Some real growth create it is also a huge on the jobs front.
Existing homes asides, every new home creates two or three full- time jobs for a year, right?
That is the estimate, at least.
With existing homes, not enough inventory on the market, and they do not have enough construction workers.
A lot of people left that industry.
2 million, 3 million jobs destroyed.
It will take them awhile to get up to speed.
They are underperforming against the s&p. michael, thank you.
We will be back in 30 minutes, so keep it right here on bloomberg television, but in the meantime, it "money moves with deirdre bolton" starts right now.
Welcome to "money moves," where we focus on alternative assets.
We will show you what entrepreneurs are doing, as well as what is going on with hedge funds and more.
Investor dan loeb leaves the board.
We will talk about that.
Also, old hollywood versus netflix.
We will show you how the new company is proving that contents page, and the sec probe of the heavyweight steve cohen, and the right for that fund to have outside capital.
All of that coming up on "money moves." first, investor dan loeb selling bancshares and leaving the board.
We have more on these changes from san francisco, with a reporter who covers yahoo!
4 bloomberg news.
What is significant about the timing?
Why is he selling back mistake now?
They are regarded as an active investor, an active shareholder.
To some extent, this was expected.
He pushed for the ouster of the former ceo, helped to bring in marissa mayer, and in many cases, they succeeded.
The stock is at a high right now.
The stock is nearly double what it was when he joined the board, and i think there is a sense that he has accomplished something.
The turnaround, maybe some people are surprised he is leaving early on, because marissa mayer is only getting started in her turnaround effort.
She reported earnings that kind of missed some estimates last week, and she is still in the early stages of the yahoo!
Maybe he has seen that he has run his course, but she will have the opportunity to do that without him now.
You make the point that he is an activist hedge fund manager.
He has made about $500 million so far on his position.
You can make the argument and to his investors to make money when they can.
Who do you think should take those board seats?
Because there are three available.
A lot of sources are even telling us that maybe one or two more should be added.
We are getting a sense that they're going to go out and add members to the board.
This may be heard chance to radically remade the board.
She brought in some candidates during her time as ceo, in she brought in one that was from silicon valley, one of the early paypal guys.
She has also pushed for a permanent chairman of the border, also a technology industry veteran.
I think she is showing a preference to fill her bored with silicon valley and tech veterans.
But what does she need right now in her turnaround proved you can argue that she needs some veterans of media and advertising.
Right now, she is in the early stages of her turnaround.
Getting employees energized.
But they need to get advertising back on board with the yahoo!
Plan, so perhaps look for her to add somebody from that world, as well.
Doug, we always appreciate it.
He covers yahoo!
For us at bloomberg.
And we bring in a senior technical analyst says investors should be concerned with these changes.
I am going to take the other side of the argument.
You probably heard my colleague from san francisco saying, look, he is just doing his job.
This does not signify anything for hyundai.
You have a different opinion.
I think if investors want to ask themselves if he is selling, perhaps it is time to ask why he is moving on, because the core business of yahoo!
Is still very much struggling.
You can see what has happened under his one-year of boards to -- , but the reality is, the core business is still facing major issues.
We think a lot of reasons investors are involved in not is because of the performance of alibaba.
If he thought the performance of alibaba was going to produce even more gains in the yahoo!
Stock, then, perhaps, he would not have been a seller.
This is a big move to sell $1.20 billion worth of stock and step down off of the board in 10 days.
It seems like this is not some and he was considering until fairly recently, and as you know, when you are either a big buyer or a big seller, you have certain moments of opportunity, and apparently, one of those windows presented itself to take an opportunity.
It is a wonderful return.
Now, unfortunately, the buyback that have been driving the stock, the alibaba, that got changed.
Another $5 billion buy back has very little left on it, $700 million.
This is a significant drawdown.
It is also a significant drawdown of their cash.
What they sold declined by 2%. the price of advertising dropped on the displays side.
The revenue, once again, a decline year over year on a net basis.
The buyback to support the stock is now gone.
I understand what you are saying.
You have some basic concerns about the core business.
I want to go back to what you said about alibaba.
There are more goods traded, bought or sold, however you want to phrase it, than with the big band with amazon.
Their stake in the company still less to stand for something.
Absolutely, but i think that is very widely known.
Everybody tracks it.
The privately-held company in china, we have limited data.
