Vegas Baby!: Street Smart (08/06)

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Aug. 6 (Bloomberg) -- On today's "Street Smart," Trish Regan and Adam Johnson find your last trade of today and first trade for tomorrow. (Source: Bloomberg)

The gains past wildest expectations.

How does 2013 stacked up?

The consistency of the gains, the short sellers have been really frustrated in this bull market because we do not get down days.

If you look at history, 60% of trading has been during this bull market.

That ranks in the top 10 historically.

One year ago was slightly below 60%. investors have to stay on their toes and beware.

Looks fascinating.

Thank you very much for joining us.

We are back with more in 30 minutes.

In the meantime, "street smart" starts now.

? vegas, baby.

Does mickey mouse play ball?

While -- the key to disney earnings.

The amazon founder buys the washington post.

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

The most important hour of the session, 60 minutes until the closing bell.

We have a market that is under pressure right now.

Weak retail data.

Concern on that trade data which was actually good.

Bingo.

We have never exported more than we have right now.

It begs the question if we need all this qe.

The picture of the day.

Once again, good news is bad news.

That is why the dow jones industrial average is down.

Charles evans adding to that notion, the chicago fed chief who is saying better jobs data, we can taper sooner.

The stocks don't like that, you can take a look at bonds and see that for the most part, bonds do not necessarily like that either.

Right now we are only up about one take.

Gold does not like it either.

Hold us down for the six the sixth day in a row, $19. a theme in the market.

Perhaps that are economic data means sooner paper.

Keeping and i on things this hour.

Let's start with the story everyone is talking about.

Amazon doing it independently of this company.

$250 million.

It is just the paper being sold, not the entire company.

The big seachange in washington.

Jcpenney going down today.

Shares down nearly five percent . morgan stanley analysts coming out today and announcing the company is burning cash faster than had been anticipated.

Also predicted the company can impose a wider loss.

A steeper drop in comparable sales.

The stock is at a 12.5 year low today.

Going in the other direction, the best performer in the s&p 500, fossil racing it's sales forecast looking for growth from 11% to 12%. i was looking at jcpenney's revenue.

It is four times that of fossil.

But their market cap is less than half that of fossil.

Thank you so much.

Viva lot china?

For the las vegas giant, almost $2.5 billion also tried -- rising, revenue in china.

The ceo is here to tell us how the company is playing for keeps here and abroad.

Welcome back here.

Let's talk a little bit about the tao.

We did have a great quarter.

We are off to a great second half of the year as well.

There really seems to be a strong growth story for the next few years and that market.

We are building our second property right now that will open up in early 2016. we have a very high hopes for that.

2016 for the second property.

Moving back to the side of the pond here, let's talk about to vegas.

It has been under quite a threat in recent years.

Are you starting to see that shift or change?

You look at that revenue which increased three percent.

Is that a trend and might we see an increase in coming quarters?

We are highly confident that is a trend and it will accelerate.

We are seeing more group business, more convention business on the corporate side and the incentive side.

We think 2014 will be much stronger in the city this year.

This year has been better than we had hoped for.

The investments that we made our yielding very high returns on investment and are very pleased with their las vegas recovery.

One of the things that struck me was that your casino gaming revenue was up.

Dallas one area that has been a challenge not just for you but for other companies.

They look to try to grow that, especially in places like las vegas.

At walk us through how you grew the casino side.

It is through the marketing events.

It will be the biggest fight in las vegas in the last 15 years.

It sold out of course.

We are having a significant amount of casino play coming in for that.

The i heart music festival a week after that.

The marketing programs are driving more casino play, both domestic tables and slots.

The international business for everyone remains very strong and the amount of money we put into food and beverage, nightclubs, new theaters like michael jackson, room remodels, a more affluent customer who spends more money on the tables and in the restaurants.

That is why our margins were higher.

Deck is still an issue debts debt is still an issue for you.

