? this is "taking stock" on bloomberg.
I am pimm fox.
For a look at the headlines, let's go to my radio cohost, carol massar.
Sanctions against russia because of its actions.
The sanctions target individuals and companies in the inner circle of vladimir putin.
It includes bands of visas and assets restrictions.
And increasing dividends and buybacks, bank of america says it made a decision after finding an error in its stress test.
And general electric may fight -- find some competition.
Siemens could make an offer if they get access to the same financial information as ge did.
This is from sources familiar.
That is a headline this hour.
Let's go to the milken global conference taking place in los angeles.
Bloomberg's erik schatzker and stephanie ruhle have been speaking with the guests all day, and currently, they are with the governor of colorado.
Thank you so much.
We are, again, with governor john hickenlooper.
Glad to be here.
Colorado has fascinated the area for many reasons, but recently, the nation's fascination is with marijuana.
A question we get all of the time.
I can imagine.
It would appear from where we sit and from where others sit that the experiment, if we can call it that, has been a success, and in many cases better than expected, generating more tax revenue than expected, creating jobs.
What are some of the unpleasant surprises?
So far, there have not been too many unpleasant consequences, but the jury is out.
We will find out about that later.
You know that some kids, perhaps bipolar kid or kids that have adhd, that they are going to be more susceptible to falling off the tracks, right, dropping out of school, running away from home, so we are very worried about copy busting the kids.
So far, we have not seen any increase of driving while high.
At this point, i think we have got the regulatory framework doing a pretty good job.
But we are not claiming success.
What i keep saying, let's be cautious.
Let's not claim victory.
A war on drugs was a disaster.
I did not want to be the first.
I did not want jimmy fallon to be saying things.
That is not fun for a state.
How long do you think it was going to take for colorado and other states experimenting with legalization, whether they will now others should follow suit?
I think it will take a couple of years.
He went to track the behavior of the youth.
When we take a poll, most adults, if they used to smoke pot, and they are still smoking pot, and they are paying taxes.
There are those that are trying pot.
The thing that we are worried about is kids, and that is a legitimate concern.
Does colorado become a gateway state for other vices that are not illegal yet, like rusted to shin.
We are going to be all over that and make sure that people are not smuggling.
We are looking at corruption.
We are trying to figure out how to do the banking, even despite it hearing against federal law.
And banks do not necessarily want to do business with those running -- we do not want to be a cash business because that does loss to like prostitution and gang behavior.
This is going to be one of the great social experiences -- experiments this century.
Even amsterdam, they just decriminalized it.
They did not tax it and building a whole regulatory environment.
Governor, colorado, as we know, it has been the site of some of the worst gun violence in america, and every episode of it is tragic, no question, but there remains a very, very vibrant and at times unpleasant debate in colorado over the guns.
You are right in the middle of it, governor.
Is the debate over gun control going to turn colorado into a red state?
I do not think so.
We are pretty moderate.
People got pretty inflamed.
The sense of freedom.
We look at universal ground checks, right?
I went home, and my son was saying, what do you do at work that is so hard every day?
Get the facts.
He said get the facts, make a decision.
We have not gotten the facts.
I memorized it.
We went back to look at 2012 at the gun purchases, and there were 38 people convicted of homicides trying to buy guns, over 100 people convicted of sexual assault, 420 people with judicial restraining orders.
236 people that when they came to pick up their guns, we came to arrest them for an outstanding mortgage.
It is a shared responsibility.
We are not trying to take people's guns away.
We are just trying to keep guns out of the hands of dangerous criminals.
I do not think it is going to be as divisive and issue as people think it will be.
It is such a topic that divides.
Well, it was, and it has, but, again, we used a very moderate approach to universal background checks.
We do not go crazy right over the top.
You can still loan a gun to your brother and sister over the weekend, whatever, but we made it very flexible.
You're saying you need to review the facts and do the homework.
You also said one of the issues with tracking, what do they not get?
Well, you know, it is funny.
When i had that conversation with my son, he said, every day i have to go into school and learn something new that never existed before.
And i said, you are right, the sixth grade is harder than being governor.
I woke up the next morning, and we do not all have the same fax.
-- facts, and i think we need a stronger regulatory environment.
Natural gas is gaping from these wells.
