Asiana Crash Investigation: Bottom Line (07/08)

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July 8 (Bloomberg) -- On today's "Bottom Line," Mark Crumpton provides insight at the trading day's critical hour, with careful analysis of big events for investors. (Source: Bloomberg)

From bloomberg world headquarters in new york, i am mark crumpton.

This is "bottom line." the intersection of business and economics with a main street perspective.

Tonight, we will have the latest on the weekend crash of asiana flight to 14. obama's plan for a faster federal government.

Earnings season by beating wall street estimates.

To our viewers here in the united states and those of you joining us from around the world, welcome.

We have full coverage of the stocks and stories making headlines.

Olivia sterns tracks monday stock market as alcoa beats the estimates.

Congress docket before lawmakers to go on summer recess.

Let's begin with cory johnson live in san francisco.

Tell us what you heard today from the first responders who helped to save lives and the aftermath of that crash on saturday.

Adjusting day in terms of the way the news came out.

The crash of the flight on saturday midday.

Because there were two groups holding press conferences, with two different very -- with two very different focuses.

One from the national transportation safety board of how they will speak with the pilot.

And then , a very different kind of news conference with many of the first responders where you got a sense of what happened.

I was struck with for all of the discussion about the black box and the flight instrument panel and the different safety equipment met -- to save them, we heard heard the stories for firefighters and police men and women who were involved in this safety and rescue terri up we really heard detail -- and rescue to save them.

We really heard details of heroism.

Listen to what this police officer had to say.

There was the chute and we went right up it.

There was one gentleman left standing up there.

He was the last one off.

You can hear the tone of his voice.

They all had a similar tone.

They were proud of the work they did.

They were really choked up when they recounted what they went through to perform those rescues.

What we know about the deaths of those tooth teenage girls from -- those two teenage girls from china?

We do not know much.

The fire department came out yesterday and said after the san francisco mayor thomas comes investigation going on involving the ntsb , fbi, and coroner's office looking if one of the victims was run over by a rescue vehicle.

They were rescuing hundreds of people from the plane.

They do not know what happened.

They are trying to investigate.

They were arrested to give out any information.

That may have been the case.

We know the two girls were 16- year-old girls on their way to a summer christian organization and los angeles.

We know they knew each other and were friends.

We do not know if they were sitting next to each other.

We do not know if they were sitting near each other or what became of them.

Police and fire it did say they are looking into the deaths of one adult people.

What have we learned about the speed of the plane as it was landing?

The reports it was coming again significantly slower than it should've been.

That was exact word he used -- the exact wording word he used.

Significantly below.

The 137 knots.

What we can see from the flight data, he sensually, the way it -- essentially, the way it is coming again, it is a straight line.

We saw from this plane, it was coming in faster than other planes, declined faster , flew down quite a bit more.

It did not make it.

It hit the seawall and spun out of control with the tell breaking golf and tragedy.

-- and the tail breaking off and tragedgy.

Investigators are focused on the speed of flight 214 as it approached the runway.

Peter cook has more on those unanswered questions.

Ntsb and they can -- investigators have not found any mechanical issues prior to landing.

They are hoping for more answers after their interviews with crew members.

All were experienced.

One pilot had 12,000 hours.

It was his first landing in san francisco area.

When we interview them, we are going to get more information about their activity, their work, their training, and who was the pilot training and in command area.

We are going to be looking to correlate all of that information with what we are finding of the cockpit voice recorder and data recorder.

The recorders showed normal operations until the final moments of the flight with the crew realized there were, get too slow and try to abort the landing.

How slope are they going?

They should've been fined at 137 knots.

They were down to 134 knots and then 112 knots.

Within 10 miles visibility and little wind, veteran pilots said it should've been easy to lend.

How could they get the plain below a normal glidepath and let it slow up to the point it was literally stalling and just to fall out of the sky?

Why do some of the pilots not to notice sooner?

Some the questions investigators are trying to answer.

Back to you.

Will have more of the plane crash investigation and a focus on the jet with the former vice chairman of the national transportation safety board.

He will join us for a look at the investigation.

We will have highlights from an interview with ben leavy on a passenger.

Ntsb is sending a team to alaska to investigate the crash of an air taxi.