-- debt is still an issue for you.

How that change in the coming months?

It will change.

We paid off the 476 in the quarter.

Like you reduce did, yes.

Correct.

Have a billion dollar reduction.

-- one half million dollars -- $0.5 a billion reduction.

We own 51% of -- we respect and promised our board that we will have consistent debt reduction over the next few years.

As we continue to reduce debt and strengthen our ballots -- our balance sheet, the shareholders will be as they have been so far rewarded as we continue to improve the balance sheets.

It sounds like you finally turned the corner.

There have been five years of losses.

This year the analysts are forecasting a loss of just $0.03. i think it is quite good.

I like our chances this year.

We were baffled by the recession.

We were trying to build that the toughest possible time.

Now it is doing really well.

Our las vegas portfolio is doing well.

I think what investors always underestimate is the operating leverage in this business.

It hurt us so profoundly.

We lost almost $1 billion from 2007 to 2010 because of the reduction in room rates.

Now we are turning the corner.

We are only about halfway back.

The leverage when you own 40,000 hotel rooms in a market like las vegas that is growing, that is a lot incremental cash flow in the future.

I bet we will see upside surprises in the next few years.

Is there a broader takeaway in the overall u.s. economy?

If vegas is backed as i mean the economy is making a big comeback?

Housing certainly is.

We found a tight correlation between housing and our gaming business.

More so than looking at disposable income or unemployment.

Housing is the most important metric we have found and the fact that housing here in las vegas but nationwide is improving very well for gaming, particularly in destination markets like las vegas.

That speaks to the consumer.

Before we let you go, what about corporate travelers?

Are they spending more at the casinos in vegas with you?

Yes.

The tradeshow business was fairly consistent during the recession.

That hung in there pretty well.

We lost an immense amount of corporate and incentive business.

One thing that was so gratifying about the second quarter is that half of the bookings that we booked was in that corporate side, the corporate business.

The margins are much higher.

I think the whole city will do well in 2014 and beyond because the corporate business is coming back.

We will leave it there.

Good to hear the corporate business is coming back.

Thank you so much.

Coming up, adam has some plays.

Things are looking better.

I enjoyed that conversation because that suggest that this economy has turned the corner.

That is something we can all be happy about.

? ok, everyone.

It is time to bring in our closer.

He oversees more than $2 billion.

He is the author of the book, from their two bulls.

Let's talk about this market.

There is a lot of concern that paper is coming.

It is the reason we are seeing the dow off 86 points today.

What do you think?

To taper, not to taper, how much to taper, and who is going to make the policy?

Who will chair next year?

What will the fed reserve neck -- look like -- what will the federal reserve look like next year?

Who is your money on?

I like janet yellin.

I have met both of them and they both have good skills.

People really like her.

I hear that over and over again.

As opposed to larry, who is not.

It is one thing to win the popularity contest.

She is a woman.

She knows how to -- what larry suggested was not possible.

Do you think that's will get in his way?

That's what caused him from being the president of harvard.

You have still to come, lots of experience.

Janet was inside, in the fed, seriously engaged.

Sommers is not.

He is a political friend, look to the president in the eye, played tennis with him, helped him early.

Now you have a president in his second term.

He is a lame duck.

If summer says i will take the pounding from the minority in the senate and i want to the job, mr.

President, now you have a personal loyalty, political tension at work.

Janet yellin does not have that.

She is a different personality.

On personality, she is gracious, pleasant.

You think people don't like bernanke in terms of policy?

She has won the popularity contest, but as far as her policy goes, is she aligned?

She is aligned with bernanke.

You can look at the choices and the fact is, that has been the policy nucleus.

I happen to think that if there were about of inflation?

Defined about.

2.5%, three percent arising.

She is a skilled economists enough to say, i need to change this policy.

I am in a more restrictive mode these days because i know people will launch into a robust recovery.

I believe the trend of inflation is headed towards one and may go under it.

