Betting on Black and White: In The Loop (08/06)

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Aug. 6 (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)

Betting on black and white.

Amazon sheath jeff bezos takes a leap into new papers by buying "washington post." -- amazon chief jeff bezos.

Plus, just when you got it was safe to go back in the water, shark week returns, and it is a splash for discovery.

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

Good morning, tuesday august 6. you are "in the loop." i am betty liu.

Cristina alesci has the latest on amazon c.e.o. deathjeff bezos and his personal bets on the newspaper business.

Scarlet fu watching earnings.

Disney and 21st century fox both reporting after the bell today.

The first report for fox since being spun off from news corp.. in washington, julianna goldman will tell us about the president's plan to make over the nation's mortgage system as he travels to the next, that was hit hard during the financial crisis correa.

-- travels to the nexphoenix.

Jeff bezos becoming the latest billionaire to jump into print media when he announced his plan to purchase the washington post for $250 million, a bargain- basement price by the way.

Cristina alesci falling -- following this story.

Even though this company has seen a 35% decline in revenue over the past five years, is still extremely influential.

Half a million print copies per day.

The latest billionaire we have seen john henry with the boston globe.

Warren buffett has spent over $300 million in the past few years acquiring smaller newspapers.

We can see newspaper's becoming the new sports teams.

Almost a vanity bybuy.

From a deal perspective, it is a bit of a head scratcher.

He is buying a company that lost $50 million last year.

A lot of it had to do with pension obligations.

What makes him different that may be another trophy by year is perhaps he wants to take a stab at the real challenge the traditional media is having, which is advertisement rates have been plummeting.

Advertisement rates are down 44% since 2008. what it comes down to is you cannot sell expensive advertisements on line.

You can sell them in a paper but cannot do the same online.

Maybe this is his way of transitioning old media -- old media and to a new media.

The problem is the track record of people who up try to do it has not worked out.

So it is going to be a very challenging ride.

If he does do something revolutionary, you can be sure that others will definitely follow suit.

And no one will stop trying, much less jeff b ezos.

I want to bring in an analyst just talking about the selling of the boston globe to john henry.

Joining us again.

You were saying to us yesterday you will see other billionaires' go and buy these newspapers.

This seems to be more than just a vanity project.

Could he do something revolutionary?

I think you are exactly right.

I do not think in this case he would have acquired it simply to own one of the most prestigious papers in the country.

I think he bought it as a lab experiment.

He wants to be one of the first to transition of business from print to digital.

I think he comes in with a game plan for how to do that through his experience at amazon.

Even though he is keeping it separate from amazon, i think he sees this as something he wants to make work and something he will be very dedicated to.

Best guess on what the game plan is.

What could it be?

That is the hard question.

If i knew the answer to that, i would recommend it to all of our clients.

I think it is such a tricky transition.

Is -- i suspect he may not even know exactly what he is going to do.

It may be more of an experiment.

He may have thought about how print can transition to digital affectively because of all the work he does at amazon and may be putting that into practice.

There has been speculation on whether or not he will keep it separate from amazon.

Even though perhaps he could not justify it buying with amazon balance sheet given shareholder reaction, do you think eventually down the road there could be a place for the post as part of the business?

I think so.

If he is successful in starts to make money with the post in transitions affectively, i would look for thehim to sell it to amazon and then acquire other media partners.

Did anyone even know it was up for sale?

It happened really fast and very quickly.

We heard basically it happened over two meetings.

And the meetings only happen -- the final negotiations happened in sun valley.

What is interesting is if you look at the business, it is about books.

It is not that far of a stretch to bring journalism into the fold.

He has an investment and business insider.

He is already been dabbling in journalism and reporting.

He wants to learn something here.

We could see a whole new model emerge.

The gum would we have talked about other people switch and content from print to digital, you cannot forget rupert murdoch.

He was the first with some of his publications to try to bring them online.

He has been a great experimenter.

Very much of the entrepreneur.

He is willing to try anything.

I think that is what is required in the new environment.

Warren buffett has invested in newspaper, but a very different buy for him where he says he is buying into them not because he wants to switch the content on to the digital platform, but buys them because he says these are local small papers that have a community- based that will be very sticky.

That is why he buys them.

A whole different ball game.

To come absolutely.

A completely different strategy.

I would go so far as to say anyone buying up major metro papers are going against warren buffett's strategy.

Thank you for joining us.

Ceo of a media-focused company.

Moving and shaking this hour, the cable operator latest proposal to cbs to sell companies all a card has been dismissed.

-- to sell channels a la cart has been dismissed.

I spoke with markets yesterday on where he is pushing viewers until a deal is put together.

We are encouraging customers to get antennas so they can access over the air products for free with an antenna.

We are encouraging for them to sign up for aereo if that is the way to want to get the content.

Unfortunately, cbs has taken what i would consider to be an unprecedented step, which is to block our internet customers.

In washington, president barack obama heads to what was once the epicenter of the financial crisis, the next, ariz.. julianna goldman standing by with more in washington.

Why is the president doing this now?

This is part of the president's economic agenda.

Focusing on issues that affect middle-class americans.

Until now when it comes to the politically difficult issue, what to do with fannie mae and freddie mac's once they are wound down, what we should replace them with.

