Welcome to "money moves" where we focus on alternative assets.
We show you what investors and entrepreneurs are doing, as well as what is going on in hedge funds, private equity, real estate, and more.
Privacy and security, president obama is defending the role of intelligence gathering and national security.
We will review his speech and show you which businesses are benefiting from surveillance programs.
Also the expanding world of alt asset management.
He is going to give us his estimates for the sector.
Internet ad revenues hit a historic for the billion-dollar hide.
The president and ceo of a digital ad trade group will be joining us.
He will tell us which companies are best poised for success.
President obama defending electronic spying in defense against terrorism.
Phil mattingly is with me.
From 9/11 to civil liberties, what stood out to you in the president's speech?
In a 45 minute speech that touched upon broad themes and technical details about how the u.s. collect intelligence, the key point is how the president is going to address the bulk collection of telephone records.
He said he would like to see that data, that bo committed data transfer to a government -- that old native data -- that bulk metadata.
The first change is going to take some help of congress and other administration officials.
The second one is immediate and that surprised a lot of people who were waiting to see the results that this administration's work would end up being.
As far as the bigger picture, what caught your attention?
From the u.s. perspective it was very interesting internationally.
A very difficult scenario after last year and -- after last year.
Angela merkel is very upset.
A number of companies -- a couple of -- a number of countries very upset.
For leaders will not be spied upon unless there is -- foreign leaders will not be spied upon unless there is a national security issue.
Individuals will only have their data collected in certain scenarios.
There will have to be specific reasons for that to be collected.
There is a very important point the president made throughout the day.
Thank you very much.
Phil mattingly joining me there.
We bring in our chief washington correspondent.
Did the president go far enough for the tech company?
Both the phone companies as well as the technology companies are encouraging the president to take the steps.
They are trying to reassure customers they are getting data.
Very significant here.
Is where it will end up.
Where will it require phone companies to hold the information?
Reaction from at&t to that, the debate about government surveillance programs saying in a statement it is striking the right balance between protecting personal privacy and providing national security.
We will review the proposal and look forward to working with congress and the administration.
That is a stronger comment from the wireless industry.
Ctia continues to get balance between national security and privacy.
Bottom line here, the phone companies do not want the responsibility of holding onto that information.
They would rather have a third- party handle it.
Most tech companies basically want surveillance scaled-back.
What you think is going to happen?
The message we heard from the internet community is is they wanted to reassure not only folks in the u.s. but the folks at the government get it.
They -- things will be different going forward.
Yes he offered more in the way of transparency -- a pretty strong statement here.
The strategy seems to be the intelligence process.
The internet deserves more.
The sentiment from the internet community is the president do not go far enough.
They do welcome some of the initial changes.
That is from the business community.
What about from congress?
You have a lot of liberal democrats and conservative republicans.
Perhaps criticism that he could go further and congress will do it on his own.
Rand paul, the republican from kentucky, is addressing the nsa spying program because of pressure from congress and the american people.
He goes on to say -- he believes the government is too intimately involved in -- with more on the international angle, how the president wants this message understood overseas, we bring in julianna goldman.
What did he tell you?
Been really gave us -- ben really gave us a look into the process.
The president really wrestled with that decision and it wasn't until last night that he finally weighed in with where he wants to see that process go to be a will to transition out of government controlling this bulk data.
Then even said he got a phone call around midnight.
The toughest decisions are left at the end.
Even after ben got that call, he was putting the finishing touches on that speech late into the night and into early this morning before the president went over to the justice department.
That is the big -- the big question.
The president ordered a 60 day review to coincide with the reauthorization paid he wants the intelligence community, the attorney general to come to him with a proposal for how you can transition this eta from being in government control to being housed in a third-party entity.
The real question is how long that will take and whether or not this made a did a program is going to be continuing under the government umbrella.
Let's listen to what he had to say.
We would like to be at a point where authorization goes up.
The big changes that the tech companies, that the phone companies are looking for, they might really not be any more insight to that.
The white house is going to be taking a hands-on approach with congress as they try to craft the legislation.
That airs at 9 p.m. tonight.
Also later pimm fox will be speaking to retired general michael hayden, former director of the national security agency and the cia.
We have a quick break to take.
When we come back, hedge funds managers join an alt firm.
How he sees the business evolving over the next few years.
We are speaking a lot about privacy and security.
The head of the global solutions management team from paypal will be with us to tell us how she is securing your online transactions.
And self assembling robots may change our world.
Some of these amazing breakthroughs in artificial intelligence.
He sold it to the altar -- to the altar asset firm.
It has $3.5 billion in all its.
Terry black is with us now.
He is the global co-cio.
Glad to see you here.
Essentially he is a pioneer in this alt asset field.