The bond market, i think, has it wrong.

I think it is a lie here.

So much in cash right now.

I took cash up in the last week, first time in a long time.

How much cash are you holding now?

All the accounts are in double-digit cash.

That is high for you.

Why not put it in ons?

By five years and corporate bonds, exactly what you are seeing.

The five year is one way to do this.

For individuals, we have grazed the allocation to tax-exempt municipals which are a if and being given away nearly free.

The yields of very high -- the taxable equivalent yield on something like that is nine percent, 9.5%. depending on your tax record, it could be 10%. think about it.

Where my going to put my money?

The equivalent of nine or 9.9 or 10. i don't know that the stock market delivers that expectation or that's real estate to does.

There is a casino company you just talk to that might deliver it.

They are trying, it has been a long road back.

In our balance accounts, we actually took stocks down in favor of raising bombs.

But you have not yet made that jump.

You have not quite gone into bonds yet.

I went from stocks into some cash.

In the balanced accounts, i lowered the stocks.

We are separate account managers.

As you are talking to the people, how receptive our people ? they say, i do not have a problem if you put a little bit of profit in the bank.

This has been a glorious run in the stock market.

If you go to somebody and say, you are up more, and you reach next year's target this year, what's the matter with a little bit of profit?

How bad is that?

Good ideas.

You are here the whole hour.

He sure is.

Coming up, aer eo's biggest shareholder will tell us what he thinks of the by.

Disney is big.

Really big.

They report earnings after the bell.

It is all coming up area -- up.

?/ ? this isd -- is "street smart" and we are streaming live.

The state department has evacuated embassy in yemen.

We're talking about the reasons behind all of this heightened concern.

This is around the world but specifically in the peninsula.

It is -- the british followed suit on the warning of a planned al qaeda attack.

This is after we intercepted a message from the al qaeda chief in pakistan who was headed toward the boston terrorist group in yemen.

American drones also reportedly killed al qaeda members outside of the capital in yemen, according to a state news agency there.

One intelligence expert says the u.s. has killed at least one al qaeda leader and a dozen commanders in the past month.

After a move like that, some kind of retaliation has to be expected.

Of course, it is less than a year ago that protesters reached security and set cars on fire.

That was right after chris stevens was killed in benghazi.

That forces the obama administration to be on high alert.

Obviously, he does not want such a thing to happen again.

Yemen is a main terrorist base for al qaeda.

At the this is after they flushed most of the group members out.

They have quite get it there at the peninsula.

It is a real concern and they are taking it very seriously, pulling almost everyone out and warning them to leave as soon as possible.

Understandably so.

Isn't it amazing?

Here we are, almost 20 years into the senate is still happening.

20 years into this terrorist attack on the west.

When you take out one leader, another one pops up and his place.

The cells that are forming are one of the most interesting and dangerous aspects of al qaeda now.

Matt miller, thank you very much.

Coming up next, disney's earnings may be hampered by the lone ranger is blunder.

We will find out of the kingdom has the magic next.

? wall street may be taking a disappointing look at disney's movie unit after it's loss from the lone ranger.

But disney's empire is so massive that even a movie down -- a movie like that could even look like pocket change.

Disney is big.

Really big.

Analysts estimate that disney generated -- that is roughly the same amount as they spoke, yahoo, cbs, and time warner cable combined in their most recent results.

Between the parks business, espn, the network does this, the consumer products business, it is a massive business from a revenue perspective.

When you are that day, it takes a lot to throw you off course, kind of like those massive disney cruise lines.

Take disney's film units.

They may write down there investment in the lone ranger, but analysts say the studio business generated close to $1.7 billion in quarter sales alone.

Meanwhile, the biggest chunk of change disney hall's in his from television.

It's unit anchored from yes p.m. accounts for half of disney's sales and two thirds of its profit.

These are high-profile events.

They're the nature of the business.

