That deal would be worth $20 billion.
Let us move to a company that is sort of related, intuitive surgical.
They make those da vinci robots.
It is about the worst performer in the s&p today.
The stock has lost $6 billion in market capital over the past five months, tumbling on disclosures of adverse event.
Now the fda is saying it basically has been inadequately reported to it has a lot of hospitals worried and doctors worried.
Clearly investors are worried.
Street smart is next.
Terrible topline growth, google, ibm, microsoft, all missing at smits.
-- all missing estimates.
And motor city runs out of money.
Vagrancy is a term that none of us ever want to get at this point.
We examine a city deteriorating and what does it say about the future of the rest of our state?
And golden arches, golden profits?
A strange product macdonald uses to keep investors loving it.
From the headquarters in new york, this is "street smart," with trish reagan and adam johnson.
We do have breaking news at this hour in civil charges have been filed against steven cohen on failing to prevent insider trading at the firm.
Among the accusations, ignoring red flags and failing to report highly suspicious information on insider trading.
And then praising a portfolio manager for his role in one of the traits.
Dominic chu joins us right now with the very latest.
The sec is charging stephen cohen with failing to supervise portfolios and managers.
This is about whether or not he had control over his employees, whether he knew something about insider trading and did not say anything.
If you see something, say something.
This is kind of like that.
Steve cohen actually know something, triggers a red flag, but then willfully or not pursues more investigations on his own.
It is a pretty big accusation.
Is there anything specific they can cite as to why he was such a failure as a manager?
They cited a number of different instances where communication happened or either phone calls or instant messages were made.
These were allegations made by the sec right now?
Stephen cohen, they agreed to pay $602 million worth of fines.
The sec is now asking that he be prohibited from managing investor funds as well.
Taking away the outside money managing component of sac capital.
Sac capital has issued a statement through a spokesperson.
A have said that the sec's administrative proceedings have no merits.
Stephen cohen has acted appropriately at all times and will fight this charge vigorously.
The sec ignores sac capital's advisory structure.
Stephen:'s strong support for sac capital's compliance program, both sides are weighing in.
This is a big deal in that they have formally sued sac capital.
You have to wonder how much of this is -- they have already paid the fine.
Now they are trying to build a case rectally against stephen cohen.
I am wondering how much might have been inflamed area you think back to his behavior in the days after that was announced and he went out and bought -- he paid a fortune for picasso painting.
There is this sense that he was flaunting this in the face of the sec.
You wonder how much she is saying.
This is something they need to pursue because it doesn't look right.
There is a lot of context for this.
There is also a figurehead.
They are not going just after steven cohen but others.
You think about a number of different people that have been implicated in this insider trading or is currently serving sentences for insider trading.
This is very much part of the government campaign to really establish themselves as a watchdog, ones who are not falling asleep at the wheel.
That is why it is such an important action by the sec.
The sec is already charging the sac capital side of things.
They are already paying funds and fines.
Maybe it turns into a family office, just managing steven cohen's own money.
There have been talks about that.
I know somebody at the sac capital said talks of it being a family office may stand.
You are a former assistant ag in new york state.
Let me get your reaction to this news we had to you think the sec has much of a case here?
I mean, by failure to supervise a case, this is not charging steven cohen with insider trading.
There is a big difference for all of the run ups and endless weeks of the department of justice -- this is not that.
It is failure to supervise.
They are doing this administrative receding, not a full lawsuit.
This is not a home run or a gland slam that everyone has been waiting for areas -- waiting for.
It is not a terribly high threshold . especially on administrative proceedings.
Even if we have criminal convictions on insider trading and another trial coming up.
If they are able to prove that he did not properly manage his portfolio managers, what does that carry with it in terms of effective punishment?
Is it another big fine?
Of this timely personal fine?
I think so.
They're talking about hundred $75 million in -- about $275 million.
The key thing here is they are going to try to keep him from ever managing other people's money.
He could be a family office in that case.
He would have to manage his own money.
That is a black mark.
It is a significant penalty.
But conduct is not -- obviously they have been seeking -- there is a question on what this means for the department of justice.
Usually you see the sec and doj marking and lock set.
This may be an indication from the department of justice that it is going elsewhere.
Do you think he inflamed the situation by going out and buying a new house, buying a new painting, -- after the initial sign?
I would like to think not.
You have some real professional people at the sec.
While i wouldn't not say they would be annoyed by it i do not think they would have taken action a spy the fact -- a stone the fact that he has been acting like a jerk.
-- based on the fact that he has been acting like a jerk.
They have specifically noted they are not bringing actions against steven cohen.
I do not think there is a link between the behavior and what is happening.
He has been after him for a long time and i think this is almost disappointing for the sec.
They were just able to go.
Let us bring it back to companies, earnings, and markets.
Have a bottom-line solution for topline problems.
You learned this week.
All of the topline line sales misses from technology.
For the rest of the economy, american express, coca-cola, this is not good news.
Even more so because of the 100 or so companies that reported so far, nearly 47% have missed on the top line.
That is a real problem and all the more vexing when you consider the fact that stocks are near an all-time high, not just a one-year high, not asked year today hi, an all-time high.
-- not just a year to date high, an all-time high.
You have the s and p at.
The spy, september 169 cost put, all you need is a move between now and the end of september.
You are up money and you protected your portfolio.
Thank you very much.