Also taking part is rice banning.

Before firefighters could get to it, the jets began burning southwest of anchorage.

Investigators said they have recovered the black box in the train explosion in quebec.

The train was carrying crude oil when it derailed and exploded.

13 people were killed.

50 people remained unaccounted for.

A criminal investigation is underway.

26,000 gallons of crude oil spilled into the river.

In other news, congress returned to washington with unfinished business.

A ticking clock until members recessed for the summer.

At the same time, president obama land -- outlined a plan for smarter government.

What is his plan?

The president met with his cabinet this morning including some new members at he gave them a directive.

Better government services, lower taxpayer expense and he is calling on congress to give him authority to reorganize executive branch agencies.

Take a listen.

I am going to keep doing what we can administratively.

We sure could use's help.

I said they want more proficient government.

They give a lot of lip service.

We are working under constrained fiscal -- so government can deliver on the functions that the american people are looking for.

The white house continues to push for a grand bargain to deal with spending and the deficit.

Administration released a budget projections showing we have the smallest budget gap in five years.

Mark, there is not much movement toward that grand bargain.

Maybe no grand bargain at the moment, congress is back in session.

Will they be working together on anything?

We are seeing a lot of indicators of more gridlock.

Members have a lot on their plates.

Tax codes, immigration law, student loan.

You can expect battles on pretty much everything.

Epa on another point of contention.

They may have trouble getting confirmed because of opposition.

Cymer crack -- senate democrats are taking aim at the house.

Harry reid chiding john boehner to pick up the scent farm bill and the immigration bill.

It eventually, he will be forced -- eventually, he will be forced to take on immigration.

House leaders agreed to float interest rate on student loans.

They doubled last week the customer was no agreement in the senate area house leaders will meet to talk strategy but they have already expressed concern about the senate measure.

As all of this sounds bad, many people believe in the last will get done next year with the midterm elections around the corner.

The approval rating for congress is 15%. megan hughes area thank you.

The details on the budget review.

The white house that the federal deficit for the current fiscal year will shrink to 759 billion dollars.

That is less than administration addicted months ago.

The white house claims it is the fastest time following world war ii.

Sylvia burwell said "under the deficit, they will be reduced below gdp by 2017 and continue to follow by two percent." we'll get more insight on the investigation into flight 214. i will talk to the vice chairman of ntsb, robert francis when "bottom line," continues in a moment.

? stocks rose for a third day.

Euro area finance ministers approved aid to greece.

Natural gas rallied 3.4% on speculation hotter weather may spur demand for the power plant fuel.

The s&p was up 8.5%. the dow jones industrial average was up 88 points under zero point six percent.

The nasdaq was up five points.

Here's my colleague olivia sterns.

Stocks climbing as earnings season kicked off.

Rest up, we had all: coming in after the bell.

-- we had al coa coming in after the bell.

Aluminum is their biggest by revenue.

It extended trade.

Another stock we are watching is dealt.

The shares a rallied after shareholders, told investors to support founder michael dell.

A battle has been brewing between dell and carl icahn for control of the company.

Intel shares, analysts lowered earnings for 2013 and 2014. weakening demand for personal computers.

Raising money today, that is activist ackman they are raising money for a fund to buy a single u.s. company.

He is not single which company.

The last fund he raised bought a big steak and target which he said it was one of biggest belly -- a big stake in target which he said was one of his biggest failures.

Olivia sterns joining us.

More now on our top story.

The crash of flight 214. join me as robert francis, the former vice chairman of ntsb.

Mr.

francis, welcome.

Thank you for coming on tonight.

I have flown into san francisco international, the approach over the bank looks daunting to the untrained eye.

The weather latest saturday was clear.

What should a pilot to be looking under those conditions?

He did not have to worry about visibility.

He can do a visual approach.

Not just rely on instruments.

Obviously, if you have a visual approach, you will be more precise.

The ntsb chairwoman said at impact the airspeed was 106 knots.

For that type of aircraft, the airspeed should've been 137. do you have any thoughts on why a pilot would do it less than operating procedures?

I do not have any idea because there was a check pilot there.

This pilot in the left seat of the captain only had 40 hours on the airplane.

He was in a sense being trained by the guy in the right seat who did not speak out.