What are you doing with the three and a half billion right now?
, we are managing pretty well.
It has been a great performer since we launched it.
You have to be able to short stocks, be tactical about the markets.
We try to do both of those.
He ran a very successful launch -- successful equity launch.
We have the investment capabilities we can tap into.
We also have a great distribution network, which we use.
I also think calamos is good at marrying the top-down and bottom-up.
That seems to be the way alts are going, it is becoming more democratic, more people can be participating in different strategies.
It helps if you have the top strategies.
If you are investing in bonds, you were down about eight percent.
A lot of the retail investors were looking for ways to take on more risks.
They don't just want to go all the way and by equities.
They say they are going into the alternative space.
The quinault is captioning about 14% of call flows -- liquid fault is capping about 14% of call flows.
Liquid offsets strategy.
You get daily liquidity every day.
If you want to take your money out tomorrow, you can do it.
Tell us about your long-term strategy.
A lot of people want to have the exposure to the upside in the market but they are worried about the downside in you are pretty bullish on the equity market.
How does that impact the weight of -- the way the firm runs?
We do try to marry the top- down and bottom-up.
We have a bullish outlook on equities, even though in the u.s. equities were up 30% last year.
We are still bullish, very low inflation.
Holmes still doing extremely well.
-- holmes still doing extremely well.
-- homes still doing extremely well.
Generally it is about 40% as a benchmark.
Meaning that long?
You hedge about 60% away.
We are generally running about 60% normal.
Tell us about how you run the short.
All you're really doing is shorting the index.
We short individual names and you have to have a great research process.
We develop insights about investments and we put on individual short positions.
You are long that you are try to get money's on the books, long and short positions?
Culturally it is a different practice to go out and find that strategies, bad management, high valuations.
When you are shorting that is the type of thing you have to do.
Out of curiosity, getting back to your role and your role at calamos, if you did this as a successful hedge fund manager, how many other hedge funds are going to be courted i alt asset firms or by other kinds of firms that run other alt asset businesses?
We had the view that this is where the future is going.
The two world would converge.
So far we haven't seen a lot of hedge funds going to the mutual road.
Some managers lend their name.
I don't -- i don't know exactly who's working on those products.
A lot of times they're joined with other products.
A big reason you do not see a lot of hedge funds going to the hedge fund spaces they have a different structure.
Those hedge funds would have to justify to their clients why we are selling this.
People should be extra aware.
There is a hedge fund manager that wants to do this?
Is that the owner is the person would give up those fees?
, i grew up -- i grew up in the mutual fund space.
40 billion went to alternative mutual funds last year.
It has been at in $11 trillion business.
That intends to work.
Gary black joining us.
We have a break to take.
When we come back, the short list of the most innovative companies in digital advertising.
The ceo of a trade group will be with me after this quick break.
Digital advertising is growing like gangbusters.
A record $20 billion in the first half of 2013. randall rothenberg is here, the president and ceo of the interactive advertising bureau.
It is the trade association for interactive marketing.
Bob rice is with me for tangent capital partners.
How do you see the internet marketing landscape?
Those growth numbers are growing like gangbusters.
Which companies are best poised to capture this growth?
There are a lot of them.
I am always reticent to single them out.
A company like facebook has been having a terrific transformative year after some naysaying.
You are seeing great activity and successes all across the board from incumbent companies like the new york times -- i like that you think the times are incumbent.
What about this idea of sponsored content or content that tricks us?
How annoyed is the average user going to be?
This is not about facebook in particular.
Any company that tries to trick any consumer is setting itself up for a massive hurtful fall.
Rule number one is do not try to fool the consumer.
However native advertising looks like it is here to stay.
What is the trade-off?
It is the differentiator for great advertising and has always been great ideas.
It is not about trying to fool people.
Creativity is the different threat -- is the differentiator.
This has always been part of the portfolio of marketing products and services.
It seems to have some staying power.
We believe that the evidence indicates standardize advertising, including standardized interruptive advertising, remains possibly the most powerful force in advertising marketing.
Mobile is the hottest topic in digital.
Ads that are inside apps are actually outperforming ads on the mobile web.
Obviously you should be paying attention to it, whether it is an actual trend, whether it has staying power remains to be seen.
Mobile web access is still extraordinarily significant.
Some research indicates there's more use of the mobile web and mobile apps.
They're certainly more use of the mobile web than any individual mobile app.
The real challenge is mobile advertising supply chain remains very complex.
In many ways it is reminiscent of digital advertising, which you know.
We need to get consistency in areas like measurement stands.
We thank you very much.
The ceo of interactive advertising bureau.
It is 26 minutes past the hour, it is time for bloomberg on the markets.
You will see a mixed picture on your screens there.
The dollar is a mover at a four- month high.
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