This is " bloomberg surveillance." housing him that i work.
A conversation with alan mulally on leadership transfer.
Steve ballmer adjust the value of the clippers, the cowboys and the miserable chicago cubs.
Good morning, everyone.
This is " bloomberg surveillance." it is tuesday, june 24. i am tom keene.
Joining me a scarlet fu and anna -- adam johnson.
Governor mark carney tells british lawmakers he still sees enough slack in the economy to keep rates at a record low.
That is actually happening in london.
The governor of the bank of england.
Business confidence and germany fell to the lowest level this year.
A very busy day in housing.
S&p case shiller coming out a new home sales.
The richmond fed manufacturing index slightly after that.
John kerry arrives in the region.
Help us understand what the fourth-largest city in iraq.
I thought there was a terrific set of maps find out.
It is an autonomous part.
We will talk about this a lot in the hour.
Particularly markets on the move in the past couple of hours.
Lex jack lew will testify before the house subcommittee today.
Finally, soccer to talk about.
Italy versus your away -- versus uruguay.
I am enjoying it.
I did not think i would.
I am a football guy.
Now that we are doing it -- nothing like the enthusiasm of the mexico coach.
Those frat functions thursday nights a few years ago.
Where are we now?
Markets have deteriorated in the past 40 minutes or so.
Oil was a 105. it was down when we all came in.
Back to 106 .98. on to the next screen.
Brent crude was 113. there is foreign-exchange to keep foreign-exchange hounds happy as well.
This is case-shiller back 10-15 years.
This is the good news we have seen.
The rollover as well.
Housing of the question.
The rent and buy calculation part of that as well.
Tuesday we scour the papers and look at the websites.
Picking up where you guys left off.
John kerry is on his mission right now.
He arrives in the capital of iraq.
Meeting with leaders and trying to get them to unite against rebels to seize control over different chunks of iraq.
Putting pressure on the prime minister.
The distinction is are they part of the calculus.
Definitely a moving target right now.
Oil prices came down.
That is the verdict.
Only 112 miles long.
I would not have been able to draw the map.
You realize it matters.
Just because we pulled the troops out does not matter.
The opposite might be true, it might matter even more.
Moving onto the next page.
Proof that apple will start making iphones with bigger screens.
Mass production of the phones next month.
One model will have a 4.7 inch screen.
Right now the iphone 5 s four inch screen.
We know they have gotten sick because the tablets are incredibly popular in asia.
I am waiting for the point where they embed a phone and an ipad mini.
I get everything i want all at once.
Until then, going to stick with my iphone.
Lex there are two sizes.
I think it is brilliant.
Are you laughing at my pink case?
This is my i can find it in a bar case.
I do not want some big phone.
The question is whether people will upgrade the phones.
Apple can come out with it -- bigger phones but will people ditch their existing ones?
You have the ipad mini a you can fit in the pocket of your suit.
Then put an earphone thing, and now you can talk on the phone.
Out overnight with a strong defense of tim cook.
They say enough.
Very cheap stock.
I am not going to give an opinion here.
Moving onto the rampage story.
Another development in the insider trading case that involved karel icon and phil mickelson.
Federal authorities were seeking information from two companies.
Now also dean foods.
Three years ago karel icon made a move that cause the stock to jump.
Investors want to know if icon somehow tipped off investors this is the speculation, what is being reported in various states.
The three men did not do any wrong either.
Breaking news as well as we look at the story.
This is mr.
Putin making headlines on bloomberg hd television.
You can see it to the right side.
Doing a friendly comment.
Not sure what that means.
Clearly taken constructively by the markets.
That pushes against what we see in iraq in the past one hour as well.
The comments were confirmed by the spokesperson as well.
Basically extending gains.
Let's also be clear the back and forth we have had, look as though relations were improving last friday.
All i know is he has the same currents behind him that's car that has in the living room.
He got it up bed bath & beyond as well.
That is the russian flag on one side.
Those are front-page stories this morning.
Guest host for the hour, tony dreier, equity strategist and another chief executive officer at truly up.
We have to start with the market guy first.
The pink phone does set the standard.
That is a breakdown.
I am trying to figure out why you are still holding your phone to year-to-year.
They have a new thing called bluetooth.
You can get e-mail on your phone, too.
Talking about the market.
The s&p 500 at 21 point 85. markets are on the move.
German business confidence coming in weaker.
Is this reaction mainly because of the quiet out there, that we are getting so many exaggerated responses.
If you look at the money supply trends in europe and asia, not so great.
There is an idea that for the u.s. to do well, you need stronger growth overseas.
If you look at the best economic time and market time in our history, probably 95 truth 2000. the dollar was strengthening.
Japan was in a recession.
Europe was plus or minus.
In the development of the eased -- asian economic crisis.
To say you have to have better growth overseas for the u.s. to do well, was actually opposite.
In other words, we canned the couple.
One of those great financial myth busters.
You go and say to get better earnings you have to have that are overseas economies, and that is not actually true.
Like springing in the chief economist at truly a. the federal reserve is worried about the housing economy but you say prices are doing just fine.
We have had good news this month on starts and sales.
The best news is the price gains we have seen over the past couple of years are starting to slow down.
We see big price jumps over the past couple of years but looks like the prices coming in for a bit of a smooth landing, especially in the west coast markets that had seen the biggest spikes over the past couple of years.
Given the to guess, i think it is time to post a twitter question of the day, are you more afraid of the housing bubble or stock bubble?
Please treat us.
It really ties everything together.
He came up with this?
That is because he watched every minute of brazil.
At home practicing his goals.
Let's get you some company news headlines in the meantime.
Trying to avoid u.s. taxes.
The seed company scored a possible takeover.