Relative to meeting, it is not a particularly big issue.

Added in the theme parks business, the lone ranger gets lost in the parade.

All right.

So will the lone ranger turned disney into a pumpkin after the bell or is it just a loop -- or is it just a drop in a very large pockets?

Good to be big, half?

If you are growing, it always helps even more.

Disney's revenue is going to grow in most of the different this is units.

If you can bring profitability, that helps even more.

There is that expectation and we made that point about the studio business.

There are estimated to see well north of $1.5 billion of studio revenue.

Iron man three, oz, and the monsters university films have been big hits.

Three out of four isn't bad.

If they can keep growing, it helps distract from one box office disappointment.

What are we saying in terms of park attendance?

Where are the pockets of strength?

Whether it be espn, walk us through what it looks like is faring well.

Let's talk about what the breakdown is.

In a neighborhood of $11.5 billion is what wall street is looking for.

More than $5 billion is messed up -- estimated to come from media networks.

More than $3 billion is expected to come from the parks business.

Then you get into the studio business, more than 1.5 billion dollars in revenue.

Consumer products.

More than $700 million from that business.

The small part which has been -- the interactive businesses expect to see growth.

There are a lot of parks and ways to spend a disney earnings report.

You've seen what happens with the stock.

That is because they had a strategy that works pretty well.

Let me go over to nolan for a moment and talk about what is going on in the studio side.

According to your research, you are speculating that we could see a series of $1 billion franchise is being released from disney this year.

One, talk to us about how large that is in the scheme of things and whether or not they are rolling the dice.

It is one thing if you lose 100 $50 million, another thing if you lose $1 billion.

Disney has taken a strategy that its peers have taken, which is to focus on the big moneymaking franchises.

They have had a couple of mrs.. i agree with the view that it is something.

We saw john carter last year.

They followed up immediately with the first big avengers film.

We have more avengers films in the type coming out this fall and then we start looking to the star wars films in 2015. if the avengers itself was $1.5 billion, star wars could easily be $1 billion each.

There is a lot to look forward to . you are looking forward to some franchise movies.

With the parks grow?

Parks are in good shape.

Disney did a good thing, which is investing downturn.

They invested heavily in their parks, both u.s. and internationally and starting to reap the benefits of that now.

They are about to report because they open up the california adventureland in their fiscal two three last year.

Attendance was up 22% at that part.

Park attendance is very strong in the u.s. now they are digging earth and shanghai.

What are you doing?

There are a couple things i'm looking at.

It is compelling, and i am at a valuation levels that is not so compelling.

I want long exposure to this stock but i don't want to own it.

I am looking at a reversal.

You do that for even money.

It gives you the opportunity to participate.

You pushed through the highs.

I could see it's going to 75. if we get the drop, you can pick up the stock.

Hearing a lot of optimism.

We will see how these numbers look when they cross.

Adam?

Our closer just held -- at the annual fishing weekend.

They will tell us what they think is running washington.

And what can just these is due to save the washington post?

That is next.

? the washington post has found a new owner in jeff bezos.

He will purchase it in a deal that will take the paper private.

It has been run for 80 years from the grand family.

They say that he is a good fit to run the post.

It is not that he is going to walk in with a prepackaged solution to the proms of the newspaper business.

He is not.

But he did not do this impulsively.

He did this after thinking for a couple of months.

I believe he will do just what he says in his message to employees.

He will come in, experiment, and see what works.

Bloomberg news reporter christina i let she joins me now.

What do you think inspired this?

It is an influential paper.

It has about half a million daily copies sold.

Very big publication here.

That said, this is a business that has seen a decline of 35% in revenue over the past five years.

No one clearly knows what he is going to do on day one, but he did give some hints about a year ago to a german paper when he talked about the fact that there will be no physical print newspapers in 10 years.

In that conversation he said that people don't want to pay for content on the web, but they are willing to pay for it on tablets.