That is not understandable at all.

It is puzzling.

Is that unusual in your career after having looked over some crash sites from other accidents in aviation history?

The only thing that comes to mind to my recollection that i can compare with as an accident i was involved with the later stages.

There was korean airline that did something comparable in terms of lack of professionalism in the cockpit and flying the airplane.

This was a major accident where a lot of people were killed.

And you know, these accidents and do not happen all the time.

I am not's merchant -- besm irching the korean country, you wonder about the training going on.

You mentioned the crash in guam.

The history for korean companies it did prompt the government to institute more safety measures in order is carriers to get into airplanes and the pilots were training.

It is something you expect to see right now as well?

I would inc.

They would -- think they would at least be looking at training and crew resource management.

You have to pilots up there.

They should both be looking at what is going on and monitoring the airspeed and the rate of dissent.

The guy on the right side more experience.

They should realize they were too low.

And much more quickly have decided to go around.

We have to take a commercial break.

I was wondering if i can as you to hold on.

With a couple more questions about the structural integrity of the aircraft and the safety measures.

I would not mind at all.

More with bob francis, former vice chairman of the ntsb.

Stay with us.

? welcome back.

More with robert francis.

Joining us on the phone talking about asiana flight 214. the structural integrity of the aircraft.

There were 307 people on board.

Most everybody survived.

How did the design of the aircraft help prevent more loss of life is to mark -- more loss of life?

There had been a high priority over the last 20-25 years not only the structural integrity of the aircraft itself , but particularly the interior.

Fabrics, nonflammable fabrics.

Seats that are well attached to the floor of the aircraft.

As the -- exit doors that are easy to identify and get out of.

Lots and lots of work has gone into this.

This is been by a lot of dedicated people.

This is a payoff.

This is where a guy accidents where a lot of people, out -- come out.

How to past tragedies help engineers build airplanes to building seats that can withstand the force of gravity?

They look at the accident and say this is how we have the seat and is more engineer sits down and ask what not to do to make us stronger?

The same thing will happen after this accident.

Ntsb people are going to go in and look at any weaknesses they can find in the aircraft and that will lead with a board comes out of the report, that will lead to people changing the regulations and requiring things that will help in terms of something that happened in this accident.

Robert francis, the former vice chairman of ntsb.

A senior policy advisor at a washington law firm joining us on the phone.

Thank you for your time tonight.

We should.

A reminder coming up at seven 30 p.m., highlights of sara eisen's interview with been a leafy -- ben levy.

The south korean government's response to the plane crash.

The top stories from asia when "bottom line," continues in just a moment.

? welcome back.

This is "bottom line," on bloomberg television and streaming on your ipad and on bloomberg.com.

Thank you for staying with us.

Let's check where the markets finished today's session as we hit the bottom of the hour on this monday, july 8, 2013. u.s. stocks rose.

A 30 day straight of the games.

-- a third straight day of gains.

The nasdaq composite index was up about five .5 points.

A check of some the other top stories we are following.

Here is olivia sterns.

Violence continues in egypt.

The health ministry said more than if the people have been killed and hundreds of more hurt in clashes between the army and supporters the ousted president.

The only islamic party has pulled out of talks to select a new prime minister.

Texas governor rick perry announced he will not seek reelection.

He is in the office nearly 13 years.

He is the current longest serving governor in the country.

San francisco fire officials said there is a possibility that one of two teenage girls killed was struck by an emergency vehicle.

In the meantime, the ntsb is investigated if pilot error played a role in the crash.

Thank you.

Let's continue our coverage of asiana flight 214. sara eisen spoke with one survivors.

He is ben levy.

He travels to se oul, south korea frequently.

Sara asked him to take us through moments before the crash.

It was uneventful until the last second.

I was sitting on the exit row just behind the wing.

Directly by the window and the door.

I fly pretty often out of san francisco.

I was look at the water.

I noticed we were flying lower than usual.

That got me little bit worried.

We're so close to landing.

Everybody with an upright position.

Everybody strapped themselves in.

Nearly second from impact , i headed that instinct that we were lower than usual.

I dismissed it.

I said the pilot knows what he is doing.

We are going to be fine.

We will be fine.

