Banks on Parade: In The Loop (07/12)

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July 12 (Bloomberg) -- On today's "In The Loop," Betty Liu takes you from the day's breaking headlines straight through to the opening bell, speaking with the most influential guests and asking the smartest questions. It's not noise, it's news. (Source: Bloomberg)

Dni.

The president's approval rating despite the policy change.

We will talk to two ceo's who says he is good for business.

How adding lampert's fight to turn the retail around -- eddie lampert's fight to turn sears around is getting mojo.

And michael eisner sounds off.

? from bloomberg world headquarters in new york, this is "in the loop" with betty liu.

Good morning, everybody.

It's thursday, july 11 at we're live from bloomberg world headquarters you are "in the loop." we have all these top stories.

Work is reporter dominic chu is watching little markets.

Equities, commodities all higher.

Ben bernanke said the economy would be more stimulus.

And bloomberg news finance reporter have the breakdown on squeezing bank profits.

Out in washington, white house correspondent hans nichols has the latest on a fight over immigration reform between house republicans and president obama.

There is also a new approval rating out on the president's policies that will tell you about.

And senior west coast correspondent jon erlichman out where media moguls are.

An inside look at disney.

Let's get it off with dom.

Pretty clear that expectations are for continued federal stimulus.

It is, carol.

It is really safe to say that it it has been bullish, risk on, whatever you wanted to -- call it in the market today, take a look at stock, futures, very much in the green.

Traders are pushing up prices, pretty much continuing the bullets -- the bullish turn.

Check out gold futures.

They're working on their fourth straight day of gains.

The most bullish of the past four.

We can paint a lot of the move on fed chairman ben bernanke, his comments.

At 2:00 p.m. yesterday, the fed released minutes from june.

We learned nothing really new.

The fed is going to wait for more signs of implement again, economic growth, and about half the participants in the meetings want to stop the fed's $85 billion a month and bond purchases or stimulus by the end of this year.

In a separate events, bernanke himself said that "the overall message is accommodation.

There is some perspective, gradual and possible change in the midst of instruments, but that should not be overall -- views with the overall thrust of policy, which is highly accommodative." it means the fed stimulus is here to stay for at least a well to come, hence the rise in stock, goals, treasury bonds, etc.

Markets definitely like it.

Concerns about the fed having back on stimulus may be set aside for now.

When it does eventually happen, can we expect the stock market slowdown?

Maybe, carol, since we cannot protect the future.

Let's take a look at the past for some close.

This chart show some of the past rallies over the past couple of decades since the late 1970's when the fed raised interest rates.

That is the redline.

Typically we see stock market gains start to taper themselves or slowdown.

They're not raising rates yet, or even tapering stimulus yet, but it is certainly something that traders are keeping in mind as we continue to dissect all of that that is speak.

So if there is a change in interest-rate policy, keep an i on those stock markets.

We could a certain reaction in the market place.

Dom chu, thank you so much.

Despite chairman bernanke you call for continuation of monetary stimulus, what happens to the nation's largest banks one step -- once fed tapering began to go> -- begins?

The markets typically react any time they hear anything out of the fed.

That has been going on the last few weeks.

The fed has said they will not start tapering until i implemented a low seven percent.

They further said they do expect that to happen until 2015. what is happening now is the long-term rates are, short-term rates are low, and are going to be low for quite some time.

That is a deal curve, which usually helps banks.

Right now it is hurting them because what is happening as long-term rates rise, the value on those bonds dropped.

That hits banks balance sheets, it's their trading books, so you're going to see some market loss on earnings on trading.

It also hurts another portfolio called available-for-sale.

That flows through to their balance sheet and their capital.

We have got much higher capital standards coming in january and so this is all like a perfect storm that is going to squeeze art -- rough it's because banks will have to forecast.

What about the play out in the orderly earnings we will see later in the year?

Quack there will be stronger, more pronounced in the third and fourth quarters, but we are going to see some evidence of it in this quarter.

Bernanke's original comments were made, at little bit more than halfway through the quarter.

The first half of the quarter western medicine strong in trading, mortgages.

It all just kind of shriveled up after bernanke said they were considering tapering off the bond buying program.

So it really hurt things starting in june or so.

How loughner -- who is the most full marble?

-- vulnerable?

Goldman sachs and morgan stanley.

They will see less.

Analysts have been provide lately -- putting their earnings down.

12 out of 26 analysts have revised their estimates down for both bulk goldman sachs and morgan stanley, wells fargo -- they've got a lot of exposure.

Jpmorgan is is going to take a hit on mortgages.

All the big banks.

Regional things will be better because the large banks are so asset sensitive.

They are so interest-rate sensitive because they just have more portfolios.

Commercial and industrial loads portfolios will take a big hit.

You will see the effects of this in the second quarter.

More so in capital van earnings.

It will definitely affect the third and fourth quarter.

Environment definitely changing.

Bloomberg news ' dawn of becky.

Thank you so much.

-- dawn kopecki.

President obama's poll numbers are underwater.

The president gets negative remarks from voters for his handling of foreign policy, immigration, and the economy.

Overall, 48% of those polled disapproved of president obama's job performance, and 45% approved on the economy.

-- on the economy, 35 % disapproved of his performance.

Still, they trust president obama to fix the upon -- to fix the economy more than they trust republicans and congress.

The president plans to use his bully open to push for immigration reform.

Legislation passed by the senate comes to a grinding halt.

White house correspondent hans nichols joining us now.

Hans, is the president second term agenda safe here?

This is a one policy proposal the president wants to get over the finish line, but he needs congress' help.

Think of the debate as having two separate distinct camps.

There is an internal debate within the white house about when to deploy the president and how.

