Merger Monday Mania: Street Smart (07/29)

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July 29 (Bloomberg) -- On today's "Street Smart," Trish Regan and Adam Johnson find your last trade of today and first trade for tomorrow. (Source: Bloomberg)

What we do have a couple big holidays like the golden week in the second half of the year, we see this moderating, maybe been going forward.

We have about 10 seconds.

What are you looking at, macau or las vegas?

Click certainly you are looking at macau.

You want to see that growth.

But keep in mind with the cap x funds going into that market, the return on investment capital will be very important.

Thank you so much, bryan miller, from bloomberg industries.

That does it for on the markets.

We will be back in 30 minutes.

"street smart" starts right now.

Merger monday mania.

From luxuries to advertising.

The details on big deals that kept bankers dizzy this weekend.

And china's challenge.

We are prepared to deal with china in the economic forum.

What the vice president has to say about the world's other superpower in a bloomberg exclusive.

Less, the first earnings report -- plus, the first earnings report from sprint.

Buyers remorse?

From bloomberg world headquarters in new york, this is "street smart" with trish regan and adam johnson.

Will we tip into positive territory?

This is the most important hour of the session.

We have your last trade of the day and your first trade tomorrow.

We're trying to crawl our way back.

We are well off below.

The three indices paint a picture of the day.

You see the dow jones down about 75 points on the low, but we have clawed our way back.

It has been a mixed a for data today.

You can understand both sides, being down and clawing our way back.

Take a look at the 10-year.

You will see the yield -- it's not up by much.

It only two beats.

We had better-than-expected home sales data.

Finally, nat gas down, finally.

Look at this.

Down 2.7%. of course, trish, people forget -- 40% of generators come from nat gas.

That is amazing.

Alix steel keeping a look and everything at the -- keeping in i and everything at the news desk.

We will start with the added agency interpublic.

Bloomberg industries saying that emanate attention may -- mergers and acquisition attention may turn to this company.

W pp slipped to the number two spot.

At the highest level since may 2007 on hopes that they can beef up the revenue through advertising.

A big jump from last air.

Keep in mind the stock has never closed above the $30 ipo level.

" but not quite there yet.

And wrapping it up, l grand, on the third day, an intraday high of 55.80. morgan stanley reiterating its overweight rating.

All right, thank you very much, alix steel.

It is merger monday.

We have three deals announced today.

One creating the world's largest ad agency, one to do with a legendary department store, and another that and may have more to do with taxes.

Our team of reporter has all of the stories.

We have julie hyman, cristina alesci.

Jilly, let's kick it up with you.

Canada for a largest department stores chain has 2.9 billion dollars in debt.

Hudson's is not a big game -- not a big-name south of the canada border.

It it is well known.

It is one of canada's oldest companies, founded in 1670 as a for treating business.

Hudson's bay paying 16% onsaks.

The canadian company says it is considering options for the saks operating portfolio including the development of a real estate investment trust.

Let's go to olivia and talk about the big pharma deal.

$8.6 billion -- the deal will merge the maker of over-the- counter medicine with a giant based in delaware.

They will take advantage of ireland's lower corporate tax rate.

12.5%. about a third of what they are paying now based in michigan.

It is a strategy we have seen before.

$12.50 per share.

That is one dollar more than last month.

Many companies have looked at buying them, but it looks likeperrigo is the winner -- it looks like perrigo is the winner.

Omnicom will be the world's largest ad agency.

All traditional ad agencies, as you know, are under pressure from vogel and other mobile players.

The challenge for these companies will be how to integrate two different cultures.

Hurdles expected -- regulatory agencies in the u.s. and europe -- and compliance.

That could create a problem.

The next big question, who is next?

We could see the fourth biggest player out there quickly become the target.

Thank you.

Let's go to adam for the other big news dominating the markets today and that is earnings.

It sure is, trish.

We are halfway through the earnings season.

The question is, who is winning?

Let's go to a little insight and action.

It is pretty simple.

Let's break it down for sector.

Banks have number one earnings growth of about 35%. then you have discretionary, 12%. healthcare, energy.

Look at all these guys who are negative.

Telecom, industrials, tech.

Five groups up, five groups down.

Who is doing the best?

Time out.

You know what?

I don't want to look at the banks.

It is simple.

With the banks, a lot of the gains have been on big banks and that is because of trading as well as taking money back on the ballot sheets because they have to lower the loss reserves.

You know what, banks are their own thing.

I want to focus on these guys.

Discretionary's. consumers.

That is what it is all about.

I want to know which of the consumer stocks reporting in the next two weeks are growing earnings or are at least forecast to grow earnings by at least 15% and where there are no cell ratings.

Guess what?

There are only five.

Here they are.

Cbs, macy's, priceline, tj amex -- tjmx, time warner.

Look at this.