That can give us some hint that he is trying to do with newspapers what he did with the book industry.

He was very successful, keeping prices fairly high for digital books versus their print counterparts.

We could see him try and basically come up with a solution to the problem that is facing all of journalism right now, which is how do you do longform journalism with revenue that comes from digital ad sales which are not as rich as print ad sales.

Maybe that could change.

Right now it is not as rich, but when you think about how amazingly you can target these advertisements and tailor make them for the right audience, maybe they should be worth more.

That is something amazon does very well.

If he uses some of that technology to experiment with targeting readers, that could be incredibly powerful.

Our next guest, everyone, is the 10th largest shareholder.

This ceo is on the phone with us now.

Good as always to talk with you.

I would like to get your thoughts here on this deal.

It was a major surprise.

We have gotten to know don graham well over the years and visited with him in conference calls.

It came totally out of the blue, but it was good news.

I think it showed there was real value there.

Our analysts have valued the property at zero.

To determine 50 million dollars is good.

Your analysts valued the property at zero?

Right.

When we look at our market value of all the properties within the washington post, the newspaper itself had a zero value because it had not been making money.

As much as we love to the brand and the people and had met some of the editors and the publisher, there really was no value there.

Why were you long on it?

We thought the television properties were particularly valuable.

They have been doing so well with all the political advertising.

We think there is a future in there for-profit education.

We looked at the parts of the company that were very cheap.

There was a wonderful brand in the washington post newspaper.

We just thought you would not be able to sell it for nearly as much as they were able to.

Did he ever indicate to you that he would like to sell, that this was an opportunity he would be looking at aggressively at some point?

Rex he gave us -- he gave us no clue at all.

I had seen him at warned buffett's annual meeting which i do every year.

He played his cards very close to his best.

What does this tell you about the industry overall?

The fact that someone like him who has been such an innovator is willing to take the plunge and buy the newspaper assets of the washington post, does it mean that we may see more people from the internet and digital space coming into traditional print media in the coming months and years?

I think so.

You will see wealthy people buy papers because they want to own them, but i also keep -- see people that are excited about the potential because these newspapers have so much content . they are so valuable.

I do think people will realize there is a way to monetize it in the future.

Are you suggesting that this was truly a financial decision as opposed to say a vanity decision, as some have suggested?

I think this was a financial decision.

He looked at this very closely . we know warned buffett has been investing more and more in small-town newspapers because of the content.

You look at progress that has been made, to be able to get paid for folks subscribing over the web.

I think there really is a future here.

This is not just a vanity purchase.

What do you make of his decision to buy this personally with his own money as opposed to buying this with amazon's money and combining it with amazon?

I think the brands are not compatible.

It will be such a small blip on amazon's radar screen.

I think maybe he was concerned it would not get the attention or the recognition in the overall enterprise.

There'd be a lot more scrutiny.

Remember, this deal was done at 17 times profit for a newspaper deal which averages about four to five times profit.

At is a big price tag.

If you think about a public company doing such a rich deal, it would basically bring out the critics and question amazon's future strategy, basically.

We could see down the line, perhaps, we have had guests who have said maybe he will sell it to amazon down the line.

You are the fourth largest shareholder of meredith.

What is it that you see in these old media companies?

Two things.

I do think the content still matters and there'll be so many different ways to monetize the content through video and over the web and on tablets.

There are these large television properties that are extremely valuable.

The stock went up over 30% on that purchase.

There is a lot of value in tv.

How so?

Because it is -- it is the best way to reach a mass audience and to be able to do things.

If you want to show off a new car or things with extraordinary graphics and color, television is the best place to be able to showcase those things and then all the political advertising every two years, more and more campaigns through all the traditional fundraising as well as the super packs, etc.. more money is flowing into television . people that television would go the way of print media, but that has not been what has been happening.

It has been the opposite.

That is good news for us.

Always a pleasure to talk to.