He has avoided weighing in on this right now.

The president is going to say that's -- he will argue that financing the nation's mortgage system could come primarily from their private sector so that once again taxpayers are not on the hook when they got a $187.5 billion taxpayer bailout in place of fannie mae and freddie mac.

He will argue that he wants to see a government mortgage reassure a loss results , a backstage rigid backstop in the case of catastrophic circumstances.

This outlined a proposal in the senate that has been hashed out by mark warner of virginia.

Administration officials have been working quietly behind the scenes to craft the legislation.

How would this work exactly?

What the president will outline is private capital must be wiped out before the government pays out catastrophic guarantees.

He is also not going to announce a timeline to wind down fannie mae and freddie mac, but the legislation, it would shatter the operation -- shut down operation within five years.

House republicans also have their own plan but has not received any democratic support.

What they are drafting is a bill that winds down fannie mae and freddie mac and does not have the government-backed replacement.

What else will the president say today?

He will recall congress to make it easier for homeowners to have a government-backed mortgage to refinance.

On a lighter note, we hear the president will be doing a late-night comedy circuit again?

That is right.

The president will stop by for a visit on jay leno's couch.

He will head over to burbank, california.

His six times sitting down with jay leno.

The first time he will be in that opinion not running for reelection again.

Perhaps he will be a little looser.

His advisers like it.

They say it is a great venue for him and really put him at ease.

In 2012 he made the joke about his rift with donald trump, saying it goes back to their days on the soccer field in kenya when they were growing up.

He is funny.

Looking forward to it.

Julianna goldman, the white house correspondent.

Former bain capital partner, ed connor weighing in on what is next for the fed.

Saying it may not matter who the president taps' for fed chairman.

Jetblue looking for a larger slice of the pie in the sky.

Why they are adding premium seats.

If you are a 30-something year- old man you will probably watch the shark week on discovery.

The numbers behind the series that advertisers love.

Stay "in the loop." ? we have ofd the weak jobs report friday.

Grumman and expected ism manufacturing report.

-- stronger than expected.

The number that bothered everyone come of friday's jobs report.

Everyone thought we were making progress.

Fewer jobs than expected.

Hours worked and earnings fell.

Should it really have had the effect?

The atlanta fed has looked at what we've learned come and what they found when they ran the numbers, maybe you should not be so pessimistic.

Look at the rate of job growth.

189,000. it went up just this year, a drop from 200,000 to 196,000 if you look at it from january.

Not much.

Put it in the context of the unemployment target.

Before that the 7% rate they expect when tapering is over.

The current average, roughly 190,000 jobs per month, unemployment will be 7% by february.

6.5% by october of next year.

If they want to stop tapering at 7%, the current job creation rate waiting until december leaves them behind the curve.

There are couple caveat.

It assumes the pacing rate does not get any further.

If that continues it could hit 7 percent even sooner.

Another jobs report before the next fed meeting.

That will be very crucial.

What if we start to see 160,000 as the new trend in jobs?

To go if we're in that new normal, it would not have much of an effect.

Here is the calculation under those circumstances.

Moving to the end of tapering to may instead of february, still way ahead of schedule.

Interesting calculations to ponder when you ponder the calculations.

Thank you, mike.

Is the fed doing all the wrong things or the influence more limited than we to think?

Some of the questions i will try to help us answer.

Crucial questions for barack obama as he judges who is best to replace fed chairman ben bernanke.

With me now is edward connors, author of the best seller " unintended consequences." great to see you here.

-- edward conard.

I do not think it makes a difference between yellen and summers.

I do think we are growing of a permanently lower base.

This is not a temporary low.

I think we're in a new normal.

All the fiscal and monetary stimulus will have very little effect on the economy.

What makes you think there will be about the same?

To go they both come from a liberal economic school, which is they did not believe taxes on success have a big impact on the amount of success, despite the difference between the u.s. and europe.

They see the world in a keynesian framework.

They see this as the animal spirits to bridge the gap.

They think monetary policy is effective at increasing demand.

Both of them will certainly keep the interest rates low, which will facilitate running increased government spending and deficits.

The deficit is shrinking.

Take us $650 billion of interest payments we're not making because the interest rate is zero and a slower-growing economy where you could not support a larger deficit as you could previously.

It has come down.

Take some in your view, what is the harm of continuing easing monetary policy?

I think it is small, not large.

I think it distorts the fed entered markets, allegations and the real economy where investments are made and not made and inject a certain amount of risk that investors and managers are not sure with the monetary policy.

Going on in normal ways.

Companies are spending money and earnings are coming in pretty decent.

Tepid growth at a time when you would expect more robust rebound.

Even if we're not going to rebound to where we were in 2007, i think he would have expected a stronger rebound so you have to scratch your head and wonder why it is quite tepid compared to normal.

Tacoma i want to get your reaction from other things happening in washington.

Big media projects already in the works with hillary clinton.

No surprise, and engaged twitter audience means more tv be worse.

Details next.

In the meantime, tweet me comments or questions.

We will be right back.

You are watching "in the loop." good morning.

I am betty lou.

26 minutes after the hour, which means bloomberg television is on the market.