Today's top story is terrible tech.
You have ibm, google, and microsoft all missed analyst estimates this week.
Their stocks fell this week.
This may not be over yet.
Starting on monday, seven tape -- seven tech players are going to be opening their books.
Joining us right now is bloomberg contributing editor and partner of ask a partners and -- great to have you both here.
It was one after another.
One, 2, 3, 4. what we are seeing the tech industry grappling.
The transition to mobile is the biggest change.
Microsoft is desperate to get into mobile.
They put everything onto surface tablets and bomb.
Microsoft has a lot of problems.
They are reorganizing.
They need to start looking for an exit for mr.
This is a company that has had 10 years with a big initiative in the fall.
We have just had a redo, they are moving to 8.1. the xbox one, people are happy with that in certain quarters.
A new leadership is your call.
That is my call.
Balmer is out.
Paul, what is it for next week?
We have more tech companies reporting.
Are we going to see more of the same mrs.? yes.
I would say there are at least two things going on.
One of them is arguably even more important than the mobile transition.
There is a chart showing the dependence of s&p 500 companies by sector on china.
Tech is far and away the most china dependent sector in the s&p 500. it is really astonishing with companies like ibm, microsoft, and others doing some intel on the top line.
In a sense what you are seeing here is a double whammy.
It is made much worse with the slowdown in china.
This is even larger than what is happening in mobile's transition.
It has a lot to do with the fundamentals of one of the largest markets.
There is no way to escape this unless you are somehow one of the new generation tech companies am a witch is mostly mid-cap companies.
Does that mean we need to bring it back right here to the united states and look at companies that are helping people figure out how to buy stuff on their cell phones?
That is right.
That is exactly right.
That is the stuff that is less leverage in the marketplace.
You are going to have far less swing.
We unfortunately have to leave it there.
We are going to be watching tech very carefully next week.
Always good to see you.
Detroit is in a state of financial dk.
There is one man that can save the city.
We are going to tell you who that is coming up next.
Motor city has run out of money.
Cities cannot hold onto their cash.
The difference is size.
You get detroit at $18 billion bankruptcy.
It is the biggest municipal failure in history.
Retired city worker unions scramble to deal with the fallout.
The michigan governor says bankruptcy could be critical to getting the city's finances back on track.
While this may be viewed as a low point in the trade's history this is an opportunity to say we have a platform for future growth.
But is he right or is detroit's deterioration part of a municipal meltdown?
We go to our market advisors . michael, is this a sign of what is to come?
Are there more cities vulnerable to this?
I think there are public workers waking up this morning and saying what have my unions done to me?
They should be marching into their union offices to ask how to make these deals.
We saw it in stockton, we see it today in detroit.
The writing is on the walls for cities and states.
Did they get all of the opportunity, assuming this works out as they like, to restructure these deals?
They will have to be restructured.
Everyone is going to take a haircut.
If you are anticipating a retirement stipend you may not get it?
Realistically i was speaking with the police lieutenant, he says money does not grow on trees.
That is the truth.
There is only so much money to go around.
What is the path forward right now for detroit?
It is just a long path of negotiation and we have only -- as your lead-in -- there have been only eight and dances of bankruptcy in the past -- eight instances of bankruptcy in the past five years.
It is $5 billion of a $3.7 trillion market.
We do not have a lot of examples of how bankruptcy goes in the municipal market.
There are going to be a lot of ups and downs and has speculation to what the result will be.
It is unfortunate that this headline has occurred just as the municipal bond market has sustained one of its worst performance periods over the last 30 years.
As investors have been leaving bonds and going to stocks or cash, this headline has unnerved a lot of investors.
Today municipal yields have risen in contrast to a declining yield environment in the treasury markets area what do you mean -- treasury markets.
What you think it means for investors?
Do you think they will be moving out of muniz?
Do you think this could have a domino effect?
I do not believe you are going to see the contagion that the groups he will be the course of action that other municipalities will take in order to solve their pension problems.
I think that is a misnomer because the bankruptcy has a long legacy of creating higher costs of debt.
You need borrowing to build infrastructures.
For some of the other services -- the other thing with bankruptcy as it is going to drive businesses away from a city.
One of the concerns about detroit is that many of the retirees, 30% to 40% of pension years live in detroit.
While it may certainly be appropriate, i do not know how appropriate the pension benefits have been, the idea is that bankruptcy does not turn an economy around.
Maybe this gives them the opportunity to do some restructuring that is needed at this point.
We are out of time.
Thank you very much.
We are going to have more on detroit's next.
We are going to talk to the man who signed up aliens of dollars as the city's distressed real estate transit turnaround.
There might be one man who can save motor city.
He is the ceo of quicken loans and he is looking to revive downtown detroit by spending more than $1 billion, buying out more than 3 million square eat of real estate.
Running me right now is one of gilbert's goto guys, part of his real estate empire and one of the voices behind detroit 2.0. what does this filing of bankruptcy mean for your plans to revitalize the city?
I think it is an important step in that process but those of us that have been investing in the city for many years have recognized that this is an importance cap.
Bankruptcy is really inevitable.
I think it is an important time in the history of our city where we turn to confront the challenges and the financial challenges that we have as opposed to trying to avoid them or run from them.
I think in many ways, while it is a painful circumstance for us i think it is a positive step forward.
You're putting literally tens of millions of dollars into detroit real estate.