As soon as i've those of the thrust of the engine going full power -- as soon as i felt the thrust of the engine going full power.

The pilot use all of the power he had to get the plane higher up.

I can see walls of water.

We started to hit pretty hard the runway.

In the airplane was in an upward motion due to the acceleration.

We kept going up and toward the left a little bit.

We got slimmed down really hard into the ground.

Everybody was screaming.

Trust total this -- disbelief it was happening to us.

Everything stops.

You realize somehow you are live.

You are sitting in the airplane.

We had no extent of the damage on the outside.

There was no smoke inside, no fire inside.

It took a little while for everybody to start snapping out of it and realizing we are alive.

We have to get out appear.

But then what happened was you realize you were alive and everybody was ok?

I had broken ribs.

The passenger next to me was breathing heavily.

I did not see the flight attendant.

I opened the door right away.

That is my instinct.

Of course, that is what you are being told.

I got up and i try to open the door.

I never open the door of an airplane before.

We realized there was no -- and they've been ripped off.

People can still step down and go further down.

Right away, i started screaming to people, we are ok.

Get out of the airplane.

Get out of the airplane.

Help each other.

Do not push.

I remember vividly , a husband and wife holding their children in their hands trying to get out.

The firefighters were spring -- spring -- sprayigng foam on the airplane.

You can see more of the interview tomorrow morning on "bloomberg surveillance." the crash has made south korea stepped up safety measures.

Mia, good day.

A good morning to you.

I continue korea is waking up in the transport ministry is investigating what happened in terms of upping safety measures.

The eight carriers really need to ensure safety on their flights.

Asiana are checking inches and landing gears on all worry and other 777's. that is going to last 50 days.

They are taking this crash and investigation of very seriously.

The other store we are watching is china inflation numbers.

What is expected?

In about two hours time, we will be watching cpi and ppi for june.

The estimate is 4.5%. earlier, it was 4.1%. that is -2.1%. i want to put in perspective.

The reason traders care about those numbers because it gives an indication of growth.

China is facing its lowest first-half inflation said the financial crisis in 2009. this prolonged factory deflation with the ppi number underscore weaker demand area that leads china at risk of missing its growth target.

That will be the first time in almost 15 years.

We will have these very first -- these very important numbers.

Thank you.

Luxury redefined.

How the $13 billion u.s. spa industry is dealing with a still recovering economy.

Stay with us.

? is time for the commodities report.

Su keenan has the details.

Stealing the show was natural gas.

It is called the weather commodity for a reason.

Times like this.

The hot, hot the weather.

Record temperatures is expected to last during midweek.

This is fueling demand for power plant fuel.

A limited energy group is high year.

The after the bell trade.

It rose above 104. egypt has been unaffected from violence.

The after-hours trade, retreated to lower volume.

Gold posting gains during the latest session.

We know more about the sharp decline in gold.

John paulson is telling investors it is 65% year to date.

They have 300 million in assets.

Is the smallest at the firm.

Another billionaire taking it on the chin due to gold and mining is a brazilian billionaire.

His estimated 12 lost $30 billion.

Dachshund to have lost $30 billion.

-- he is estimated to have lost $30 billion.

A hurricane is boring.

Not expecting to impact the gulf.

Despite this move, goldman sachs is cutting is forecast.

There is a big debate over the direction.

Bp capital is very bearish.

The gas may reach $5 in a cold winter.

The surplus of the drug prices below dollars for the first time in a decade to come back again.

Thank you.

The u.s. spa industry is a $13.4 billion industry according to the spa association.

The industry is responsible for 300 40,000 jobs.

Let's look at how the industry is coping an economy that is limping along.

Michael thompkins sco -- is a ceo.

Mr.

tompkins joins me from tucson.

Thank you for joining us tonight.

The recession , how did it force you to change your business strategy and is luxury have the same meaning now as it did during less volatile times?

During the downtime of economy, we had to focus on a different area area which was business partnerships.

We joined partners with places like national geographic and clarence to reach more of a customer base.

We were fortunate enough to have an owner who believed in our strategy and invested capital to create our new miraval spa.

It was the combination that sent us of the true debt -- trajectory of growth.

