CBS Blackout: Street Smart (08/05)

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Aug. 5 (Bloomberg) -- On today's "Street Smart," Trish Regan and Adam Johnson find your last trade of today and first trade for tomorrow. (Source: Bloomberg)

The second thing is, direct cash subsidy.

We have already seen one program like this.

If we see that, it will not be that the effective upon price movement.

Prices will still be around this area, maybe go down to 110. as you give farmers more money, down the road, you end up with more crop.

The show we will leave it there.

We will be back in about 30 minutes from now.

Cox cable flash.

-- cable 5 spyridon if you want to see those shows that cost a lot of money kamal we will have to get paid for it.

But time warner doesn't want it.

Well blackout continue?

And mgm earnings into the black.

How to cash in on this casino king.

Plus, there is a billionaire that you may not have heard of, and he hails from my home state.

This is "street smart" with trish regan and adam johnson.

The 59 minutes on the clock and we are schering markets for the last -- scour in the markets for the last for the day and the first trade for tomorrow.

Many people are not able to watch cbs.

What people are able to watch, the big picture.

The dow industrial average is down about 47. we have been sideways most of the day.

Take a look at the 10-year, because this explains what's going on.

The service sector expanded faster than expected.

When you have expansion gabbai you have the expectation the fed will pull back on its bond buying.

And finally, no love for gold.

The it is down, not by much, but as you can see, at about 13,000 -- 1300 four.

-- 1304. a south korean company lost -- apple in south korea lost over $1 billion.

Good will flood the market with lower-priced versions of its telephone.

Tyson's foods also a big gainer.

Tyson food coming out with better earnings than expected.

Shares are up about 4.5%. we were looking for less.

A beating by just one penny, but still a big gain.

Cliffs and natural resources is the biggest gainer.

This is interesting because it has been apple three days in a row -- been up three days in a row.

Broke into the hot 100-day moving average on this side.

This stock has been in a long- term downtrend.

It had an agreement with its union last week.

But especially on a day when commodities are really taking a hit.

It is interesting to see cliff's up three days in a row.

On to today's big story, cbs verses time warner cable.

Did you live in new york, dollars, or loss angeles, you may be one of the 3 million who have been cut off from seven -- from cbs and short time for the past 72 hours.

Cbs wants time warner to pay up for programming that viewers could get for free over the airwaves.

Time warner says cbs asked for just too much money and pulled the plug.

Ron markets explains his company's position.

We're not looking for any expansion of rights.

We're willing to live with the contract that we have all lived with for several years.

It is not ideal for time warner cable or its customers, but it is in the interest of getting the product back out to customers as quickly as we can do.

But neither party that the bargaining table right now.

The standoff is the latest evidence that content creators are taking a hard-line the the to get paid for their product.

In a rare move, the ceo explain his tough move against a distant past -- different sort of distribution channel.

Like you said is a sense -- ostensibly right.

They're taking are content, selling it by charging people for it, making money on it and we are not.

All we said was if you want to continue producing the big bang theory and csi and ncis, which cost a lot of money, we want to get paid for it.

We view it as paved -- piracy.

Whether it is old fashioned cable or new streaming services, cbs is clear.

It will take whatever -- it will do whatever it takes to get paid for its content.

We want to bring in our roundtable of experts.

Great to have all of you here.

Who do you think has the upper hand?

The content maker, or the distributor?

It is who should have the upper hand is the better question.

Cbs is lessons of to get paid for its content.

We decided that 15 years ago when the contract for a three transmission was conceived.

The big networks did it in directly.

They launched cable channels instead of making money.

But they got distribution, and now they are saying, that has been fun.

Now we have established with all of the cable channels and i would like to start getting paid.

And there is a fair price that time warner cable and comcast repay to retransmit the cbs signal.

It is not the number that less is asking to be paid by a factor.

If every man and woman here in manhattan extrapolated from the request that cbs is demanding the the of time warner cable, those of us around the table would be spending somewhere around $18 to $20 just for the old broadcast content that has been free for decades.

Because of the extrapolation of the instant.

But is this over a year, our per month?

Because there are nine uhf channels in our market area.

You use to get it over the air.

None of us can get it over the air anymore.

Three years ago by an act of congress we all went what is called digital.

About 3% to 4% of the population still get their services over the air.

The rest of us are getting it through some multichannel distributor.

Les is looking for more than a double.

Isn't this part of negotiations?

You get two sides.

Eventually, they will get there, one would assume.

It is in their interest to get there.

In this part of the negotiating?

It is part of the negotiating.

My sources tell me that the actual dollar amount that time warner is willing to pay, they are not that far off.

Internet streaming is a big issue in this particular negotiation.

Who gets to stream what?

Time warner cable wants better access for its customers.

Cbs is fine with it.

They're like, just pay as.

It will just cost a lot more to get that.

These are emerging rights, who can watch it on tablet and on television.

It is sort of bent -- a cake and eat it, too.

You want the company to pay you for the fixed subscribers, by you want to control the streaming away from home.

Whose customers are these people?

It a cbs customer or a time warner cable customer?

That is your point.

And correct the the earlier, he said it was his customer.

He doesn't want it stolen by the area.

In the same breath, he wants time warner to pay what is an exorbitant price.

The underlying advertising rights associated with this, on a traditional cable bundle, some of those advertising rights will accrue to time warner cable.