The deal would have allowed monsanto to move headquarters to switzerland for tax purposes.
According to people familiar with the matter the deal is now dead.
Cap has promised to boost pay to $10 an hour has paid off.
Job applications have risen by 10% from a year ago.
Especially noticeable at the old may be chained number of job applicants falling.
Discount retailers target ousting the ceo last month after other executives gave him a message, him or us.
Executives felt he needed to leave immediately or they would.
Several top managers are running targets until a permanent ceo is found.
Those are always the interesting stories, essentially the dirt behind.
They are valuable.
They show that can -- cacophony that is out there.
All of the noise.
Getting to that in a minute.
Matt miller sat down with alan mulally ford exclusive conversation on his next step after fort.
That is coming up next.
We will be right back.
? good morning, everyone.
Coming up, former secretary of the treasury, henry paulson in the 10:00 hour.
He has been out front on climate change.
He has been definitive and asia on bringing back the very rare birds.
Has made a multi-decade commitment to ecology.
Look for that in the 10:00 hour.
This is bloombe"bloomberg surveillance." you get us started on automobiles.
Matt miller caught up with alan mulally yesterday for an exclusive conversation.
He came to fort from bowling in 2006. on his way out.
What did you learn from him?
What have i not learned from him over the years?
A lot of people look to him for advice.
He is going to be the advisor going forward.
He owns more shares in foreign then bill ford.
Yesterday i started off by asking him if mark fields can still expect the occasional nuggets of wisdom from him.
I think i will maintain many of the great relationships i have.
I have fallen in love with ford.
It is a great company.
So important for the economy.
I will stay close to four going forward.
Mark can call you if you would ever need to?
I said any time.
Environmental sustainability is an issue he hit on a lot lately.
Bill ford long been concerned with the environment.
Concerned with congestion and pollution.
They spend a lot of time in china.
Allen had just come back from asia.
Holding a series of town halls with employees and retirees.
He held town halls and asia first.
Thousands of people coming to listen to him who are employees of ford over there.
Asia is terribly exciting and a great opportunity for fort.
In china market for vehicles will approach 23 million units this year.
We are about 16 million units in the united states.
Clearly 1.3 billion people that are mobilizing.
For us to support them with the best cars and trucks in the world and symptom solutions in the bigger city is a great opportunity for fort.
The chinese have such respect for history and innovation.
They love henry ford and what he did for everybody by making it affordable to all of us.
China and asia pacific an exciting opportunity.
Notice he said system solutions.
Talking a lot about non-car transportation.
Arsenal mobility always key to the ford story.
Henry ford a big driver of that from the get-go.
Interesting to see where they go from here on.
Interesting to see where he goes.
Did he say what the future holds?
One of the employees stood up and asked, where are you going to go?
What are you doing next?
He said are you from bloomberg news?
Obviously ever reporter on earth asking him this question.
He said he has not thought much about it.
I feel like in his mind he schedules 15-30 minutes per day.
He said he would call me from starbucks.
He mentioned starbucks so often i almost thought is he going to starbucks.com a lot of people talking about the veterans administration.
The big story is he would be a great fit there.
Such a disorganized government institution he could maybe put it back the way he did afford.
Exceptional integrity and capability.
We will check in with you after he e-mails or calls you from starbucks.
He is going to call me on july 2. thank you.
Jonathan tisch, cochairman of flows will join us.
-- cochairman of loews.com ? good morning, everyone.
Futures negative five.
Rent food 113 handle.
Now 114.23. a little weaker than yesterday on oil but we have come back in the past hour with headlines out of iraq.
We need a morning must reads right now.
Adam is robotic after brazil.
Resulted not look back and all of a sudden accelerated.
-- brazil did not look bad.
Mexico plays the netherlands.
This one caught my attention.
Original founder of netscape.
Technology has put the means of production within everyone's grabs -- crasgrasp.
Sony wire, the most bullish strategists of the whole lot on the s&p. how much of it is technology for years?
We are overweight in technology.
Everyone wonders if we are in the text bubble because the social media stocks had the rights and then cropped out.
Net to get -- netscape became public in 1995. priced at 14 originally.
That was the sign of the bubble.
Not so much.
Lasted another 5.5 years.
The leading indicator for capital spending continues to improve.
Good news for technology.
To your point on apple, not exactly an extensive stock.
Looking at equity markets and housing as well.
Lex one of the coolest thing about the housing industry, last by no no robots involved.
Still people out there building.
What is different now in the building of houses versus 2006? the biggest differences we are not building houses but apartments.
Apartments per unit actually use fewer workers than houses.
Not seeing as much of a rebound.
Robots, like all technology help create some jobs but not others.
The prefab thing, that never happened.
Some people are predicting this.
Still way too early to see this happening.
Jed coco the guest host today.
Along with tony dwyer.
We will continue the conversation.
Coming up, the highest s&p 500 on wall street but tony dwyer calling for correction.
His call next.
Are you more of the -- afraid of a stock bubble or housing bubble?
? links good morning, everyone.
-- good morning, everyone.
I am tom keene.
Joining me is scarlet fu in adam johnson.
The market is quiet.
Futures on iraq news quiet.
Negative five right now.
Nymex crude of fractionally.
Going to the top headlines this morning.
John kerry wants kurds part of the solution to the crisis instead of part of a problem.
Meeting with the president of the kurdish reason -- region discussing the insurgency.
Asking them to cooperate with the government more in baghdad.
Meanwhile, taking advantage of the chaos grabbing more ground in disputed territories.
Angela merkel told members of her party russia faces full economic sanctions unless it takes verifiable steps to calm the crisis in the ukraine.
She's focused progress and separatists in the east ukraine called the cease-fire in fighting against government forces.