Media, a big part of the story.

We will call these companies the fabulous five or fab five.

Look at this.

It up 41% year to date.

Double what we are seeing in the s&p 500. that is where the growth has been, trish.

All right, good stuff.

Our closer has not been all that impressed.

He has follow the media for 20 years.

We want to welcome back to "street smart," paul sweeney.

Good to have you here.

You say that media companies generally, in line with estimates.

What are you anticipating from the likes of cbs and time warner?

The media boom has been the last couple of years coming out of the crisis.

It is primarily driven by the advertising funds coming out of the crisis.

It really took a big hit in 2008, 2009. coming out of the crisis, advertisers have come right back.

They are spending money on television.

We know they are spending money online.

They are really doing well on the fundamental, on the earnings front.

Combine that with effect they they are all returning tremendous amounts of cash, the stocks have been tested performance.

Are they keeping up the pace and able to really reap the rewards of advertising dollars?

How will the old media companies managed to transition to agile as been one of the questions.

Frankly, i think the jury is out.

Take netflix.

Hollywood is making a lot of money off of netflix.

They have content for anyone who will pay for it.

They have a lot of short term deals.

Nonexclusive deals.

They are maintaining control of their content unlike the music industry which arguably lost control to itunes and apple.

Hollywood is keeping control.

They are making money.

Cbs, viacom, time warner.

They are all making money.

And they would like to make a little bit more.

Oh, yeah.

What is going to happen?

It is possible at 5:00 today time warner cable will pull cbs off air because they want more transmission fees.

We have seen that time and again.

It seems like every few months a network, a cable company, a satellite company getting into these last minute negotiations, threatening to pull channels off the air.

We even see congressmen get involved to mediate these issues.

At the end of the day, cable networks are really challenged to control their programming costs.

Programming is the number one cause for cable company company and it is growing at more than 10% per year.

What's driving it?

People like cbs, espn, all of these cable and broadcast networks are charging more and more and more every year or the right to carry their signal.

The time warner cable's of the world, viacom -- they have to pay and pass on those price increases to consumers through higher bills per -- through higher bills.

The net result is the margins are getting slim.

They are trying to fight back.

We have heard a lot about mergers and acquisitions today.

There is mergers and acquisitions in the local tv space as well.

Yes, i'll britain was bought.

That is -- albrit ton was bought today.

What is the total volume?

8 billion dollars.

And we have not seen any mergers and acquisitions in the tv business.

Why now?

Transmission fees are becoming a big deal.

The local stations are being paid by the cable operators.

In other words the guy creating the content wants to be paid by the cable company and then the local affiliate says, oh, you know what?

I want to get paid.

That's true.

And they are getting paid.

They are creating new revenue streams for the station owners.

And any kind of spectrum hoarding, if you will -- tv stations on a lot of spectrum.

Arguably a lot of unused spectrum.

If you believe this country is entering a spectrum crunch, as a lot of wireless operators will suggest, these station owners are sitting on valuable real estate.

People are speculating that value will only increase over time.

Paul sweeney, we're glad that we have you here today.

Coming up, more mergers and acquisitions acquisitions activity.

Plus our exclusive interview with vice president joe biden.

What he thinks the slowdown in china means for our economy here at home.

? the herbalife short squeeze continues.

The lachman, very public short bet on the -- bill ackman, very ugly short bet on the company.

And karl icon, his nemesis, taking the opposite wager.

-- carl icon -- carl icahn.

There are a couple of different things investors will be focusing on.

First, the nomenclature.

This is something that ackman has targeted and something the company has said, yes, we need to work on this.

It is a nutritional supplement company.

It does not sell directly to the public.

It sold through distributors who sell to the public.

Many of those distributors, the company said, are using the product for themselves.

Herbalife has been saying it would reclassify those distributors.

[indiscernible] quick they are all distributors and they are recruiting new distributors -- correct.

The are seen quite a few are in users.

And in fact, the company is talked about this number.

Analysts have talked about the numbers 70%. herbalife has said for several months, we're going to reclassify.

We will change the the number.

And they have not done it.

The preferred company -- the preferred customers.

The second thing is the buybacks.

Remember, kpmg resigned as the company auditor, another little drama that went on.

The company hired a new auditor.

They suspended by back.

One of the tools it has, another way to fight against ackman to freeze that short is to buy back shares and pushed the stock up.

There is a $1 billion buyback authorization.

The question is, will it resumed the site back -- the buyback, or is it happy that the stock has gone on its own.

You can see it is at the average price.

It has accumulated in the months prior to that announcement.

So in the worst race, carl is winning?

We will keep an eye on those earnings.

Coming up, do consumers notice -- ? this is "street smart" on bloomberg television streaming on your tablet, your phone and bloomberg.com.

Today, our exclusive interview with vice president joe biden.