In the c.t.s. model, he controls 100% of that advertising model.

To get two dollars would put them -- taking out only sports -- it would put him at the very highest.

Sports gets about $8. and that is per subscriber per month.

Does that include showtime?

It is a really good.

For people who do not really understand this.

Part of the reason that cbs is the network that time warner cable is going after is that the deal is coming up.

But cbs also does not have as many cable stations as some of the other networks do.

Nbc broadcast is tied up with comcast, which has 12 other network censors heated.

Abc is owned by disney and espn.

Newscorp, not greed for century fox, owns a bunch of -- now 21st century fox, owns a bunch of channels.

You think that abc may be able to take a better deal -- it is like, ok, you give me dollars for espn.

In the old days, abc got no retransmission moneys.

They came to us and said, we don't want any money, but launched espn2, 3, 4, 5, 6, 7, and eight and i will call it a day.

If he were the nbc affiliate in omaha, you say, what do i get out of that?

You get nothing.

Now they are all coming together.

And there is a fair price.

How you determine that fair price?

How do we get there?

I think verizon has nobly step up and said, over time, there should be a correlation between ratings and price.

And included in the calculation would be who gets the advertising.

As we are talking, there is news crossing on cbs right now.

It says it is formulating a response to glenn britt's offer.

It seems those negotiations are going on.

He offered that they may be unwilling to come to the table to talk about this.

Why don't we just sell cbs directly to the consumers and they can decide what it is worth and will pass all that ought to cbs.

And they are saying, okay, put your ratings where your mouth is.

It is the most watched network.

Let consumers pay for it.

We will extrapolate that, especially to sports.

It is way above by factors.

Anything that any cable or broadcast channel received as we know it.

It averages of $8 per month per subscriber.

Do you think that is because you do not really want to record that?

I mean, you could, but sports is unique.

You go ala carte on sports, it will be seismic.

Forgive me, i want to -- we have some breaking news.

Matt miller is standing by.

It is perfect for this panel.

They will have a lot to say about it pitted the major league baseball has come out with the suspension of 13 players.

12 of them come a 50-game suspension.

Including nelson cruz.

But a rod, the guy you're seeing running around the bases, for the rest of this year and next year.

It is a big deal because he still had at least $86 million left on his contract with the yankees for the next four 0.5 years.

It could potentially be $116 million that the yankees would after payout.

If he does not perform well, the club would love to get rid of him and stop paying him.

And that is what they have been trying to do with the immelt been through the suspension.

He is going to appeal.

He will be able to continue to play through an appeal.

You will see him suit up.

He will play against the chicago white sox tonight.

That could keep him from getting paid -- or could -- will keep him from getting paid this season.

He is not just a racing died.

-- your panel there, they're not just sports guys.

The yankees are going to be off the hook in terms of paying him, right?

Alex made that point in an interview yesterday.

It is clear the team is not upset by this suspension.

I think they have grown to conclude that his value to them as a player with his injuries does not match up to the dollars they still owe.

The suspension from the yankees.

In view is not a tragedy.

The tragedy year -- here is , and i love the way nat and alex cover it.

You have 12 kids today being suspended.

11 of them are hispanic latin kids.

I think that major league baseball as the courtesy -- owes the courtesy of these young men that they bring up, from the caribbean particularly, there's something going on.

The agencies are manipulating these young latin players.

You think it is becoming the norm that if you want to compete you have to -- it became the norm when mcgwire and those that were popping them out of the park.

And for a while, everybody liked that part of baseball.

And they realized it changed the game forever.

It was diminishing the hank aaron's for the -- of the world.

But undermining its integrity and as america's pastime.

The correlation of the cost of the sports program to the average consumer and the value that they perceive what is the correlation to ratings to cost?

There is a more acute correlation there.

At least, it is highly rated.

If you look at sports programming 24-7, so to speak, it is very expensive to the american consumer.

And nbc has the sports network prepared fox's party -- starting ups a sports channel.

They all want to get in because they can charge so much money per subscriber and more or less forced it on larger bundles of channels.

The pay tv operators want to put many of these networks onto sports where only people who watch sports will pay for it.

The various devore and channels out there do not want that, because they want as many eyeballs as possible, partly because they have promised this distribution to sports teams when they agree to the contract.

Time warner cable, for instance, just signed up the dodges -- the dodgers for a billion dollar deal.

Part of that is that they build in a distribution.

It is unbelievable.

It is sad.

We will continue watching the time warner cbs saw that.

Thank you all for being here.

You are not going anywhere.

Coming up, -- i'm not going anywhere.

Coming out, london calling.

Plus, grab your helmet.

We asked aleris industries about why they decided on it all this american motorcycle.

Did you let you write it?

No, but he let me sit in the seat and read it up.

It is the oldest motorcycle company in the country.

? the u.k. is winning.

Time for a vote in sight and action.

-- a little insight and action.

The u.k. service numbers are up the strongest in years.

And the u.s. is up as well, but on the services side, the u.k. is doing better than the u.s. the same is also true in manufacturing.

Bottom line, manufacturing and services, the u.k. is doing a better job.

You can imagine what the foreign exchange strategists are saying about this.

City across-the-board support for the pound.

What does the council looked like?

-- what does the count look like?

Many are making the case that the pound is what you want to be long on versus the dollar.