A pair of congressional careers on the long -- on the line today.
Facing a tea party challenger in a runoff vote.
Congressman charlie rangel fighting for a 23rd term in new york in the primary.
Those are your top headlines.
Looking at the equity markets.
Housing in this hour.
Now at 17,000. dow jones industrial average 18,500. according to anthony dwyer.
He has been long and right.
Give me the single point why we are going higher.
How is the pension fund going to make 7.5% benefit they have to pay out with a high yield debt market of five percent?
The most liquid part and high risk category is at a record low punctuation despite slow mobile growth and weak domestic growth throughout the cycle.
What will be the motivation to stick -- to switch from fixed income to equities?
That is a great question.
There is an idea that everyone will switch at the date and time.
It is a great rotation coming from everywhere.
It is coming from gold.
Even though some of these areas are rallying you start to get the slower money drains because you need the returns.
The pond and trade.
We can find no trace of change and the five core basis points.
The yield curve is steep and money stability continues to improve as he meant business loan demand.
What makes you most upset when you hear doom and gloom?
We try to complicate a very simple thing.
The market correlates to the direction of our angst.
That is driven by inflation.
It is a new normal.
Sort of normal.
What president obama is doing is not relevant.
Know what is relevant is as long as core inflation remains tame, meaning somewhere around two percent, the fed can basically give you the fed put.
They will tell you they will not raise rates.
Ben bernanke took out an op-ed piece canceled due to take risk.
We tried to prove he was wrong.
The guy printing the money told you to buy them.
You do forecast for correction of some point.
We don't know why.
Trying to make it iraq or anywhere.
No one predicted in the summer of 1996 alan greenspan would give us irrational exuberance speech in japan.
What is great about this conversation is the idea of someone doing this every single day.
Marty is today's mayor saying do not fight the fed.
That is exactly what the messages.
Here is the one thing i have to ask you about, you are the baseball and have made that very clear.
You also say we will get a five or six.
Lex that is a great strategist.
Pretty highly convict and we will get somewhere closer to five percent and 10%. limited upside.
Typically the seven percent correction.
I am looking for that correction.
You have to buy it.
Corrections are only healthy until they actually happen.
When you are -- when it is happening you are to help into good.
They're never going to buy it on a correction.
Until you get -- for the next four years we will not have a recession.
There is how i get there, we are not raising rates for a year.
You only have a recession after an inversion of the yield curve since the 1950's. takes 50 years at least to invert the curve, usually longer.
Your mean inversion is 15 months.
So that is true, you are telling me you're going to pay 15.5 times forward numbers?
You will use the opportunity to get aggressive and add to your upside potential returns.
Connect the dots between what we hear from tony dwyer and what is going on in your world in u.s. housing prices.
There is very little risk of a bubble on the housing side.
Issa still look about three percent undervalued.
The biggest effect of low rate is with prices undervalued and rates still near historic lows over many decades, those who can get a mortgage, still much cheaper to buy than rent.
For those who can, much cheaper.
We will continue the conversation on housing him a particularly in the western parts of the country.
Markets and housing.
We can do like yankees and red sox.
What is the twitter question of the day?
Are you more fearful of a bubble in housing or stocks?
Lots of attention on soccer and the world cup.
How does it compare to other big professional teams in the u.s.? looking at the most viable franchises in the single best chart next.
? good morning, everyone.
Headline just out across the bloomberg.
The.. the syrian air force strike kills 14 along the iraqi border town.
That from arabia.
Military action within iraq today.
You see that with the entitlement and markets.
Futures make it a four.
I am tom keene.
Whitney scarlet fu in adam johnson.
Every four years we talk about how soccer will finally capture our attention.
Unlikely because we are at best with football and baseball and baseball in a couple of other sports.
Our single best chart is on the valuable franchises.
Sorry to say red sox and not on the list.
Dallas cowboys americas team valued at $2.3 billion.
The yankees high on the list.
2.3 billion as well.
The toronto maple leafs the most valuable hockey club.
New york knicks $1.1 billion.
That actually goes up to 5 billion.
A great study of what mr.
He changed a lot.
Major league soccer.
Seattle sounders worth 175. soccer club.
They call themselves the new york city football club.
We want to tease ahead.
Joining us in the next hour is the co-owner of the new york giants, jonathan tisch.
Lex i think stephen ball mark of holiday greetings from jonathan tisch.
We have three.
Starting with number three.
Going down to melbourne australia.
At least 80,000 homes lost power due to gale force winds.
Heavy rain and snow.
That is pretty intimidating.
Reminds me of hurricane sandy.
Number two, u.s. secretary of state john kerry visiting iraqi speaker of parliament.
This is all about diplomacy.
You would love to be there.
The press not allowed and a lot of the meetings.
That is what it takes in times like this.
Number one photograph, going down to rio de janeiro.
Look at that.
The cocoa cabana beach.
World cup fans watching the live broad cast of yesterday's brazil cameroon match.
Very coordinated that brazil did that.
The winner was espn.
If you look at ratings, average of 18.2 million tuned in to the one match.
I have been watching a lot.
Less falling down holding my ankle then there was four years ago.
They do not have the dam warns.
's if you watch it on the spanish-language network, another 6 million.
You just get iron up to hear them rattle off.
Lex i am a hockey dad.
You fall down and grab your ankles when someone looks at you wrong -- they did that throughout the series.
They play with broken phones.
Is that the way it goes.
Blood is drawn from the other team has to go into the penalty box.
They do a little bit of this.
Remember kurt schilling's bloody sock?
If you get net in hockey-- nickd ined in hockey you make it a bigger deal.
Are housing prices entering bubble territory again?
This is " bloomberg surveillance." ? this is "bloomberg surveillance." apple thinking thing in the production of the new iphone.