How much worse to you think it could get?
I think we have hit the bottom.
We are investing a lot.
We are investing in properties and we are doing it because we think we can do good and do well.
We have our own guys passionate about the environment revitalization.
At the same time we are very confident that we can do well as entrepreneurs.
That is certainly been reflected by the investedment taking place.
Downtown is hermetically better with office buildings.
It is a vibrant downtown these days.
Collects the demographics are working against it.
The city's population in the 19 that these, roughly 2 million.
-- in the 1950s. roughly 2 million.
While it is a single ecosystem, they are different.
Downtown is doing very well.
Unfortunately we have to go.
Let us get straight to dominic in the newsroom.
Has to do with the steven cohen suit brought by the security exchange commission.
This is in regard to the dell trades that were in question.
What the as easy a ledge is -- the sec alleges steven cohen did wrong is an analyst at sigma capital, they say in their overall list of charges or accusations against steven cohen, that in august of 2008, this man, the former analyst at sigma capital, received a material nonpublic information from dell.
Another portfolio manager in an e-mail said that he thought the gross profit margins were going to come in below analyst estimates.
The complaint then goes on to say the e-mail was for ted to steven cohen -- was forwarded to steven cohen.
They say he then began selling his entire long position.
He failed to take responsible steps.
This is with regard to the dell trade in question.
Whether he got material inside from a research analyst who got it in direct the from an insider.
That brings more color , more in terms of the substance to what the sec is looking at with regard to its suit against steve: -- cohan.
Pre-k's you have been investing so much in this region and the demographics.
How is that going to change?
We talked briefly , downtown is starting to become very vibrant, significant expansion of our office and the residential base.
There is work to be done.
We are a city of 140 square miles.
And 100,000 people.
We're going to have to build upon the downtown and our strong never goods, we will have to disinvest in other areas.
We have to run i can auto plant.
There is a good land in place to start down that path.
Having saved the cadillac downtown, it is gorgeous.
You move a mile and a mile and a half and it is bad.
How do you bring that area back, what do you do to help that part of detroit?
You do not necessarily bring all the 140 square miles back.
There is a plan and laced to do this.
You move people into areas of greater density and you remove that right.
You move into the strong areas and where there is a house or two on a block, you take that out.
What about offering tax incentives for businesses to relocate and provide jobs?
Wax that is taking place, it is happening with residential and it can happen with office.
We have a price that is very attractive and that is why so many things are starting to take place in downtown despite the concerns around the bankruptcy.
Thank you, matthew collins.
We want to continue this conversation.
Our codirectors of the documentary.
Thank you for joining us here today.
Does this come as any surprise?
The real question is what will happen next.
We were driving over to the studio, there was a new announcement about court ruling and day by day, things will be changing and everybody is waiting to see what the end result is.
Do you think this is good, and opportunity for the city to wipe the slate clean and start over to a certain extent?
People here bankruptcy and they think failure.
Now we can flip that.
We have the opportunity like we never have before to restructure things, reframe things.
It has been decades of poor choices and bad management.
And questionable decision- making.
Who gets his chance to remake those decisions?
It looks like detroit may have that chance.
Your film chronicling the lives of detroit firefighters.
These are guys who run into buildings.
They are the ultimate optimists and here they are in such a difficult situation.
What did you learn from these guys traveling around with them, living with them for years?
They're dealing with the emotions of what it is like to be a public employee in a bankrupt city.
Rex that is -- not to give up.
They never show up and say the fire is too big or my gear does not work.
Every single call, they put the fire out.
I hope the same will hold true for the rest of the city new matter what they are given or what hand they are dealt.
They will get those fires put out.
As we move forward here, what do you think will transpire?
We were talking with an investor in the region.
His hope is to revitalize downtown to bring more corporations in, perhaps there is some tax incentives.
How do you get people back to detroit, how do you get businesses back to detroit?
The business sector is doing a tremendous job of ringing investment back, bringing buildings back, bringing their employees back.
Relocating satellite offices, and to detroit.
That is a huge step.
That means retail comes back, commerce comes back.
That is great.
And then those people need to be safe.
The citizens of detroit need to be safe.
Fire and police get a reinvestment after this bankruptcy and wings are reformatted for them to put them in the best position possible to protect those new and long-term citizens.
That sounds a good formula for success if detroit can pull it off.
Coproducers and co.
Producers -- directors.
We are talking about mcdonald's . they are coming out with their earnings on monday.
We will tell you if the golden arches are poised for golden profits.
Did you know that 69 million people ate at mcdonald's somewhere in the world every single day?
They are not all eating big macs and chicken that nuggets -- chicken mcnuggets.
That shiny icon that promises gastronomic uniformity wherever you are in the world.
Also offering a surprising amount of brady.
This is porridge with chicken in it and features in the malaysian breakfast menu.
And japan's substitution for the big mac.
This is a spicy potato burger.
People still order the french fries.
How about japan's mega potato?
It is the most calorific item, meant for sharing.
Dessert is easy.
It is no surprise international consumers are important to the bottom line.
They get 70% of its sales overseas.
Our panel with the story and the strategy and the trade.
How are they doing internationally?
And this is the number that we will be keying in on four the company and if you look at either europe or asia, the middle east, you're looking at the clients, small declines relatively of less than 1%. this is in line with what we are hearing from a host of different types of companies on the consumer and technology side.