Coming up, should print be reading the writing on the wall?

We will ask our clothes are next.

? at least 19 u.s. embassies will remain closed at the state department indicates there is a potential terror attack.

Matt miller has more in terms of the size and scope of this threat.

We have 22 outposts closed yesterday.

Only 19 today.

Going through august 10th.

It intelligence officials say it is not a new threat.

It is the same threat, but they want to continue to be very cautious.

We believe this threat is very significant and we are taking it seriously because -- for that reason.

And we have taken the actions that the state department has announced and an abundance of caution.

And we will continue to monitor this and take action if necessary.

President obama's speaker there, jay carney.

This threat really comes from the arabian peninsula outpost of al qaeda, the aqap.

They're trying to stop more of these attacks.

They're trying to find out what these small cells in the bentley are doing, so shifting their focus from getting the top brass in al qaeda to getting all of the in little groups that are popping up all over the place.

And obviously, taking seriously a worldwide -- not a ban on travel, but a warning.

We have been giving with this now for a couple of decades.

And we're still in this -- in the thick of it.

That is right.

The largest operator on a strip reports tomorrow morning.

Stay with "street smart." we're back after this.

? is it time to roll the dice on mgm?

Last quarter, the company posted its best results since the beginning of the downturn five years ago.

Look at three factors when it comes to mgm's growth.

New half the comeback of the cash cow macau and the potential of online gaming.

We're joined by our guests.

Let me go first over to brand.

What have you been watching for?

What are people expecting?

What excites you about this company?

When you look at their revenue streams, it is not 50% a loss biggest strip, 32% macau, and when you look at the las vegas strip, there's a lot of growth out there.

What has been to their benefit is the convention business.

They expect to see strong growth in the convention business and that carries over to 2014. macau, that is a huge market.

And they have been doing it pretty successfully thus far?

Yes, they have.

They're one of the smaller operators and their heavily skewed toward the vip segment.

What about on line?

They have about a 50-50 joint venture with the gaming board of of the antics city.

Bam online gaming there.

New jersey is pushing that forward, so that should be an incremental revenue stream starting next year.

Are you seeing a lot of our personal and tea?

As a result of the things that -- a lot of opportunity?

As a result of the things that brian just outlined.

There is significant growth in macau and they just added the $2.5 billion casino project that is up opening on schedule in early 2016. there are a number of development opportunities year in the u.s. in washington, d.c. and also in springfield, massachusetts.

That will allow for growth beyond loss vegas.

It really is a wonderful turnaround story.

I spoke with the ceo and he will be on the show tomorrow.

He was saying that years ago when we were first dealing with city center, our stock was at $1.81. you can see that in 2008. quite a turnaround.

Macao is part of that.

Online gaming is promising.

But you're also in an environment where there is a little bit of these casinos feeding on each other.

What does that do to the overall business when you can effectively gamble wherever you want?

You don't have to go to vegas.

There is no doubt it is a pretty significant catalyst asian in the regional markets.

-- catalization in the regional markets.

Not get a lot of capacity on the las vegas strip.

We think we are about five, 10, 15 years away from hitting a saturation in the macau market.

And gm will not be dealing with this mobilization issue as much.

-- mgm will not be dealing with this mobilization issue as much.

What do you -- what are you seeing in the options market?

I don't think the put is very effective.

And gm has missed earnings twice last year.

-- mgm has missed earnings twice the last year.

They've got to make two $0.4 billion in revenue this quarter.

-- $2.4 billion in revenue this quarter.

And the online gaming is going to be competitive.

It is going to be gamblers at the tables in the casinos.

You can talk about china all you want over the next 10 years.

We are talking about tonight.

This september 15th put for 30¢. any pullback in the stock market could be a payoff for about a month and a half.

Do you agree with those numbers?

I don't think so.

They're looking at 4% revenue growth and 6% profit.

They should be able to meet those.

Thanks to all of you.

The chairman and ceo coming on to the show tomorrow.

? we have breaking news.

Just released the investment letter after recently celebrating the company's 20 the anniversary at apple was out.

Stephanie ruhle is here with an inside look.

First, welcome back.

Tell us what you found out.

I just had the pleasure of sitting down and having lunch with mr.

Tepper.

Appaloosa was founded in 1993. they started with $57 million.

Within the first six months, he was up 70%. the first six months of this year, up 16.8%. an incredible tidbit out of his letter, if an investor would have put $1 million in appaloosa in 1993 without taking any money out, that would approximately beef $149 million now -- approximately be $149 million now.

Two-thirds of the money they're making this year is off of equity related investments.

And when we have seen him on the air, he has been super built up and working on getting his performance run.

Like they made a lot of money in canada, latin america, and they were the first to buy treasury notes outside of korea.

They were down over 20% independently and it took them less than six months to bring it back.

They do not call him the big dog for nothing.

What is he buying right now?

It is all equity related.

Do you know what he's not buying?

Urban life.

-- herbalife . he loves equities.

The names right now.

He says yes, their individual problems, but overall he says that equities are still very cheap.

When vikram pandit stepped down, david tepper said, i'm more comfortable with bad investments than ever.

It has clearly paid off.

He has only taken on two new investors in the past few years.

David tepper has more individual money and he has given back a lot.

Fykes pretty good.

20 years.

-- pretty good, 20 years.