Currently futures trading a little bit down, suggesting that s&p will off -- will be off for the second day in a row.

Michael kors trading up after retail estimates topped estimates.

Here is a look at the bloomberg top headlines.

Americans improving finances, ready to borrow again.

Debt to income at the lowest level in 33 years as household -- household net worth hit a record high.

What follows is an increase in spending.

People ready to spend more money.

This network reporting a second quarter loss after customer numbers plummeted by 78,000. this comes after the satellite provider plan to transform into a wireless company were halted when it gave up the bid to acquire sprint and clearwire in june.

Twitter officially a weapon.

The surge in sweeps about a show increased ratings almost a third of the time.

Not bad for twitter either, which may turn this into more marketing dollars.

Another reason to be using twitter.

The republican national committee chairman has sent a warning letter to cnn and nbc, stick with your plans to run hillary clinton films and you could get shut out in 2016. edwards conors still with us.

Peter cook in washington with those details.

The campaign starting early and already pretty ugly.

The presidential election more than three years away, but never too early.

That is what the rnc chairman is doing.

Cnn bones planning of featuring documentary -- cnn films planning a feature read documentaring documentary.

The rnc chairman calling them to pull the plug on this.

If they did not, he will seek a binding vote at the summer meeting in boston to effectively freeze the networks out of the presidential primary debates.

Bove you have to realize i did not have a ghost of a chance of beating him.

These networks are leveraging the fact that she is born to run for president.

They are using it to make money.

I am telling you as chairman of the party i will not let them depose the candidates while doing this on the other side.

In 2011 and 2012, more than 20 primary debates.

Cnn and nbc both participated.

So far, any reaction from nbc or cnn?

Nbc news says it has nothing to do with the hillary project.

Cnn said the rnc is jumping the gun.

The statement goes on to say that this would be the ultimate disservice to voters.

That is the question for republicans as they shoot themselves in the foot by boxing these networks out of the primary debates.

Those are some of the voters they want to reach in 2016. that is right.

Stay with me.

Very interesting.

I want to bring you in on this.

You are certainly a member of the republican party.

Do you think they would be doing themselves a disservice by blocking cnn or nbc out of the debate?

I do not know how they can look at them and say now we will participate.

I think they have already made the decision.

I think that has two effects.

It reduces the likelihood they will go forward with the project and a lot more pressure on them to be unbiased and fair.

It is posturing.

Why is it only the republican party that is raising a red flag?

They do have certain obligations beyond news to not do these sorts of things.

It is not to say someone should not make the documentary.

I think they could.

Admittedly less dramatic than hillary clinton.

Take some if they were to take one of the republican candidates and do a profile, it would be one out of 10. people look at that and say why does the republican party have to politicize everything?

Why?

Why can't they just say they find a compelling subject and hillary clinton is a compelling subject of the want to read -- do a documentary leading up to the presidential elections?

Is a the republicans or cnn and nbc?

To come when you are a network of should you be running a four-part miniseries on the future candidates of the president of united states?

In balance committee would have to run it on the republican candidates as well.

Who out there is compelling enough for four-part miniseries?

To come are they trying to make money?

Of course.

I do think they have a responsibility in the community to do more than just make money.

You weigh in on this.

What reaction is this getting in washington?

It is not getting a ton of reaction right now.

I think given the hoopla we have around this, he is probably almost ensure there will go ahead with it because there will probably get more eyeballs behind this.

We had a democrat on yesterday, a strong supporter of democratic heads that agreed this is perhaps going too far for cnn and nbc.

Not the first time we've had this conversation in the past.

I would be surprised if they go forward.

Take some the democrats did this exact same thing to box in the 2008 election.

There was a debate in the refuse to participate.

Did anyone care?

No.

just to wrap all of this up , and outside of all of this, outside of the networks and documentary's, this is already getting -- we're not even finished with 2013 and this is already getting to be a very tense situation leading up to 2016. is this a sign the gop is worried about what is ahead in 2016? i think they recognize hillary clinton is a formidable competitor.

The entire party will rally behind her and we'll end up in debates that get quite contentious and will probably do more harm than good.

I think they're trying to rein in the number of debate but each state is its own party and wants to have a primary and debate and bring a lot of attention to their states, so it is difficult to herd them and get them to agree to a more unified national strategy that would reduce the number of debates.

Great to see you again.

Also, peter cook, chief washington correspondent.

And ed will join me in the loop at the half today.

Noon eastern time on bloomberg radio.

Also in boston on bloomberg 1,294.5. also, we just had numbers come out a few moments ago.

You head the trade balance shrinking quite a bit.

$34.2 billion for the trade gap.

The expectation was for it to have been around $43 billion.

Futures, which had been trading a little but lower, still in the red.

Pretty much unchanged for the nasdaq.

And i know you have been looking at the trade balance numbers.

What can you tell us?

This is really big news.

22 percent decline in the trade balance.

Exports hitting a record for the month.

We see imports falling significantly.

One of the things that has happened is we sold a lot more petroleum overseas and imported a lot less at a time when you wake -- when you would expect more oil to come into the country to help with the summer driving season.

If this is the beginning of a long-term shift, you could see a major change in the trade balance going forward.

That is something that boost growth.