In the end, they together created regulatory environments that are going to dramatically make our air cleaner.
But, governor, you know that many of your democratic supporters are thinking, here is our governor that we put in office trying to give fracking a good name.
You may be doing it with the best of intentions, but why would you be alienating your supporters when the democratic party has such a narrow margin of control in the state legislature?
Colorado is the first date to regulate methane, right?
And they see that we did this with the environmental community working side-by-side, not always happily, but in the end, both sides stood up to claim credit.
Fracking has been going on for 30, 40 years, 50 years.
It has not had the mythic and damage, or certainly not the extent that everyone says, and if we get those facts out and let people hear there is another side.
Carbon emissions are down to the lowest level since 1961 per capita.
You cannot do that without fracking.
We are replacing coal plants with that.
It is cleaner.
It is cheaper.
It puts an additional $800 in every household budget.
Elinor, before we run out of time, you have been a geologist in the oil industry -- governor, before we run out of time.
You are now the governor in the state of colorado.
I would love to be commissioner of baseball, but that might be a stretch.
Many influential people in new york i getting on the hickenlooper train.
Take a good look at this space.
Read that name.
Do you think there is anything electable?
A buddy talking about fracking?
If a guy named skier can end up on television, yes.
-- named erik schatzker can end up on television, yes.
The governor of colorado, john hickenlooper.
All right, thank you very much, erik schatzker and stephanie ruhle, reporting from the milken conference in los angeles.
Coming up next, how the world champion boston red sox went from worst to first in one season, and it is time for mystery guest clue number two.
The mystery guest is rolling in the dough.
One decade ago, the boston red sox had gone 86 years without a world series championship.
Fast forward to today, three championships in the past 10 years.
At the helm of this dramatic turnaround, the boston red sox owner john henry, on the cover of the bloomberg businessweek, which looks at success stories.
Our bloomberg own, joshua green, wrote the story and joins us from washington, d.c. all right, joshua, i know you have to be a fan of the boston red sox to take on john henry and produced this story, but you must have felt pretty good when you learned that the boston red sox were all for you.
Tell us about this story.
Well, basically, i wanted to look at what brought about the red sox' success, the world series, and then suddenly three championships in the last 10 years, so i went down to spring training, which was a tough assignment, to do a profile on john henry, and it turns out that henry made his fortune as a futures trader and has essentially applied those skills to baseball, and baseball is, itself, a game that is really changing in a way where the prize commodities are younger players, like the ones the red sox are focusing on, and much less on the older, more expensive superstars, like the teams like the new york yankees used a generation ago to build their championship team.
Now, just describe how john henry came to own the boston red sox.
Henry has a fascinating personal story.
He grew up on a soybean farmer in arkansas that he inherited when his ad died when he was 26, and he began buying corn and soybean futures, as farmers do, to hedge against crop crises, but he found that he was much more interested on speculating on commodities futures ban on farming, and henry, who is a mathematical genius, eventually turn that into an algorithm for generating commodities futures that by the late 1980's had made him a billionaire.
He first bought the florida marlins in 1999 and then traded up to the red sox in 2002 and has been at the helm ever since.
Now, josh, you have obviously seen the movie "moneyball," and he is in that movie.
Is this how he is using algorithms to make the team better?
One of the interesting things you see in pro sports, and baseball especially, is this influx of owners from the financial world.
Henry, when he came in around 2000, was one of them.
He actually went and try to hire the hero of "moneyball" he took over the red sox before the book was even published, so henry had the metric before other people did.
As it turns out, he accepted the job and then recanted a day later.
He decided to spend his day in oakland, which the movie recounts, but henry went ahead and wound up applying a lot of those formulas, a lot of that data analysis, to the red sox, and, obviously, 12 years later, three world series titles later, we can see the results have been pretty positive.
Is there any connection between the team payroll and the results in the season?
No, there is not, and that is one of the interesting things.
When henry took over, you might remember, bud selig had just produced this blue ribbon report, and enormous report, and the yankees had just won three series in a row, and it was a big, existential fear in baseball that having a big payroll or elated with winning.
Interestingly enough, the skeptic from that major league handle was the federal reserve chairman, who i spoke to and quoted in this john henry profile who set that is actually not true.