Happy anniversary, david tepper.

Nice to have you back.

Coming out, a hidden billionaire from trish's home state of new hampshire.

They actually and have those there.

They have lots of them.

Portsmouth, new hampshire is beautiful country.

According york profile that, as you -- "the new york times" profile id.

? next the bloomberg billionaires' team has found its newest hidden billionaire.

He is the manner rock -- behind the largest wholesale grocery distributor.

And they discovered him of all places in keene, new hampshire.

A lovely the place.

Who is he?

His name is rick allen.

He is worth $11 billion.

-- rick cohen.

He is worth $11 billion.

Usually when you find billionaires', they are worth $1 billion, two billion dollars, $3 billion.

His gregos taylor store does -- is a grocery wholesaler store does no advertising.

They take possession of the worst freeze from the restores -- of the groceries from the grocery store and halves of managed teams.

They get paid more if they're accurate, or they get docked pay if there more mistake -- if they make more mistakes.

As a result, there are more efficient.

How did you find him?

We go through industry by industry looking at large, closely held assets.

It turns out he is the biggest one in the grocery list.

How long has the business been around?

It is a third generation business.

He took over in 1987. his father started it in massachusetts.

Then it was moved to vermont and then to new hampshire.

There is a tax incentive there.

No income-tax, no sales tax.

Fascinating, he ranks at 95 out of 100? i cannot emphasize hawks in out how difficult it is to find someone that is worth more than $10 billion?

A big discovery for you guys . time for chart attack.

We bring you a chart that will make you smarter and maybe it will make you a little bit of money.

Our closer is a leader in the media industry.

Media has changed dramatically in the past couple of decades.

Leo hindery, you should of us understand what is going on.

Let's talk about television, print, digital, you name it.

Tell us how we are consuming.

In a revolutionary fashion, and we're so far?

-- so far past the revolutionary period.

For decades, women and men were watching seven hours or more a day of television.

That has fallen off of the cliff.

And for very good reason.

The use generation is now very much committed to the mobile space.

The pads, the devices they carry around with them.

The television era is largely banished.

You had to tune in at 6:00 for the news.

That was the only time you could get it.

Let's bring a camera in here and show people how many hours and minutes per day the average person is watching television and listening to radio.

Four and a half hours of tv, and to your point, it used to be about 7. in their early 1980's , a very consistent 7.5 hours.

We had reintroduced the traditional broadcast.

And it was like glue.

In 30 years' time, it has fallen roughly three-quarters.

And digital has picked up a lot of the slack.

The amount of time that we are involved with a digital media, 5 hours 9 minutes per day typical ly.

Correct this number -- a year ago, this number was exactly the same as the tv number.

You have added an hour in a year's time.

This is the world as we know it is almost undefinable.

Is it my desktop at the office?

Is it my daughter on her mobile devices?

We may evolve to a world where we are only in the broadband business and not actually a tv business.

Google has come out with a waterflood bite -- device that will allow me -- a wonderful device that will allow us to watch television.

But am i watching television when i do that?

Or am i watching digital?

You can watch bloomberg news on your iphone.

Sen the camera back over and let's show people what is happening to print.

This is mind blowing.

It just 32 minutes a day on traditional print media.

That is incredible.

And it has almost instantly correlated itself to values.

We science -- an ounce and over the weekend of the "new york times" selling the "boston globe." it sold for $70 million over the weekend.

And that was a high price given the bidders out there.

We have seen collapses in print.

That includes every newspaper, every printed book, every magazine that an average adult american might encounter in a day's time.

Somehow finding time for almost 10 hours of tv and digital, and roughly a half hour for print.

What do you think of this newsweek deal?

It has changed hands at yet again.

It is already just a visual property at this point.

I grew up with newsweek.

Time magazine, sports illustrated.

We have abandoned that form of media now.

Specialty publications are quite vital, but general news publications have no business, unless they are very long forms.

You take the economist, bloomberg business week, which is an incredibly wonderful product, but very specialized.

It is sort of a must have in my business.

But i do not need newsweek or time magazine to tell me how to get through the day in general with the news.

It is coming to me digitally.

Just go to your hand held.

From j.c. penney, kraft, revlon, we have the top 10 that you need to know about when we close.

? . ? if you missed everything that happened today in the session, we will get too caught up on the only stocks in need to know about today.

No.

10, apple.

The obama administration vetoed a ruling from the international trade commission that would have been the import of patents.

Essentially stopping apple from selling the devices in the u.s.. qualcomm, shares are dropping 1%. reduced demand for high-end smartphone has caused their revenue to drop.

#8, that plus, jefferies said that the -- tesla, jeffries said that the firm believes the adjustment should help to distinguish the buyers.

#7, falling 4.5% today, the ceo said that " -- growth is slowing in chinese markets.

Latin american growth eased in the first half for hsbc.

Had group down one fraction today.

The deal values them at $4.4 billion.

It is the largest takeover of u.s. insurance broker on record.

J.c. penney, down 3.5%, hiring deborah berman of craft.

She will be responsible for revitalizing their brand.

How often can you revitalize?

She will be under the ceo.

They need a lot of people, they have a lot of revitalizing to do.

And then you wonder why the stock goes down.

You high aircraft to retailers for box stores?

With mostly women's clothing?

Get someone who knows what she's doing, right?

Kraft, she does jesus?