People familiar with the plan says the new models will have bigger screens and 5.5 in screen as well.
The current iphone has a 5 -- four inch screen.
Amazon is accepting pre-orders of warner dvds.
According to someone with knowledge of the dispute between the companies.
Amazon had been demanding price concessions.
Twitter denied it agreed to block accounts in russia.
Officials said access was being restricted.
Only showing russian technicians how to report illegal content.
That is this morning company news.
Those have become sensitive issues.
It really upsets me when we take freedom of speech for granted.
That is the pillar of this country that makes it special and different.
Like there are people that cannot talk.
The evolution of social media is where this is going.
This is like five or 10 years.
Of all things very quickly.
I still go to my phrase of twitter vigilante.
Moving the markets, i thought the morning cyprus lou up.
The whole debate was on politicians.
We are not allowed to use it.
Goes against the compliance.
You get the political dialogue on twitter.
I could not believe it.
The twitter vigilante was born.
Does the political mis-hit twitter wave before -- way before.
There is a lot of false information disseminated on twitter.
Rex it is like the mood of the moment.
It is getting better.
The truth issue is valid.
Talk about truth, housing.
Home prices rising to the highest level in six years.
Precrisis valuations in some markets like san francisco and austin, texas.
Our guest is for the hour says there is no housing bubble to fear.
Why is this not 2006 all over again you go we look at where prices are compared to fundamentals.
Kind of like looking at a pe ratio on the equity side.
When you take that into account, still looking three percent undervalued.
During the recession, rents rose.
Incomes have also risen slightly.
Even in places where the dollar amount, the dollar -- the prices getting back to the peak level.
When you say three percent undervalued, this is the result of the proprietary index.
If we can pull this up on the screen so everyone can see it.
Explain to us how you came up with the index.
To compare prices to income and prices to rent.
We look at that relative to the past.
What that shows us is the height of the bubble in 2006 prices were almost 40% overvalued nationally.
The places that look the most overvalued are the markets that saw the biggest price drops.
Predicted where the bust is going to be worse.
You can make the same chart for the equity markets.
Valuations you say are still pretty reasonable.
That is what it comes down to.
Many people assume the same fundamentals.
Incomes have grown a little bit.
According to the philadelphia fed, they are understated since 1965. with what little income we have had, you have more than he think historically.
The question i have is there is a big move and rentals because the millennial's are just turning 25. you will have a baby boom generation in the millennial's in the key homeownership is when they turn 30. what we see right now is their moving out of their parents home and starting to rent.
Do the jobs and incomes recover?
Which i have not very much yet.
Also, can they get mortgages?
A challenge for young people is affordability has gotten worse.
It was investors who had to take advantage.
Repeat buyers but not yet those first-timers.
Does that include the duration?
You could get a guy that is 25 coming out of college on their first job to get a 400,000 dollar mortgage to live in a three-bedroom house in bergen county.
You are shortening the cycle because you were pulling forward the housing data.
Wouldn't it be better to go from her rental to a first-time home to a bigger home?
What we see , and the challenge has been the lack of first-time home buyers has been we have fallen behind.
Should have existed without the recession.
We will see they will move up.
Many eventually will buy.
Also demographic trends affecting this.
People marrying later, having kids rate or.
Aside from the recession we would have seen a slowdown and the age of first-time homebuyers.
Bikes every region has its own supply and demand issue.
I wanted to ask you about california.
Strength in the most extensive segment.
What does that tell you?
The first thing going on in california is the for clay should -- for closure traces is pretty much behind us in california and many other states.
That means much less inventory at the low end of the market and prices for than 20% year-over-year or more in a lot of markets.
It is very hard to buy in california right now.
I want to rip up the script.
In new york city, the city of new york has decided to raise regulated rents one percent.
Bloomberg coverage cost one a five-point some percent for landlords.
Do you assume when you see a regulated market that you see less construction?
A regulated market is a symptom of not building enough housing in the past.
The places that have rent control and rent regulation in the country are the places that do not building up to begin with.
Friends cannot is lined with income and becomes affordability crisis.
The places like new york, san francisco, santa monica -- these places both far less housing over time.
Jed coco and tony dwyer, guest host for the hours.
Are you more afraid of a stock bubble or housing bubble?
What do you think?
I do not think either one are anywhere near a bubble.
You cannot pick two markets historically undervalued.
Thank you so much.
We will have you back when we get a bubble in housing.
How about a forex report?
A turn in the quiet market.
Euro-dollar 1.36. brazilian rail.
Living large in brazil.
Coming up, jonathan tisch, cochairman of loews joins us.
? this is "bloomberg surveillance." so much to talk about in this hour.
We will do that on "bloomberg surveillance." good morning, everyone, i am tom keene.
We will have a conversation with alan mulally in this hour as well, and steve ballmer as well.
Here is alan mulally of ford motor company, and we will look at that this hour.
I am tom keene.
With me, scarlet fu and adam johnson.
We will start over in the u.k., where they giving them governor tells british lawmakers he sees an uptick in the economy to keep rates at a record low.
Here in the u.s. we have a ton of data, starting with housing.
S&p/case shiller comes out at 9:00, followed by new home sales at 10:00. earnings -- walgreens -- walgreens and fedex, don't you think?
Like a bellwether.
I don't know if you have been in walgreens recently but they have this new device that you trigger finger and it takes the blood and tells you whether or not you are healthy.
All right, what else?
Secretary of state john kerry -- into northern iraq.
The semiautonomous kurdish region.
He is trying to work diplomacy theirre.
Treasury secretary jack lew will be testifying before a house subcommittee.
And there you have your morning brief.
We do have breaking news.
This warranted a red headline on bloomberg.
