San francisco tragedy.
Investigators focused on split- second decisions in the crash landing at one of the nation's busiest airports.
Bolling, a bad year.
How is the aerospace -- boeing , a bad year.
The pentagon, out for the summer as nearly 700,000 civilians start their furlough today.
? ? good morning, it is monday, july 8, live up from bloomberg world headquarters.
You are "in the loop." we have more on the asiana airlines flight into san francisco covered for you from every angle.
Cory johnson is live in the bay area reporting of what happened and what we know so far.
Peter cook in dc has the latest on the investigation into the cup -- into the crash.
Right here in new york, adam johnson, covering boeing for us, looking at what this means for the triple seven plane model, which has been one of the safest so far.
The flight recorder from the crashed asiana plane in san francisco show that the pilots tried to avoid the crash before impact, but what actually happened?
Cory johnson takes us inside.
Asiana flight to under 14 began in shanghai.
Teachers and students were among those boarding on their way to san francisco for a summer camp.
They took on more passengers when they began their 10 hours a 20 minute flight to san francisco international airport.
The flight was typical compared to the dozens of nonstops.
It was one of the newer planes in the fleet, one of the 12777's purchased in 2006. some carriers chose to cram them with as many as 365 seats, this was near capacity with three and seven people.
-- 307 people and 16 crew.
The tower told pilots that visual flight rules were in effect.
In other words, pilots could guide themselves to the run like without the assistance of traffic control.
In a last-minute approach there were clues that something was not quite right.
Look at this flight pass on the previous day.
Data shows the safe approach, a steady, straight decline, culminating in a safe landing on the red -- the runway.
Look at the actual flight path of saturday's asiana flight 214, you can see the pilot trying to jack the airplane out of the descent, coming in much steeper.
Seven seconds before impact, the tower tell them to increase speed, someone says -- go around.
There is a loud banging sounds.
Air-traffic control warned other airplanes to avoid the runway.
Coming in to slow and too low, the tail slammed into the sea wall short of the runway, snapping off and sending the airplane spiraling?
The fatalities two 16-year-old girls.
Lying on the tarmac, dozens of passengers who jumped from the airplane before the evacuation chutes deployed, some taking shelter in the frigid waters of the day.
Dozens more ran from the airplane.
All told, 182 survivors were rushed to local hospitals, a number in critical condition.
David brace of the airplane and stepped this picture, which spread rapidly on twitter.
"i just crash landed at sfo, most everyone seems fine, sir real." he used the correct twitter handle.
Cory johnson, officials investigating this disaster, they say that the plane was going far too slow for a safe landing.
You have flown flight simulators before.
How can the crew know or tell it is coming again to slow?
There is a lot to learn yet and the ntsb has warned us not to jump to conclusions, but they did tell us that the airplane was going a lot slower than even we were told.
All kinds of warnings could have gone off.
They could have looked out the windows to see the lights that indicate the correct height.
When they are below the height, the lights dark red.
Furthermore, within the cockpit, warnings went off, there was a stick shaker where the throttle shakes and makes a loud noise and at that point it was too late because they were going so slow, hitting the seawall.
I know you will be with us throughout the day for the special coverage of the crash in san francisco, live at the san francisco airport, cory johnson.
Back in washington, federal investigators are watching the approach of flight to under 14 very carefully.
Specifically the cnet quarry just talked about.
-- specifically the scene that cory just talked about.
The first crash of a major airliner since 2001. 12 years of safety.
Adam johnson, digging into boeing and its response on having one of its most highly used airplane models being the subject of the investigation.
A tough year for boeing.
The cause, peter?
They are not ruling everything out.
Anything is on the table, according to the chairman of the national transportation safety board.
It was pretty clear that a big focus of the news conference and of the investigation is on the airplane policy approach, speed, that it was well below what was targeted for the 777's landing.
The speed went as low as 124 miles per hour.
Aviation safety experts said that it hit 1,000 feet short of the touchdowns on.
From comments earlier it did not indicate that mechanical failure was an issue.
At least not so far.
During the approach the data indicates that the throttle was at idle and air speed was slow below the target air speed.
The throttles are advance a few seconds prior to impact and the engines appeared to respond normally.
Now, i want to tell you a little bit about what we know of the pilots on the plane.
There were two operating the plane at one time, the length of the flight, lee joe , 46 years old, 10,000 hours in the cockpit.
This we were told by a ciena.
The ntsb is not ruling anything out at this time.
Not jumping to any conclusions, either.
Thank you, peter cook.
I want to bring in adam johnson, who recently told jim but nearly about how to handle these types of issues.
It has been a tough year for the world's largest aerospace company.
You are referring to the fact that the dreamliner was postponed so many times.
First, i want to show you what they have said with regard to this specific accident.
Number one, they have extended their deepest condolences to the families and victims of the incident.
The technical teams are on site now.
I did indeed speak with the ceo boeing on the relaunched -- ceo of boeing, this is what he said it was like to deal with the problem at that point.
When things like this happen, we are galvanized.
The mission is to produce the best technology, there are glitches, people do not -- not sleep.
Quite an understatement.
He told me that when they were dealing with these questions, he had literally hundreds of engineers working on this.
You can imagine right now, a crash where lives are involved, they are doing everything in their capability to figure out . look at their backlog, it speaks for itself.
The 787 is the largest , what you're seeing right there is the data.
The 747, that iconic image, the lives and safety of everyone on the flight is important to them.
Thank you, adam johnson.