Coming up, can disney and 21st century fox keep hitting profit home runs?

We will find out after the bell.

? time for chart attack.

They have a lot of that -- debt.

They went from short term maturities to lengthening out and buying long-term debt.

They drop the amount of short term maturities.

That is what it demonstrates with the lines which show how much longer-term debt the fed now holds.

To get out of this, they have to allow it to run off over a long.

Of time -- over a long period of time.

They have extracted so much long-term debt from the market.

When they stop taking that from the market, the market is shocked.

That is what it is worried about now.

The close is coming up erie it we will be right back.

? if you missed everything that happened, do not worry.

The only stock you need to know about, our top 10. the washington post up more than 4% now that jeff bezos is buying the newspaper.

He is betting he can apply his success to the struggling newspaper industry.

Stay tuned.

Cbs down nearly three percent today.

Its biggest decline.

The drugstore chain is lowering the top and to $3.96 a share from four dollars a share.

They're still going down.

They missed the consensus by about one penny.

Fossil, rallying 18% after the second quarter results beat estimates.

They had an 18% increase in profit as business surged in europe and asia.

Guidance came in below estimates, but the full-year estimates were in line.

Number seven, mgm resorts.

The largest casino operator posted a profit to beat analyst estimates.

Mgm reporting big gains in its nevada operations earlier this hour.

He struck an optimistic note saying things should continue to get better.

He sure did.

That is certainly good news for america and the markets.

The 20th century fox, down a fraction ahead of the second quarter earnings report.

Bank of america raising the stock price targets to $38 which may include accelerating buybacks and the modern family syndication.

Number five, jumping six percent.

Thanks to big european acquisition.

Molson coors expects jumps.

They are ratcheting up market spending so they expect weaker sales area they will also have to contend with the fact that -- it will also have to contend with the fact that corona is marketing brand and putting a lot of money behind that.

Number for its american eagle.

It cut its earnings forecasts and half.

Blaming cutting prices on clothing.

Dish network is up slightly, even though they posted a loss of $11 million in the second quarter.

The total numbers of subscribers declined.

Michael kors is up almost 4% after first quarter profits.

The company's strong profit growth reflecting luxury shoppers continued at the sites -- appetite for handbags and clothing.

Correct you know more about suits than i do, i think.

Handbags, definitely, clothing, definitely.

[closing bell] the number one stock of the day is disney.

It will announce its results with third quarter earnings after the bell with all eyes earning -- on earnings.

Stay tuned for disney's results coming up for yuan "street smart." -- coming up for you on "street smart." the snb had a loss of about 6% on tapering concerns.

President obama is in what was once the epicenter of the housing crisis.

Phoenix, arizona.

The president is calling for fannie mae and freddie mac to be replaced with a new government insurer.

What more can you tell us?

This is all part of the turning attention back to middle-class issues.

Until now, he has for the avoided wading into it.

It is politically difficult.

He is getting ready to start speaking in phoenix.

The thing is what to do with fannie mae and freddie mac, what to replace them with.

They guarantee half of all u.s. mortgages.

And he will argue in this speech that financing the nation's mortgages should come primarily from the private sector.

He will say that fannie and freddie will be -- should be fully wound down so that taxpayers are never again on the hook.

And yet, in their place, as you mentioned about the president wants to see a government mortgage reinsurance of -- a last resort backstop.

And only for it to be used, private capital would have to be wiped out.

The principles outlined mirror a senate bill introduced by bob corker.

Administration officials have been quietly working behind-the- scenes with them to craft this legislation.

We had bob corker on the show and he said in his perfect world he would get rid of backing altogether.

What do you expect the president will be saying specifically today?

He will also be renewing calls for congress to make it easier for homeowners who do not have the government-backed mortgages to refinance.

He will say it is important to do this when rates are low.

It had also home foreclosures because of job loss and to meet certain requirements, they should be able to get a federal housing administration mortgage.