Rebecca brooks found not guilty on all charges of obstruction and phone acting.
-- phone hacking.
Rebekah brooks found not guilty by the u.k. andy colson was also an editor at one of the tabloids found guilty of the charge by a jury.
These appear to be from a jury.
The takeaways that rebecca books -- the take away is that rebekah brooks found not guilty of charges having to do with that girl who was kidnapped.
Good morning to all of you in a and the united kingdom.
I was thunderstruck by how big a story this was in the united kingdom.
This is a huge deal in the united kingdom.
At&t is trying to reassure lawmakers skeptical of the proposed takeover of the tv -- directv.
The at&t ceo says that the $40 million deal will need to lower prices for consumers.
Consumer groups want to block the takeover.
They said the deal would hurt competition.
Avon is cutting jobs to try to get back to profitability.
The company will eliminate 600 jobs, mostly from the corporate side and the north american business.
Avon has posted losses in 5 of the last numeral six quarters.
Alan mulally is saying goodbye to ford.
He engineered a turnaround in cap for it out of bankruptcy, unlike his counterparts at general motors and chrysler.
In an interview with matt miller, he talked about the recalls that have been plaguing the industry.
I clearly can't speak for general motors, but this industry is really important, and it is important that we make progress on the issues we are dealing with.
In ford's case, i am so pleased with the way ford operates, the respect they have for the process, and the way we stay so aligned with the process and any time we find in issue we move on decisively.
Any automobile company that has an issue, we review the issue and check everything through ford to make sure we don't have the same issue because what is really important is the integrity of the great industry, which is dedicated to safe and efficient transportation.
He will leave the job next month.
All the focus on goods producing jobs as well.
It gets us to one of the great themes of the hour, the service sector and particularly the travel business.
Is the service sector job equivalent to a goods producing job in the economic recovery?
Front and center for american job creation.
Jonathan tisch is cochairman of loews corporation.
He sees the travel industry, there i say, booming as well.
What was the biggest headache in redoing your regency hotel?
Having to move my mother.
[laughter] happy now, though.
Down to the ritz, right?
And not saying where she went, but she is ok, believe me.
Totally renovated the hotel.
Become a new bar, new restaurant , new salon.
We were pressed to get it done before super bowl.
We started up on january 1 of '13 and opened january 16 of '14, 2 weeks before the game.
I will be a gentleman and not asked if you came in on budget -- well, we did come in on budget.
Sort of a moving budget, but on budget.
When you look at the trouble business, it is clearly booming.
Do you wish there were more airline seats?
It is a combination of airline seats and making sure our infrastructure is buoyant and renovated enough to handle the international travelers we are trying to attract.
We have brand usa, putting a message together that resonates in other countries.
But when somebody lands at kennedy or lax, we have to get them from the airport to the center of business district, we have to get them to other parts of the country, and our infrastructure is in serious trouble.
I was in boston a couple weeks ago, flabbergasted by the number of new hotels in boston.
All the surveys that we see on the that we follow, demand is increasing.
Supply -- yes emma there are new hotels coming online.
We opened our fourth hotel last thursday down in orlando.
Excuse me, shameless plug.
Of course it is.
It is a statement about how loews corporation and loews hotels are committed capital to building new hotels, and that says a lot that we have made a conscious decision that we cannot supply because demand is increasing.
And that is the key point.
I was looking at data coming up from mastercard suggesting that spending habits have shifted.
A few years ago they wanted stuff for their home.
Now they are willing to spend money.
What is the described area in hospitality?
Hotels are growing insurgencies.
If you look at -- hotels are growing in certain cities.
If you look at new york, 5000 coming online -- 1500 coming online in the next two years or so.
Chicago, we are building a hotel -- shameless plug number two.
Buying it on.
-- bring it on.
The biggest growth area, to answer your question, is international travel.
A lot of international travelers, particularly the future traveler, who was younger, are using the b&b and staying at people's homes in brooklyn.
Is that eating and your business?
The eighty are making the -- they are making the argument that these are travelers who wouldn't make the trip if they couldn't stay at a less costly facility.
Our argument is that an airbnb travelers not creating jobs.
We need to create more jobs.
By people staying in hotels and eating at restaurants and going to broadway shows, that is what creates jobs.
We have 300 75,000 people in new york city that make a living in the travel industry and we want to create more jobs.
They say they are creating additional growth, but more people are traveling on the country has done a very good job . this administration has listened to the concerns of the travel industry as it relates to visa reform, agents to process international travelers.
Airbnb is about the 4-, 5-, 6-night stay.
The kids get crushed if it is five days in boston.
When you opened the regency, how may applications did you have for the number of jobs available?
Because we work closely with our union in a new york, our workers took a year off, some of them worked, some of them were taking care of by us, by the union.
We get everybody back and we had some new open positions and we have new coworkers who are still to be part of loews regency hotel.
How many people apply for those few jobs?
Don't know the number check them for a 500-room hotel, we have about 600 employees.
He had a good ota period and the giants are optimistic and we're looking forward to a great season.
You can go now.
You will be with us for the entire hour.
Lots to talk about for this service sector as well.
Our twitter question both have generated a lot of thanks out there -- angst out there.
Coming up, it is a topic we love discussing here.
Stay-at-home dads and other challenges of working families.
We will be joined by neera tan den, president of the center for market progress -- center for american progress.
Good morning, everyone.
"bloomberg surveillance." i'm tom keene.
This vendors to our guest host -- this menace to our guest host.
Jonathan tisch is chairman of those corporation --loews corporation.
America is behind, behind in steel, in asphalt, and indeed, in infrastructure vision.
I see it everyday.
What do we need to do to jumpstart what you when i saw when we were kids?
We need to make sure that the highway fund is reenacted.