Which states he should go to, how much she -- much he should get out there.

Every time the president gets out front, he could jim house republicans, and that makes it less likely he could get a palace the deal.

-- a policy deal.

You saw the debate yesterday when john boehner met with his caucus.

They're trying to decide how to proceed politically and policy wise.

It is clear that the senate bill is dead on arrival inside of the house.

It was a 2.5 hour meeting yesterday.

Their goal or hope -- boehner talked about this a little bit -- is that house republicans will be in a much weaker position if they don't move forward on some sort of immigration plan.

At the overwhelming sentiment is that nothing is going to happen, but they do want to take it up piece by piece and move along that way.

All right, hans, thank you so much.

White house correspondent hans nichols.

Now heading out west, the allen and company sun valley conference is in full swing as moguls from the media world are rubbing elbows and talking shop.

Senior was close or spun it jon erlichman is in the resort town, and he joins us now.

You said down with former disney ceo michael eisner.

What does he think about the decision to go on longer a disney?

He is encouraged by.

Bob eiger arrive here at sun valley yesterday.

-- bob iger arrived here yesterday.

He will stay on as ceo longer until 2016. he told bloomberg news that the board felt it was a good idea, so did iger considering he will hold onto the chairman title until 2016. for michael eisner's respecter, this is an encouraging move.

This is what he had to say but the current disney ceo.

If i had my choice, i would have him say even longer.

Maybe he will.

There you have it.

One of the reasons he feels that way is because bob iger comes from the tv side of it, from abc, and a huge part of the disney revenue story today is the cable channels and espn businesses.

I know you have been busy rubbing elbows, and there are other disney execs out there, tom sachs who is rumored to be ceo.

When the announcement came down that iger will be staying on as ceo, some wondered what it would mean for success in.

You can still inspect that some of the long-term executives like tom staggs could end up being the next ceo of disney.

Staggs is the cfo but currently running the park's business, a very important part of the disney empire.

One of the biggest focus is right now is opening its shanghai resort, expected at the end of 2015. we did get a chance to ask tom staggs a couple of questions about what he has been up to.

Here is more of he had to say.

Right now, it is about managing construction process.

I will head over in a few weeks to take that out.

But things are moving along.

Staggss, a guy who is been with the company for more than 20 years, is quite an favor of iger staying on as ceo.

Investors want to keep them in place as well.

Jon, thank you so much.

Our senior west coast correspondent jon erlichman good way well more from sun valley when "in the loop" continues.

Dr.

toby cost growth is there , as well as investor david winters.

Those interviews are still ahead.

Career builder ceo will join us next to talk about the company's new trend for small businesses.

They are hiring.

Are they really afraid of healthcare referral -- reform?

And kenneth -- katniss chitty the families.

"the hunger games" is teaming with subway.

We're just getting started on this thursday.

? you are watching "in the loop" life on bloomberg television, streaming on your tablet, your phone, and bloomberg.com.

I'm carol massar.

Betty liu is off today.

As investors, anyone a main street -- they will all have the same question about the rest of the year.

Will companies continue to higher?

-- to hire?

Not just for back-to-school and holiday, but permanent.

With us now, one man who might have an answer.

Matt ferguson is ceo of career builder, which just publishes second half outlook.

Great to have you back here on "in the loop." we got so excited about the delay to a report.

Based on what you are seeing in your report will we continue to be excited?

I think we will.

I think it will be consistent hiring, around 200,000. i think people projecting that might go up.

I do not think our report shows it.

The biggest jump in projections for the next half of the year will be in the temporary and contract area.

We saw a 10 point jump from last year in that.

I do think we will see more hiring, temporary or contract in nature.

The permanent hire will continue the way it is that.

That is not great.

We want to see those armitage on being created.

Do you see at some point based on what you were saying any reports that at some point some people are able to willing more -- more likely to commit to those permanent positions?

I think so.

Two things are driving the contemporary contact work in uncertainty that is still around, were company's are still afraid to bring in full tom -- full-time employees, and the health care law creates uncertainty for all locations around full-time employees.

That being pushed back a year may change the result of the survey and move more of those people that soda.

-- that showed up here in the temporary and contract side.

Are we going to see a burst of hiring as a result of back- to-school?

We will.

When you look at the bls, they factor those out.

They factor those seasonal things out, so you would be looking at your incremental growth.

But they will be a burst of hiring as we get back into the fall.

I also think if people continue to europe is going to solve their problems, or at least they're not going to cause huge issues around the world, if china can continue to move forward, even though their growth rate is slower, if we can handle some of our fiscal issues, 2014 can set up to be the best year since 2007. where are we going to see the hiring gecko there's a lot in the tech area.

The biggest things are mobile, social, cloud, big data.

Digit growth, i think those will be big things on everybody's mind.

Everybody is trying to grapple with how to enhance their businesses.

So those will be big drivers.

Some things run health, understanding the health law and generally we saw that in here.

Those are some of the big growth drivers.

One of the things i was surprised about in the survey is the midwest all the biggest jump in op the ms.

Him -- and optimism for forward-looking hiring.

Northeast saw flat to down slightly.

Midwest manufacturing story continues to improve, and we saw the the biggest jump in optimism there.

And plays into some of what's of when he has been writing about in her book about where we will see the growth going forward, not necessarily on the coast, but some of the inner areas of the country.

That plays into what you are seeing in the midwest.

Talk to me about small businesses.

I have to tell you how important they are to the backbone of the u.s. economy.

What are they going to be doing?

The good news coming out of this survey is when you look at the employers less than 500, the show the most optimism for increasing headcount throughout the remainder of the year.

As you noted, especially when you talk about businesses under 50 employees, that is where most the job growth in the u.s. has come from in the last 30 or 40 years.