We have revenue and what was given in their sec filings and their earnings report.
The expectations are already quite lofty.
There are some people talking $100 billion, $120 billion, so i think the alibaba state is already known.
The core business remains under pressure.
All right, well stated.
Thank you very much.
Glad to have you with us.
That was his somewhat bearish take, at least a hold rating.
We are going to keep you on the new media scene and focus on netflix.
The online video company is proving that content is king.
Our senior media and internet analyst at bloomberg industries, paul, i am hearing this is even better than "house of cards," one i have not seen.
It got great feedback.
It looks like netflix has got another pretty good winner on its hands in terms of original programming, and that is kind of key, not just to repackage things but to focus on key, original programming that can drive subscribers.
I think in the past, it was probably hard for a company like them to get top-notch writers and producers, and now, the content can good to them first.
I think hbo wrote the book on this with shows like "the sopranos." basic cable, such as amc, with "mad men," nl, they are paying for a list content.
How does this translate for subscriber growth?
Because as far as i can tell, that is what people care about.
They do not care about profit or revenue.
Everything i read is about subscriber growth.
Yes, much like american online back in the day.
Better and better and quality content.
It used to be just getting the best television shows and movies, but that is not enough anymore.
They have to have original programming that can stand out against the competition.
Speaking of competition, who do you see as the main competition for them?
Is it amazon prime?
Isn't it hulu -- is it hulu?
Longer-term, i think you have to start looking at some of the technology companies that are expressing an interest getting into the technology business.
We had google.
Last week, gould said -- googles said they were considering a subscription service of their own.
What does this mean for all of the media companies?
The content creators are really the ones that are benefiting.
The hollywood studios, the ones creating the content, they are doing well.
Longer-term, they have to be concerned about the changing viewing habits and what that means for the existing pay television model.
At least for right now, they are ok.
That is right.
Paul joining us there, our senior media and internet analyst.
Coming up, an effort to put steve cohen out of business, at least to get him to close the hedge fund and not take any outside capital.
And what we need to know about the sec chairman, and hedge funds becoming free to advertise, a group looking for a mascot.
We will show you what animal bloomberg readers think will be the best match for the industry.
That is next on "money moves." welcome back to "vogue money moves," on bloomberg television -- welcome back to "money moves." steve cohen is sending a message to wall street.
There is a new sheriff on time.
Peter cook joins me now.
He has more on mary jo white, and, peter, what is on the top of her list?
The tone has changed.
That is right.
She said she would pursue a bold and relentless enforcement operation.
Picking fights with not one but two billionaire hedge fund managers, charging steve cohen with failing to supervise two portfolio managers, and there was another.
They are taking on some very big fish and also taking on some risk in the process.
It should not come as a total surprise.
She prosecuted terrorists and mobsters, and a former sec chairman said she is basically taking the same approach at the sec.
This is her trademark.
She is very tough and smart, and she makes heart calls based on what they filed.
This case looks like this is the proper approach for them to take.
Harvey talking about the cohen case.
There is criticism that the commission is not tough enough and is more likely to settle cases did you take them to trial.
The sec has also taken criticism of not allowing people to admit wrongdoing.
One proposed a settlement with citigroup, initially rejected by a federal judge in 2011 in part because there was no admission from the bank.
In june, white proposed to changes.
This is a continuation of that theme, if you will.
All right, peter, and we know that the coehn case is going to be held in d.c. and not new york, right?
It is up to be a minister of law judges within the sec.
She will decide where this goes.
This could be done in new york, but more than likely, it will be done by the sec, and a judge will hear the case, but do not be surprised if it is the chief judge.
We are going to continue now on the sec probe of steve cohen, and i am joined by a white collar attorney and also a managing partner with a group.
I would like to start with you.
Did the fed changed tactics and to move the probe because that was the best they could do, they did not have enough evidence for criminal charges?
Well, in short, yes.
It was certainly a short-term win for steve cohen, because at the end of the day, they did not have enough to get it across the line, and they could not issue an indictment, and they did not have the to the real building blocks to have a criminal case by way of either the witnesses or the documents.
However, that being said, this will really be an uphill battle within the agency.
This is a very serious charge.
This is a very serious case.
And there is new information about friday.
Yes, he has a short-term victory, but he has a battle ahead, and it will be an uphill battle with the new person in charge, who really means business.