They're seeing slowing growth in those regions.
It is not necessarily that they will be able to look to the u.s. they saw a decline in sales.
Some analysts are looking for a rebound.
The question how big is it going to be?
I would agree with those comments as far as europe is concerned.
Certainly unemployment is high in key countries like spain and southern europe.
That when folks are out of work they have trouble affording any mail outside the home.
Sometimes you see a rebound in stores that do better.
Maybe mcdonald's can benefit from people who would have gone to applebee's now going to mcdonald's. i think so that is true in the u.s. but in europe where you have an implanted rates that high, folks are not eating out.
What do you think as far as trading this one ahead of earnings?
Mcdonald's looks pretty bullish to me.
It sold off so the options market is implying a two dollar move.
I'm looking to put on a trade next week and -- two by the july 26. it sounds like you're buying be july 26 weekly.
And the idea that you will set up a 2-1 reward.
Back to julie.
Is there something we can infer about the overall -- is very much a barometer of the global environment.
There definitely is some of that to be taken away.
The company has been aggressively rocketing its dollar value menu.
That should tell you about what it thinks is the demand from consumers of they want value here but it is offering new products.
There is a twofold approach year.
The dollar menu appealing to value but also these new products are appealing to uniqueness and giving people a reason to come into the mcdonald's. pretty incredible.
They are trying to get a lot of new customers maybe with some of those new products.
We will leave it there.
You want to see a lower unemployment rate?
Our closer knows how to pull it off.
We will be back right after this.
?/ time for chart attack where we renew a chart that will make you smarter.
Hopefully it will make you money as well.
Thewe are digging in with our closer, brian edmonds.
Full-time unemployment, let's start there and go from there.
When you look at the chart, what is your conclusion?
It seems the fed has talked aloud -- talked a lot about employment.
If you look at the unemployment rates we see an improvement in jobs created but what kind of jobs are we creating and that is the important thing.
What is the meet of the job improvement?
It has not been in full-time workers and he gets interesting when you overlay part-time workers.
That, sadly, has been where the growth is create there's a lot of growth in the retail and the restaurant business and the jobs are part-time and not the kind of jobs that we experienced in the past.
The only improvement is great but you have to take it with a grain of salt and terms of the part-time work people are getting.
What does that mean for ben bernanke?
This is part of what will cause the fed to taper and then tighten.
The talk about the rate, if we hit those thresholds, that will start a process of the fed starting to take away some of the accommodations.
You are looking at the statistic that is based not on jobs that are necessarily as meaningful as they were jobs created years ago.
This is the same thing as full- time employment.
What does that mean you're telling your clients?
We have seen improvement and that is welcomed but i do not think we we have seen employment improvement enough with the kind of jobs you need to benefit the economy.
While we may see optically and improvement in the unemployment rate, are we creating jobs that will sustain this economy?
Sounds like you stay with bonds.
You do not want to be short yet.
Thanks for joining us.
Come back and see us soon.
From open tables to jet engines, we have the top 10 stocks you need to know.
The closer is next.
In the next hour you will want to tune in to this former sec chairman.
Weighing in on the sec versus steve cohen lawsuit.
That is coming next.
We will be right back.
? don't worry.
We are getting you caught up on the only stocks need to know about today.
Google down nearly 2% a surprise earnings miss.
The move to mobile is hurting their average.
The armored cost per click cell 6% as more marketers aim to reach consumers with smartphones and tablets that's the average cost per click fell.
Plunging the most in nearly one year as the hospital cuts operating 2013 forecasts.
Lower admissions are hurting profits.
Number eight is chipotle.
The chain posted second-quarter profits to beat analyst estimates as an increase in traffic boosted sales and established restaurant and they have also started serving tofu and petrone margaritas.
Not tokyo and petrone margaritas.
-- not tofu and patron.
They are reportedly working with goldman sachs on a bid for the cable giant.
Time warner cable rejected an informal proposal by charter him alone earlier this year.
Advanced micro devices, amd, down 14% forecasting a drop in third-quarter gross margins even as they project higher sales.
They are looking to get 20% of their revenue for new sources including game console processors.
Opentable is down after yelp acquired seat me, a web and ipad based reservation service.
This follows on yelp making a deal with eat24 and they can just click through and order food.
They already had an agreement with opentable.
They are expanding their offerings.
Have you ever had a situation where you call a restaurant and they say, i'm sorry, we are totally booked and then you go to opentable and you are able to get in.
Why were they just not honest ia?
Call them out, adam.
Keep them honest.
Four is honeywell.
Topping estimates on transportation and energy related sales.
Honeywell is on a four year streak of holding down costs and introducing new products such as advanced natural gas filters.
Cody runs a very tight ship.
Slumber j -- schlumberger will buy back $10 million worth of shares.
They are also reporting second- quarter profit climbed 49% and is forecasting double-digit customer spending increases on crude exploration.
2, 1 of the stocks responsible for the declines we are seeing today particularly in technology, microsoft down 11%, the biggest one-day drop since january 2000 nine.
Weak demand for pcs causing for the quarter profits to miss by the biggest margin in at least a decade.
Results were also hurt by a $900 million write-down for surface inventory.
Coming up for the number one stock of the day -- ge, general electric.
They are up about 5%, the most they have jumped since 2011 listing second-quarter profits beating analyst estimates.