I have already had a couple a -- of a condom is saying this sets us up nicely.

This will be way under what the commerce department estimated for trade in the last month of the second quarter.

This may change, at least going into the next couple of indicators, the calculation for what you think third quarter growth will be.

A question of whether this can be sustained or not.

There does not seem to be unusual factors that would tell you it is not going to be, but such a huge move that you could not figure it will continue to do that.

Very good news for the economy.

We will watch the reaction for that.

Michael mckee.

Coming up, even more room.

Jetblue poking some flights up with first-class premium seats.

Earnings after the bell.

Stay "in the loop." ? one-stop we're following this morning is -- one stock we are watching is jetblue.

Beginning next spring they will offer premium seats on some of the cross-country flight.

11 planes will have upgraded front tappan's. they will have several private suites with close of bourse.

The president and ceo joins us.

Joining us from san diego on the west coast.

Thank you for joining us on this.

A big announcement and departure.

What brought about the thinking?

Good morning.

Always nice to be on bloomberg tv.

This innovation, this is the next chapter.

Would we start to take a look at really significant routes, lucrative routes and when we look at the home base, there are customers who have been telling us, love flying with you but not on the long-haul flights because you do not have a further upgrade experience and do not have wifi.

Solving both of those with this announcement.

Is it only going to be on these routes?

We are discarding on this routes.

What we're really excited about is the court experience, this is what got us here.

Certainly that will get us into the future, the court experience.

Taking care of a large number of experience.

We will see what happens after the first year of experience.

Potentially more markets.

Some of the analyst covering this say there is a sense that they may be squeezed on both ends.

You have much lower cost carriers on one end better undercutting you with ticket prices.

Spirit airlines may be one i can think of.

Did you have the bigger airlines like delta and united airlines to offer the premium seats already.

You are stuck between them.

What you say to that?

To go-- do you say to that?

> that is the heart of the business model.

Our message is there is room for three models.

We have never chosen to be a discounter.

There are some models that it is bare bones.

Everything is nickel and dime.

That is a different model.

By the way, the network guys come of the legacy guys, all products of bankruptcy and now mergers.

We are not charging that passed either.

The sweet spot we're in, and now with this upgraded experience, we can do it even better and lower-cost point.

This is what we a been about since we started flying 14 years ago.

There are room for three models in the airline industry.

How are you going to do it at a lower cost?

First of all, we start to like -- take a look at a new fleet.

There are real efficiencies, starting with the cost in terms of fuel burned.

We have the young this fleet of any of the major carriers out there.

Then we take a look at how you utilize the aircraft and how you utilize resources on the ground and the ability to deliver the product at a cost structure.

On this price point we're not talking about some of the fares out there today.

If you want to fly this week on those carriers operating and offering the product, talking close to $4,000. on average, it does cost about $4,000-$6,000 to travel from new york to l.a., so where will you be in the price point?

We have not offer the pricing just yet.

I will share this with you, we will all -- not couched the traveling public.

The corporate customer, there are plenty models going after that customer.

We are the smaller business owner, higher-end leisure travel the customer.

Someone really saving up for the trip of the year.

And i am really excited about this product.

We rolled the dow yesterday.

There has been an incredible amount of interest.

To go when you talk to jetblue customers, they fly a lot to florida.

Would you look at shorter rights and eventually -- shorter routes eventually?

Not necessarily.

This is the evolution of the company.

When you start to take a look at the first 14 years, the evolving into something like this, another class if you will, we have not had that type of business discussion.

These routes, they are 2 of the most lucrative routes in the world.

This product fit into those markets.

Customers will tell us i love flying you down to west palm beach.

Wifi, really excited about that.

That is the customer we want to make sure they stay on.

To go than to for joining us.

The president and ceo of jetblue airarys, jeff barger.

Mcdonald's franchisees' have complaints.

We will tell you about that in a moment.

With shark week entering its 26 year, it has bought just evoke the fans but big advertisement dollars as well.

Taking a look at the popular fish in the sea.

Sharks do not just roll oceans -- rule oceans.

Now, shark week will be the biggest event on tv and the web.

That is a big event for discovery channel.

It has drawn more than 20 million viewers.

Last year there more than 3.2 million digital video screen reach extremes.

The sweetest part for discovery, during shark week the average age a mostly male viewership dropped a full eight years to 31. making it a home run for advertisers.

Speaking of advertisers, discovery channel brought in more than $571 million an advertisement revenue last year, more than a third of the u.s. advertisement revenue for discovery communications.

A lot is riding on this year's marketing partnership.

After converting a beetle into a shark cage, 4360-second advertisement, they sold 3000 of the car is the following month.

-- 3 60-second.

As is the cold storage ne creamery sharkcream.

Discovery made an advertisement of its own.

Now you see it.

His triumph but return.

Since the debut in june, the campaign has gone by role, sparking 5 million views on you ttube.

The other networks will need a bigger boat for sure.

To go watch out.

That brings us to this morning's big number, 4.8 million.

That is how many people watch the kickoff.

Here is another figure to two on.

We will return in two minutes.

? and it is about 56 minutes after the hour, which means bloomberg television is on the markets.

Equity futures are on the decline as economist wait for a speech on monetary policy.