I will tell you the last couple of years, there has not been a lot of optimism there.

They about the slowest growth.

In this survey, we will see more growth out of those businesses.

Fast forward six months from now, what will be the biggest labor, job market story?

12 months now, the employment rate will be below 7% or right at 7%. next year we have a chance to be creating 250,000, 300,000 jobs for the first time since 2006, 2007 timeframe.

Construction has a wider impact across the implement marketplace.

With housing approving and people spending more on housing, buying more and housing, building more housing, that will have a widespread impact on the employment market.

Matt, anything the u.s. found in your survey that caused you to have little bit of concern here?

I do not see us jumping to 250,000 jobs at this -- at the back half of this year.

There is a possibility in 2014. people projecting that for the latter part of this year will be disappointed.

But hiring will be stable throughout the rest of the year.

Matt, thank you so much.

Matt ferguson, he -- ceo of career builder.

Coming up, don't let the name fully.

A former citizen -- senator has written a book called "gridlock congo a thriller about cyber terror.

Plus carmaker's plus consumers.

They're trying to convince you to pay extra for some and you already have on your smart phone.

That is coming up next on "in the loop." time for this versus that.

This is when we talk -- tackle one story with two different sites.

Today, we are looking at the battle for your car's dashboard.

This is an in dash global was listening system for cars.

20% of cars on the market currently offer the future.

This is according to his.

While it may help drivers avoid getting low, it's fancy software can add as much as $2000 to the price tag of a car.

That is an iphone.

It has got the same features of an in-dash gps system at no extra cost.

Dexter -- car owners telling gay power and associates they use the map on their smartphone over their car's system.

It is part of the growing challenge carmakers are facing it they try to maintain premium prices for features and a more mobile connected cars.

Staying with technology, we will tell you about a story where apple was not the big winner.

It has to do with the judge's ruling on e-books and price- fixing.

And "catching fire." "hunger games" sequel is excited to be huge, and subway is hoping to catch an -- cash in on that success." -- that success.

Say "in the loop." ? you are watching "in the loop" live on bloomberg television, streaming on your tablet, your phone, and bloomberg.com.

I am carol massar infra betty liu on this thursday.

Here is a look at our bloomberg cap guidelines.

Ben bernanke made it very clear -- he is in favor of going ahead with the stimulus for the foreseeable future.

The fed chairman saying the economy needs what he calls "highly accommodative monetary policy." that coming three hours after half of policymakers want to have bond -- halt bond purchases by the end of the year.

Real estate tracks thing home foreclosures last month slashed 35% from a year ago.

The foreclosure rate is three times the national average in florida.

In egypt, the interim government is talking reconciliation but acting tough.

There have been arrested weren't for the top leaders of the muslim brotherhood and others.

Eric use of purging -- they are accused of encouraging the outbreak of violence that left people dead.

We are bringing you data as well as initial jobless change.

Coming to will have -- dominic chu will have more and so will sara ireland.

-- so will sara eisen.

We're waiting for import price numbers to come out for the month of june.

We have got weekly jobless claims as they always come out on thursday.

Also the continuing claims number, which gives of a longer- term perspective.

U.s. initial jobless claims, that if the imported one.

A little bit higher than what the economists were forecasting, coming up and it 360,000. economists were looking for 340,000. 2.97 7 million compared with 2.95 5 million.

As for import prices, we're seeing a decline down .2%. economists admit they were looking for a number that was flat, unchanged.

That is month over month.

Year-over-year, it is about .2%, less than what economists forecast.

They were looking for increasing double that, when four percent.

Let's head out to dom.

We had a very supportive market . how about this data?

It is still supportive, carol.

Despite those numbers coming in maybe a little bit higher for jobless lanes then economist had anticipated.

For s&p futures, we were up about 17.5 numbers -- 17.5%. nasdaq up about me it .29 points.

-- about 28, 29 points . overall, people are buying up treasuries.

Forcing yields down 2.57% for the 10-year.

On the currency site, dollar- yen, 9916. that is below the hundred level.

Euro, $1.64. to isolate.

Let's head to sara eisen for more on those numbers.

It was a surprise for the jobless claims numbers, carol.

The number of americans filing front of women have shot up to a two-month high.

There is a caveat -- this is a weekly number, it is very volatile, seasonally driven.

And the risk into this number, we thought it was going to go a little bit higher because of seasonal factors like a retooling of the u.s. auto industry.

That is what economists were looking for because i could explain perhaps in part why we got higher initial jobless claims on the import price index.

This one is interesting because it is a negative number.

It continues to paint a picture of no inflation in this country, nowhere rising prices your ready much take it all together.

Steady as she goes for the federal reserve, as ben bernanke says.

He will stay accommodative for a long time, even if they think about tapering.

The fed still has some breathing room.

There are, thank you.

Bloomberg "surveillance" sara eisen.

Trade talks are underway in washington.

A wide variety of corporate interest stars are making their voices heard.

That is from audi to zappa.

Washington correspondent megan hughes explains.

What do companies like audi and friends out that having common?

-- and frank zappa having common?

Automatic dimming headlines in u.s. cars.

45-year-old u.s. rule does not allow them, but the talks ring a beacon of hope that will change.

The music industry wants consistency on royalty limits, like how much should the trust that owns zappa's music when -- get paid when "donate the snow" gets played on the radio?

Radio broadcaster should pay artists of the same with the eu does.

For any industry, changes could mean big money.

The deal would create the worlds largest free trade zone with nations representing one third of world commerce.

A cumulative gdp of $33 trillion.

Trade analysts warn agreeing on the details will be a challenge.

Relations in the united states are different from the regulations in europe.