I want to focus now on boeing -- on asiana airlines.
They are a member of the star alliance, including domestic carriers united.
They have been voted the best airline in asia last year by the world airline awards.
I want to bring in ed sullivan, former director and safety safety.
One of the things that you wanted to mention, boeing is actually one of -- asiana is actually one of the safest airlines out of asia?
Voted by sky track, which says that to safety, perce, but was right up there with other carriers for excellence.
Let's without jumping to conclusions, a lot has been made about the flying time of the co- pilot who was there operating the airplane during the crash landing.
How much is that going to factor in here?
Ultimately their carrier operates much like u.s. carriers.
It appears that there was what we would call a line check responsible for the aircraft.
Sooner or later the pilot has to fly an airplane and they do it with another pilot with more experience.
I believe the more experienced pilot had 3300 hours.
It is not an uncommon circumstance.
Like this is not unusual, then.
The training there, is it pretty much standard throughout?
Is it the same type of training the to see at that airline that you would see in a domestic carrier?
Yes, since the advent of the commercial aviation safety team in the united states with similar organizations around the world, there is more and more standardization.
Capt., tell me more about the investigation.
You have certainly coordinated lot of safety investigations, what happens here during this type of investigation?
What are the things that investigators wanted to look at first?
The ntsb and, most important, similar organizations have a very structured approach, with subcommittees on everything from engines to flight training to whether.
Those committees are made up of representatives from the pilots union, the faa, the manufacturer, they will go through every single thing that affects the flight in the aircraft.
They will come to some agreements and issue a blue book report.
Let's at least initially it seemed like investigators were focusing on this idea that the airplane was coming in to slow in its angle.
Any idea why the pilots would allow that to happen?
There are a number of possibilities.
Until you have seen the flight data recorder and overlaid it with the voice recorder, certainly to make a determination.
Generally the glide slope, the electronic glide slope is out on that runway, which makes the approach certainly fairly common for pilots, but a little bit more prone to error.
San francisco, it is not uncommon to come in high and therefore from aloft.
One of the things that my carrier and most carriers -- at a stabilized approach criteria that says you have to be stabilized with the power up at 500 feet.
Everything i have seen in the media, the aircraft throttles were still closed before impact.
Captain, thank you for joining us, capt.
Sullivan, joining us on the crash.
We will have much more on the investigation.
A lot of action from silicon valley in that hub, we will be talking to one of them, a google product manager who witnessed the entire crash landing.
? you are watching "in the loop," live on bloomberg television.
Turning back to the markets for a moment, a color released second quarter results after the bell today, marking the official start to yet another earnings season.
Joining me with more on his take, great to have you back, howard.
The first quarter was not bad.
Operating margins lifted for several companies across the sector.
What about the second quarter?
The first quarter actually made a new record operating as reported.
It was a good quarter.
Second quarter is also supposed to make a new record for operating by 2.2% with 3.6% over the second quarter of last year.
There is some stiff competition here, but overall the numbers should set a new record.
I need to also add that absent financials, this is flat.
Absent financials, obviously banks are going to set a strong pound, but is this going to represent the peak for earnings this year?
The estimates are high when you look at them right now and they have been going up.
The second quarter was 4.1% with the second have somewhat holding its own on year.
The second half is still expected to be better than the first half.
Sales actually show an increase.
That is the weak spot here, sales have not done well.
Especially with iet.
Technology is really the big worry for you?
The second biggest contributor to earnings are financial- services with earnings that are supposed to be about 1%, meaning apple, which contributes the second most of the index could tell you whether or not the sales index is supposed to be 2% down again.
Enterprise, pc sales, the european situation, sales are very poor on there.
We should get some dialogue on the dollar again, but nothing quantifiable.
As you mentioned, sales overall are a concern.
Our sales going to improve their margin if they are not well pace to?
I could not answer.
Based on that, we will have a record operating margin, 9.6%, putting out 120% to begin with.
These issues have found a way for over nine quarters to do this.
There is a good shot they will find another way to do it now, another way to produce more.
They continue to cut.
We have not seen that much unemployment.
Domestically we have not seen as much, but they are holding the line on margins, especially i.t. on lowest sales.
We will get a better picture hopefully this quarter on what exactly is going on.
Howard, thank you.
That was howard, senior analyst at standard and poor's. a sound of the bloomberg on how washington is over-complicating banking regulations.
Are new yorkers willing to forgive and forget the former governor?
Eliot spitzer will get the chance to find out, story in a moment.
? ? ? today at noon eastern time, in the loop at the half, our radio program, under pressure, boeing.
An investigation into their second most popular model and its role in the crash landing at the san francisco airport.
We will be talking more about that on bloomberg radio.
? ? you are watching "in the loop," live on bloomberg television, streaming on your phone, ipad, and bloomberg.com.
We are looking into the investigation into the korean airliner crash, now focusing on the pilots.
The men at the controls had less than 50 hours of experience with the plane before trying to land it in san francisco.
Investigators say that it was flying far too slowly and began to stall just before the crash landing.
Back on the business front, michael dell and his plan to buy out his computer company has got a big endorsement.
They say that investors should accept the proposal.
Carl icahn has urged shareholders to vote against the plan.
Steve: may not be off the hook just yet.
Likely to remain under federal investigation, even as prosecutors missed their late july deadline for charging him in that giant insider-trading probe according to a person familiar with the matter.
Prosecutors are looking to find the appropriate evidence.