We discussed trade crap -- trade gap numbers.

The highlights of the washington post up in the pre- market after jeff bezos agreed to buy the paper for $250 million.

On the markets again and 30 minutes.

George clooney using his leading man that status to weigh in on why wall street should leave sony pictures alone.

It looks like sony agrees with him.

Stay tuned for more on that story.

30 minutes to the opening bell, this is "in the loop" with betty liu.

The countdown begins right now.

Jeff bezos became the latest billionaire to jump into print media when he announced plans to purchase the washington post at $250 million.

President obama hangs on to what was once the epicenter of the financial crisis, phoenix, ariz.. alex rodriguez will play for the yankees as he appealed the suspension slap on him by major league baseball.

More on that in a moment.

Going straight to the markets desk for the countdown blitz.

Scarlet fu kicks it off.

I am watching michael kors.

Reporting higher than expected quarterly profit and raised the outlook for the full year.

The stock is up 5.5% in the pre- market.

You have to watch the dollar after the trade numbers.

The dollar is starting to move again.

The biggest drop in the u.s. trade deficit since 2009. american eagle outfitters tumbling after the retailer/the second quarter earnings forecast.

Predicting 10 cents.

Down from 21 cent forecast previously.

They have been offering promotions to boost traffic but coming at the expense of margins.

Take the household finances appear to be the best shape in decades.

Americans have made progress in putting finances back in order.

They are ready to borrow again.

Giving the economy another driver of spending and growth.

Michael mckee back with us to break down the indicators.

Looks like we are ready to borrow ourselves back into debt.

We can, but the question is, will we?

We ran up huge debts in the last expansion.

Americans made a lot of progress in putting that behind them.

Look at the indicator like the financial obligations ratio, a long name.

The ratio of what you owe to how much you make.

That is the lowest in three decades.

Household net worth at a record.

With home prices coming back up, we have more money.

Those that have stocks have more money, at least on paper.

People are ready to be able to spend.

The question is, do they translate that into spending?

They did translate -- borrow at a record rate in may.

We have the conditions.

We're waiting for the economy.

Companies are spending more, right?

Companies are spending a little bit more.

There is evidence they have the ability to do so and a little more confidence today.

Barry narp looking at the economic policy answer in the index.

Fell to the lowest level since august 2008 and about the same time we had a bump up in business spending and gdp numbers.

Companies are feeling a little bit better about the outlook and might be spending.

Others dispute that at the moment.

A big debate whether we should have a tax incentive for companies.

Whole other issue right there.

Think you.

Michael mckee.

-- thank you.

On a totally different topic, moving and shaking this hour, none other than alex rodriguez.

Greeted with boos from the crowd when he stepped onto the field last night in his season debut against the chicago white sox.

They handed him the august performance-enhancing drug began in history.

He chose to appeal the suspension and will play until the matter is resolved.

Ironically this could make it the most lucrative stretch of the new york yankees schedule.

One of the most valuable teams in major league baseball.

In washington come apple's ability to persuade the obama administration to overturn an import ban on older models could affect other patent battles between other tech companies.

Macon hughes joins us now.

-- megan hughes.

This could make it harder for some patent owners.

This was about apple vs samsung, with a big win for apple.

They get to keep the iphone 4 and ipad to on the shelves.

The bigger picture, the white house took a stance that could be hit with companies that have patents on what are known as industry standard technology.

Standard essential patents.

The administration is concerned they would be used by those companies to hold a competition with the patent owner demanding higher rates from competitors.

So, the losers.

Not a samsung, but big patent- holding companies like qualcomm, companies that rely on royalty revenues.

Google another example.

It has said it should be able to block the use of standard technology if the company will not pay a reasonable royalty.

That will be a trick your case to make.

It will be those that have been in the industry for some time.

Others that have legacy portfolios.

It may not necessarily affect the value.

And the winners here, the product makers.

Apple and microsoft about to use not -- out to not use any patents they have on industry standards.

Are there other cases pending that could weaken because of the white house stepping in?

Absolutely.

This is a really interesting twist.

It could benefit samsung in other cases.

They have disputes right now with ericsson and inner digital.

Samsung trying to fight an import ban of its phones based on the ericsson complaint.

They have been accused of demanding unreasonable or royalties.

And another big case is expected to be decided this friday.

The patent attorney we talked to said we also may see delays in some of these cases because of the decision.

Think you.

-- thank you.

Two media giants reporting after the bell, disney in 20th-century fox.

Scarlet fu here with more on this.

Analysts warning there may be confusion with the numbers.

Absolutely.

The consensus is revenue for $7 billion but could make it hard to make a comparison.

The focus will be on operational trends.

Fox the more profitable arm.

It houses the film studio and the networks.

13.5% mobile advertisement growth.

This is driven by the cable network.

What investors want to get is some kind of detail on cash return for dividend or buy back.

Future guidance?

In a commentary on fox sports.

-- any commentary on fox sports.

Analysts see some risk to the target.

Fox will compete against espn, which is owned by walt disney.

Disney will report.

They have "lone ranger" on the books.

Anywhere up to $200 million.

The crown jewel is espn and also having a bumpy patch as well.