Demand for jet engines and gas equipment sending their order back log to a record.
Here we are at the close trading this friday afternoon.
Flatline on the s&p 500 but still trading up 2.7 points.
Another record for the s and p. the dow jones industrial average struggling a little bit.
We will see how that pans, but pretty much a flatline.
The nasdaq is the one who suffered after the tech earnings from google and microsoft.
None of that looking good.
Let's get back to the breaking we have this afternoon.
The securities and exchange commission has filed civil charges against sa see capital steve: i'm failing to prevent insider trading.
-- sac capital stevd e cohen.
The sec is suing sac capital's cohen.
This is not for insider trading but the failure to supervise.
This is not insider trading but saying that he did not have the supervisory oversight of his employees that he should have.
That's the important thing.
What they're also doing is looking to ban him from overseeing investor funds.
The sec is alleging -- that is the key here, alleging -- that he received insider information that should have at least led to a pro.
This is with regards to trade that earned profits or avoided losses.
More than $275 million, yet one of the trades in question is with regards to dell when it was alleged by the sec that steve cohen received an e-mail via a dell insider.
Go through that again.
Received an e-mail from who?
A portfolio manager whose employee, a research analyst, had alleged insider information from dell.
Upon receiving this information, it's alleged that he traded on it and sold dell shares.
It helped him avoid losses of at least one point $7 million.
That's a lot of money.
Click to the check those e-mails though?
-- did they check those e- mails?
Sa sc capital said the administrative proceedings has no merit and that he acted appropriately and will fight the charge vigorously.
They are ignoring the supervisory stature and his strong support.
Here's my question.
If, in fact, the sec or had proof that there was an e-mail chain going back to this analyst who seems to have insider information, then why would they not follow through with an insider trading case against mr.
You hit the nail on the head.
Why didn't they?
They had a number of different options to pursue in terms of how strongly they wanted to go after this case.
This is being used by some as one of the more diluted of the options.
Click stick with us.
For more insight we will be joined by harvey pitt who served from 2001-2003. and chief washington correspondent peter cook is with us as well.
Why is it that they are not coming after him for insider trading if they are alleging they have proof that there is something inside the related?
They have to wait for the outcome of the criminal cases to find out at the two portfolio managers were guilty of insider trading.
The case that gives them the greatest flexibility, they are saying that mr.
Coh en did not properly supervise these people when it appeared clear to any hedge fund manager that what you were doing my the improper.
They do this with a very low standard of proof, a preponderance of evidence, and that gives the maximum flexibility to extract the sanction against mr.: cohen.
Would've the person running the appliance department be more responsible instead of the man who founded the firm?
-- are running the compliance department?
In this particular instance, there is an e-mail train that shows cohen was communicating before and after the trades.
That raises very serious and suspicious circumstances.
That is why they are targeting the head of the firm and not just as compliance officer.
You bring up something very important here.
It's a burden of proof.
You can prove he did not manage well instead of insider trading?
That's exactly what it is.
Even if these people ultimately were not convicted of insider trading, that does not mean that stephen cohen cannot be found to have failed to supervise them properly.
Let me ask you this, harvey.
This is a question we have posed to a few people here today.
The motivations of the sec itself, you are of course a former head of the sec.
Let's not forget the circumstances around which that these charges are coming through for stephen cohen.
He went out and bought an extensive collection of artwork and an home after getting hit with that fine.
Could that sort have -- sort of inflamed regulators?
In fairness, let's say no one is unaware of those details of his personal life but the judgments have been made here on the merits.
Mary jo white is a seasoned prosecutor.
The other commissioners are very diligent down tough on these kinds of cases and they are persuaded and allowing the case to be brought that there is adequate grounds to believe that cohen did not supervise properly.
In the end, it is the merit that dictated this outcome.
They are also trying to show that they are much tougher on enforcement than the sec has been up until now in going after the head honcho instead of some middleman.
Are chief washington correspondent emma peter cook.
Can you talk about the new chair and what might be happening behind the scenes?
This is what people probably expected from mary jo white.
She was a well-known commodity here in washington because she had been a very well-known federal prosecutor for a long time in new york and the message all along was that she was going to have a hard time with regulatory because she might not know as much, but the one thing she does know about is enforcement and as harvey indicated, this case moved forward because the commission voted to have it move forward.
It's hard to imagine this did not go forward in this is the highest profile thing this sec has done.
It's not a total surprise given the kind of behavior.
Faced with a decision like this, it is again making a tough call but using the badge of enforcement here, if you will.
Harvey pitt, this is a big case against a very high profile hedge fund manager.
If this is the easiest case for the sec to prove and that they have the best chance of doing so, what exactly is next for the sec and steve cohen?
What kind of action can we expect from the sec?
What kind of charges, fines, anything like that can we expect the?
That depends on how the case lays out when it is actually tried.
One of the most significant elements of this is they can effectively put him out of business.
He will not be able to manage a hedge fund if in fact they have found that he has failed to supervise.
At a minimum, there will be time away from the industry, even if it were not a permanent are.
When someone as high profile as cohen, the likelihood is they will go through a substantial suspension or a complete outright revocation of his registration.
We will have to leave it there.
Thank you so much for joining us today, harvey pitt, former sec chairman, peter cook, and dom chu.
That you're close.
Here's a look what's next on "street smart." just a little ray of sunshine.