What he make of the comments about this being involved?
First of all, i do not view this in any way as a win forscohen.
I think it just means that they want to put him out of the business.
The s e c is playing the long game.
"we are going to put you out of business." and that is a wrap.
That is their goal.
Picking something that is the easiest for them to prove in their home court in administrative proceedings in order to succeed.
It will also send a message.
Ok, getting back to what seth said, which is that cohen is far from being in the clear.
You would agree with that?
And in manhattan last week, the pretty much announced that.
They were not speaking specifically of cohen, but you can read between the lines.
Not necessarily expect something by the end of the month, but we are still working on this.
So, yes, he is not in the clear at all.
I want to bring you back again about the comments last week, talking about dodd-frank and hounddog franny gives him a little bit much -- more power.
Cohen's lawyers are going to say that dodd-frank is only a few years old.
What is your take on that?
I think sac capital is not entirely out of the woods.
If you look at the allegations in the charge in order, there are some very interesting passages with regard to the alleged dell trades.
The martoma part of the case for the pharmaceuticals are a big part of this, but if you look at those other trades and the timing, those actions allegedly by steven cohen and the traders into august.
Even on the criminal side of the fence, you have those criminal allegations back and go into august.
There is that five-year window.
You can scope that out along those five years and even its did back in with the farmers and oil trade.
Yes, i think that shoot -- shoe could drop.
Steven cohen is going to be in administrative law judge proceeding, presumably in washington, d.c., and it will be a different venue, different rules of evidence, a different world of how the case is presented.
It will be much more difficult for him for those contentions.
All right, you are saying he could actually have something to learn from raja gupta.
The sec did something similar to that former director of goldman sachs.
They objected to the fact that an administrative proceeding was brought against him, and he won his day in court.
However, i am not sure there is a parallel here.
We have not gotten any word from the camp that they will remove this from an administrative law proceed to open court.
There are some of villages and disadvantages for steve cohen.
All right, all this is the next timeline we have to pay attention to.
To our guests, thank you both.
We have a break to take, but when we come back, apple' s growth.
We would show you their smartphone strategy.
It is an answer to what some have criticized as and lack of, let's say, a future in some of those products.
All right, we are back in a few minutes, and we will show you what is pushing gold prices to a one-month high.
We are back in a few minutes.
It is 26 minutes past the hour, which means it is time for on the markets, and dominic chu has more.
Alternative assets that people can invest in, namely the commodities, and some interesting themes are playing out.
We are seeing some interesting price action in things like gold and oil and copper.
Check this out.
That is gold futures rallied on some economic optimism.
Also, taking a look and what is happening elsewhere in the markets, we are talking about oil, also showing some interesting action, falling to session lows a surprise decline in the past month.
Also, taking a look at what is happening elsewhere aside from crude-oil, natural gas, we are seeing, again, prices drop as the temperatures have dropped on the east coast overall.
He are other things we are watching.
In terms of the overall picture, what is happening?
It is becoming pretty much a flat market, we will call it, up marginally, you can see for the s&p 500, the nasdaq up two tenths of 1%. overall, that is the real picture.
Keep it here.
Every half hour, bloomberg television.
? this is "money moves," where we focus on alternative, innovative investments.
I am deirdre bolton.
We want to bring you are street smart anchor, adam johnson, from the newsroom.
We begin with a cautious note, sales of previously owned homes dropped in unexpectedly in june, hurt by a lack of supply, and purchases fell to an annual rate of about 5 million homes, and michael dell and silverlake do not agree on the breakup fees, dell believing they should only be reimbursed their expenses, and kate middleton went into labor this morning.
Fans have been crowding the area in anticipation of an official announcement.
It could happen at any moment.
And coming up at the top of the hour, a marketing moghul taking the marketing world by storm.
A ceo of a company that operates in 100 companies, with 4000 clients, including verizon and master card and coca-cola.
We will get his sense of what is happening, right here on bloomberg television.
Back to you.
Thank you very much.
Adam johnson joining us there.
Another item we are following, a global conference, a three-day event taking place in san francisco.
This is according to the samsung web page.
They want to showcase their hardware and software, try to challenge the apple market share, apple earnings out tomorrow, revenue and profit margins being squeezed by lower-prized smartphone competitors.
Some worry about the shifting strategy.
Peter covers apple, and he is with me from our san francisco bureau.