We are one hour away from the start of trading.
Dominic chu has more on how futures markets are shaping up.
A bullish tone so far, futures are up nine points, we are near session highs for those stock futures.
Treasury side, forcing yields down about 2.7% with interest rates dropping for today's trading session.
Currency, $1.28, that is what it will cost you to buy a euro.
Cook commodities, crude oil in the last trade, falling.
Gold near session highs for today.
Thank you, dominic chu.
It is no secret that the markets reports have been at hands of the federal reserve as investors continued to place the baton tapering.
Bonds sold off, as we just saw, yields are coming back down this morning.
We have the real deal on why there is still reason to be concerned about tapering.
Sarah has just returned from a trip to europe, where she talked about meeting with economists and central bankers, including paul volcker.
Mike, let's start with you.
Why is there so much concerned about tapering them about end where we go from here.
We know that rates are going to go higher.
We will see a move to more normal numbers, but what scares some is the speed of the move that we saw on friday.
Volatility has returned with a vengeance to the bond market.
You can see what happened in the financial crisis, but we are back to normal after friday, what does that mean?
Look at mortgage rates this morning.
If he were thinking about buying a home, you might want to rush out, if you were not, would you still think about it with rates rising like this?
How do they manage inevitable repricing?
The same questionnaire asking in europe with a different urgency.
Thinkingthe pressure on european finance ministers meeting today to approve aid packages for greece and continue work on bank regulations , for all the talk of markets stabilizing, the fed is carrying matches.
Look at what happened to spanish and italian notes when ben bernanke mentioned tapering a few weeks ago.
The only thing that kept them down was the almost promised to keep them down for long term.
Mario draghi's reality is that his life is complicated with portugal and greece not out of the woods, they also have elevated spreads.
The last thing they need is a market overreaction to the fed, making ben bernanke's job trickier in september when he has to explain.
All lot of explaining.
Every time they explain, the markets go wild.
Thank you so much, michael mckee.
Staying with the federal reserve, it was all the talk over the weekend in italy, where the world's biggest economists gathered.
Sarah was lucky enough to be there.
There was a focus on regulation?
Lack of progress was the theme that we certainly got from paul volcker, the former federal reserve chairman.
Three years after the dodd franc legislation, he was interested on and interested in being associated with the volcker rule, he is treated the lack of progress to too many cooks in the kitchen.
They all have this particular point of view that tends to hit the lowest common denominator.
Sometimes that is more detail than necessary.
It is not fair to the market to not know what the rules are.
He says the lack of progress in clarity on the issue is an unfair signal for investors and the market.
His new institute is a nonprofit that focuses on government inefficiency, he says that this month is front and center.
What about qe and the fed?
I know it was a huge topic of discussion at this meeting.
As the notes started to pour out of wall street, as they predicted capering a quantitative easing on the jobs report i had a chance to speak to central bankers about it, including the chairman of jpmorgan chase international, soon to become the next bank of israel governor.
Here is his take on the federal reserve.
The fed is very clear that when circumstances allow , they would start to take it down.
In a way this gives them a good opportunity to activate the plan.
But no one talks about a plan of removing the punch bowl, in a way.
Taking quantitative easing to a center.
Constructive let out -- level.
His main point there was that it was important to emphasize that they were not just removing it all at once, that it would be a gradual process that should begin as early as september.
He also made the point that it is time for central bankers to step aside as the main actors in the global economy thanks largely to the improved outlook from the u.s. and optimism surrounding the u.s. economic recovery and labor market recovery.
Sarah, thank you for bringing us all of that from cnn, italy -- siena, italy.
Coming up, the unwanted vacation.
Hundreds of thousands of civilian workers taking unpaid time off in the next month.
We will also take a look at how boeing stacks up against its biggest competitor when it comes to the chances for human error as opposed to computer- controlled.
? ? ? in other news in washington, edward snowden, will he accept the venezuelan offer of asylum?
Nicaragua has offered -- also offered him asylum.
Hans nichols joins us now.
Could this be his best option?
The question is, how does he even get there?
Venezuela does appear to be his best option.
Mike rogers thinks that any of the countries you mentioned will give him travel documents, of which is key right now when you look at how to get from moscow to this south american companies.
Rale callous -- rale castro says that he does support their offers, but did not mention, and this is crucial, whether or not an airplane carrying him could land in cuba to refuel.
The distance he has to travel is significant.
He can avoid these countries by taking the northern route, but it is a long flight.
Venezuela and cuba have been looking to improve relationship with the u.s.. congressman rogers wants to use trade talks with venezuela and libya as pressure points.
We should not just allow this to happen and then shrugged off.
This is serious business.
We ought to look at all of that to send a clear message that we will not put up with this behavior.
A bit of a disconnect between how capitol hill is talking about him and how the white house is.
The president is downplaying how important he is to overall u.s. relations, national security, you saw it on the trip to africa, he was not going to scramble fighters to bring down one man, but at the same time those actions are betrayed a bit by of what the president is doing.
We do not know if the plane that was potentially carrying him -- we know that it was grounded today.
Thank you so much, hans nichols.
I want to stay in washington but on a separate issue.
700,000 employees are going to be forced to take unpaid days off for almost three months as defense budget cutbacks continue.
This is a move to save another $1.8 billion in federal defense.
What might not get done at their military facilities this summer?
What does this furlough tell us about the budget impasse on capitol hill?
The head of the upcoming bipartisan project and former senior aide on the budget committee, steve, great to have you with us.