We have to come up with a new formula because people are driving less and we are driving more fuel-efficient cars and it is based on gas consumption, how that gets funded.
We put in the nexgen system in terms of air traffic control and use gps technology to put more planes in the sky.
And that we have to work with our local and state governments to ensure that airports, the roads that bring people to and from airports, work on some rail projects -- you mentioned the competition internationally.
There are more people hitting the roads globally than ever before.
Every time an international traveler comes to this country, they spend more money i say longer than domestic travelers.
When you look at the international and domestic market, there is a partition in the hotel industry all wrapped around infrastructure.
Where is loews corporation's grade is opportunity/-- greatest opportunity?
Our fourth hotel opened last week.
1800 rooms -- this is the largest hotel to open outside of china in the world.
That shows a real commitment between comcast, our partner, and loews hotels to growing our hotel base in florida.
That is where we see opportunity come that is where we see growth.
Frequent-flier miles -- your competitor starwood is big on this.
We have 21 hotels.
We will never be the size of some of our fellow competitors -- starwood, marriott.
They are at 4100 hotels.
Our program is based on guest recognition.
We want to say, "tom, thank you for staying with us.
We know you were here 2 weeks ago.
We want you to have your favorite amenity --" about ir -- a bow tie rack.
Is the world cup a friend?
I think it is because people gather together and they like having the camaraderie that comes with big sporting events.
Jonathan tisch with us on housing.
Good morning, everyone.
"bloomberg surveillance." i am tom keene.
With me, scarlet fu and adam johnson.
Jonathan tisch joins us, cochairman of loews corporation, the one who brought us perfect weather for the super bowl in february.
We are starting right here in the u.s. a pair of long congressional careers on the line today.
Republican senator thad cochran of mississippi is facing a key party challenger -- tea party challenger.
Primers been trolley rangel of new york -- congressman charlie rangel of new york is fighting in his primary.
Vladimir putin is asking lawmakers to cancel rights to use force in ukraine.
You ca -- the ukraine president announced a truce three days ago.
Secretary of state john kerry wants kurds to be part of the solution in their countries crisis, not the problem.
He is asking the kurds to cooperate more with the government in baghdad.
But they might push for full independence.
Those are the top headlines.
It is very in flux right now.
Brent crude, 113.24, a little salt of word was hours ago -- moving nonetheless.
Secretary of state john kerry says the united states is preparing a strategy to act.
We want to bring in neera tanden , president of the center for american progress, director of the mustard policy for then-senator barack obama -- director of domestic policy for then-senator barack obama's campaign.
The white house is considering all kinds of options including air strikes but has yet to decide on anything beyond sending troops to defend the embassy.
Is time running out?
I think that we have a fair amount of time.
The most important issue to remember is that we don't want a wider conflict in the region, sectarian conflicts between sunni and shia.
Secretary of state kerry is doing the right thing by talking to leaders in the region and trying to have them lead the effort to ensure that we don't have a iwider war.
Iraq is in deeper trouble between shiite militias fighting the sunni extremists and that could tear the country apart.
I think we all know the domestic ramifications.
See it with the president's polls declining in the number of days and weeks.
What is the mood in your washington?
Take yourself away from secretary clinton.
What is the mood within the beltway on how to handle this crisis in iraq?
Well, look, i think we can talk about the domestic politics about these problems.
I think everyone is frustrated that the problems in the world are growing to some degree.
But the truth is that the challenges are much deeper than domestic politics.
Having sectarian wars in the middle east will have the consequences not just for the u.s., but for the global economy, and that is why it is important that we try to support the dramatic efforts, and that we keep -- support diplomatic efforts and that we keep military options open to fight isis, a threat to iraq but really to the world.
I want to talk about closing the door, dropping the hammer, restoring american credibility, which at this point is in a difficult place given the fact that we pulled out of iraq, left afghanistan, the palestinian peace talks fell apart with israel.
What does the u.s. need to do right now, neera tanden?
Actually, the greatest threat to america great ability was going into iraq in the first place.
Wrong information, if not lies.
That was the greatest hit to american credibility over the last 10 years.
We have to build a coalition together to stop support for isi s, and to have shia militia step back so that we can have changes in the government.
And we have to ensure that there is military stops to what is happening to isis' advances.
It does seem that they are getting to baghdad and that is an important thing.
I want to ask you about hillary clinton.
You were a policy adviser to her and whoever becomes president will need to take on this iraq issue as well.
She was clear in her book "hard choices" that her vote for the iraq war was a mistake.
Does that leave for more options as result of that admission?
I think that she was secretary of state for 4 years, she knows the region extremely well.
If she runs for president, i imagine iraq will be different than it is today.
We don't have years to act on these issues.
We have days and weeks.
I think she will face this challenge but she has a lot of experience on this issue and i don't think iraq -- i don't think her vote on iraq will be an issue.
I think the party has moved on, the country has moved on.
I want to ask you one final question.
You participated in the white house's working families summit this week, and fathers were a big theme because it is not just a women's issue anymore.
Why is this such a hot button issue and should government be taking such an active stance?
It is a major issue because it is a concern of voters, women voters and male voters, but women voters particularly -- republicans, democrats, and independents recognize there is something wrong when the united states is one of the handful of countries, up there with oman and papua new guinea, that doesn't offer paid leave for fathers or mothers.
It is a real concern to people and that is why it was such an important topic yesterday.
Neera tanden thank you so much.
Our twitter question of the day this is "bloomberg surveillance." i am scarlet fu, here with tom keene and then johnson.
Add monsanto to the list of company at trying to avoid u.s. taxes paid a deal would allow monsanto to move headquarters to switzerland for tax purposes.
According to people familiar with the matter the deal is dead.