He completes his tour to speak about america's influence throughout the region.

He did speak to bloomberg television on how the u.s. is competing and cooperating with china.

Let's listen.

There is this storyline that either there is a new cold war with china or there is a new g2. neither is true.

We see china that is made up of competition and cooperation.

We are in healthy competition.

We are prepared and anxious to compete with china in the economic forum.

He also stated that the u.s. is fully committed to securing that region.

This has been a concern, of course.

We have been a big part of their political stability.

This is what he had to say.

One of the reasons why the region has been able to succeed so well economically for so long is the stability and security of the united states presence in the region.

We are not going anywhere.

We are a pacific hour.

We are not going anywhere.

-- we are a pacific power.

There you go.

Our recap.

All calm, hudson bay buying sacks --saks, and you have perrigo buying elan.

It is the flurry of m&a. we have paul sweeney, and i will start with you,mark.

To have this many mergers in one day, does this mean we have turned the corner when it comes to m&a activity?

We are hopeful.

Unfortunately, the data would suggest at least in the first half, the numbers were year- over-year about flat.

We would be down about five percent.

The last couple of months, we have been accelerating.

While it is too early to tell, it helps.

What are you hearing?

I think that paul hits on this earlier with the flurry of media deals.

What we see are these headline grabbing deals.

Me traveling to austin every other week to coverdell -- -- to cover dell.

And in spite of that, we have a pretty you did -- muted m&a environment.

If you look at the m&a last year over $1 billion, there were six deals that were riced over 50% in terms of premium.

If you look at this year, -- that were priced over 50% in terms of premium.

If you look at this year, you only have five or six.

It shows that buyers are concerned about the fed pulling back -- but you have a stock market that has been on fire.

To what extent do people say, i better buy it now or risk not being able to get it later?

I think you have potentially the end of qe, and we saw bond market disruption at the end of june.

There is still macroeconomic concern, political concern.

We do correlate to the market, although the correlation has roque and down over the last few months.

I do not think that will be the drive.

Do you think people are being more confident about things at all?

In the media sector one of the key things we have seen over the last 18 months is this whole concept of getting scale.

We have seen it in the cable business.

John malone, talking about that in the cable is this.

I think that today's announcement is about nothing but scale.

That is a reflection of their customers, their advertising clients, they are getting bigger and more mobile.

M&a media has had quite an impact on volume.

Potentially if you think about the bidding wars.

That has a positive affect on the buying numbers we see.

That's very important.

Hold that thought, mark.

We will take a quick commercial.

And we will come back with more from paul sweeney, mark schaper, and cristina alesci.

? ok, let's get back to our big story.

We have mark schaper head of m&a over at citi.

We have cristina alesci.

And we have our closer, paul sweeney.

We were talking earlier about the m&a environment.

Talk to me about financing right now.

Money is cheap.

Are people willing to get out and borrow?

Look, if the cash market.

If you look at the yield, over two thirds of the transactions are all cash, and that is because even though they are off the lows, it is still incredibly safe -- incredibly cheap.

I want to get back to your point about risk preference earlier.

I would note that all three of the transactions were riskier deals, so we may see a shift in risk preference which is overall bullish for the m&a market.

I'm glad you made that point, mark.

Do you think this is assigned that the economy is improving?

The three deals do not make a market.

It's really hard to say.

I'm not convinced the world economy is improving.

The u.s. has been pretty good.

We know what the travails are in europe.

At from a risk perspective, perhaps people waited long enough and may be are willing to be a little bit more transaction activity that basis and ceo's are taking more risk.

Again, too early to tell.

I have to add, the on the calm deal, and there were a lot of banks around that transaction.

Do you think this is something that shows the boutiques gaining share?

I'm just curious to get your thoughts?

Obviously, congratulations to the boutiques involved.

You did not need a big ballot sheet.

But no, i'm not particularly worried when you look at market share.

I'm not worried.

Good for the boutiques.

Congratulations for them.

Mark, when you look at your deal sheet out there, we see a lot of should to do deals getting done.

But where are the rabbit equity play -- the private equity players?

Are they sitting on the sidelines?

Our statistics suggest that they are up about 10% in volume.

Really, they are between $400 billion and $500 billion globally.

Which is smaller.

Transactions have gotten smaller.

You cannot get ein dancing on one million ldo's. and there is how burned they got on some of those egg -- those big deals, mark.

You also need counterparties.

There is not much inventory available.

You have got to make a market.

Buyers and sellers have to agree and that has not been so easy in this market.

Quickly before we let you go, what sectors should investor look at most carefully for activity in the coming months?

We talked about media.

Media, cable are interesting.

Believe it or not, real estate and healthcare have been pretty big.

Certainly healthcare seems to have legs.

Beyond that, we have been disappointed in technology.

We've got technology would be better than it is.

There's a variety of reasons for that.