[laughter] -- she does cheese?

[laughter] bloomberg reported that the u.s. decision in the case may limit interstitial is to rely and roiled to revenues used in smartphone chips in sound transmissions.

Tyson, rising to its highest level since 1984 after earnings and revenue beat analysts' estimates.

The chicken unit was in a wider margins during the third quarter.

The chicken unit, revlon, the cosmetics maker agreed to purchase the: group for a bolstering offering to a lot of customers.

Coming up on our number one stock of the day, time warner cable, down more than half of 1% right now.

The ceo has offered to put an end to the fore day blackout of cbs stations.

Saying that it would be sold oligarch to consumers -- ala carte to the sewers.

Cbs has responded saying that they have formulated their response and we are waiting for that.

[closing bell] markets ending slightly closer -- slightly lower on the s&p. trading down 52 points there.

On a bit of a downside day for the markets here.

Looks like financials, health care, industrials, energy, the only standout year, consumer staples and technology.

Matt miller is going to go through all on the set for us.

A tough day, not right for the market, tough day for commodities, anything that you buy to balance out the printing press.

We had better news than expected for the u.s. economy last weekend.

Unemployment fell to the lowest level since december of 2008. a lot of people here may have missed that because we all focused on the non-farm payroll numbers.

It may mean that the fed can get ready for the big paper and slow down the printing presses in a little bit.

Not good for these kinds of assets.

Today the service sector was very strong.

Making the argument for ben bernanke to continue buying at the pace that he is more difficult.

And maybe you need to get out of these assets.

Do you see tapering in september?

I think that the service sector being robust is actually bad news.

I only argue about manufacturing.

Women in the sector is that one- third of what it should be for the long-term.

I saw the numbers last friday.

I put out quite a bit of commentary to some friends on the hill and it wasn't okay report.

In real terms it was a good report, but there are still too many men and women in the marginally attached.

You are saying it is not good that they are switching over the service industry?

You cannot do anything other than jump from credit bubble to credit bubble.

We have to reconcile the fact that if we are going to emulate the success of germany and china, we have to have a manufacturing policy that rewards resuscitating that sector.

Having not seen some strength?

Everyone keeps talking about this manufacturing renaissance, labor in china.

It is improved.

We are making great cars, right?

I think that the detroit resurgence has been very positive.

You speak to that often.

The reassuring political attempts from apple on putting the stones together is the man in this response.

It came on the eve of their discussion of a tax repatriation where they dodged the bullet.

No, i do not see a genuine manufacturing policy yet in this country.

I see more attention to it.

There is government policy saying that they need more than the 8% that makes something.

Was a disservice to job growth?

If not done well.

I think it did not do the two things that i've got work adjunct to the bill.

Those that did not have coverage are now covered and in a positive sense it was a shift of economics that moved around in a constructive way.

It was not a job creator outside the medical care industry.

I do think that it was really insensitive to roughly 14 million women and men who still will not get any coverage.

For more today we want to bring in our market roundup street fighters.

Jim, downside today, does this mean that fears are back alive and well?

I do not think so.

We thought that it was a choppy market.

I think that is indicative of what we will see for the rest of the week.

I would take a look at s&p futures in the weekly's, a lot of 14. moves up or down this week, not big moves.

Like i said, lack of catalyst.

The hot 20 line of the hyatt, no one is getting afraid that these levels just yet.

What is the argument right now for puts on financials when interest margins are starting to widen?

It should be a positive, but there is still a lot of uncertainty there.

We are not 100% sure when about happen.

That is information we do not have.

I think that if we do get a correction, financials are going to lead the sell-off.

It looks like a hedge to me as they get ready to go higher.

The underlying economic fundamentals are looking stronger?

We have to remember that we look at the service sector, as you mentioned earlier, of which beat expectations.

I think that what will happen if the fed will look at this data and they may decide to start tapering in september.

They are going to want to see, as we move into the first and second quarter of the new year that we do not have the economy sputtered out and die on us.

It might seem modest taper begin in september when all eyes being on the inflation numbers.

The fed president came out this week to begin to discuss what he believed, that the united states was the lead risk of deflation and that quantitative easing is as much about boosting employment in the economy as it is about defending against deflationary.

We may see some tapering.

One of the best real time barometers, for media, right?

Are they buying?

Are they willing to invest in advertising right now?

What does that tell us about the overall?

I had the idea for this a bit ago, the revolutionary shift transition.

I think that that industry has not yet figured out what is effective in what is not effective in these new spaces.

I think these dollars are going to move a lot.

Meaning they will spend more?

We are doing at in auto.

You just said that we are replacing a bubble?

I think we are real inflating credit bubbles all around.

I do not think the underlying strength of this economy, with all due respect, is that strong.

I do not think we have a material changes in the manufacturing trade deficit or in how we portion labor in this country.

As we sit here today, 90% of american workers, there is no real wage increase since 1967. that is a constant number.

Those of us blast at the top are doing fine again, but i really worry about wage inequality, wage stagnation.

We are fighting over a minimum wage of $7.25, which is unconscionable.

You cannot live on that.

You cannot live on that.

One of the great political events of all time -- of all time, raising the minimum wage.

Did you try to jump in?

You see this as an asset bubble?

I think it is more of an asset bubble then a credit bubble.

As a response to the bursting of the credit bubble, it is inflating the asset bubble.