One character and one big box office battle.
Can they steal the thunder from the top grossing movie?
The man behind mintz.
It has 13 million users and it might be the most accurate measure of consumer data.
The economy crunching the numbers shows us who is spending where.
Sus, who are the tennis titans?
Hans nichols and peter cook defending their skills on the court yesterday.
Your understanding of tennis is little like your understanding of economics, which is to say lacking.
Find out if they lived up to their tough talk.
Stay tuned for your first trade monday, all coming up when "street smart" continues.
? this is "street smart" on bloomberg television, streaming on bloomberg.com, on your ipad.
Dreamworks launching another front with "turbo," a superfast snail.
He is small but the budget is big, $135 million come and could lead to a deal with netflix.
Jon erlichman takes us inside dreamworks for a closer look.
My name is turbo.
I just want to go a little faster.
Likes it tells the tale of a snail who dreams big, really big.
He watches racing obsessively fantasizing about one day being able to compete in the indy 500. director david soren dreams big.
It started 10 years ago with a pitch at a competition.
They host a competition where the staff can pitch tories.
It was not until two and a half years ago he got to make his movie.
The hottest animated films have been based on proven characters.
"monsters university" and "despicable me 2." this will appeal to the fast car crowd.
They had mario andretti drive me around the track at 170 miles an hour and that experience, getting to feel what it is like a viscerally gave me a sense of where we wanted to bring the film cinematically.
There will also be an "turbo" tv show coming to netflix and dreamworks is producing a lot of original content for netflix.
Netflix has become such a popular way to watch television.
I know my kids spend the bulk of their time watching netflix.
For now, dreamworks hopes they will spend some time at the theater.
A snail cannot race in the competition meant for cars.
Aren't you just a little ray of sunshine.
Jon erlichman, bloomberg, los angeles.
Can a tiny snail turbocharged dreamworks the october to ask our friend paul from hollywood.com.
Four new films coming out this weekend.
Let's start with "turbo." what do you think?
And led the box office on wednesday with about $5.5 million.
It has made $10 million in its first two days and we're expecting in the mid-20's for the weekend so for the first five days, it could be in the $33 million range which is not too bad for an original.
Like it was said in the earlier piece, "despicable me" is a known commodity.
"monsters university" is a prequel.
For them to distribute this dreams work -- dreamworks movie that is truly an original, it's a highly competitive weekend with so many films crowding the marketplace.
As you said, four new films including "turbo" coming out this weekend.
One of the hollywood insider things here is that ryan reynolds is the voice of turbo and he also has a different film coming out, rip.
I guess you can compete with yourself is one of you is animated.
I think they're ok with this even though he is animated.
Ryan reynolds has two movies in the top 10 this weekend weekend and it has to be really bold for his pole.
He has two movies out there.
And then you have "red 2" coming out as well with "ripd." then "the conjuring," the r rated scare fest.
Why do you think that one is going to be so successful?
It's unusual for a horror film in the middle of summer.
It's a great counterprogramming strategy.
With all of the animated, action , family, to have a horror film written the middle of all of this i think plays and peoples need for something different different, a little creepy.
The movie has a great cast, ron livingston, lili taylor, vera f ormiga.
They set up this pressure cooker situation in this house and demons.
It is the ex-assist me to the words me to amityville horror -- the exorcist meets the birds.
Horror films always find an audience.
Hollywood likes to bank on these and i like the fact that they put this movie in july right in the heart of the summer movie season staking their claim.
Remember, this has a reasonable budget.
I don't remember, but certainly not $100 million.
This will be a big profit machine for warner bros.. especially since they have already brought in $5 million knocking out "despicable me 2." are they going to stage a comeback?
They were able to take on two newcomers last weekend, "grown- ups 2" and "pacific rim." it has been an absolute juggernaut beating films left and right that have gotten in its way mulling them over one at a time.
This weekend, that won't happen.
Universal is not crying.
They have been on a great run for the past year with incredible hits this summer.
They also have "r. i.p.d." coming out this weekend which is a great film.
Paul, thank you for giving us the rundown.
From hollywood.com, we will see you next friday.
Coming up next, think small.
Stocks you've never heard of putting up huge numbers.
How to play them in today's etf friday segment coming up next on "street smart." the money managing site mintz may be the most accurate measure of consumer spending and we will talk about the little company prostration or trove of big data coming up on "street smart." ? big gains, small stocks.
The biggest returns coming from the smallest docs.
-- smallest stocks.
The russell 2000 has been dominating.
This could mean that small-cap stocks are no longer the bargain they were one year ago.
The question -- what do you do now?
Where do you go next?
Maybe you go even smaller.
Our etf analyst joins us as always on friday.
We are going really small.
Click these are all overlooked stocks.
They are all microcap stocks.
What's going on here?
We have a bet on the u.s. economy growing in kind of a domestic band play.
They get their earnings only from the u.s.. no exposure overseas.
The micro shares microcap etf, 1300 microcap stocks based on the russell index.
It is of the 8% in july.
It is most traded, the oldest, and the one that people go to.
It has a stock like red robin.
It holds a stock like red robin.
I've heard of that one.
90% of them i've never heard of, so i picked one i had heard of.
What is red robin?
It's a burger chain.
Krispy kreme is another one.
That when we are well familiar with.
Another is the wiltshire microcap.