Crystal ball on the trading floor.

[laughter] all right, good ideas from mark shafir.

Thank you for joining us.

Paul is staying with us throughout the show.

You sure is.

Coming up, washington washington's favorite maverick, john mccain.

? all right, earlier this month the japanese mobile provider close the deal on sprint.

Get ready for buyers remorse.

Here are a few of challenges they could be facing as the going to earnings.

Sprint has had on even profit since 2000 seven.

Rival t-mobile is earning market share with competitive pricing plans and now the iphone.

Plus, sprint could lose subscribers once the net -- once the next tell -- nextel sector is shut down.

All right, walter through what we should be watching for.

-- walked us through what we should be watching for.

When it comes to the wireless wars, sprint has to do a lot of running.

At&t and verizon have two thirds of the market.

The number of subscribers that sprint has is basically half of the other two players out there.

They have lost the scriber's for a few reasons.

Not having the iphone -- which they do now have -- but also the lack of iterations with nextel, which now has left.

With softbank's massive cash infusion, they are going to tinker with the pricing, trout to get -- try to get additional subscribers.

Matthew yoshi's son has some magical marketing ideas to breathe some life into sprint.

What do you think?

Does he have any of those march -- those magical marketing ideas up his sleeve?

Britain has had challenges recently.

-- sprint has had challenges recently.

Their margins have been unnaturally depressed because they have been carrying two networks.

They finally turned the lights off on the nextel network.

If this is all about scale, then this is actually really interesting, but that they have 15 million more customers than t-mobile, yet margins that are fit in percentage went below t- mobile.

Does this merger makes sense?

I do.

I think it makes a lot of sense.

I think that this would have played out anyway, but with this investment, it should play out quicker than most people thought.

Ok, jim, you are watching the options market.

What are you seeing?

Do you have a take away here?

My glass is half empty here.

I am looking at a stock that has sold off seven of the past eight quarters.

Down seven percent.

That is where the market is saying it is going to go.

I see lots of buyers of the on the money puts.

I cannot so say -- i cannot say whether those are hedgers or speculators, but you can say that someone is concerns.

They have a really good risk versus reward set up and they have a break even just below where the stock is right now.

All right.

The whole gang.

Good ideas from everyone.

Adam?

Senator john mccain has had kind words, believe it or not, for president obama, especially on immigration.

When it comes to russia, a very different story.

Our own hans nichols spoke to him.

He reveals a different reason that the russia policy is a failure.

What more can you tell us?

Mccain, for all his movement toward the president, and there has fun the last couple of weeks, he can still be one of obama's harshest critics.

He called the russia policy unrealistic.

He questioned the president's credibility -- this is a big thing -- on whether -- on why a no-fly zone has not been erected over syria.

Aid should have been a disappointment to the president and i hope will modify his attitude.

I am not talking about reignition of the cold war.

We can expand the madness deal.

We can move forward with our antimissile systems in europe.

There are a number of things we can do that would not reignite the cold war, but show our displeasure with what the russians are doing.

On egypt, should the white house just call this a crew?

Well, it is a coup.

We can say we will lift any suspension of aid with the constitution and a free election, etc.

We are telling the egyptians to form a constitution and free elections and we are not really abiding by the rule of law.

I think there are ways we could impose a suspension of aid, but at the same time, promised them that we will take certain actions to reward them for a path to the constitution, free elections, and rule of law.

Right now it is no doubt in anyone's mind with the situation in egypt is deteriorating and deteriorating badly.

Some is deterioration in syria.

Is it too late?

It is never too late.

The option of doing nothing is unacceptable.

We literally have the blood of these people on our hands.

We have done nothing and there are many things we can do.

There is the no-fly zone, but the oteri seems opposed.

Fair?

Totally unfair and exaggerated to the fact that they have lost that ability.

Four times the israelis have had standoffs and taken out stationary targets.

We can take out stationary targets.

They are only flying out a handful of airfields.

By doing that and establishing a no-fly zone, we reversed the initiative on the battlefield.

Right now, bar chart of side -- bashar al-assad's side is winning.

The fall of bashar al-assad is inevitable.

That is not a military opinion.

I did not think so at the time and i don't think so now unless we change the equation.

The status quo is unacceptable.

Adam, not only is john mccain strafing the white house, but he is also strafing the military establishment.

That is important for these discussions on serious and egypt.

When we get into sequester talks on military contracting and spending, will be senator be as radical of the military contract establishment as he just was of -- critical of the military contract establishment as he just was of the white house?

All right, hans nichols, thank you for bringing us that interview.

Super battle at the box office this summer.

We will find out which studio is going to be ahead.

Chart attack, and we will be right back.

? time for chart attack where we bring you a chart that will make you smarter.

Today were talking about the box office battle.

Our closer studies trends in media.