Peter, glad to have you with us.
What do you expect to hear from apple tomorrow?
Are they expecting to have one or two steps down, as far as the price point goes?
I do not expect to hear anything, or analysts do not expect to hear much in the wake of new products.
People are hoping for flat sales from the prior year.
People are very helpful.
And we might see the iphone 5s or even the cheaper iphone.
Something from the samsung web page, they are going to try to challenge apple's dominance, and they will have a big event in san francisco.
What kind of competition is the setting up between the two?
Oh, i do not know.
Samsung does not control its own operating system or platform.
That is android.
Apple has a very, very strong developer ecosystem.
Certainly, android is growing, and samsung is benefiting from that, but it will be interesting to see what they can do to differentiate themselves from the other android providers.
Peter, i was reading something this morning about the fact that apple may consider making some of the screens bigger, on the iphone and tablets.
What do you make of that?
They are under a lot of pressure.
The high end of the smartphone business is slowing down.
It is slowing down in places like the u.s. and western europe.
And elsewhere, people are opting for a very cheap phones.
Apple is in a position where they think they need to segment their existing product lines.
If that is coming out with a bigger screen, even if they have got the screen sizes, some people want a bigger screen, there are going to have to give a bigger screen.
We might see other kinds of product extensions, like they have done in the past, like the ipod.
The classic ipods, and then they did the many, and then they found other ways to sell the product.
-- they did the mini.
The halo effect seems to be working pretty well for them.
Peter joining us from san francisco on apple.
When we come back, a growing number of independent investors are turning away from traditional money managers.
What the wealth management business may look like in the coming years.
We will bring you back, next, on "money moves." welcome back to "money moves" on bloomberg television, and streaming all day long.
In next step of evolution is here, brokers and investment firms, and my guess is a founder of the largest partnership of independent i know you founded the company in 2006. what made you realize there was market demand and that it would be well received well, really, our industry is about trust.
There is trust that we do the right thing with their money, and the trust of the traditional brokerage firms and houses really has been broken with many of the scandals and issues but most important by the deep conflict.
What is good for the broker is not good for the client in many, many cases.
We have a legal obligation to do the right thing for our clients.
How hard was the cell -- sell?
There was a lot of bad press, as you said, about the wire houses.
In 2006, an easy or hard sell?
This has been going on for over a decade now.
You are right, it has accelerated, and what we are seeing is the smart money, the larger clients decide to leave the wire houses, and they become one of us.
I know you made an agreement with private equity.
You have an investment there.
What is the nature of the partnership, and what does it mean for your business?
Private equity investors, about $20 billion in funds.
When it made was sophisticated investors on the street, the power of a focused business model, but probably more importantly, they see the industry would support over $200 million.
Moving away from the wire houses toward the independent ones.
What is the next step for you and for the company?
What is the goal?
We started in 2006 with $3 billion, and now we have over $60 billion.
We have 1000 people in this business.
There is no other registered investment adviser group that is even close to this scope and scale that we have.
But in many ways, i think we have only scratched the surface.
We have enormous potential here, and another will invest in us.
As you mentioned, that is, obviously, an impressive amount of business.
Where do you see the role of alternative investment?
Alternatives have to play a role in many portfolios for wealthy and very wealthy clients.
A very good example.
These are typically quite expensive investments.
It is kind of opaque, many of them work.
With the issues.
They have learned the hard way.
When you invest in alternatives, you really want to have somebody on your side.
It really helps you find the right investment.
Doing diligence in a way that helps you.
Not just what is on the shelves.
Not just a bucket, as you say.
Investors always have to pay particular attention korea always great to see you here.
He is the founder and ceo of focus financial partners.
We have a break to take, but when we come back, 10% of british households use a supermarket.
They are trying to disrupt the u.s. market, and the ceo will be with us in just a few moments.
Also, as you know, hedge funds can now advertise, so why not get a mascot?
We will bring you some suggestions.
It is time for hedge funds to get a little creative, in the way they pitch themselves to potential investors.
The sec said they are now allowed to advertise, which means they can have some fun.
And mascot could do the trick.
The wise owl and others being taken, bloomberg business we came up with some alternatives with some help from you our readers and viewers.
The mink is an animal with a bit of cachet.
Also, among the hedge funds set, not so much with an animal rights activists.