People have said this for a while.
All that they have been able to see is with sequestration so far in this economy, but you say that there is more to come?
Starting with the defense department?
It is important to understand that sequester impact is just now starting to.
There have been some furloughs for other government agencies this week.
The pentagon and other defense civilians will be laid off for the next 11 weeks, probably causing a lot of people to rethink what they're doing.
Exactly how is that going to affect the running of the pentagon?
What is the impact that we are going to see?
More people right now thinking about how to implement the sequester them doing their jobs.
Most of the people doing procurement have already told contractors that they will be released slow in getting contracts done.
2, contractors in the defense industry already have big projects but have not yet gotten the money for future part of those projects?
Those will be cut by the sequester.
Thinking defense contractors for the next 11 weeks, the second sequester.
I was going to say, what happens after september?
Right now there is a huge dispute over the annual appropriations spendingthinking defense contractors for between the house and senate.
Unless this dispute is solved in some intelligent way, october 1, another dispute kicks in.
Most of us down here think that neither defense nor non-defense can take that kind of hit and giving it will continue to have negative impacts on the economy.
Some of the contracts you're talking about, could they be reversed once the sequester finishes?
Or once it is gone, it is gone?
If it is gone, it is gone.
If you have an obligated contract and you expect to build a ship in the third year, once the money is gone it is gone and has to be repeated.
Squeegee we appropriated.
What do you think that number could go up to 800,000 acts of -- 800,000? if you add it to the other furloughs in the other agencies, you get to 850,000. if you work for treasury or labor, at those together, those big pot, defense and non- defense, that is about a hundred 20,000 people who have already been furloughed or starting this week will be furloughed.
Ultimately, how do we get out of this?
What is the solution?
That is the question everyone is asking on capitol hill.
The house and senate are so far apart on these bills, no one thinks that they will be able to get anything individual, like a defense bill.
Now we have this resolution that is this catchall bill for 90 days to get us into perhaps the first of january.
In between, as you know, we will have the debt ceiling fight, which will be a lot of fun.
October is the time to bring york kevlar jacket around here.
Steve, thank you for joining us from the bipartisan policy center on sequestration.
Coming up, the question of experience.
Was the wrong pilot at the controls of the airliner that crashed in san francisco over the weekend?
Of the bill look at human error over giving computers more control.
Down but not out, the disgraced former governor of new york, eliot spitzer.
Yes, he is back and he says he will run for office again.
Stay "in the loop." ? ? as investigators continue to focus on the crash landing of boeing airlines 200 -- of asiana airlines 214, the demand for pilots is high.
And what about the technology differences between boeing and airbus?
For more, i want to bring in our bloomberg industry senior analyst for aerospace.
Pilot experience, is training becoming more standardized between airlines?
I think that there is a difference in the pilot the to get in the cockpit in different countries.
In the u.s. we have a long tradition of some large militaries, lots of aviation training in five of those militaries.
They have a lot of experience flying the airplane without computer assistance, which i think makes a difference.
The biggest airlines, the highest growing in the world, a lot of these pilots, they do not have a large military is, so you train these pilots from initial training and put them in sophisticated airplanes.
In the u.s. typically you may have earned your pilot's license in the civilian sector where the military may have trained you and they may have train you to be a good pilot first with computers in front of you to help manage the flight.
You start initially with airlines, like korean air, taking you up initially, getting you into airplanes that are somewhat sophisticated.
You have less of that seat of the pants understanding of what is going on.
Is this what happened here?
What do we know about these pilots?
Nothing for sure, but we are hearing that some had a lot of experience on the approach, and that was part of the crash.
How are you going to get the experience if you do not fly?
There were senior pilots that were supposed to help to guide him.
One of the differences is that the guide slope was out, a radio wave that helps them stay in the right trajectory to hit the threshold in the right place.
But that was up for all of the airlines, they had been flying in and out anyway.
No one had a problem until now.
The pilot had to use a visual indicator.
George, tell me about the technology.
Are there more controls?
It is largely the same electronics and technology.
They approach cockpit management differently.
This is for much more a computer-controlled event.
Give me an example of how you see that.
Airbus has these side states that do not provide feedback on the opposite side.
We think that may have been a contributing factor in the air france crash over the southern atlantic.
One was in one direction, the other was in the other direction.
There is a center wheel and one opens up and opens up to see what the other is going on with.
George, thank you for joining me.
George ferguson, our senior industry analyst.
We will be back with more on "in the loop." ? ? back in the markets, we are watching the u.s. dollar.
One of the best performers this year could continue over the coming months with all of this talk about fed capering.
Dominic chu has more in the report.
Hitting multi-year highs, the highest levels since july of 2010. they have since backed off those levels, but the u.s. dollar index is a measure of the value against trading partners with more bullish times ahead.
Rising against the major currencies tracked by bloomberg.
Traders look at improving economy, so keep an eye on those u.s. dollars.
We will, indeed.
Coming up, the big endorsement, the shareholders advisory firm endorsing his plan.
? 30 minutes to the opening bell, this is "in the loop with betty liu." the countdown begins right now.
You are "in the loop." the investigation into the asiana aircraft will focus on the pilots.
It stalled just before the crash.
As we head to the opening bell, futures are higher, showing stocks might post gains for the third day in a row.
The optimism comes as the world's largest producer will kick off earnings season after today's closing bell.
Let's get to the marketing bell -- let's get to the marketing desk.
Julie hyman click set off.