There is a real showdown at blockbuster.

Quick summer is a big-time -- summer is a big time of the market for the big studios.

47% of the annual box office takes place.

The big studios bring out the big guns.

It is their christmas.

They bring out the sequels, animated films, all the big, big films to try to make as much money as they can.

Yeah, they sure do.

I will tell you what, i want to show people the numbers.

A lot of numbers.

Disney has been a straight line up for the last four weeks.

You look at some of the other studios -- sony, universal, warner brothers.

More of a mixed bag.

Talk is through these numbers.

Sure, every week it's a battle between the big four studios.

Every single week during the summer, we will have a big tent pole money -- tentpole movie from one of the big studios.

One of the sciences of the movie business is to pick the right weekend to launch a film.

You do not want to launch a big action film is -- if there is only one in the marketplace.

Securing the spot in the calendar is important.

Particularly for these $200 million movies.

This may sound naiàve, or do these guys ever coordinate with that door deals?

I do think they try to work together.

When someone kneels down a weekend, which could be -- kneels down the weekend, which could be two or three -- nails down the weekend, which could be two or three years in advance, very unlikely than one else will try to launch another movie.

They maximize the potential of all of them.

Will disney and universal have been neck and neck.

Not just the last four weeks.

All year.

Who was in the league?

Disney is benefiting from the marvel movies.

Iron man three, the avengers, doing very well.

Universal has been a big surprise.

Typically, warner bros.

And disney is buying at the top.

Universal is having a great year, consistently coming out with great movies resonating with the moviegoing public.

They are right there for the year.

This is a good contest.

Comcast just bought nbc universal and are really getting the benefit in the first year of ownership.

Look at that box office battle.

Over $1 billion.

Neck and neck.

I think disney over the course of the year as a lot of egg franchise films in the marketplace still coming out.

Disney tends to have focus more on the big blockbusters, the franchise films.

They tend to do well year in and year out.

Universal is a little bit more hit and miss.

They do not have the same number of franchises.

That this year, they are having a heck of a winning streak.

It's like wall street.

What have you done for me lately?

Every week.

I like that.

I like the way you think.

And the wolverine debuts.

We have the top 10. plus, everything you need to know for your last trade today.

The close is next.

Plus, bmw unveiling its brand- new electric vehicle.

We of all the details, coming up.

? ? ? if you missed everything that happened during the day's session, we'll update you caught up on the stocks he did know about.

The company has agreed to come by and -- combine stocks and create the largest advertising firm.

Barclays shares falling more than 3% today as the bank prepares to share cells -- selling shares to bolster capital.

A rights offering will obviously trick the assets as well.

That is according to a story in the financial times.

Jumping almost 11%, a letter to investors that says the trades have unwarranted discounts to fertilizer and chemical peers.

This is herbalife, analysts are looking for $1.18. the results are all going to be coming up for you.

Offering shareholders a 11% premium to friday's closing price.

The deal will give them a significantly lower tax rate, 12.5% for international expansions that will all be booked through an irish subsidiary.

A recent offer to buy the struggling pc maker bypasses an important shareholder safeguard.

The stock would also be worth more than the michael dull silver led proposal of the company replaces michael dell.

He blames michael dell for a lot of the downside that this company has experienced the last several years and says he absolutely would work very hard to find a replacement should they regain control.

There is no vision for this company.

We don't know what they want to build out.

We need someone saying here is where we are driving the share.

-- the ship.

What is the business worth?

We know the pc market is not doing well.

A few candidates have mentioned as possible contenders.

A lot of people feeling 1375 a share is too cheap.

Down more than 1% even though the wolverine debuted atop the weekend box office.

It opened with $55 million in north america.

Needed jobs?

Called amazon.

They are boosting staff across 17 different warehouses and will be hiring more than 5000 full- time people trying to meet new customer demand.

The new hires will help staff facilities adding to warehouse expenses that have already doubled in three years.

Of the opening bell early.

Does la surging to a high despite the introduction of the rival i3 for tesla.

Forecasts are bmw will only sell of your year.

The number one stock happens to be -- the r etailer agreed to sell itself to hudson bay.

A total of 324 in north america.

The dow jones industrial average ending up 35 points, despite the merger news.

Three major deals today.

It is time for a roundup of these markets.

Let's take it off again on stocks.

The home sales report did slip, of about four tenths of -- 0.4%. people looking for reason to get out of these markets right now have the rally we have seen.

They have plateaued from that record, trading a little bit sideways.

If you look at the group's, health care is actually -- and telecom is the best performing group today, energy and financials the worst performing groups.

Financials had been a standout of this earnings season and they have also performed well.

In terms of waiting for the s&p 500. let's check on how commodities did today.

Trigger futures rose for -- cocoa fell and trading and orange juice among the big movers.

Natural gas and the tropical storm just falling apart.