This one is actually lifting it up to 30% year to date to these are two ways to play microcap etf's. oil has been surging.
How do you play it?
The first is united states oil fund, the best way to get it.
If you think oil in the short term will move, this tracks futures contracts.
It's a 12%, i think, already in july.
If you don't want to mess with derivatives, you can look at some of the market vectors oil etf's tracking big oil companies like schlumberger and halliburton.
It's up at least 20% year today.
The wildcard option, the powershares dynamic small-cap oil.
Now you have all of the above, small-cap and oil.
Thanks for being here as always.
Thanks for having me.
Mint.com is using its treasure trove of data to unveil hidden trends on how people spend their money.
The dirty secrets coming up next.
? mint.com knows darn about spending -- knows more about spending and it dumps all of the information into a giant database and now it is putting the data to work.
They have just unveiled what they are calling the intuit consumer spending index.
We have the brains behind the operation with us on "street smart." scott is heading the operation.
Good to have you on.
What does this index say right now that american consumers?
Thanks for having me.
The index, [inaudible] [inaudible] [inaudible] [inaudible] we have been seeing steady consumer growth, growth in consumer spending, [inaudible] over the last [inaudible] [inaudible] several years.
Since [inaudible] 2009 [inaudible] [inaudible] [inaudible] [inaudible] [inaudible] [inaudible] [inaudible] until the first [indiscernible] quarter of 2013, we have seen [indiscernible] [indiscernible] an increase in real consumer spending.
As many americans may be feeling, not as quick of a recovery as in previous recoveries.
Is there anything you can predict based on the data you're seeing right now about the coming months?
You think consumer spending will pick up in any way?
We have seen a continued increase in a lot of different categories.
This signals that consumer spending in the near future is going to be slow and steady growth.
You have looked at interesting trends.
You have broken down the population by age , male, female.
Walk us through some of the things you have noticed.
That's one thing to stress here.
It's interesting that this is not just representative of the mint.com user base but we have done a lot of normalization to make a representative of the nation as a whole.
Because of that, we can extrapolate and get a lot more detail about various consumer groups across the nation.
We can look at male versus female spending, spending in different regions, spending in different categories of consumption.
How are they different, male versus female, different regions?
For single males versus single females, we see a slightly higher and consistent level of spending for males.
This is most often representing slightly higher incomes among the single males, but where they're spending the money is very different.
Look at spending on alcohol, electronics, vehicles, you see the men spending a lot more.
Whereas women spend more on personal care and apparel, as one might expect.
Let's walk through some of the regional differences.
What do you see there he?
We have seen large differences in overall spending as well as different categories.
If you look at some of the bigger and richer states like california and new york, we have seen this slow and steady growth . if you look at some states that are part of the oil boom , shale oil, shale gas, places like north dakota, you see a rapid convergence.
People are getting rapidly richer and are spending more in these oil-rich states.
All of that money burned a hole in your pocket, scott.
You were talking about men spending more money on cars, booze, the usual suspects.
About how much more typically than women?
Depends on a category, but it can be as much as 50 or 60% more in these smaller categories.
With the flip side of women for categories like arsenal care and apparel, often 30%, 40%, 50%. -- categories like personal care.
How do you take these categories and, for the lack of a better word, monetize it?
We want to release data regularly.
Looking at different types of users, releasing this data relatively regularly and this will help our mint users better understand consumer trends and how someone like them stacks up in different categories of spending?
The way you actually categorize this is because you have access to all of this information.
People are essentially turning over that information to you.
They can see daily what they're spending on.
We have a video of it right now on the screen.
We can capture a huge amount of consumer spending.
Debit cards, credit cards, checks, cash spending.
This is very aggregated or impossible to look at individual users data, but on a whole it is extremely useful.
Thank you so much for joining us today.
Men spend more than women, adam.
Do you have a theory?
We have to pay for the woman.
We have to pay for drinks, dinner.
Certain things even out.
You know, you have to be a gentleman and get the bill, you know?
There you go.
That is adam posterior on why men spend more than women.
-- that is adam's view on why men spend more.
I'm sure i will hear from plenty of viewers about that.
Barbie has an impressive resume.
Some of her most interesting jobs coming up.
What happens when two bloomberg reporters face off against white house economists on the tennis court?
Find out today in "weird wall street." ? barbie is not aging so well.
Sales of the toymakers flagship doll continuing a decline falling 12% missing analyst estimates on wednesday with overall sales of only 1%. mattel it should be did some of barbie's lackluster performance to the popularity of his other newer products.
The monster high line or the goth barbies.
She's had more than 100 different career so we decided to take a look at some of her more unique jobs.
Barbie has big plans for this weekend.
? barbie is hungry.
? barbie, you were so beautiful.
? [laughter] that is just great.
Which was your favorite?
Let's get to jeff right now, from eastman kodak, joining us on set for a closer look at barbie, mattel, where it all went wrong.
When you think of barbie, you think of me.
[laughter] dog walker barbie.
I look like can.
If you wear pink on the show, it's only because of barbie.
You have to take a look at where they are at.
If i was the ceo this company, i would be worried.
You you miss income by 24%. if i was off by 24% in that sea suite, you are gone.
-- in that c suite.
54 years old and she is starting to sag.
They are saying it's competition from their other line.
It is taking money away from the barbie franchise.
It is still going to mattel and they are not delivering on earnings.