What you saw today, particularly in the equity markets, you saw them begin to sell off when the dallas president fisher came out and said that the bond purchase program is not going to last forever and you should not count on it.

The problem is that we followed a credit bubble with an asset bubble.

We have the leverage to back to 2003 levels, which is ok, the question is what happens as we exit from the quantitative easing program?

We will leave it there.

Thank you so much.

Jim, gland, good to have you here.

That is your clothes, everyone.

A look at what is next on "street smart." the snowmobile maker that hopped on the tail of harley.

The ceo of polaris on how the motorcycle made its way back to the road.

Otto baht, a car is made out of people turned heads on many levels.

Plus, once we'd burger and a favorite television show today.

Stay tuned for your first trade of tomorrow, coming up when "street smart" continues.

? ? hail to the cheap, the chief indian motorcycle across the country's oldest motorcycle in 2011. after 27 months they have finally launched the new chief.

The ceo decided by polaris decided to bid on a company that went into bankruptcy four times.

We started with 1954 in the first american manufacturer of motorcycles.

Having been in the industry for 15 years, we started it from scratch and we won many awards.

We had the supply chain in the engineering resources.

We knew how to make beautiful motorcycles.

You have the infrastructure, before you did not?

No matter how much money you bring to the table, without the infrastructure it is a difficult battle.

We spent a lot of money over the last few months, but i am proud and confident with what we are bringing to market.

This is a groundout engine with an incredibly talented engineering team.

It was incredible, 119 ft pounds of torque, industry leading in that respect.

We are proud to have that across the line.

A monster.

What is it like to go against harley-davidson?

There are a great competitor, but no one is entitled to market share and we are looking forward to the opportunity to compete.

Americans love a comeback story with an underdog.

We have all three.

Which bikes do you have?

It was a tough choice, but i took a one in the middle.

I loved the classic styling.

It was a tough choice.

Where is this strength coming from?

From innovation.

Across the line our snowmobile's our industry leading side-by- side vehicles.

We had a new product come out last week, that is certainly the type of innovation that it takes to maintain a lead.

As we maintain a lead with great products, consumers fallout.

The selling price is not cheap.

In some cases is 30,000 if it is checked out.

Is it harder with the more expensive bikes right now?

One of the things we did with the brand and the previous bikes, some were upwards of $30,000, but the entry level cruiser, the chief, $18,000. vintage is $29,000. $22,000, the touring bike.

We are confident that feature for feature we have the best value in the industry.

Absolutely gorgeous.

You guys recently made a few acquisitions of electric companies.

Pick four in the last couple of years.

Over time more will want non- commissioned.

This would be someone who wants to go shopping, for example?

We have like to do the haulers, -- duty haulers.

We also have our gm vehicles, which are really industry leading people movers.

In resort communities my father just bought one in virginia to get around.

It is a great alternative means of transportation.

Halliburton has shifted some of its own, could you imagine natural back -- natural gas powered motorcycle?

Does that make sense from your point of view?

It probably is in the power source lineup rather than shifting the medium to electric.

I am so confident in our engineering team i am quite sure they could develop the best natural gas engines in the world that is what the demand.

Are you making any plans to design those kinds of vengeance?

We will do what consumers ask for and every now and then we will jump ahead of them.

At this point it will not be worth the investment.

Where are you putting the money right now?

Were the last couple of years?

Right here.

We are expecting that to pay off handsomely.

A large one is the side by side vehicles.

Riding side by side, that is the largest part of the business and the largest part of our investment dollar.

Why not pay more for the dividend?

We have a lot of uses for our capital.

We will keep it where it makes sense.

A lot of our money right now is over $200 million in capital investments.

Putting plants out in india, we think we are delivering the best value for shareholders.

India, interesting.

The u.s. accounts for close to 80% of your sales.

It does.

What do you think of a be in five years to 10 years?

The long-term goal is to have one-third of sales outside north america.

We are working on making that a reality.

One of the things we noticed on the show, money managers coming on and talking about the renaissance of american manufacturing.

You pointed out that you do not have to ship abroad.

Is that real, from your point of view?

Absolutely.

Especially as the cost of transportation goes up in china.

It makes more sense to do stuff close to home.

We are making those investments and hopefully the government will begin to shift policies to do that.

Give me an example.

We deal a lot with the consumer product safety division.

Boeing is based in south carolina.

We have to be careful that from a tax and policy perspective that we are making a wise decision.

This past weekend you large -- you launched a partnership with the history channel.

We did.

Why did you choose the history channel?

When it first happened on saturday night, we rode bikes up on stage.

He was passionate about the brand.

We love working with him.

He was a great spokesman for the brand.

Are you going to start one up so that we can hear it?

Sure.

I notice that he did not get on one of those things.

He let me get on but not write down the street.

All right, coming up ahead, the republican national committee chairman, talking tough on his morning letter to cnn and nbc.

? ? time for our next big trade.

Move over, chipotle.

Noodles are working their way into the u.s. diet from dorm rooms to downtown.

Sales in the new company are up and our next guest says that this is just beginning.

Nicole miller joins us from piper jaffray.

How is it that noodles suddenly became cool?

They could be the next transformational stock, taking what chipotle did forecast capital -- casual capital and increase of that.

So far they have held the growth on the earnings line.

How sustainable is that?