We go over to alex for the latest on treasurys.

You also have the difference between the two-year note and the 30-year note yields reaching the widest in almost two years pointing to rising short-term rates.

They discuss whether to taper or not.

The fair value for the 10-year yield is closer to 2.75%. this is given the state of the economy.

The risk right now as for higher rates.

We will go to our street fighters.

Bob, we will start with you.

You would think that people would welcome that and say this is the bullish sign.

We are back to what we did in 2005-2006 reacting to an economic news.

It is definitely in our sights.

The profits are going to jump.

If they take a little bit of that free money away, it can't just come and live or we will see some of the smaller sell- offs.

This being the case, how are you trading these markets?

We have seen a pretty choppy market.

By this friday's expiration, a lot of economic data this week.

We saw a little bet involved as well.

It is still cheap enough to buy protection.

If we buy protection, will it be lower?

I think we're going to get a break out of that range after this week here.

I think maybe will be taking some earnings trade and following the break out ending the unemployment situation on friday.

When you say break out, that means we are going higher.

A break out to the outside or break out to the downside.

If we test the downside, we could see some more selling, and i will be taking a more bullish view.

I want to get through this weekend follow the trend.

People are really worried about the fed right now.

It is sort of a secondary story.

Bernanke said that of the tapering begins, it will be later this year.

Your more looking past the to the jobs numbers.

If they will announce anything, it will be the meeting.

Having said that, i don't believe they are going to taper in 2013. you don't believe they will do that because the economy is not strong enough?

I don't believe the fed wants to turn on a dime, they want to be sure.

I don't think we get there, and not without the rest of the globe turnaround.

As we try to adjust kicking ourselves away from the fed, perhaps it is taking its i away from day-to-day movements.

What does that mean for media investors?

They want a seat generally a decent a good economy.

It is the driver and that has been out.

Advertising has been pretty strong.

Maybe a little better next year, that is the fundamental building blocks.

The good news is the management teams are working very hard for shareholders in the form of returning excess cash.

We have been hearing bernanke flip-flop and i think he has lost his credibility here.

I think it is still tied to data.

I agree with the trade that gm wants to put on, that is what i am going to be doing.

I would not say bernanke has lost credibility but more so that people are forgetting the characteristics of the fed.

Good have you here today.

We get your first-rate tomorrow.

A look at what is next.

Bmw get the electric.

The german automaker reveals its first electric vehicle and a shocking promise for buyers.

Fast food workers unite.

We are breaking down exactly what it takes to go from burger flippers to franchisees'. millionaires in the nile, -- denial and sharknado 2. stay tuned for your first trade tomorrow.

? ? herbalife earnings out.

It looks like they are better.

$1.41, the company saying it has sales of about $1.2 billion.

The company is also boosting the forecast for the full year.

The earnings for the year are going to be above what analysts had been anticipating.

A little bit mixed on that particular front.

Really now is not just dependent on the u.s. but it is dependent on what happens internationally as it tries to push into new markets.

That is behind some of the criticism of the technology.

It sort of burns through markets and has to enter and push into new markets.

Undoubtedly it is seeing a growth and all of these places.

It doesn't tell you how much in sales, but it talks about volume growth.

For instance, in north america, it is volume.

Growth of 11%. in mexico, it is a bit more of a mature market.

That is where some of the increases were around the globe and this is something that michael johnson point out in the statement today.

He talks about the ongoing engagement of distributors and the consumer demand for products worldwide.

Exercising that global demand.

The conference call is tomorrow at 11:00 a.m. eastern where we might get some insight on potential buybacks and potential change to the nomenclature.

Investors lacking the after hours.

Bmw is getting electric.

The electric car, how does that affect tesla?

Take a look.

All right, to discuss the electric light, we have the in- house card route and the bloomberg news reporter.

I want to start with you because you spoke to the bmw c.e.o. last night.

What does he say about competition?

This is what he had to say about that competition.

The success of does la is very encouraging because it means the market for electric vehicles is growing and you can see the market in the year 2012 of around 93,000 vehicles in the expectation in the year 2013 is around 150,000 vehicles.

That is the success of tella and other car manufacturers.

It is still a tiny proportion of global sales, interesting to see if they do something for that.

They need help to articulate that market before hand?

They have been given a clear idea of what is possible.

The price point is competitive, $41,000 for the cheapest model.

The price difference is amazing.

This one comes with an extra added perk in case you were planning on taking a long weekend somewhere.

We understand you have anxiety of how far this car will go, range anxiety.

If you want to go on a road trip, they can lend you an x3 for a few weeks.

It makes you feel better about going the electric route.

His bmw going to be able to compete with this space?

They are coming in and a somewhat different position.

This is an interesting product and we have not seen anything quite like this.

They are positioning it between the nissan leaf and chevy volt.