Both sides in many cases have deep-seated reasons for doing that.

Food labeling is another big step -- citywide.

French vendors one only sparkling wines in the champagne reason of -- region of france to be label champagne.

American regions were a lot to be grandfathered in.

France would like to amend that.

Campbell soup is looking to end a european import restriction on the american practice of renting chicken with a chemical solution to kill germs.

Consumer advocates are worried corporate influence on the trade talks will lead to backdoor deregulation.

Europeans have very strong genetically modified food labeling laws.

U.s. companies want to steamroll into the european market here in the meantime, corporations are lobbying hard on both sides of the atlantic.

Megan hughes joining us live now.

Megan, you mentioned consumer advocates are worried about corporate influence.

Other than food safety, what else are the watching out for?

Consumer advocates are afraid that negotiators are going to take the weaker law on either side on a number of issues.

The greenhouse gas emissions, chemical regulations, those are just a few examples.

It is hard to overstate the number of industries and interests that are involved here.

Just yesterday, giving presentations, we heard from ebay, oil companies, farmers, lou -- unions.

So a lot of people, a lot of industries.

A lot of layers, a lot of issues.

What is the topic here?

When will we know what is in this ultimately?

This is really the first step.

Negotiators meeting all this week through tomorrow at the white house complex.

After that, they will be meeting every three few months.

-- every few months.

There are a lot of trade advocates that are skeptical about the 2015 time i peered keep in mind, this will need to be approved by congress, the european parliament, and the european council, all that which have had something in the regulations that are currently on the looks.

Washington correspondent megan hughes.

Thank you.

Coming up, what should the u.s. do about nsa leaker edward snowden?

And former u.s. senator who is just written a book on cyber terror has some ideas.

That is coming up next.

And a marketing genius figured it was a natural, nation.

The upcoming sequel to the "hunger games" and a restaurant chains.

We will tell you that when we come back on "in the loop." ? a new poll shows that the majority of american voters consider edward snowden a whistleblower, not a traitor.

He remains on the run.

There is speculation that snowden will expect -- except asylum from venezuela.

Byron gordon -- byron gordon -- byron dorgan just wrote a book called "gridlock." he joins us here on "in the loop." let me ask you, because i think your book is so timely.

It talks about cyber terrorism.

We're trying to figure out edwards noted.

Is he a traitor, is he a hero, is he a whistleblower?

I don't know what the right label is.

I think he has done a disservice to this country, honestly.

Why.

There are ways to ask for more oversight.

He was in a very sensitive position.

He had disclosed information that was not -- should not have been disclosed to us or our adversaries.

Did he do a disservice to americans -- they're so much information that the government can access legally.

I see this in two points -- one company is in a disservice to our country, second, it is very important that the american people push their government so that we fully understand what government is doing.

Congress has a responsibility to provide the right kind of oversight if there are things going on that we don't know about.

There is a response ability in the intelligence communities and others in congress.

It is not clear to me they have always known what is -- what has happened.

I do not view mr.

Snowden as a hero.

He may asylum somewhere, but i do not think he did the right thing for our country.

20 talk to you about the president and how he has handled the president.

You approve or disapprove?

I think so.

You think so what?

This president is trying to do a difficult job on it -- under difficult circumstances.

I served with him in a congress be an he is a friend.

It is easy to be critical.

It is much more difficult to write the right leadership.

He is trying very hard.

You write about cyber security in your book, and it deals with getting into the power grid, and it brings the power system in the u.s. it is new territory for us.

Everything is new.

It is a rainy world.

The next pearl harbor maybe cyber terrorism.

It's a case,, the last two wars we have been involved in, iraq and afghanistan, the enemy did not wear uniforms.

That was for a different.

An index work, maybe there aren't things that explode, maybe there are digital attacks which could shut down the entire electric grid system in the united state, or the distribution system for water, or our terms occasion systems.

That could happen.

A study was done, just released , they say the grid system is vulnerable and could be shut down days, weeks, or months.

If that happened, it would be devastating to this country and this economy and the american people.

So we are at risk here.

We are at risk.

Obviously i have read a novel -- had he separated from the headlines?

It is based on serious issues.

Homeland security warned our electric power producers that middle eastern hackers were try to get access to that system.

So we have to be very careful to protect our country in this circumstance could can we keep up though?

Technology is awesomely evolving.

Can we keep up, provide the right security, especially when everybody is trying to get into other people systems?

Would not have a choice.

It is a new worldview and we have got to protect our country.

Did you report on the circumstance with wrinkle oil, 135,000 of their computers, the data was annihilated, the burning american flag was left on all their screens at the image?

Our country in every country sent their experts of all what on earth happened, how the terrorists do that?

This is very real, these attacks against other countries, against corporations, and against our country and the specific infrastructure systems we need to the kind of life we need.

You have written several books, you serve in congress for a long time, what is one difficult?

The first two books were about economic issues come of these two about fiction.

Some say you have not really changed occupations, you are from politics to fiction, same thing.

He was a much for joining us.

Former north dakota senator byron dorgan.

Coming up, they did not come to sun valley just for the scenery.

In a moment, what the head of one of the best-known medical clinics hopes to get out of the media conference.

We will talk about that.

And they are made in the usa again.

The bunnies moving production from china to america.

Stay "in the loop." ? media molders have -- moguls have flocked to sun valley where the allen company conference is in full swing.

Tomorrow, betty liu will go one- on-one with ceo of aol tim armstrong.

She will also speak with parton sorrell, ceo of wpp.

They cover this week it's not just for media industry players.

Dr.

sidney -- dr.

Toby cosgrove is the ceo of cleveland clinic.

He joins us right there this morning.

Good morning, dr.

Cosgrove.