Job applications at this retailers chains has risen 10% from a year ago.
Gap says it is noticeable at the old navy chain, where the number of applicants had been falling.
Target ousting the ceo last month after executives gave the board a message -- it is him or us.
They said that target ceo rex pineapple needed to leave immediately or they would.
Greg -- greg steinhafel needed to leave immediately or they would.
The jets and the giants getting together for a huge super bowl -- that was earlier this year.
After sochi, after the new york super bowl, the critics this -- so what.
Jonathan tisch tapes eli manning's ankle for the near giants.
I absolutely will defend it.
It was a great success for the new york and new jersey region.
Broadway -- never in the history of the city -- broadway was closed from 35th street to 43rd street.
Not one arrest.
Not one arrest.
Not one person was taken off and handcuffed.
This is a sense of excitement.
People were thrilled to be part of the super bowl in his region . . what was the net cash after paying for security?
I don't know about the net, but we are sticking by our number that we think about half $1 billion was gross generation.
You can do your own math and figure out what security cost.
I think that the positive impact on his region will last for years to come.
The next couple years of taken.
2018 was given to minneapolis, which is good because we just bought a hotel there, shameless plug number 3. oh, come on!
A new stadium with a roof, and the all-star game is there this summer could i'm a big believer that these events make a difference.
If this kind of event comes back to new york, what would you differently if new york posts another super bowl?
We learned about traffic control and certainly i'm not speaking for new jersey, but there are issues with people trying to get home after the game.
They might view the transmission infrastructure in a different matter.
All in all it was a success.
I think you covered the giants.
This uproar about the washington redskins, it's become real.
We want your opinion on this.
It is an issue that certainly offends people, when you cross that line to offending a good slice of your fan base it becomes problematic.
Do the jets need a name change?
They are our neighbor in the building.
I love the jets.
I did not have a problem with this until i thought about it in this context -- what if it were the blackskins or yellow skins?
Whenever the name is, people are being offended.
We are more sensitive in today's world about how we brand issues and companies.
It is becoming a distraction.
Should they continue to fight this or should they just make the change, preempt it?
Dan snyder will make the decision based on his team and what he wants.
When you have the president and senators and members of congress saying that this is a problem for our country, you need to look at it.
You think it is precipitated in some ways by don sterling -- absolutely.
On the heels of the nba's action , but look at that valuation.
$2 billion is a lot of money for a basketball team.
What does that do for the valuation of other sports franchises?
People are saying that the new york knicks would be worth $5 billion -- i can't even imagine the new york yankees, and your giants.
What it shows is that appointment tv is more important than ever.
We can dvr everything else, but if you want to watch a sporting event as it is happening, live tv, appointment tv, these teams are worth a lot of money.
Congratulations on what you two did.
Super bowl in february, it was a success.
We have data on housing coming up this morning.
Futures down by almost 4 points.
Good morning, everyone.
"bloomberg surveillance" -- we are on bloomberg television, bloomberg radio.
I'm using more each and every day and i hope you do as well.
I am tom keene.
With me, scarlet fu and adam johnson.
Our guest this hour, on sport and travel, jonathan tisch joins us from the loews group.
For zillow dancing in the world cup as expected, but something surprising is happening this year.
Presents are protesting public money spent on stadium -- brazilians are protesting public money spent on a stadium over health care.
Bredin greely is there from brazil.
-- brendan greeley is therefrom resulted sports usually transcends all s -- politics.
Why not this year?
One thing brazil always does is get behind the national selection, the national team.
Usually on the apartment blocks, what you see is a brazilian flag in every window.
Yesterday i was in a city of about one million people outside sa o paulo, and you could count one or two brazilian flags, block, and that, i'm told, is a huge change from 4 years ago.
The brazilians are really into the cup.
It is really good soccer this time around and they are excited to host people from all over the world but they are not getting behind their own team.
People are not taking to the streets the way they had feared, but they are not as excited as they normally are, frosted by $11 billion that went to 12 different stadiums.
Are they taking their anger out at the players, the ones who are still rich and represent the kind of divide they are protesting?
Ah, well, you know, not necessarily.
It is not that they are angry at the players, it is the government.
The government had assumed that once the couple started everybody would be so excited about the national team that nothing else would matter.
I think the frustration stems from that assumption.
What they are saying is we are not that easy to buy.
Even football-obsessed brazil can't be bought with the national team pride.
All of the companies, particularly the international committees, international -- international team companies -- if you look at mcdonald's, they are just draped with lou and yellow and green flags.
They have a long marketing biplane and they presumed this whole time that everybody would be really, really into the brazilian team.
Shell oil also draped with brazilian flags, really remarkable.
Companies are attempting to use brazilian patriotism to sell things but -- there was actually -- just a quick question.
Can you get a sense of people from other countries outside of brazil, to watch the games?
Has there been an influx of international travelers?
More americans than any other nationality, so there you go, tom, americans really like soccer.
Last night on the northeast coast there were a lot of americans.
You hear a lot of american english spoken on the street.
One way brazilians are really in a very almost stereotypically brazilian away -- i watched a little tv yesterday and i saw 2 different segments on how amazing it was to have the secretly attractive soccer players from all over the world in brazil, asking people to phone him and say she was the most attractive -- who was the most attractive.
There was another segment on who is the most beautiful fan.
Brendan, paint for us to brazilian interest in germany-usa on thursday.
Are they engaged in that match?
They are passively engaged in every match.
I had some people who were hosting the near sa o paulo -- hosting me near sa o paulo.
Phase set to watch the usa game -- they sat to watch the usa game against article.
I think of is against preferred to see the americans -- i think the brazilians prefer to see the americans in later rounds.
I cannot foresee a world in which america beats germany, particularly this german team.