He also taught that to the housing market, saying immigration reform will boost housing, because immigrants make up 40% of homeowners nationwide.

Why now the?

You you alluded to what corker was talking about and the legislation that he has proposed.

The housing market has strengthened with rates rising.

The lawmakers want to help homeowners refinance before they get locked out of those low rates.

In congress, where you have is on the senate side to my you have the legislation from corker and from warner.

On the house side, there is legislation that does not have the government in any way as a backstop.

This is a way for the president to try to get in and start shaping debate going forward.

The the -- thank you.

It is time for your roundup, where we bring you the top stories.

Let's get off with markets.

Stocks falling from record highs today.

It is all thanks to the taper.

And a disappointing earnings.

It also, trade data fuelling some worries about the fed the yet again.

All of this is affecting the markets today.

I hear that tapers sound like a worm that you get.

The the new do not want.

-- something you do not want.

And by that, you mean, that the fed will not buy as much in terms of the bond market but there is a perverse logic, because a lot of the numbers that we seek here are better than expected.

G.d.p., manufacturing, unemployment, or they reached new lows for unemployment since 2008. you should cheer that.

I am ok with tapered coming sooner than later.

Why aren't they?

Correct i don't know.

The what investors do every day, it depends on what they eat for breakfast.

The deficit was $1 trillion and the fed was buying $85 billion per month and the deficit has been cut in half.

That is where it is.

The bet -- the fed buys half as much.

Isn't that an equilibrium?

Did we really withdraw the stimulus and everything?

We have shuffled, is what you're saying.

Yes, and the amount of the debt is being reduced.

It is funny how you are saying that taper does not need to be doing what it is doing in order to get the effect in a real-world basis.

I don't think so.

I think the fed could taper without a shot.

Wouldn't that hurt public relations?

Now you are saying the issue.

After six weeks they spent time trying to put it back together.

They want their cake and eat it, too.

But they say one thing one day and another on another day to keep people guessing.

I don't think they've do that purposely.

-- that they do that purposely.

There are two issues.

What is the policy?

We are not sure.

And who is going to make it?

-- who is going to make it next year?

That is now a big deal.

70 stocks traded shares, closing in the red.

-- sonny hill's stocks closing in the red.

Apple ownership of the tv and music unit is integral for sony posies turnaround strategy.

-- bersani's turnaround strategy.

. for sony's turnaround strategy.

They talked about here -- and this is one of my favorite corporate words -- synergy.

They want to focus on that between entertainment, consumer electronics, etcetera and then we know this was coming back -- this was coming?

He is up against cultural difficulties with sonny, right?

And george clooney coming out and saying what he did.

He is very influential in the investor world.

It [laughter] all of the big brains are getting involved.

Brains is a curious choice of words.

Dan loeb is not the only one who is disappointed with what happened today.

Ibm is upset with the computer.

Forcing employees to take reduced pay as a cost-cutting measure.

Demand for servers and other hardware is slowing.

" they're trying to make sure to suffer, but there are mandating that some workers take a week off and it will not be paid.

If you were an employee for however many years, and forcing them to take a vacation and then expecting them to come back to that job, the the -- yes.

This was done more frequently with the auto industry.

You see slowing demand and you have to take measures.

Would rather take a week off without pay and have a job to come back to or be laid off entirely?

If i'm going to take a pay cut, i would want a week's vacation.

That is really what it is.

That is a good way of putting it.

German factory orders are up 3.8%, the most in eight months.

It is a promising sign for the region's biggest economy.

It is one month before the angela merkel faces reelection.

You spent a lot of time over there during the crisis.

It is not totally fixed, but what do you think?

I once wrote an optimistic book about europe.

It was my worst seller.

But recently, people have been sounding optimistic about the european economy.

Let me make the case.

The case if, merkel wins.

The constitutional court of germany comes back, and powers the european central date -- bank to begin buying debt.