Underway at evercore, a couple different reasons.
Pc trends, personal computer trends, continue to weaken.
Average selling prices will likely peak this year for those intel chips, and the shares already up 17% year to date.
I am watching dell.
Shares higher as the biggest shareholder, iss, recommends investors vote in favor of michael dell's offer.
A blow to carl icahn who says the company is worth more in the long run.
Making diagnostic screening a tenement -- diagnostic screening equipment, nasa medical.
-- natus medical.
Shares down in the premarket.
Let's focus in on the crash of the asiana airlines jet.
What we can infer from the investigation so far, bloomberg west editor-at-large cory johnson is live in terminal three of the airport.
What is going on right now at the airport?
I know it is quite jammed because the airport closed after this crash, but are things back up to normal now?
They still have one runway not being operated, the beginning of the monday morning commute.
There are a lot of business travelers commuting from and to this airport, another -- among other places in the west coast.
A number of people slept here overnight.
There were people standing in line still trying to work on issues of flights that were delayed on saturday when the entire airport was shut down and going into sunday.
Those flights and those delays will ripple throughout the entire west coast travel.
As travelers arrive now, they are looking at long delays, a lot of business travelers facing those up and down the west coast.
The latest on the plane crash investigation -- yes, there is a lot of speculation about the pilots, the inexperience of one of the pilots on the flight.
The ntsb warning us that these other issues could come into play, not least of which, and expansion here of san francisco international airport.
There was an expansion underway to extend the runways, and some of the warning systems that are typically used, the older warning systems, have been turned off at the airport.
One in particular called the glide slope indicator was turned off.
The speed was significantly below 137 knots, which was the minimum speed that the plane should have come in at.
That is one of the things the ntsb will be looking at, why it was reported as going faster than it actually was.
Two tragic victims, the 16-year- old girls, there are reports from the san francisco mayor looking into the possibility that one of them may have been run over by many of the emergency -- by one of the many emergency vehicles that rushed to the scene following the crash landing.
Cor, as far as you know, in terms of -- cory, as far as you know, in terms of the investigations, will it be more focused on pilot error, or the technical problems that may have happened here?
They clearly are going to look at everything, and maybe that is just obvious.
But it is always the first thing , to blame the individuals involved.
We just don't know what happened.
There are a lot of reasons people would like to blame it on a single person, not the environment, not the equipment, not everything else that might have led to it.
The ntsb has to be careful not to rush to conclusions.
They have got to make sure they don't. thank you for joining us.
You will be there all day for us covering this story.
Cory johnson, our bloomberg west editor at large.
One of the busiest airports in the country, just behind new york's jfk.
It especially serves a large group of executives in one particular sector, and that is technology.
I want to bring in a silicon valley player who witnessed the entire crash landing, google product manager chris sidon.
You have been quite busy over the last 24 hours answering questions because you were tweeting out immediately after this crash that you saw it, and you started taking pictures.
I saw it immediately.
Maybe four or five people at the gate when we saw it approaching.
All of a sudden there were clouds of smoke.
It was a very intense situation right away, and i immediately took out my phone and started taking pictures.
What about the people around you?
Was there lots of confusion?
What was the scene like then?
It was a bit surreal.
The first 15, 20, 30 seconds, people did not have too much of a reaction.
The board trying to copper had what had happened.
I was one of the first people -- people trying to comprehend what had happened.
At this point i had already been taking pictures and i had been sending tweets about what i had seen.
So you had actually seen this before the agent?
You were at the u.s. airways counter, is that right?
I was, yes, a few feet away from people boarding a u.s. air flight.
So what happened immediately after?
Did the airport immediately shut down?
Yes, almost immediately the airport, about 10 minutes after the crash, the airport came over the intercom and let everybody know that the airport was closed down for the time being, that there were not any incoming or outgoing flights.
For the first 10 minutes or so, there was no real news from anyone, abel sitting around speculating what was going on.
And you were still able to see this airplane that just crash landed.
What did you start to see, or what did you see in the first few moments after he came to a stop?
The first few months we saw a lot of black smoke, maybe about 60 seconds after the actual crash we saw the emergency responders get to the scene, a lot of ambulances and fire trucks to spray down the airplane.
Maybe after four or five minutes, the actual smoke started to die out and we were hopeful that things were getting under control better.
And then a few minutes later it started up again, maybe four or five minutes after that, and came on a lot stronger.
Everybody was very concerned.
We did not know if people had fully made it off.
We could see the evacuation slides from the airplane at that point, but it was kind of far away to see people coming off the slides.
Very unknown, people just standing around the window in uncertainty.
You eventually got onto your airplane.
You are in arizona now.
Were you scared to fly after seeing all of that?
You know, i come from an invasion -- i come from an aviation family and i am not scared to fly.
But coming into sky harbor at phoenix airport, i did get fairly nervous and i started gripping as i started landing.
Which is an unusual feeling for me.
I had just witnessed the crash landing, and it was tense.
Thank you for joining us.
Let's get back to some company news.
Alcoa unofficially kicks off the earnings season when it reports earnings after the bell today.
How does the rest of the earnings season shape up?
Dominic chu joins us with a preview of how analysts are reading the latest round of corporate earnings.
We just heard from one analyst who says it is expected to be a good quarter.
It is, but there is no one metric ahead of this earnings season, but there is one that we will focus on and that is valuation.
The s&p 500 has rallied 58% in the past three years despite the recent pullback.
During the same time, profit growth has matched gains in share prices.