Good morning, carol.

Why travel to sun valley and speak to media entertainment and investors about health issues?

What can they learn from you?

This is some of the smartest group of people that you can possibly interact with.

Healthcare is part of the fabric of society.

We need to interact with all parts of it.

It is a great opportunity to meet people.

Exchange ideas with a group of leaders across the entire usa . who in particular are you interested in hearing from and rubbing elbows with and talking to?

I've had an opportunity to talk with a lot of people about the technology that can bring now for communications and healthcare and new technology we can begin to use in terms of understanding the data.

It is now accumulating a very large masses.

This is a great opportunity to meet them and exchange ideas, also within the insurance industry.

Do thing people really understand how technology is already transforming the healthcare industry, how much more it can still do here you go?

We have a big opportunity in health care right now, with big data being, the electronic medical records -- a tremendous amount of data.

For example, we have some 40 million patients data that we can begin to analyze and understand the effects of drugs, the effects of various activities on their lives, and this is brought to us by technology.

The technology goes on and on.

Whether it is communication or analysis of data or actually delivering health care.

It is interesting you bring it up, i was just talking to an investor in the media space, about that made a data -- that metadata.

It is all out there.

You have got figure out how to leverage all that data and have the systems in place and we are so lacking in many ways.

Who in particular are you looking to maybe talk to, financially support some measures to help advance that?

We have the data now.

We have the ability to collected.

Now we have to learn how to analyze it and how to understand what it is telling us.

This is a whole new area for us.

In fact, the big data is an emerging technology itself.

It is a quite exciting opportunity.

Anybody you can think who can leverage this system?

We are talking to a number of companies.

We have a spinoff company from the cleveland clinic called explore us, which has collected data from a number of healthcare systems across the country.

And they have helped us enormously to getting to understand pings like cost, and effective various treatments are what seems to be the biggest obstacle in terms of leveraging all that data and making a connection between technology and healthcare at this point?

First of all, it is people.

We have to have people who can help us understand the data and analyze it.

Secondly, understanding the potential that we have there.

This is really a whole new field.

And something that many other industries have been looking at a four-year spirit we have got learn this in healthcare.

Certainly lots to be done.

Good to get time with you.

Enjoy your time in sun valley.

Set --dr.

Toby cosgrove , ceo of the cleveland clinic, joining us live from sun valley.

You are watching "in the loop." lenovo is bringing manufacturing back to the united states.

Is one of the latest come bunnies to reach or employees.

I want to one of their locations outside of north carolina -- out of raleigh, north carolina.

Down to the time nearly forgotten -- we are thrilled to be making commuters in the u.s. we are really the first who is on it in a decade.

Lenovo is part of the growing trend in the tech community, apple and lenovo are bringing manufacturing jobs back to the u.s. the road benefit of this facility is the locality of it and the ability to get in more quickly.

We are importing components, thing -- we're saving there, paying a bit more in labor.

But higher labor wages and the cost of shipping goods from china has made manufacturing in china more expensive.

Lenovo is the biggest pc maker in the world.

Headquartered in beijing, and employed over 35,000, 115 of which when obvious among laptops, pc's, and servers in carolina -- in north carolina.

We consider ourselves to be a global company, and this happens to be one part of the globe.

This top giant has made leaps and bounds.

Revenue has increased 10 times.

You are reigning in pc's, but you know what the numbers say, and it is a market that people are not interested in.

They want tablets, they want smartphones.

It is crucial for us to move in that direction.

We are focused on winning in pc 's, expanding into tablets and service more aggressively, and maybe eventually smartphones.

Winning the pc market is key.

They make up 87% of lenovo's revenue.

Also important -- spanning the brand.

Not so easy considering the company is not a household name.

Lenovo is not a consumer brand that people say i need a little noble.

A lot of companies do not -- customers nonetheless.

Our brand has no baggage.

The lenovo brand is recognized in china, where the company ranks number two in the smart phone market.

In the u.s., stop smartphones are not even on a table yet appeared we have to continue to build our brand come our distribution network, and ultimately our manufacturing capabilities to make that a reality.

We did not make this multimillion dollar investment thinking that it was an experiment here it we are committed, and we would like to believe is only the beginning.

Manufacturing in the u.s. will also give lenovo a leg up for particular customers that include local and state government as long with the federal government, that may require purchases made with u.s. taxpayer dollars to be made medically.

For those keeping track in order for somebody to get the label made in the usa, 51% of the value of the system and of the components has to be made right here in the u.s. we will continue our focus on tech on the next hour of "in the loop." to the opening bell.

30 minutes.

The countdown begins now.

You are "in the loop." u.s. stocks higher ahead of the opening bell.

Fed chairman ben bernanke made a statement that he supports continuing economic stimulus.

Jobless claims unexpectedly grew to a two-month high last week.

We are keeping a close watch on microsoft.

Let's go to our markets desk.

Think of what is happening with amd.

Those shares are sharply higher in the premarket.

The game console chip is helping to drive markets forward.

I'm looking at brightpoint education.

Shares are surging this morning.

The company reported parliamentary earnings that missed estimates.

Its ashford university accreditation, analyst say that is a positive.

Congress is getting closer to agreement on various student loan rates.

Am watching shares of tribune.

The company follows similar moves by news corp.

And time warner.

Carol?

Thank you.

The sun valley conference in full swing.

Get ready for some major changes at microsoft.

The company is set to announce a long anticipated reorganization.

Jon erlichman has more on the exchanges that might be coming from sun valley.

Good morning.

This is something that steve baldwin, ceo of microsoft, has been working on for a long time.

He talked about this company the need to focus more on the new world, the new world of phones and mobile computing.

Microsoft is a company that does not have massive reorganizations all the time.