There are negatives to contend with, but that will be offside -- offset by the same stheme park business.

A lot questions whether the magic bracelet's will have increased spending at the parks.

We will wait for commentary on that.

Think you.

Preview of the media results.

Still ahead, it pot of video advertisements make you mad, how you plan -- how you feel about the facebook plans?

The gross tree business.

Where it is at.

We have uncovered another hit in billionaire in the supermarket business.

-- the grocery business.

? 1 stock we are continuing to watch this morning is facebook.

Second quarter results and news of the social media giant plans to debut video advertisement similar to television.

They're hosting a press event later today that will focus on changes coming to the new speed.

For more, i want to bring in jeremy k. again eagan.

A professor of digital marketing at columbia business school.

Great to have you here with us.

Facebook has this momentum now with mobil.

They found the secret formula and a way.

The stock is going up.

Better than ipo price now.

Video advertisements, starting to introduce that.

Will that turn away people that use facebook?

I think it is a great idea.

They have a huge audience and up until now have been proving they can utilize mobile.

And so that has eliminated a big question mark for a lot of people.

Can they take advantage of the big switch from desktop to mobile?

Video advertisements are a totally different thing, which is targeting the tv advertisers.

They have a big audience and putting very brand-from the medium in front of the audience.

We're talking about a consumer product companies, food companies.

I would imagine the movies.

You could do worse than having an attractive clip on facebook.

The real question, will this change the experience so the news be does not get more cluttered and start to make people spend less time with facebook?

They have saturated the audience.

The have everybody.

A critical question of how long can they get them to stay?

Is there a track record with other companies to say whether users to get turned off by this?

We have people who are not dependent on you checking on every single day.

Then you have the road littered with people who preceded facebook.

Where if it got too cluttered or problematic, people chose alternatives.

With twitter out there and new versions they can turn to, they really have to worry about this.

Win this actually happens, because it is basically like a pop up video advertisements, it can pop up or will be on the side, what would be the best strategy?

I would make sure it is user initiated.

Give people control about whether they look at it or not.

Otherwise you cannot -- you might make people angry.

We've seen great success with google and youtube advertisements.

I think that would be the way to go.

It is really a question of whether they can show the results.

To go to switch gears.

I know you consulted with several companies.

Several large newspaper companies.

The idea of newspapers trying to capitalize on digital.

How are the advertisers want to react to this?

I think it is amazing piece of news.

He is clearly buying this with a personal, long-term view.

This is not in amazon purchase.

I believe with a brand like the washington post, the quality of the content they produce is there.

To go we are learning in seeing the changes happen.

People have a lot of questions, could the monetize mobile?

Tens of million dollars in revenue already.

It is growing fast.

Are you getting the sense that pretty much in the end we will see papers go all digital?

I do not think we will call them papers.

I think we will think of them as media brands.

Thank you for joining us.

Coming up, cbs has a prescription for profits.

Generic drugs.

Details of that straight ahead.

Does tweeting about your favorite show translate to higher ratings?

Tweet me on this.

Back with more on that story.

? you are watching "in the loop." eight minutes away from the opening bell.

From bloomberg world headquarters in new york, for the countdown plants.

-- blitz.

Revlon boosted offering to a cosmetics maker.

A grant to buy it for $650 million in cash and -- $660 million cash.

This gives them the american crew hair-care products.

Andall four ll four hedge fund strategies were positive.

To billion in assets.

Worth nearly 7%. asset managers appreciated.

That definitely helps matters for the company.

In a situation where you see anecdotal evidence being worn out by hard data.

Twitter buzz can boost tv ratings.

That is according to nielsen's. finding a surge in the number of tweet about a show did raise ratings almost a third of the time.

Interesting proving what we already thought.

Just like nielsen provides regular tv ratings, now the site each show it will show the number of tweets about that show.

Pretty straightforward.

This research is ahead of that.

On the flip side, also good for twitter, to boost the advertiser appeal.

This is a marketing tool now.

Take a very interesting.

Thank you.

Senior markets correspondent, julie hyman.

A few minutes away from the opening bell.

Top-10 trade to do not want to miss right after this.

Keep it here on "in the loop." ? welcome back.

You are "in the loop." i am betty liu.

26 minutes after the hour.

Olivia stearns has the latest on futures just before the open.

Here is a look at how markets are trading right now.

Futures are pointing to a slightly lower open.

Nasdaq down by about 2 points.

The s&p off about three points.

The s&p is set to extend its decline after friday's record high.

One focus will be a speech from the chicago fed boss, charles evans.

Everyone wants to hear about when they might start to caper.

It is today we did have comments from dallas fed chief, richard fisher.

They suggested the central bank may start to close the tapering s -- sooner than expected.

Counting down to the opening bell with the top then.

The only trade duty to know about it thes you need to know about today.

Cb reports the second quarter earnings of profit of 16% because of gains of a new generic drug.

-- cvs.

#9, allot sold the months -- the most after a second quarter loss.

And this order will be booked in the second half of this year.

And number eight, and gm, the largest casino owner beat -- mgm, the largest casino owner beat analysts' estimates.

More people are making bets.

And number seven kabab shell.

The oil giant plans to drill in alaska.