Against the 50% gain in the s&p 500 price-to-earnings, essentially how expensive the impact is ash the -- the impact is, the 25 year average of around 18.6, lower than the 17.5 level when the market's peak in october of 2007. this has driven equity analysts to raise their s&p 500 target to the highest price level since 2007, and they have up to their target to around 11% in 2015 alone.
Certainly some bullish sentiment at work here for sure.
Thank you so much, dominic chu, our markets reporter.
Still ahead, boeing and asiana are not the only companies under the microscope as investigators look into the crash landing cause in san francisco.
We will take a look at what technology pilots have access to when making critical decisions.
And andy murray.
What a win and victory that was in wimbledon.
And the chaos that comes with that win.
? you are watching "in the loop ," live on bloomberg television, streaming on your tablet, and on bloomberg.com.
We want to focus on airline stock, because it is time for "the call." joining me is the lead portfolio manager at scout investments and lower he manages nine million dollars.
He says it ends like this weekend's crash is not dissuade him from owning stock or stakes in airlines.
Markets reporter dominic chu and julie hyman joins us as well.
It is interesting because traditionally , crashes, do they in fact affect stocks of airlines, or is it too difficult to factor them in here?
They affect the stocks of the airline that had the plane that crashed.
Asiana is down fairly sharply, i think, but the rest of them, the rest of the airline industry i think it will be a blip.
The odds are that you are going to get run over on your way to the airport before you die on the airline crash.
It is a safe way to go, and i frankly am amazed at the success they had in getting people out of that thing, and the relatively small number of deaths involved.
I took it as a plus in a sense.
Positive commentary on the industry.
When they do crash, it is big and dramatic, but they did not lose as many.
It seems like the effect is minimal.
I want to switch to other sectors that you have been focused on, that you like, and one of them is the auto sector.
Dom, that is what you are looking at now.
In a cyclical recovery you think people will buy more autos and goods that last longer.
But delphi, look how strong they have rallied.
They have doubled 98% this year, a good year -- good year up 43%. the s&p 500 price to earnings ratio, how much you pay for dollar earnings, 16. ford motor company is only at 11. and goodyear at nine.
Why do people not want to give as much respect to the auto parts makers?
Jim, you are looking at the auto parts and automakers overseas.
Well, some of them are not as far overseas as others.
Magna auto parks is -- magna auto parts is based in canada.
There is leverage in the auto parts business, which is good from an investor point of view, on the upside anyway.
The worldwide demand for autos is really at this point driven by the u.s.. so what we are interested in our manufacturers like toyota and parts manufacturers, so we think that is where it is in the short run.
Jim, hang on, because julie is working -- is looking a part of your portfolio.
It has been a tough regulatory environment for these european banks.
Today we are hearing that the uk parliament and government are considering tougher rules for the banking industry, and george osborne back to the tepper roles -- bank -- backed these tougher roles.
Jim, why do you like some of these banks?
Well, as the economy turns around, the banks are going to do better, and right now nobody loves them.
They are out of favor, and we think the one that we have owned , bnp paribas in france, is an improved situation.
We have some uk banks, like hsbc and barclays for their worldwide exposure.
But in general we have been cautious about the european banks, and he bnp paribas is kind of our first nibble at the continental banks at this point.
We are not getting carried away yet.
Jim, thank you so much.
We will be back in two minutes on "in the loop." ? you are watching "in the loop " live on bloomberg television, streaming on your phone or tablet and on bloomberg.com.
Futures are higher again.
Better than estimated.
It is time for the countdown with dominic chu.
Let's start with steve:. we are not going to start with steve cohen today.
We will start with softbank.
It will be -- softbank had their credit rating cut.
Their highest noninvestment grade debt rating or junk status , and a lower credit rating means a possible risk of default and they can raise the cost for softbank to borrow money in the public market.
From wireless to autos, fiat is taking another step toward being taken over again, at least for chrysler being taken over.
Fiat has an exercise of option to take over another 3.3% from chrysler.
They have been exercising options to buy small stakes in the automaker from that trust for the middle of last year.
The medical trust for the uaw owns another 41.5%. let's round out our premarket trifecta in video games, specifically zynga.
Their new ceo has been interested in the company for quite some time, though not necessarily for a job there.
Bloomberg news has learned that he may have wanted to buy this game maker while he was still there, going all the way back to 2010. these negotiations apparently have been going on for quite some time, so this is interesting.
Also interesting because you have mark this who will now be working with -- mark pincus who will now be working with don.
Dominic chu, thank you.
We have the top 10 trades you won't want to miss after this break.
? welcome back.
You are "in the loop." the opening bell is moments away on this monday morning.
Mike mckee and julie hyman here, because it is time for the top 10. these are the only trades you need to know about, starting with number 10. united health shares may rise over the next 10 years, which means investors may benefit from market expansion due to the affordable care act.
Aol, the online giant authorizing another 100 $50 million in share repurchases over the next few years.
The board also gave the go-ahead for a five-year, $250 million revolving credit line for a group led by j.p. morgan.
Qualcomm, the global technology chipmaker, removed from the top picks live list.
City steelmaking it's recommendation -- -- number seven -- number seven is priceline.
It may break $1000 after becoming more competitive for booking european hotels.
Eli lilly, the ceo cleared to return to the top spot after having heart surgery early this year.
He has been serving as the top of the company for the last five years.
Number five is bp.