Very.

It is basically a build in comp story.

It makes this model pretty predictable.

What do you mean built in?

It sounds too good to be true.

It is interesting, it has been in the single-digit range for quite some time.

They have opened up at 90% volume and as they grow into mature volume over time, it makes for a positive, cmop . i thought that chipotle was good at 66%, but 73%? have you make that?

Apples and oranges, given that the main ingredient is's that, which tends to be a lower- cost good item.

Understood.

What about fresh food, is that an issue for them?

No more so than anyone else.

If you look at labor and occupancy costs, they are still putting up a healthy 20%. there is a lot of leverage in the model.

How big could this company get?

273 stores right now?

10% to 20% total penetration, they could be a lot bigger over time.

Nicole miller, the new shop, the stock is already on the move.

Thanks for joining us.

Is it early for 2016? no, it is not.

? ? italian automaker fiat, featuring an ad campaign featuring cars made out of body contortionist paintings.

Turns out they are not the first ones to have the idea.

Ford, a progressive, a number have been featuring vehicles made out of people in advertisements over the last seven years.

Here's a look at the most eye- catching examples.

Amazing stuff.

? according to a new study, the age group of people most likely to buy a real car, they are getting older.

We are joined now by matt miller, here he is talking about it, with jamie joining us from our studios in detroit.

Matt, let's talk about what is going on here.

People are getting older and they are the ones buying the cars?

They have all the money.

A great story from the detroit bureau about this.

Baby boomers have all the money and they are spending a lot more than every other generation.

We have known this for a long time.

They have two-thirds of the above in the country and our -- and are outspending the other generations.

They have the cash flow and a lot of them, the lucky ones, are retired, so they can do something like buy cars.

The story that he wrote about today was a 63-year-old guy who was buying his 50th and 51st car.

Of course the other reason is, as you pointed out, because he could.

Give us some perspective from detroit.

What is hot right now?

What is selling?

The boomers have driven a lot of the trends.

They really led the push away from detroit to the japanese brands.

Especially toyota and honda.

They led us to the minivan in the suv boom.

One vehicle in particular that really is aimed at the baby boomer generation in the u.s. is the toyota, the return of the wagon that they love so much from their youth.

It has an easier way to get in with a high rise that allows you to cede to the road, it has been marketed to them, allowing them to poke fun at the kids to live at home with their parents, talking about how blame their parents are when it is the parents having a good time.

They are buying a hot cars.

Why not?

What about the mustang?

Pumped up with a quarter panel.

Let that thing.

That is hot.

Why are they not buying the mustang?

Bid by the mustang pretty well.

The mustang has a real bipolar set.

You have got some va that a $40,000 muscle car -- and then the v6, called more of a secretary possy car, a very affordable sporty car.

Both of those sets release sell well.

When you look at the average high, where our car companies targeting at?

Are they going after boomers?

I think they are actually going after the young audience.

The mobile app worked pretty well in car advertising.

To your colleagues comment, and the car with that on the hood, i will buy that.

Matt the value, as your colleague will, the reintroduction of the cadillac brand was for the wealthier boomer.

These muscle cars at the youth and, the charger, the powdered mustang, that is where the youth generation.

Matt made a good point earlier, this recession has been very hard on entry-level employment.

Young women and men coming out of college staggeringly damaged by this economy.

It is not of likely that you would see a shift from automobile companies to their parents and that generation.

Obviously you are seeing cadillac brands and the new corvette playing to the heart strings of these baby boomers.

Chevy, for example, the summit was only $15,000. ford, the fiesta, they both sold the x-games.

Sonic has the spotify on it, which i do not even know what it is.

I will have to download it for you.

Thank you so much.

Coming up, the head of the fomc is going to join us.

He is being very critical of cnn and cnbc.

We will talk about it more after this.

? ? we have breaking news.

Newspaper ads for the washington post are being bad by none other than jeff besos.

Incredible, in the past 72 hours we have had three major digital deals.

All changing hands, what do you make of that?

Earlier today we were talking about john henry, owner of the red sox, buying "the boston globe." not being a paper of record, as we would think of it.

"to the washington post" is a legitimate paper of record for the establishment of washington.

Nobody back to the segment from earlier is better equipped to exploit to digital and jeff bezos -- than jeff bezos.

Why would he want that?

The news gathering capability is almost without peer.

Bloomberg business week is a publication of record.

Financial times, economist, "the new york times," "the washington post." that is about that.

If you play that out, there is a digital acumen that is second to none.

He could legitimately turn it into a product.

Earlier today in boston, the boston globe , up 250 per the washington post.

How does he maximize this now?

"the wall street journal." the world that we live in, we need them in print, digital, mobil.

I am a political animal, as we are going to talk about in the next segment.

We do not care who owns it.

I think that jeff will be very accommodating.

Do not go anywhere.

You just mentioned the republican national committee chairman, who sent a warning letter to cnn and nbc.

That if they stick with their plans to run hillary clinton documentary's, you could be shut out of republican presidential debates in 2016. peter cook has more on that morning.

Shplaying hardball?

He is buying serious hard ball.

Henrik related projects in the works for both networks, cnn is planning a documentary to come out in theaters next year, nbc has a 4 hour miniseries planned starring diane lane as hillary clinton.