The ruling rejected a challenge by conservation groups a mistake above the arctic circle would be almost impossible to clean out of their race bell.

And number six, disney reports after the bell today.

All eyes will be on how much the lone ranger will cost the company.

A 140 two million dollar writedown.

The battle between the broadcasting giant and time warner cable continues.

Time warner cable stopped broadcasting cbs to more than 3 million viewers on friday.

And number four, 20th-century fox entertainment.

Analysts raise the price target $5 to $38 per share.

And then -- and no.

3 to mcdonald's. store operators are saying the company is charging too much to operate and are not opening any new restaurants.

As a result, the the big mac seller is slowing, and may have to renegotiate.

And virtu, facebook is replacing its chief marketing officer.

-- is hiring a chief marketing officer.

He starts today.

And never one to amazon.

-- and number one, amazon.

It [opening bell] and joining us now from chicago , todd moore.

Let me guess.

You still don't see an excuse to buy, but to sell in the market.

It is not an excuse to sell, but i certainly would not be a buyer.

The slowest day of the year, including holidays.

There is no real excitement in the markets are complacent.

It -- went into look at this friday's jobs report.

We should have sold off on that number, but we didn't. the fed is going to have a problem and they may not be able to taper.

I think the margins will float around and when they finally figured out, we might see some selling.

If you have cash, hold the cash.

There will be better or opportunities down the road.

Correct -- at least in theory, support stock is continuing to go up.

And if what you say is correct and the fed will not tapir, then is there any reason to see a significant sell-off?

Under that reason, no.

But i think what eventually will swap and is that the tapering is a problem, but not been able to taper will create problems > and then suddenly, you see that the other side has some -- will create problems.

And then suddenly, you see that the other side have some problems.

We still have liquidity prices.

He essentially, the separation between wall street and main street has to start to narrow.

It is as wide as it has ever been.

Thank you.

From the c.m.e.. from the trade to the call, a global market strategist at j.p. morgan funds.

The markets will be rattled and there is still more upside in stocks, he says.

-- the markets will not be rattled and there is still more upside in stocks, he says.

Your little more positive.

I would temper expectations.

The rally that we have had in equity markets year to date, i do not think he will see that momentum in the second half of the year.

Having said that, there are fundamental reasons why the markets are moving higher.

Take a look at the housing market, very supportive.

And then of course, take a look at confidence.

Rising consumer sentiment is going to be the catalyst that continues to move multiples higher.

A couple of sectors, tech is one that you are not that crazy about.

Crates at wells fargo likes technology stocks.

I will play what he said to me here.

In addition to might you look at the tech sector, the volatility is coming down it makes a very nice risk-reward.

The broader technology space has underperformed the market year- to-date and longer-term, so we think there is opportunity in that space.

Why is he wrong?

I would not necessarily say he is wrong.

Technology is the only sector where valuation is trading below its five-year average for all of the other sectors are approaching their 10-year averages ended some cases even higher.

The s&p 500, we know they will be deploying the cash in the next 12-18 months.

Technology will be a beneficiary.

Take a look at what is happening at economic growth across the emerging markets.

In the near term, i suspect you'll see technology stocks continue to underperform.

Some technology stocks are cycles.

Let's go to olivia.

We have seen some of the home builders get hammered in recent weeks.

They have plunged since their peak back in may.

They are down 7% since the start of the year.

At the same time, we are seeing mortgage rates rising.

The average fixed rate has jumped more than 1% since early may.

Combine that with weaker than expected jobs numbers.

It suggests to me that cycles do not have more -- much more to run.

What do you think of that?

If you take a step back and look broader at cycles, the about the valuation between cyclical and defenses, i continue to believe that cycles on average will outperformed defenses.

Look at areas like this correction -- consumer discretionary, for example.

Industrial stocks.

Those will continue to improve, and of course, financials.

And you're looking to improve fundamentals and possibly in europe.

You are watching bond yields in europe, to the.

A lot of investors have been talking about the attractiveness of valuations in europe.

One of the sign has been the stabilizing bond yields.

Itlooking at pimco's blog this morning, he says it is the result of temporary and potentially reversible factors.

He calls for a more comprehensive approach to address the economic challenges of that continent.

Would you agree?

I would the fundamental issues in europe are found it -- are complicated.

There are a couple of things to keep in mind.

One, so long as the ecb views within its mandate to preserve the euro and be the lender of last resort, i suspect the equity market will continue to move higher, despite the fact that we're facing challenges there.

And second, take a look at growth.

A lot of the data we have seen in the last couple of months continue to suggest that the worst is behind us.

With lots of austerity expected in the coming years, investors need to start looking in their portfolios.

If they do have under way positions in europe, then recognize that they may see your outperforming the next 6-12 months.

Thank you.

Up next, bad news for dish network.

The provider this is over 70,000 customers.

And yesterday we saw the billionaire from new hampshire.

Now we get out to california out west where we found another one.

? this network has lost about 70,000 customers, increasingly choosing wireless over satellite services.

They may decide to merge with directv.

And unwelcome news @ ibm, furloughing workers . it is the latest dell tells sign that the demand for servers and other hardware products are slowing down -- is slowing down.

And a third party and electronic payments operator deals with alibaba and other companies.