We saw major strategy shift with microsoft when it came out with its own tablet devices.

Microsoft getting into the hardware business.

These changes are along the lines of focusing on devices and services,. getting everybody on the same page, if you will.

They have benefited tremendously through the growth of xbox.

We've seen the high-profile new- media hires over the past couple of years.

Blake kerkorian, microsoft bought his company.

We spoke to him about what it was a got him excited about joining the microsoft team.

We talked about this for decades, the merging of gaming and tv and entertainment.

There have been halfhearted attempts, but the technology was not there.

For me, it is something i'm really excited about.

They're getting into the hollywood game, with a halo tv show.

Trying to build that brand in different ways.

Interesting step by microsoft rated shareholders pretty happy -- microsoft.

Shareholders pretty happy.

Don nasa rick took the top job over and zynga.

Don is a guy off and here representing microsoft.

He's not here this year.

He used to run the xbox division.

He has taken a top job at zynga.

I spoke to ben gordon and mark pincus about the fact that don is not at sun valley this year.

It was his first week on the job, so he decided he was going to focus on helping to rebuild the zynga story.

Jon erlichman in sun valley.

Stay tuned for full coverage of the sun valley conference.

Betty liu will talk dealmaking and all things with tim armstrong.

That is coming up at 8:00 a.m. eastern writer on bloomberg tv.

-- time on bloomberg tv.

Moving and shaking this hour, yahoo's marissa mayer, one of the tech ceo's who has an approval rating like the president.

A highly unscientific survey shows her with an 84% approval rating in the second quarter.

That is down from 91% in last yours third quarter.

-- year's quarter.

Other tech ceo's got some ratings as well.

Larry page in came first -- came in first.

For years investors have complained they want growing tech balance sheet cash.

Jewels, how much are we seeing when it comes to payouts?

Specifically, paying out dividends in the fastest rate in more than a decade, amounting to $10.8 billion in the most recent quarter.

Up significantly, more than the $5.1 billion for teh same period in 2010. all of this is an effort to draw in those value investors as growth of these technology companies slows down.

I talked to matt mccormick.

He said he is definitely buying into these tech companies.

We want dividend growth names, not that yields.

The tech sector looks very interesting right now.

They have low payout ratios compared to telecom.

102% of their earnings are paid out in dividends.

People need to be very selective . go for dividend growth, not just the big yield.

He's not looking at telecom and utilities, he's looking intact because he sees potential.

We would be remiss if we did not mention apple.

Here it is the same sort of narrative.

Apple' tatian has been hit, growth has been slowing.

-- apple's reputation has been hit, growth has been slowing.

The total plan now stands at $100 billion.

One caveat is that these companies are still paying out a low percentage of their cash to shareholders.

If you look at what the industry is producing, cash flows in the first quarter excluding dividend payment, it is $57.4 billion.

They are returning more cash, but they still have a lot of it.

A lot of the coffers, that's for sure.

-- for the coffers, thats' for sure.

A judge has ruled that apple violated antitrust laws by raising copies -- the price and copies of electronic books.

Amazon has long been known as a company that likes to make it a low cost advantage type thing.

They will sacrifice the margin to get market share and penetration early on.

With kindle and their e-book, that is huge.

Apple's ibook has been getting a lot of traction and market share.

This ruling says that apple did violate antitrust laws.

Anytime you talk about the word collude with anything, you you start to get negative comments.

They are saying that apple aligned themselves with publishers to make the prices were a certain amount.

That does not help amazon.

Amazon has always try to cut prices on its products to get it in the hands of consumers.

We all go to amazon because we know the price will be less expensive.

A big reason why apple lust this case -- lost this case is because of steve jobs.

Back in the day, steve jobs had statements with regards to this kind of practice and how they were targeting specifically amazon.

When you make that kind of a statement, the judge that was drooling over the case said that was a big part of the case against apple -- ruling over the case said that was a big part of the case against apple.

He was rather pointed in his comments.

Don, thank you so much.

Microsoft expected to make changes in terms of reorganization.

The company is going to organize the company by function and have four engineering areas.

Their goal moving people around at this point.

They are talking about the specific executives.

This is dissolving a product units for four new ones.

Streamlining, it sounds like.

We're going to head back out to sun valley, idaho.

David winters manages the $1.8 billion wintergreen fund.

He is a longtime attendee of the allen and company conference.

David, great to have you here.

Have you seen warren buffett yet?

Warren is here and looks great.

Let me ask you about microsoft.

We just had news breaking here.

It looks like they are streamlining their organization.

Operations, apps, cloud, and devices.

This is make sense of the company -- does this make sense at the company?

The whole technology media area has become extremely competitive.

All these companies keep trying to find advantages so that they can be competitive going forward.

What microsoft is doing makes sense.

Do you like microsoft as a company?

We are not a microsoft shareholder, but we certainly use their software.

Why aren't you a shareholder?

The challenge as an investor is a fee like a kid in a candy store and there are so many opportunities around the world -- i feel like a kid in a candy store and there are so many opportunities around the world.

Talk to me about what you see as the best.

Coca cola certainly a big berkshire investor.

What is it that you like about berkshire hathaway besides warren buffett?

Berkshire hathaway is a cash machine.

Money comes in every day, and they have invested it wisely.

It is a low risk, long-term good investment.

Around the world, especially beyond north america and in fact many of the companies here are focused beyond north america, is where the consumer is growing and there is those big, fat slow pitches that we like.

Google has had a pretty good year so far, 30% higher.

What do you think is the outlook here for google?

Google has created this fabulous franchise.

Nobody can catch up with them.

It's a global business.

We think the future of google is bright.

It is a cash machine.