A key difference is that it is considerably less range for the base price.

You're only going to go about 80-100 miles.

The interesting twist is making available the optional reserve gasoline tank that will function as a generator, like the fuel and engine due in the revolt.

It will double the range potentially.

It is an interesting idea.

In addition to having access to a conventional model, you can get this back up fuel tank to get you back home.

Bmw is getting there with this announcement today.

Who else might be trying to conquer this space?

There is also talk of mercedes , slightly behind bmw, but they are getting involved in this business.

Thank you for joining us today.

Crops, you either love them or hate them.

The company may have fallen out of favor with wall street after a disappointing earnings report.

But we have found a believer whose thinks they are pretty comfortable.

? ? time for the next big trade.

In spite of last week's disaster, the earnings report, the analyst to occur estimates down twice the head of the quarter but she maintained a buy rating.

People get stuck with you, there are down 20%. how long will it take to make the money back.

The company is in a multi- year process of recreating the brands from the classification business and really diversifying into a global ft we're offering that as more lifestyle oriented.

We believe the numbers that the management team reduced are believable at this point and we would look at the stock.

The numbers to start to move higher.

It will take a couple of quarters to gain back some confidence.

We don't get back to $1.40 until 2015. i am more optimistic than that.

You have a fairly established japanese business that is getting hit by the adverse impact of the yen.

We are optimistic that we're starting to see a broader recovery.

We think it should help as we get to next year.

Asia is a big part of their business equal to north america.

What is the demographic for who wears these?

The business has been built around the family, a female consumer and potentially her husband.

It is a compelling piece of the business.

17% as diversified away towards the sneaker.

The u.s. is closer to 50%. they certainly have plenty of colors.

We will see if they can turn those colors and the dollars and cents.

Thanks for defending these.

We have found the must-than double the dead-end jobs out there.

Regresses what is.

Except you know what it is.

We will be back andin two.

? ? welcome to the fast-food restaurant, no one is here to take your order.

The average cut at a fast-food restaurant earns $18,000 a year.

The hope is to climb the right toward management and earn more money.

A study suggests that rarely happens in the fast-food business.

They are flat burgers and taking orders.

2% are managerial position, compared to a 30% management jobs ratio in the overall economy.

If you say would you like fries with that, are you stuck in the ultimate than job?

This is really an industry built for inequality.

You face essentially a 2% shot.

Essentially a 1% shot of having the opportunity to open a franchise.

It may go on to all kinds of other different fields?

Nationwide, the median age for a fast-food worker who is 28 years old.

These major low-wage sector is well-defined the core of the u.s. economy.

Setting aside the question of interest in opening a franchise, the opportunity was the sole defense offered by the fast-food industry for the reason they pay low wages in the first place.

I want to share with you an excerpt of betty's interview from the ceo of mcdonald's. 40% started as hourly employees.

Over 50% of our franchisees', they started as hourly employees.

You were one of those people that started as an hourly employee working at a fast-food franchise.

Walk us through how you got through that and navigated the path?

I started doing dishes as my first job and this would have been a long time ago.

After i finished high school and got into college, i went to school for restaurant management, that i was given the opportunity to be able to get my own franchise.

There were seven locations.

I really liked the concept.

It was maybe 1%. what do you say to jack that says it is very difficult to do?

It is difficult to do.

We probably have 40%-50% of our people that moved from within.

Over half of our general managers came from within starting as an hourly employee.

What do you say in response to this?

Referring to the macdonald c.e.o., the statistic is a little bit smoke and mirrors.

It might be case that they started as hourly workers, but in mcdonald's, there is only one franchise owner for every 293 employees.

All the franchisees as they have may have started out as hourly workers but there aren't that many franchisees.

There are considerable financial requirements that the company, not just mcdonald's put in place to screen prospective applicants.

Nine of the 11 largest fast-food companies, franchise applicants have to have at least $500,000 of net worth.

And an additional $250,000 of liquid assets.

It is not something better frontline worker could realistically look forward to.

What do you think the take away is?

Beginning to take action, the standard wage.

Bob, would you be for that?

If your average $15 an average, we will talk mcdonald's. you have to make the numbers work.

May be the profits, it would be less of a profitable franchise as opposed to changes in prices?

There are considerable opportunities to offset the cost of higher wages.

They are tightly correlated with reductions in turnover.

There are big losses in productivity.

The workers are more likely to stick with the job if they are paid a fair wage.

I know we have a very good turnover rate.

We maintain our people.

Penn station is a smaller franchise, i have had three managers that started and worked up to a general manager.

There are always exceptions to everything.

Great to have you guys here.

It turns up the world's richest people don't really think they are rich.

We will explain in today is we're wall street.

-- today's weird wall street.

? ? the clock is ticking for time warner cable and cbs and for all of us as well.