But we can always believe.
We certainly always can.
Great having you as always.
We will talk to a celebrity chef coming up next.
Good morning, everyone.
"bloomberg surveillance." i'm tom keene.
Whitney, scarlet fu adam johnso touch with me, scarlet fu and adam johnson.
Matt miller caught up with ford ceo alan mulally.
What did you say about what he is going to do next?
Employees in the audience were asking him -- we had exclusive access to this town hall meeting.
He has been doing a series of them around the world to say goodbye it passed the torch -- to say goodbye and pass the torch.
It was an all-star for crowd t-- ford crowd.
I asked him if he would be advising him is because the companies out there that could use his cell.
He is definitely giving advice still to ford.
I will maintain many of the great relationships i have had.
I have fallen in love with ford.
It is a great company, so important for what it does for the economy and sustainability.
Mark will call you if you ever need to?
This guy stays on message, alan mulally does, but he has such talent he could broaden it out to other companies and organizations.
Jonathan tisch, leadership -- you have written 3 books on the topic.
What is the lesson?
We all have the ability to be successful and we have a responsibility to help others get to the same place.
We can't be all things to all people.
There are certain ways we work that are effective.
But we have to surround ourselves with others that make the entire organization really click and work.
This transition has been pretty seamless.
Did he talk about that at all?
Over and over.
When he first went to ford they were talking about a succession plan.
They haven't had that at ford a lot, they haven't had that many companies -- they started early on this transition.
Or would be revised after observing the train wreck at jcpenney -- what would be your advice after observing the train wreck at jcpenney?
One of the keys to our success, and he comes from my late father, my late uncle, is that we listen to each other, we respect each other.
We know what we're good at, we know where we need help.
That is made -- that has loews corporation as successful as it is today.
2 guys in brooklyn who had nothing.
They worked together, they respected each other.
I saw jon tisch throw a croissant at steve tisch.
I was aiming for you but you ducked.
Matt miller, thank you so much for bringing your conversation with alan mulally.
Jonathan tisch, our guest host for the hour.
We want to bring you the tutor question -- twitter question.
We welcome you to "bloomberg surveillance" in new york city.
Tomorrow on the program, always interesting, always controversy or, carly fiorina will join us here on "bloomberg surveillance ." this is "bloomberg surveillance." i am scarlet fu, zero tom keene and adam johnson.
Let's get -- year with tom keene and adam johnson.
Apple is thinking big in the smart phone battle with samsung.
Reduction of the largest iphone ever will start in china.
People familiar with the plan say that the new model will have 7.5 inch screens and 5.5 inch screens.
Amazon and time warner are settling the feud and amazon is accepting pre-orders of warner dvds.
Amazon had been demanding price concessions.
Twitter denies blocking accounts in russia, following statements by officials there that access is being restricted.
That is this morning plus company news from the files of "bloomberg west." you wonder where that is going to be in five years.
Governments need to catch onto social technology.
A lot of people do good i was a late convert.
I didn't join twitter until a year and half, 2 years ago, and i can't live without it.
In the food business, the restaurant business, it is lenox avenue in new york city, also known as malcolm x. boulevard, in the heart of harlem's heartbeat is red rooster.
I will have the oysters and links, scarlet defied yarger.
-- deep-fried yardbird.
Marcus samuelsson cooks for president clinton, he cooks for oprah, and jonathan tisch is known to get it without reservations.
You have pulled this off a few times.
Look, i am in the same business he is in.
Happy to wait.
Take us back to when you opened.
You were an idiot for doing this, everyone said it would fail.
The very first day was pretty amazing.
Our first guest, you won't believe this, was keith richards and ron wood.
We did a party for paul mccartney's big event at the apollo and keith richards and ron wood walked in and said "where's the party, man?" you have had a lot of support from celeb crews like jon tisch getting this going.
With this app by itself without liberties -- with this have gone by itself without celebrities?
The biggest fortis from the community.
-- the biggest support is from the community.
The people who made the reservations were not necessarily from harlem.
A third of the restaurant is all was open for walked and.
We basically have three customers -- the visitor, books online.
The new yorker -- give me the 8:00 reservation right now, do you know who i am?
I don't do that.
[laughter] and the local who says "that is my restaurant, i am not going to make reservation." the customer tells you what to do and we serve them.
You just got back from aspen and the wine and food festival there, you go to miami beach all the time.
You are starting one in harlem.
Why harlem, why now?
One thing you and i share, love for new york.
I truly believe that we learn a lot about, for example, each other when that incident -- bad incidents happen.
We had that with sterling and incidents on race.
I want to do the same journey with good stuff.
Food and hospitality can bring us more together.
Harlem is an incredible community and the food festival we are starting, next year, it's going to be food, arts, and culture.
You can go to many local restaurants and enjoy it for just like you do in aspen.
You got president clinton to sign on as a cochair.
Not so bad.
Very nice, both of the mayor and mr.
Clinton came up.
All the small businesses in harlem came out and supported.
It is really their event.
What people love about red rooster is they don't have kale.
[laughter] kale is so in right now.
I'm sick and tired of kale.
Kale this, kale that.
Who osnwns the kale factory?
My wife says 5 years from now we will come up with some disease attributed to kale.
You got three stars from "the new york times," almost unprecedented.
And yet you left that you started this.
What is the lesson to people who are thinking about starting a business?
First of all, the model for me of super high-end dining, i thought the consumer wanted something else.
They wanted to be able to go out without reservations.
Starting a business in harlem allowed me to really start over again and be more consumer-driven in which you cannot really do when you are a midtown restaurant.
It allows more flexibility.
You are active in the community and promoting your personal brand.
I'm wondering how you divide your time.
How much time on celebrity