Billions of dollars hang of the balance for the oil company today, as it reveals it has to pay fines for the 2010 a of mexico oil spill.
Bp says much of it is for fictitious lawsuits.
Number four is at&t, america's largest telecommunications company.
Turning group is submitting a joint bid for hulu.
-- churnen group is submitting a joint bid for hulu.
The bids are due friday.
Number three is out,. it kicks off earnings season, replacing its quarterly numbers.
Six cents of profit per share, nearly 50% job from last quarter.
Number two is dell.
The battle over the communicator -- the battle over the computer maker getting even hotter.
Investors should accept the founder upon michael dell, $24.4 billion offer.
The iss sees it as the space for bids.
A good day from michael dell die for michael dell, but not for boeing, our number one stock.
Investors in the airline maker waiting for results of the investigation into the airline crash.
Keep watching boomer television for continuing coverage on the first jetliner crash -- keep watching bloomberg television for continuing coverage of the first major jetliner crash in several years.
The president of nws capital joins us, and the founder of average joe options.com.
Let's start with you this time.
You say traders have to get over it and start investing.
It is not like 1991 or the 1990's. what do you mean by this?
The book "market wizards," which i grew up on around 1990, and all the stories -- we are just not in that era, and people are forgetting.
They want to chase this market.
We have had a lot of stress besides the correction, in what i call lifestyle growth docs.
Your whole foods, starbucks.
All these stocks have not even been touched, and they still look really good with last friday's performance report.
So you want to say stop worrying so much about the fed and just get on with it and buy into this u.s. economic recovery.
I think if you buy into this is irresponsible.
I think the markets are mid range between its most recent high and low, and until we can convince the something breaks outcome on good information, you want to stay on the sidelines.
I don't see a reason to get involved in here, what i am calling the house of cards they are building.
You have draghi that came out with one announcement.
They are trying to manipulate the market to prove they can push it higher.
But we are going up on air, and there is no reason to continue her.
Tesla, no earnings.
The pne is in the infinity right here, so how -- so, matt, he says you're crazy.
Well, i think todd is actually crazy.
You might be right that one day correction is there, but the end of the day we are back making money on our investment.
People are invested in stocks up to 15% this year.
People that hedge funds are maybe one percent, so who is right?
There is one thing you have not mentioned here when you are talking about the folks you say are manipulating the market, and that is the job market right here.
Do you think that is being manipulated, too?
We have seen several reports in a row showing growth.
When you look at the jobs number, if you look at the bureau of labor and statistics, we are showing a loss of jobs.
The way the number is reported is not enough.
100 95,000 jobs enough is not enough to create growth in this country.
We need over 300,000. the average joe has not been able to benefit from this cheap money policy, they have been able to get their money back, but they have not been able to grow as the rich and the banks have been able to flourish through this.
But it does seem there is progress being made, doesn't it?
I didn't see the progress myself.
I see it as a market that is floating on air, waiting to collapse, and when you look at the average guy who has not been able to borrow money, it invest money, reinvest money because they have been trained to get their money back, they are looking ahead of 2009 but have not been able to see the appreciation through.
Thank you to todd, and to matt schapiro of nws capital.
Coming up, it took 77 years, but a british man has finally won wimbledon again.
Andy murray, solid skills.
And more on the role of technology systems like gps in airplanes and how they may have played a role in the crash landing of flight to 14. it is a new day as the sun comes up on the airline wreckage of flight 214 asiana airlines.
Cory johnson is live at terminal three of the airport.
I know you were mentioning that one runway is still closed, and it is almost back to business at the airport.
This is a hub for a lot of the technology executives that you talk to on a daily basis.
How rattled are they by this event?
You know, all they are referencing, is how safe air travel is impaired to other forms of transportation.
Yesterday i was doing a broadcaster bloomberg asia and i've come across a big traffic accident.
People were badly hurt, and this kind of accidents getting to the airport are probably more dangerous than once you get to the airport.
The other thing is a lack of control, the fact that people don't fly the planes, they ride in the plane.
I think that is affecting people's psyche here.
The airport is back to business as usual but still slowing down.
There are long lines of people waiting inside trying to get out of town.
Going off to the airport and in san jose trying to make this commute work because it is not working at full capacity here.
Thank you for joining us and keeping us on top of the situation.
Cory johnson, our bloomberg west reporter at large.
Coming up, investigators look at the cause of the crash landing.
We will look at the role of human experience.
? we are continuing to watch the developments following the crash of asiana flight who 14 -- flight 214. it will be a landmark accident that will point to survivability research and design improvements.
Also joining us with how the technology systems work on airplanes, someone who has flown a lot of airplanes -- who has not flown a lot of airplanes himself but has seen the cockpits is gregg harper, a major tax collector, one of the first people who tries out various technology and gives feedback to several major companies.
In fact all the major companies that you can imagine.
Kevin, let's start with you because you say this is going to be a landmark moment for safety in aviation.
What do you mean by that?
We have taken all what we learned from the past accidents and made it possible to be put into the design of the newer aircraft such as the 777. in this particular case, this aircraft was built very strong, as the 16 g seats and fire resistant material.
What are 16 g seats?
That means the basic impact, the seat will absorb 16 times the force of gravity that we normally experience.
so because of the updates in safety and technology and the way the aircraft is built, you are saying, kevin, that this crash could have been much worse if it were not for this update?
Yes, we could have seen a lot more fatalities in this case, but due to all the things we have learned in the past when they have put these in these newer aircraft, we have been able to prevent that.
