
The reality is they are consuming every part of the market.
We have different people from different countries.
This has been a phenomenon for a long time.
What is different is not buyers coming from europe, which is what we used to see.
Who is it?
Brazilians at no.
1 right now.
Did you have argentinian scum of venezuela, colombia.
I just got my first serbian empire.
Then we are talking about also the chinese, and everyone is coming for investment.
Takeover talk to was about financing.
I know a lot of these transactions involve cash.
-- talk to us about financing.
Who provides it?
Describe the environment.
The biggest banks are not lending today to foreign buyers.
You have to go to smaller banks that will get 60 percent loans.
They go to their own wealth private managers and basically they take a line of credit based on their own portfolios.
Rising mortgage rates influencing your business?
We have to see how the local market will react.
Right now it is fueling the market for people to come in.
They know the trend will be upward.
They want to get at least the end it tale of a very low interest rates.
Always good to get an update from you.
Power broker in new york city.
Getting your wallet out here?
I bet you are.
-- thank you.
"in the loop" up next.