There is one believed to be what has the largest brain, and the albino wallaby, i cannot even believe this came up, but this was with the hedge fund manager that could give profit a bounce.
There was the balloon dog, a not so subtle reference to the sculpture that stands in the driveway of steve cohen, and if the feds get him, that may go pop, and you can check out bloomberg business week online.
We are going to focus not on a company that calls itself the cognac for supermarkets.
My supermarket is a web based grocery corbeille, and it helps people find the most competitive prices on everyday goods.
It started in the u.k. in 2006, and now 10% of u.k. shoppers shop with it.
They just launched in the u.s. last month.
The ceo since 2010, great to have you with us.
Thanks for coming in.
How much are you worried about competition?
Because in big cities, there are companies that are very local, like fresh direct, and then there are some in this media age that do let you get your groceries on-line.
We add them into our system.
Right now, we have the eight largest retailers that serve nationally in the u.s., and we will add more retailers.
The more they move on line, the better for our customers, and the more choice.
People complain that some things are up race to market, and some things, well, they have to pad a little bit, like any business, but your side is talking about showing where the products are the cheapest, and then you make up your mind.
The fundamental change we have is that we work for the shopper.
We help the shopper optimize their savings.
So the price gaps against retailers on identical brands are huge.
The price gap is typically around 40% to 50% on identical products.
You could buy pampers or heinz ketchup and massively over pay.
We treat transparency.
Replat information from the top online retailers, including the amazon, walmart, and we show you the prices at the product level.
When you choose a product, we choose it for you at the lowest price, and that we optimize it and bring the shipping down to zero.
Ok, how do you do that?
If you find one company that has, , pampers that has the best price, but the best price for heinz is in a different shop.
How do you do that business?
We are essentially the smart information later.
You might it two or three deliveries, but your savings could be significant.
Our average savings is around 20%, so that is significant.
As we said, you have a great attraction in the u.k.. you have about 10% using your service.
What about the difference to the u.s.? how are you preparing yourself to do business here?
Similar products, and the market's moving on line.
More and more people are trying to shop for things online.
Toilet paper, bounty paper towels, all of the products were you care about the brand, but you do not care about what retailer it gives it to you.
And, obviously, they are not perishable, so there is more flexibility as far as the delivery rose.
We mentioned venture capital.
How are you going to use the money?
Over several years, we are using the money on improving our product and going heavily into mobile.
We are not just going to launch our mobile in the u.k.. we will launch it in the u.s., and we want to have it so that people can use it wherever they want, online or mobile.
And i know that you have visions that are a little bit beyond household goods.
I read about office supplies.
You are looking into new verticals, as well.
Yes, a basket of items that are too painful for consumers to shop, i can help consumers do a better shot that is focused on what they need.
We're going to remain in the areas where, again, paper is paper, where we want to get the brand or the product, but you do not want to overpay.
What is the biggest surprise in running the business so far?
Every day, there is something.
That is part of the excitement.
There you go.
You will be kept on your toes.
Great to me.
The ceo of my supermarket.
When we come back, the day's major market-moving headlines.
We will bring those to you in just a few moments.
Tomorrow on "money moves," we have what is called "circle," and we will introduce you to the new ceo.
Plus, new wearable technology.
We will be joined by that ceo, and it is 56 minutes past the hour, and it is time to check the markets.
Dominic chu has more.
Stocks, to start with them, i want to say that something is happening, but it has been a whole lot of nothing.
You can see the market flat, the dow jones up two points.
About 3.5% -- about 3.5 points in the s&p 500. currencies, some interesting action.
The british pound, we are waiting for the british baby.
It is stronger against the u.s. dollar, and the euro, also stronger versus the u.s. dollar.
And let's move on to some of the commodities.
We are seeing some interesting action, some volatile action.
Nymex crude oil is down, at least with the existing home sales coming in wars than economists expected.
This is taking a little bit more off of the table and pushing further down the line.
Watch not just the commodities but the stocks that go along with them, for the miners and the gold miners, and we are going to stop on some of the energy ones.
Overall, it has been interesting trade for natural gas, and that is what we are seeing in terms of the overall commodity rate.
You can see the chart for natural gas.
Is it in a range, or is it going to break out?
Our bloomberg analytics commodities specialist, you watch these things all day long, and that gap stands out in your mind.
There was a hot weather last week that blew into the northeast.