Jackpot is not the only billionaire to make headlines.

-- jack ma in the is not the only billionaire to make headlines.

There is another.

The owner of save mart has expanded them into the largest store in california.

His world now stands at $1.1 billion.

For more, head to bloomberg.com /billionaires'. and the yankees slugger, alex rodriguez, was greeted with boos from the crowd when he stepped up to bat.

He chose to appeal his suspension and will play into the matter is resolved.

You have been all over this story, waiting for months on this decision.

Why appeal now?

They made it very clear that they feel the players being singled out by bud selig and by baseball.

Whether or not a ride to a performance enhancing drugs -- a-rod took the performance enhancing drugs.

It correct is he being singled out, though?

That is a good question.

He is saving money by appealing.

How much?

About $2 million, give or take.

If he loses the appeal, he loses the 2014 season.

And there are the games he would have lost this year if he takes the suspension now.

Itbut the 49 games without pay cost him less than they would right now.

Is there any chance he will win its appeal?

There is always a chance.

They have waited in to complete the unprecedented waters here.

And there's a chance as we saw last year with another player who failed the drug test and got off on a technicality on appeal.

They may try to find a reason that bud selig stepped outside his bounds with a full suspension.

Whether or not he wins the appeal, it's his career over?

That is a good question.

He will be pushing 40 when it is time for him to come back in 2015. and we have seen his numbers decline pretty significantly in the past few years.

It is a question of whether or not he was healthy and whether or not taking a year-and-a-half of our major the baseball was the thing.

But he is one of the best hitters in the game.

Thank you.

We will talk about another big personality.

Actor george clooney came out swinging arm -- swinging at hedge fund manager dan loeb.

? today we are looking at the burger wars, not between mcdonald's and burger king, but between mcdonald's and its franchise owners.

I spoke with don thompson in an exclusive interview recently about the the thousands of workers going on strike, demanding $15 an hour, twice what any of them earned right now.

Employees are not the only ones complaining.

The majority of the the stores are run by franchisees' and it is where mcdonald's gets most of its sales, about $2.5 million per sale in the u.s.. they say they're being squeezed by a corporate parent that is looking to on to pass -- looking to pass on more and more costs.

For example, a rand cost of 8.5%. the remodeling cut costs, one franchisee says it costs about $800,000. mcdonald argues it only costs about $600,000. by the way, it costs $1 million to build a new store.

The the -- i want to bring in our senior market correspondent, julie hyman, and a quick update.

The war between george clooney and daniel loeb.

Yesterday, we talked about actor george clooney's outrage over dan loeb's fight to split up salemme.

Clooney said the the the -- that dan loeb knows nothing about the business and is only trying to spread fear.

Sony for now rejected the global's proposal.

-- dan loeb's proposal.

The company is saying -- actually, he is saying in a letter to love you will focus on doing just that.

I get the feeling that maybe dan loeb need to watch some more kony films.

Maybe he could get some advice.

-- the more george clooney films.

It may be could get some advice.

There's a lot happening.

Adam johnson this year with more on what to watch and are triple play.

You are watching the president.

Ads are we all.

He is headed to phoenix today to talk about homeownership amongst the middle class.

He is trying to get people excited and focused and believing in this economy.

Household debt as a percentage of total assets is down to the lowest since about 2001, about 22%. maybe that does argue for people taking the homebuying plunge again if they can afford it.

And so much is happening in the media.

Including earnings, up from fox news and disney.

The tv group for fox is reporting tonight, as is disney.

For disney combined earnings are expected to come in flat.

And for fox, about 8%. the the -- not a lot of growth.

And the ceo of mgm will be on your show.

And yes, jim jurrien -- jim murrinen.

They're doing something right and we want to find out exactly what that is.

" -- "first look" is back live in two.

? tomorrow, aol reports before the bell and the ceo, tim armstrong, will talk about building big brands.

And also how he is trying to stem the losses.

Bloomberg television is on the markets.

Olivia stearns has more.

U.s. stocks are selling off this morning, extending the declines for the s&p. the dow is selling off more than 90 points.

The nasdaq down about 16. one.

The focus will be the investor from chicago and the idea about when the fed will start to caper.

-- the caper.

And abercrombie is down after american eagle, one of its competitors, posted lower second quarter guidance.

Joining us is a bloomberg analyst.

July was one of the best months for e.t.f.'s. why?

Cracks in june, the talk of tapering scared everybody out of fixed income -- in june, the talk of tapering scared everybody out of fixed income.

In july, e.t.f.'s started to get money back in.

It is one of the top five best months ever.

E.t.f.'s continue to attract as a product type as well.

We are at $110 billion.

-- for the year, which puts us on track to beat the previous year.

It could be the best month in five years for the s&p 500 e.t.f., which is a big deal.

That would be a record.

This e.t.f. is in a league of its own.

Another interesting trend that we have seen is that the social media e.t.f. has broken out and is outpacing the technology e.t.f. what do you attribute that to?

The global social media e.t.f. is beating the technology e.t.f. by about 20% year-to- date.

The reasons for this is the social media stocks in e.t.f.'s are the not in the tech e.t.f.'s. the only stock a share is google.

-- the only stock they share is google.

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

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