We love cash machines, especially if they earn their money everywhere.

You rub elbows with all these various media executives.

Who in particular are you hoping to talk to?

You're looking for that next great cash machine.

Who would you like to get some time with in particular?

The thing that is so great about sun valley, allen and company, you kind of relax into it and you get a chance to talk to just about everybody.

People are generally willing to have a nice conversation.

It's more about the general themes of water going on in the day, and i think that is what is important -- what is going on in the day, and i think that is what is important.

We are seeing m&a activities in various components and players.

Do you think we will see a lot more?

It is almost inevitable that there will be more mergers.

There is big discrepancies between the prices that securities trade at and track session values -- transaction values.

If confidence in the economy returns, that meeting game of deals will begin again.

Everybody is competing for content at this point.

In terms of who will be delivering all of it, is it still up in the air or do you have to accept there will be a lot of players here?

Is a very competitive game.

Years ago there were three networks and now there's a lot of networks.

It's very competitive to try to get people's attention.

Google is a long-term winner.

All the companies here hope that they will be the long-term winner.

It's a very competitive environment.

Enjoy your time in sun valley, thank you for joining us.

Let's get a quick check on futures.

Over the past year, microsoft shares have been doing pretty well.

The real question then becomes whether or not it propels microsoft shares to that next step higher.

It's already up 18%, 19% over the course of the past year.

On the stock market side, equity futures still near their session highs right now.

Green across the board on those been a geek comments about continued stimulus -- ben bernanke comments about continued stimulus.

On the treasury side, if the fed keeps on buying, they're going to keep on buying treasuryies.

People are buying up the safety of treasuries, forcing those yields down little bit more.

Dom chu, thank you.

Jon erlichman has more on that breaking news for microsoft.

It sounds like they are streamlining their operations?

Absolutely.

The reason these reorganizations don't happen every day is because a company like microsoft is so massive that it gets really challenging to turn the boat in one direction.

Steve balmer in his shareholder letter talked about the need for them to change.

He talks about it in a lot more detail.

I go back to the point we made earlier, this company has watched the phone market explode and has made huge steps to try to stay up with the competition.

Inside the organization, if you don't have everybody on the same page, it can be really difficult to make that transition.

This is something that had been in the works before some of the key executive departures we talked about recently.

Steve sandusky , high-profile departure.

It's about the need to figure out where microsoft will be positioned versus the likes of apple and google, and how do you market the new strategy and make sure everybody is on the same page.

You want to make sure everyone is communicating in the right way and you don't do it everyday because of the fact that it is such a big company company, it's not easy to make these shifts.

The skype president is going to run a new group for acquisitions and business development.

It sounds like microsoft will be out, looking thereto -- there, too.

A lot of executive changes.

Tony bay is someone who is well- liked.

He's got a larger role in that for sure.

Jon erlichman, thank you.

Stay with bloomberg for the latest on microsoft as we head towards the opening bell.

Ceo steve balmer takes on reorganization.

Were talking about sears.

You're watching "in the loop" live on bloomberg television and streaming on your tablet, your phone, and bloomberg.com.

We are about eight minutes away from the opening bell.

Futures higher.

It's time for the countdown.

Gold miners are moving up in the markets.

Though stocks have taken a huge hit since last fall because the price of gold has fallen.

Gold prices are up and so are the miners.

Another thing on the rise these days is the foreclosure rate in the metro miami florida area.

One out of every 236 housing units in the miami, fort lauderdale and popular beach area has seen a foreclosure filing last month, four times the national average, and gives it the highest foreclosure rate in the nation.

We been talking about that allen and company media conference in sun valley.

The electronics business at sony a much bigger focus.

He had cement your sting things to say about what goes on in sun valley.

-- interesting things to say about what goes on in sun valley.

The sony ceo is not looking to do deals at sun valley.

He's there to collect business cards and do some networking and get to know people.

Another take on the old sun valley.

Thanks so much.

We have a few moments before the opening bell.

Futures definitely closing higher.

We've got the top 10 trades you don't want to mess.

-- ms.. welcome back.

The opening bell just moments away.

Our market team is ready to take us through the bell.

These are the only trades you need to worry about on this thursday.

Number 10 is facebook.

They're expanding the functions of the recently acquired instagram business, allowing users to add photos and videos to their websites.

Facebook is betting this feature will expand its reach on mobile devices.

Number nine, the clothing and apparel chain that owns victoria's secret and bath and body works.

I never get tired of seeing those pictures.

The international mining company releases its june quarter operations numbers today.

Rio tinto.

Viacom, the entertainment giant.

Shares are getting an upgrade from bernstein, who had the only sell rating on the stock.

Number six, smith & wesson.

The gun maker is planning to buy back $75 million of shares.

Investors pushed their shares up 25% since january.

Number five is amazon.

Shares set to open higher today, getting a boost from that ruling that apple violated u.s. antitrust laws by colluding to increase it book prices alongside publishers.

The ruling is expected to help amazon's sales.

Number four, pfizer.

Investing $30 million into irish manufacturing sites.

Expected to focus on their new cancer medicine.

The stock up 13%. advanced micro devices, getting a big boost in the premarket after an upgrade and bank of america saying the company is likely to benefit from its transition to xbox consoles.

Number two, progressive.

The fourth-largest u.s. auto insurer reported profits that almost doubled from a year earlier.

Number one, microsoft.

The tech giant is reorganizing into a few units and promoting several executives.

That is our number one on this thursday.

Joining us from chicago at the cme, president of trading advantage.

It looks pretty positive this morning.

Do you think we have room to run higher when it comes to the equity trade?

I do.

We are starting off on record highs.

We are on the highs of the overnight session.