If you look at the oakland a's and the teams like them, they seem to do ok with low payrolls, and smart financiers are buying these teams, which they would not do if they were a losing bet, and sure enough, you can see 12 years later that we have teams like the oakland a's and the tampa bay rays, who have managed to have quite a bit of success despite having small payrolls.
What is interesting with henry and with the red sox going forward, not only do they have to that statistics approach, they also have an enormous payroll.
They are kind of combining the best of both worlds, and they hope that will bring them more world titles.
Josh green, john henry, in addition to the boston red sox has also got the boston globe, right?
He does, he does.
My focus really was the red sox, but i did some asking around about whether you can apply sabermetrics to a newspaper chain, and the answer i got is that nobody has figured out how to do it yet, but having said that, henry has applied it to trading and major league baseball, so who knows?
Maybe he can find the secret algorithm to make newspapers profitable again.
And he also has liverpool, right, the football club?
And i got shame on facebook and twitter for not having grappled with liverpool and talking about that in my profile of henry.
I am not really a big soccer guy myself, but henry did want to talk about this.
I understand that liverpool is in first place, so obviously, whatever it is he is doing lent itself to english or merely soccer as well as baseball and commodities future trading.
I see a soccer game in your future.
Thank you very much, josh green, the author of the cover story on john henry.
It is available now on newsstands or on your businessweek mobile and ipad app.
Coming up next, my mystery guest will be revealed, and it is time for my final clue.
My mystery guest has franchises.
More next on "taking stock." ? all right, it is mystery guest monday, and i have no idea who my next guest is, but my producers provided us with some clues.
Who number one, a twisted life.
Number to, rolling in the dough.
I do not know that is money, maybe it is.
And number three, has ranch ices in his blood.
All right, -- has franchises in his blood.
Doesn't have anything to do with baking?
Twisted baking products, with bread?
We had national pretzel day.
Did you celebrate national pretzel day?
Are you in the fretful -- pretzel business?
Are you from philadelphia?
are you are part of annie's pretzels?
I do not know anybody who works there, so i am just going to have to say that you stumped me.
How did you get into the pretzel business?
The "e" on "anne" is silent.
My name is bill dunn.
Thank you for being here.
I get half marks were being there.
Actually, i thought you did pretty well.
National pretzel day.
Why is this such a big deal right now?
There are so many opportunities to celebrate things throughout the year.
National pretzel day is something we have been experiencing along with our franchise partners over the years, so it is just an exciting day for people to enjoy pretzels.
Other franchising or restaurant concepts was to my yes, my father had a franchise in florida, so back in the 1980's, i was involved in his operations and oversaw it.
So you really do have franchising in your blood.
And it is not just simple pretzels anymore.
You have to have the condiments and flavors.
We have everything from our original, which is the soft pretzel, to the cinnamon and sugar, with the various toppings , a lot of variety, and then we have signature things that can be enjoyed with the pretzel.
Auntie anne's. how did you get that name?
It was founded at a farmers market in pennsylvania, and our founders wanted to start a business that would generate enough revenue so they could provide services.
I remember that.
Family counseling services.
And it took off?
Yes, and it is the largest in the world with what we do, and it is a humble beginning and a wonderful story.
Let's do some of the stats.
How many pretzels do you make every year?
Well into the millions.
We have 1600 stores around the world, so i do not know how many.
40 states, 30 countries.
What are some of the most popular locations?
Are the airports or sporting events?
Actually, airports, we do extremely well.
Traditionally, we are in malls, but the nontraditional ones, colleges and universities, amusement parks, other transportation.
It is a great on the go product as people are moving from place to place.
One of the things i heard recently about pretzels is about protein.
It depends on what you put on it.
We have our pretzel dog wrapped in our signature dough, and the combination of the sweet and savory dough with the flavor profile of the dog is tremendous.
What is the newest?
We introduced a new product which was the mini pretzel dog.
We have a number of products that are in tests, but it is steel early to see what will make it out there.
What is it about pennsylvania about pretzels?
I think it is this net capital of the world.
Every thing from potato chips to candy, i cannot tell you, but it is something special.
Do you have a favorite pretzel?
It is the original.
To rebut he is hungry now.
The chief officer of aunti anne' s. i am pimm fox.
? . .