Rebus says that it is unfair to democratic -- two republican candidates in that "out of a sense of fairness, i am calling you to cancel these political ads masquerading as unbiased productions.

If they do not applaud, i will seek a vote in the summer meeting to call for the party to another partner with nor sanction primary debates affiliated with these networks." there were more than 20 republican primary debates in 2011 and 2012. thank you very much for outlining all of that.

Welcome to mr.

-- welcome to stop -- welcome to "street smart," mr.

Prebus.

Why are you so upset about them running these documentaries?

Let's start there.

I am not upset, they are going to assert what they want to do and we are going to assert but we want to do.

I want their president and chairman to know that their voyage to move forward promoting one particular candidate for the election, we're going to do it.

It is not a bunch of whining.

It is telling what they're going to do about it.

Would you have the same reaction if fox said that they were running a lifestyle documentary on the governor of new jersey, who also has not announced a? they have not done that, yet.

But we know for sure that cnn and nbc have done that.

And if it was not political, they should just wait a couple of years to see what she does.

Certainly in two years they will know whether or not she is going to run.

I am not dictating to them what they are going to do.

They can do what they want to do and i can do what i want to do and i want to let them know that if they're going to spend this money promoting a democratic candidate, we will just shut them out of debate.

It is their right to do that.

Sounds like you're saying there is a financial issue at stake here.

Eventually translated into a lack of savings for them.

Seems like you're trading ratings today for ratings in the future, right?

If we run these documentaries, you think, this thing will bring in an audience and translate into revenue.

The same can be said about the debates of 2016. that also translated into ratings and revenue.

Look, we had a traveling circus and last time around and the last thing i want to do is add more debates to promote agencies going out of their way to make sure they are promoting hillary clinton.

Obviously she is gearing up to run for president.

Look, i think we have a right to protect the brand of the republican party and protect our candidates.

I think we have to stand up for ourselves.

We cannot just sit around and that these networks do with the want, slap us around, and the deposed our candidates in a debate circus.

That will not happen and i will not put up with it.

That is all.

I think that the earth just stopped spinning on its axis, but i could not agree with you more.

He is a big supporter of the democratic party.

It is simply wrong to do this.

I would add an added attack if i thought a rick santorum documentary was being run on one of the networks.

I think it is inappropriate as a run-up.

We have so commercialized but service and you are highly qualified and well spoken on this issue.

It should not happen on the side of either party.

I would hate it if santorum had a buyout.

Why would you assume that it would be a good picture?

I do not think it would paint him in a good light.

I read opened but the blood sport." i do not know that it will be a peace -- i read "blogs pour." i do not know that it will necessarily make her look good.

It is not going to be a negative piece.

The executives at nbc and cnn said they wanted to air this thing before the fairness doctrine came into play.

If this was going to be so terrible, why make that calculation?

No one waited for citizens united to come out with their productions.

Look, i have to make a judgment call.

If you watch and snb see every day and the other network programming, not all of it is bad, but listen, if you are sitting in my seat, you make a judgment call.

A miniseries, some of which will be four days, for -- full-blown movie documentary's? you have to believe it will not be negative.

They are using it to make money.

That -- i will not let them to oppose our candidates.

That is all i am saying.

I do not think it is that earth shattering.

The only thing is i will not continue to get slapped in the faced by these people without standing up for the rights of the party.

Talking tough, thank you for joining us today.

Thanks to our closer for being here today.

I want to go through this breaking news that just came out moments ago.

We have learned that "is the washington post" newspaper assets are being purchased by jeff bezos.

We will be right back with more "street smart" after this.

? ? 56 minutes past the hour, meaning it is time again for bloomberg on the markets.

Let's take a look at how we ended the day's session of trades, stocks trading out of bed again, off three points, the nasdaq gaining by three points, the dow down by 46 points.

So much for, as they say, going away.

The bond market impacting investor billionaires' feeling it too.

Joining us to discuss, matt miller, editor and chief of "bloomberg billionaires'." let's start with this news about jeff mays says.

-- jeff bezos.

What is this, a trophy?

Always.

We have seen a lot of this over the past three days.

You have seen him come in by the washington post.

Billionaires' tend to have an affinity for that for some reason.

Anytime the tribune goes up, billionaire is go after newspapers.

It is part of a long litany of billionaire is that like to buy newspapers.

How does warren buffett feel, then?

He has a historical relationship with that family in that newspaper.

Speaking of warren buffett, earnings were out last friday.

He did well, up 12.6 million this year.

You have to think about that in terms of him giving away 5% of its stock every year to charity.

For him to see his fortune go up by $13 billion is really quite astounding, he is now the third richest man in the world.

Incredible.

Facebook, mark zuckerberg must be relieved that last those share prices are back at ipo levels.

How much money has made this year?

The stock is up $7 billion this year.

Most of that gain is in the past couple of days, 50%, crushing earnings, they beat on mobil ad sales.

Mark zuckerberg was barely ahead of the game in terms of the mobile space.

His fortune had been kicked around and kicked around on the index for almost one year.

He is not even 30. amazing.

On the flip side of things, what happened to the iced tea business?

Carlos slim in the rearview mirror said that he was going to overtake slim as about this man in the world but he is not -- no longer even a billionaire?

Barely worth $100 million.

His commodities empire had all of these different oil and coal, shipping, all of these companies crumbling.

He borrowed money against one company to fund another company.

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

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