Sir, when economic downturn like the one the u.s. faced, are you really prepared from a business standpoint and in a worst-case scenario, should that now be part of the paradigm going forward?

The consumer is spending smarter.

Well to look at what are the ways they are getting the information to their vacation experience in travel destination.

What we can do to impact that so our customer service is good, our experience is great thomas and we are positioned to grab the travel dollars and ways to outpace the competitor.

Last year, you opened a new spa.

Was that a gamble given that market indicators showed an even recovery?

It was.

It was a strategy that we set forth from the beginning.

We knew when we came out of the economy, we wanted to be in position in front of the market so we could be primed for growth.

That's exactly what we are going to do with a property out of new york and new jersey called miraval.

It was decision to move forward in the company that has positioned us i head of the market with that new -- ahead of the market with the new spa.

We are seeing growth.

Why the northeast?

Why this area?

It is a major metropolitan area.

That is where our major demographic is.

It is convenient.

The property is self spectacular.

It currently has a restaurant and it sits in somerset county.

And we are going to be adding a hotel and spa to it.

The component of all of that given the existing property is so strong that it will be a home run.

Has the new spa help to gain market share?

It has because most of the places did not invest in their product.

The fact that in late 2012 and early 2013, we are coming out with a brand-new spa and innovative services like meditation, innovative service that are grading experience you cannot get anywhere else.

The consumer is looking for unique experiences they cannot find anywhere.

We are thankful they are seeing miraval as a choice.

You offer a luxury that can be viewed as something people could do without.

Your clientele is comprised of high net individuals.

To become he forced them to change their lifestyle?

Any consumer is being smarter.

They are looking at ways you can get the best value for their dollars.

We convey that in every way possible.

It has been difficult to claw back a rates.

In terms of our growth, we are fortunate that the decisions we made seem to be the right words.

It is not about luxury, but taking care of yourself.

Taking the time to say that my life is stress, there are things going on that the hard to deal with and to take the time for yourself and to go and back away for a bit and unplugged.

It is been a great thing for many.

Michael tomkins.

Joining us.

It is a pleasure to have you on.

Thank you for your time.

Good luck with a spa in new jersey.

, got, companies are -- coming up, companies are betting on botox.

? considering splurging on botox?

The company that may factors the wrinkle treatment just got a lot cheaper.

Olivia sterns is back on why it could be a takeover target.

What is going on?

Why has the company stock falling so much?

Sales are booming.

It is $2 billion a year.

The trouble is some their other products have hit a few roadblocks.

If you look at the share price on the screen, it tells the story.

The beginning of may, that is when callaghan said it would delay -- alerger n said it would delay to other drugs.

It will be easier for generics to compete.

A huge plunge altogether.

Down 24%. the reason why people are interested, because of botox.

This is why.

That shot is making so much money.

It is not just about wrinkles, writes?

-- right?

It is going for medical use.

Not just to get rid of wrinkles.

It is being used to treat migraines.

That is one reason why sales are doing so good.

They could hit $3 billion by 2017. as one analyst said, botox has little competition.

It is really the scotch tape of toxins.

The brand name.

The market cap as $25 billion a lot of money.

Is a big price tag.

You have to have a lot of money to be in there.

North of $100 billion.

Merck is included and glaxo because they already sell the drug in china.

I spoke to one manager who said -- nor is it broken.

Olivia sterns, thank you.

We will bring you a world wind of extreme sports around the world.

Hot shots is next.

? it is time for hotshots, the most compelling images of the day.

A scottish celebrity complete another sporting feats, andy murray, not the wimbledon champion, but a doctor who specializes in sports medicine.

He climbed africa's highest peak in just one day.

Most climbers take 5-7 days to reach the summit.

Dr.

murray did it in seven hours.

Last year, he won a marathon at the antarctic ice marathon.

In another extreme event, 30 athletes gathered in austria for the beginning of the ultimate amazing the race.

Trouble 620 miles via 10 amended to reports in the fastest time possible.

The other methods of transport is by foot or the paraglider.

You get the latest headlines at the top of the hour on bloomberg radio and streaming on your ipad and on bloomberg.com.

That does it for this edition of "bottom line" on bloomberg.

I am mark crumpton.

This text has been automatically generated. It may not be 100% accurate.

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