We are up about 18 points in the s&p. i think there is more to go because there will be more and more talk of this fed easing.

We never tire of that talk.

If you are able, your loving that talk.

-- a bull, you're loving that talk.

We are at record highs.

1625, 1637. that is 30 points below where we are trading right now.

You got to pin it all on the fed.

To you think the interpretation of ben bernanke's commentary yesterday is correct, that he is full steam ahead, the taper talk is done at least for now -- do you think the market is reading that to positively?

@don't think they can read it to positively.

We have watched this situation for the better part of two and a half, three years.

85 billion dollars a month.

It has driven the market up for the longest time, and investors have figured out that that is the deal.

Even an experienced investors know that the fed is the reason why the market goes up -- inexperienced investors know that the fed is the reason why the market goes up.

People have not been cautious.

I don't recommend buying the highs.

If you want to make money, especially when tapering talks are off the table, you have got to buy the highs.

Aside from the steamroller that is the fed, we've got to talk about what is happening elsewhere as well.

On the microeconomic side, we have those smaller stories, company stories.

Earning reports coming out.

What would derail or pump this market higher besides the fed?

Can earning season do anything on that front?

There can be a knee-jerk reactions.

The fed is the steamroller, but earnings are something that traders were watching every take want to watch.

-- tick want to watch.

As far as employment, it's not doing very good.

The president and government wants you to think it's doing good.

But it's not.

But corporate america has done a great job of recovering from 2008. the other side, the climate side is not a good thing -- employment site, is not a good thing.

The fed is what is driving everything.

The real movement is coming from the fed.

Larry levin, thank you so much.

Coming up, sales falling in cash at a 10-year low.

We will find out what the chances are for a turnaround for lampert.

And how much are they really worth?

We will separate fact from fiction on how much money the most popular rappers have.

? we are seven minutes into the trading session.

Stocks are rallying in the early trade.

We are up to 1670 on the s&p. we are now up about 17% for the year, but up 17 point today.

Nasdaq also charging ahead, 3559. we are keeping a watch on media stocks this morning.

Moguls from the industry are gathering for the allen and company conference.

Billionaire john malone joins us.

What did he have to say?

This is somebody who has been one of the longest investors in the cable and media world and is also a huge fan of consolidation.

The big storyline recently has been headlines about his interest in seeing charter, time warner cable to get together.

In talking to reporters, he highlighted the fact that he would be interested in seeing more consolidation.

We also asked him, what about when it comes to companies that he invests in, when they are thinking about making strategic investments -- we know the time warner cable is interested in hulu.

Here is what john malone had to say when i asked him about that.

Time warner on their own, if they were the sole owner, that would not make a lot of sense.

If the cable industry were to invest in hulu together in the u.s., that would make sense because now you're starting to talk about scale that allows you to do things that you can't do if you are geographically limited.

That was shot on my iphone.

He made an interesting point about facebook, facebook has that scale.

People around the world can put up content right away.

He said that is one of the reasons why facebook has grown so quickly.

In the traditional cable industry you have players like comcast, which is so big but still only has 20% of the market here.

That is why the big reasons why he is is in favor of more cable consolidation.

Thank you so much.

Our jon erlichman out there in sun valley.

The latest issue of "bloomberg businessweek" hits stands tomorrow.

A deep dive into sears.

Chairman and ceo eddie lambert.

His unconventional leadership approach has been scrutinized.

Joining us now is leon nicholas, from a research and consulting firm.

What do you think about sears in the job eddie lampert is doing so far?

It's hard here.

Yes try to do a number of more innovative sorts of things withholdings he has got there.

But you have to judge his performance based upon how the sales have been coming in.

It's hard to find a bright spot there.

It's hard to find a ray of light that would give people confidence about its longer-term prospects.

Business week talks about how he has divided the company into 30 units and every unit has its own board and all its senior executives and it competes for resources and money from eddie lampert.

He is running it kind of like a hedge fund, is that a smart strategy for a retailer?

It's a curious one.

The evidence has shown now that it has not really worked.

Folks have been competing internally for dollars and attention and resources.

They should be competing in the marketplace for shopper dollars.

That is not really been enabled in this ayn rand sort of approach.

They just have not gotten the kind of shopper appeal that they need in those boxes or online.

I think it has made it very difficult for them to gain any kind of traction despite the fact that they have done some innovative things.

What is the future?

You mentioned ayn rand.

That is certainly an author that eddie reads.

He bought sears in 2005. it lost $10 billion in sales.

You look at the retail space.

Do we need a sears at this point?

I don't think so.

The consumer is in a long array of unwinding their portfolio within sears.

I think the shopper is voting to say that they may not need -- they may not need sears as it stands as a one-stop shop big box kind of operation . you mentioned the same thing about kmart.

They might need some of its elements.

Those individual elements are what have the most value.

Even those just don't have the kind of scale behind them to enable them to compete with amazon and the internet world or walmart and target and the brick-and-mortar world.

If you can't get relevance amongst the shopper base because the brand sears or the brand kmart doesn't have any equity with the shopper base, it's going to be difficult for them to find traction.

Co-author of freakonomics , he was the harvard educated statistic that michael lewis wrote about in his book "moneyball." does eddie lampert need to bring in more retail help?

He might need to bring in expertise.

It is online expertise.

Then he can find the synergies that exist between brick-and- mortar and online.

He probably doesn't need a lot of the real estate that he's got even still within the portfolio.

Taking some of the assets that are there and redeploying them towards smaller brand focused kinds of operations may work.

This idea of taking seven or eight of those core brands , and really combining them in such a way that provides some more unique value to the shopper base.

The banner of sears over it, i don't think it means anything to today's shopper base.

Leon nicholas, senior vice

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

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