If they can't reach an agreement by 5:00 p.m. eastern, in 20 minutes, fans may miss out on favorites like homeland and big bang theory.

We have been following this very real life, home.

The former institutional all- star analyst ranking, let's try to figure this out.

Both trading at about the same multiple.

It the movies to companies they work this out.

We have just a few minutes to figure it out so hopefully we can work it out between us.

Time warner cable takes the stand for its customers to say we are sick of paying these big transmission fee increases.

It did not exist 10 years ago because cable providers would get broadcast for free.

As these multichannel bundles have gotten bigger, the broadcast networks have started to say you have to pay $5 or $6 a month, they are getting billions of dollars for the content.

Time warner cable has said, that might be true, but you are asking for a 600% premium over the same programming we're giving to these local affiliates not owned in smaller markets.

We're willing to give you some money, but not that much money.

It is overpriced, that is the loggerhead.

Is that price?

If it overpriced?

Espn is the street high.

And cbs wants how much?

Hard to say, right now they get 66 cents.

How they might want as much as a dollar or two, but those numbers are not public.

This is a whole new revenue stream.

This is one of the main drivers of the stock price.

This is a second revenue stream, they have always had advertising, but they're starting to get paid by the distributors.

This is almost 100% margin.

On the flip side, if you are comcast, your biggest expense is programming.

And that is going up about 10% a year, much faster than you can switch prices.

Why not be willing to take a little bit less?

Let's say that they might be.

The deal comes from these things.

There are ads that have been running, don't let time warner cable take away your favorite shows.

Even though when there is a blackout, it is usually just a matter of days.

There is no way they will get -- and they are not going to budge.

It will come at the very last minute and to reach a deal.

Espn, fox, cbs, take your pick.

The fact that each will see our revenue stream, will we get cable a cart?

The bundling of different channels is a way of keeping the general price per channel down.

It would cost more money to sell that channel.

Espn might cost you.

There are some that consume a lot.

People believe the consumer will always win say is just a matter of time.

The consumer doesn't always win.

There needs to be some sort of business involved.

We get some sort of decision.

Some of the insiders have totaled about it.

We could see another one.

Although it will probably be a short one.

There is a possibility of both sides, it could go dark for a short time.

Sadly, we will have to say goodbye as well.

We have a big story to talk about.

A sharknado sequel is in the making.

What star might be off the hook for round two.

? ? cbs and time warner have extended the deadline on the d.o., it was supposed to have been met by 5:00 p.m.. they have gotten themselves an extra three hours to try to work it out.

He thought it would be extended yet again.

Let's do it.

The rich have spoken and are redefining wealth.

Most millionaires don't consider themselves to be wealthy.

Only 28% of the people between $1,000,000.5000000 dollars view themselves as rich.

It seems to be having $5 million in investable assets when people begin to start feeling the wealth of fact.

You consider the median household income is $52,000. a lot of people would be feeling pretty good between $1,000,000.5000000 dollars.

Some of us tend to get spoiled, no doubt about that.

Now for the latest.

It looks like tara reid is shark bait.

She is not on the producers wish list.

It is crazy talk.

He only after they want, according to people close to this, the actor here.

She denies that the rumors exist has been cut.

She said there is no script for the second movie until i read it and then i will make a decision.

Everyone sang i got cut, that is not true.

What is it without her?

That does it for us.

More market news coming up after this.

? ? it is time for on the market, we saw declines across the board and pending home sales data that showed a decline in new contracts being signed.

It did not help stop the drop in the markets.

Let's talk about today's biggest movers.

Both the regular session and after hours.

A late bond and a very dramatic one.

The company is trading this on war to discount and will pay a larger dividend.

The stock rising as much as 12%, ending the session on that level.

The company announcing plans to buy the irish drug maker.

With earnings after the close of trading, came out ahead of analysts' estimates, fueled by volume gains in china, latin america, and south america.

The company at the center of a battle.

The shares are doing well lately.

In terms of the earnings will be watching the rest of the week, chesapeake energy just a few of those.

She covers the medical and biotech industry, looking at the $8.6 billion deal.

It is an irish firm and a lot of talk about potential takeovers.

Not necessarily about drugs but rather about taxes.

Really, this looks like it is paying less tax.

They also make a lot of generics.

They are paying 35% in corporate taxes.

The giant based in dublin will read domicile the companies said they are only going to pay 12.5% on all non-u.s. sales.

It will be really nice to help them expand internationally.

They will get viceroyalties from earlier this year.

All of this sounds fantastic.

And yet shares are down pretty sharply.

A pretty sharp drop because analysts don't exactly know what to make of it.

They think they may have actually overpaid.

They downgraded from a buy to hold, one analyst says the deal looks pricey but favorable in the long term.

They will pay $16.50 for cash and stock.

It represents a 11% premium and $1 more than royalty had offered.

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

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