Greg, as i mentioned, you are familiar with some of the systems put on board these aircraft.
To the extent that you have been reading in the media, and knowing what you know, how much does technology play into it?
Of course we won't know until the accident report comes out, but one of the contributing factors, the airport landing system was out of commission.
Are we talking the glide slope indicator?
They were flying it manually.
They didn't have the aid of somebody saying, either way, you are are running too hi or too low.
They had other indicators.
Aircraft always had multiple sources for everything.
The aircraft do when it was in trouble.
It started shaking, indicating they were losing lift and in danger of a stall, so they were in danger already.
It is a combination of things.
You cannot just measure airspeed.
You have to measure airspeed under the wings, altitude, temperature, all kinds of things.
When it comes to trying to piece together what happened in the cockpit, do you expect for a lot of this, the safety regulators to be focused on this glide slope detector and the fact that the system was off?
They are going to look at that as part of it, but as greg had pointed out, there are other ways that the aircraft can be flown.
I have over 15,000 hours in the 767 built by boeing.
You have got items that you can use in the cockpit to help give you some depth perception as far as how high and fast and how slow you are going.
Greg, we were talking about the gps systems on airplanes, too.
That would have had nothing to do what was going on here.
That would indicate ground speed, which is not what you are worried about.
They are worried about airspeed here.
Flight congestion would give you better mileage, better routes.
Gps will give you more flexibility in routing and better on-time arrival, more fuel efficiency, etc., but i don't believe in this particular case that the ground speed really would have helped that much.
It may have been another indicator for computer on board, but it would not have been a determining factor.
We have had probably one of the longest periods of safety with no arrows plane accidents in more than a decade, but some have said we have not had a technology update in a decade.
Will that be re-examined after this crash?
Every time we have some type of a new event like this happened, we will always re- examine what is in place, and is there something we need to change . as the investigation plays out, we will see what we might need to do in terms of pilot training, a® la qualifications, and whatever else the accident will point to.
All right, thank you for joining us.
Kevin hiatt, the ceo of flight safety coordination.
We are going to talk about something else, switch gears and talk about this.
Thank you so much, the founder and ceo of parkervision.
Coming up, andy murray . we will look at his potential earnings after that historic wimbledon win.
Stay "in the loop" for much more.
This morning, mover and shaker, former governor eliot spitzer.
He is now throwing his hat back into the ring, saying he will run for new york city comptroller.
It has been five years since he resigned as governor in the scandal involving high-priced prostitutes.
Since then he has been a commentator on cnn, heart of the city university of new york.
He told bloomberg that he violated a code of behavior and the public understand and may bring him back to the public.
From new york to london on, because our obert number is $74 million, the number that andy murray may taken per year -- may take in per year.
He is the first from britain to win the wimbledon title in 77 years.
He made an estimated $12 million last year.
One sports marketing firm says his annual earnings may afford more than six times that after his victory.
He was not planning an elaborate victory celebration.
I am going to go out this evening with my team and my friends and family, go out to dinner and celebrate.
I am sure they will try to get some on-call down may, but i will try to stay away from it if i can.
He sounds a little exhausted after his match.
Switching gears, it is time for our weekly check of the most shared stories and headlines will stop joining me now is the social media sites executive editor, dan roth.
A lot of the stories have to do with how to better your career, right?
Fred kaufman on linkedin, he is talking about the biggest networking mistake that you can make?
Yes, he is a former accounting executive, accounting professor.
He looks back at his accounting history to say when you are talking to people, you need to trust people that are not always necessarily trustworthy.
The same way that companies have an allowance for bad debts, you need an allowance are being taken advantage of.
You are always guarded, surrounded with people you know you can trust, you are not broadening your network.
You get put into a vacuum, essentially.
Also, if you are not taking notes come you're not learning.
Yes, an author and entrepreneur talks about if you want to find the most senior person in a room, look for the person taking notes.
People who have learned a lot and know they need to keep learning take notes.
He is dismissive of the idea that you can learn by just listening.
You have to look back at your notes and circle the main items.
He talked about how students are not doing enough of this these days.
I think people like that.
I have been a lunches were people take out their iphone and start taking notes, let me remember this.
He has a different thought about if it is a one-on- one situation.
You have to make sure -- you cannot be taking notes the entire time for lunch.
This is from jeff wiener, the ceo of your country -- of your company.
Basically get rid of powerpoint at the beginning of the meeting.
There is no presenter.
If you have a meeting coming up to give the presentation ahead of time for everybody.
There is a 10 minute silence at the beginning of the meeting where everyone reads this presentation, then you jump in and start discussing it.
But the presenter never gets it chance to present.
This has eliminated meetings for him that just talks about the substance, and it works out better.
And the first -- the third most shared story -- nike?
Where are the big slogans?
How about -- why don't -- why doesn't anyone to this anymore?
A great story.
Dan roth, executive editor at linkedin.
Coming up, earnings statement kicking in.
We will have a look at what to expect this quarter.
? . . we have been following what is going on in san francisco, but back into the markets, investors are buying up a lot.
I was up by 101 points.
Adam johnson is here with me for the triple play.
It's like we're headed headed for another day of gains a year.
Another day of gains, in spite of the notion that the fed is going to be cutting back on their bond buying.
But look, we learned on friday that we have growth in this economy two months in a row, 195,000 jobs per month.
That is very strong.
Even a name like boeing and that we have been talking about, negative news obviously, and yet a stock like that is only