? look at the time are good overall.
It is relatively flat.
This is still the preseason.
The real season has not occurred.
? but - they have some of the top lines of all time.
But they are down.
Monster high is up.
They are up by 25% and the american girl is up by 14% and that's pretty good.
What happened to barbie?
I asked people on twitter and facebook and here's what one mother said to me.
I grew up with barbie but now i would rather she focus on things rather than how a girl looks.
I would rather have her outside playing sports or learning an instrument rather what she wears or rather ken likes her.
They have career barbies.
I don't know.
You what may be more professional jobs.
I don't know if dog walker barbie is the best thing.
In defense of barbie, those were the weirdest careers ever.
? you still have to question the freshness of the brand.
It is the 800 pound gorilla in the category.
Monster hide all , $500 million -- monster high dolls.
You had to figure out what the next big thing is and even if it means cannibalizing our brand.
Isn't that what they are effectively trying to do?
I would look at barbie like a blonde bombshell like beverly hills housewives and i would look at the monster high like the walking dead.
That is starting to change.
I was reading one of the analysts who said that kids stopped playing with barbies at nine and now it's six.
They are more digital, getting more with it and that is what it's doing.
Monster high, it celebrates those freaky flaws when you start to look at the characters.
It's kind of cool actually.
I had never heard of them or played with them, obviously.
It is the antithesis of barbie and yet still has some of the barbie characters.
And then they have the goth barbies and the same slim features, but again it focuses more on personality.
You have to give them credit for that.
Mattel has their work cut out for them.
Anytime i can come back and talk about dolls, what's next?
Get me on for that.
Jeff hayslip, our all things barbie specialist.
Coming up, a tennis court clash between bloomberg and washington, d.c., best economic minds on part of today's "weird wall street." we'll be right back.
? you know what that means.
Time for today's weird wall street.
The car hailing app, ub er, leading people order a different kind of vehicle today, an ice cream truck.
Dom chu is here to fill us in.
I want ice cream.
And instead of calling for a cab, you call for this ice cream truck.
It stop right outside the building today.
33 cities around the world looking to raise awareness for their product.
The reason why is because a lot of locations through the world don't allow them to operate including here in the u.s. where taxi registration requirements don't necessarily let them operate.
You cannot have ubrer.
What are they charging iago- ? free today, but they are doing a deal.
In the much-anticipated rematch, our very own tennis stars hans nichols and peter cook went head-to-head with gene sperling and alan krueger and managed to avenge last year's crushing defeat.
? give it up for peter cook.
? the 2013 classic and yes, bloomberg has gotten a little sweet revenge.
Jeanne, your analysis of the play?
? i was weak -- i was weak.
Hans was strong.
A regressive gene for our doubles.
This was a disappointment.
This is the most disappointing experience i've had in four years working for the president.
That question today.
The bloomberg team was better.
It was a hard-won victory.
It came down to the practice session two nights ago.
We would like to thank our wives for getting out of the house and playing tennis.
? [laughter] congratulations guys.
You delivered on your promise.
You defeated sperling and kruger 7-4. wasn't that the same score they had last year when they beat you?
Revenge is sweet.
It's the same score.
I think adam and i helped back you up.
We like to think we had a part in this.
You definitely put some pressure on us.
Hans and i were talking about it that we had to deliver after the conversation yesterday.
A little trash talk and you are trying to take me down.
We were all part of the team.
We were trying to get you fired up.
That's all what it was about.
The only thing more embarrassing to losing to us in a tennis match is actually bragging about it the next day.
We win on the embarrassment scale.
Have a great weekend.
We'll see you monday.
? . . it is 56 best the hour.
-- past the hour.
A look at where the stocks are on the day.
An interesting session.
We have weakness on earnings from microsoft and google.
That really drives the nasdaq.
The s&p at the end of the date managed to you cap gains.
We have a record close for the index.
You see the s&p 500 has a fourth straight week of gains and has now risen in 11 of the top 12 sections.
Take a look at the year to date as well.
That record run, 19% on the s&p 500. one of the things fueling gains is this reset in the mind of investors as ben bernanke finally convinced investors, yes, stimulus is here to stay even if it is going to get a little bit smaller.
Charter medications is said to be meeting with goldman sachs yet again to pursue a bid for time warner cable.
Why would charter want to do this?
Why would time warner cable want to accept?
This is the second attempt for liberty media and for charter medications to do this.
What is the obsession with going after time warner cable?
He tried to replicate what he did a decade ago when he rolled up the cable industry.
But so much of the consolidation in this industry has already happened and a lot of it happened because of john malone.
Now there are only a few companies left.
It could do a slow rollout of the few companies that are out there and slowly march along and build up subscribers, or it could go after the whales of the industry like time warner cable, the second largest u.s. cable company.
And that is the idea.
Time warner does not have a family ownership like comcast has or that cox enterprises has, the third largest.
It is not family-owned.
Malone has said bigger is better in the cable business.
Why is edgar -- why is bigger better?
Margins have been shrinking year-over-year because the disney's and the foxes out there have a lot of leverage.
They say, we need -- you need our programming.
We will make you pay for it.
But if you get bigger, you can push back.
You can say, you know what, i do not want a 10% increase every year.
What are the big challenges here?
Because time warner cable said we do not want to accept this -- ultimately it comes down to price.
What is interesting as we have