And we get a shot of stimulus finally.

Because europeans are buying and not us.

Exactly.

Correct -- the ceo of cbs sent a letter calling the proposal to offer the channel a la carte nothing more than an attempt to muddy the waters.

He said he was surprised to see the open letter extending an olive branch.

They have not spoken in more than a week.

He called the communication of unexpected and unwelcome.

Negotiations have broken down.

The question is, will they resume in time?

Can you imagine how many people will not get their fall shows on cbs?

What are you talking about?

It is the most watched network.

Correct that -- that is right.

I cannot think of anything i watch on cbs.

Everything i watched it on netflix.

It is on itunes.

I am 40 years old, so if i'm the future -- what is coming?

Time warner cable he said it would offer.

Oligarch and cbs said that it insincere.

@ u.b.s. notes -- offer it all carts and cbs said that it was insincere.

Cbs wants to get paid for the digital content.

He figured out how to get people pay for content.

If we could just figure how to apply the same model, maybe we will get there.

May be.

Correct that is what the "washington post" deal is all about.

Learning what people read, so you know something about the user.

Now you have identified their interest.

Now you will sell to them.

That is 100% correct.

It we will get your first trade for tomorrow.

It disney earnings are moments away.

I find out how many stocks alone rangers filed up.

And the challenges of keeping print relevant in an on-line world.

Plus, i lost wallet found after 24 years.

Colorado farm stands and weird wall street.

Breaking news.

Disney beat on the earnings.

We will go to jail and ehrlichman in los angeles -- jon erlichman in los angeles.

Earnings per share for disney, $103 -- $1.03. the books like the top line numbers may have come in a little shy of estimates.

But we talked about the espn network and abc have been the drivers of revenue.

Year over year growth is fairly significant.

The parks and resort businesses also coming in with results on the revenue side higher than what wall street analyst estimates that i was looking at or.

The studio entertainment business, we have talked about movies, because of the lone ranger.

It $1.5 billion in revenue is down from last year, however they were talking about the fact that they got strong performance from iron man three.

On the lone ranger, they say the marketing costs were part of that.

Thank you.

When you think about all, you think steve jobs.

-- of apple, using steve jobs.

It turns out there was more behind the company than just one man.

John sculley was part of that and served for 10 years.

Welcome to "street smart", john.

Nice to be year.

-- be here.

Matthew modine is playing year.

Correct he is a terrific guy and we have stayed in touch with each other in the last year.

I have not seen the movie.

Steve wozniak has seen it and said it does not bear much with reality, but this is entertainment.

It is hollywood.

It what do you think he was trying to zero in on when he spent time with you?

I think he was trying to capture my personality.

I think ashton kutcher is trying to capture steve's. hopefully, it will come often an effective way.

You have said that -- you have been said to have a very good for management style.

How did you two differ?

My mission was to keep apple going to generate as much either cash as possible.

The apple tree had failed.

Apple two was getting very old.

The company did not have cash coming in.

And we needed three years before the mac was developed and making money.

The big blow up with devore about the future of steve's vision.

-- the future -- the big blow up between me and steve was never about his vision.

He wanted to catch -- cut the apple to.

I said that was crazy.

It all came to ahead and you were forced out.

-- and he was forced out.

You effectively fired him.

No, i did not.

The board went off and did an independent study about steve's position and came back and said they were withdrawn.

Steve was never fired.

And he was asked to step down as head of the division.

The board could have done it in another way.

I did not want to take over the company.

It was steve's a vision.

They could have figured are a way where we could have coexisted.

But i could not be ceo of a public company that was starting to lose money.

Do you think in some way, shape, or form, it actually helped steve dropped to become more age visionary?

-- steve's job to become more of a visionary?

When i came back to apple?

The the -- when he came back to apple?

I don't think it changed his vision.

He had all of the vision.

We were working on that phone in 1984 even though we could not build it.

It was about him maturing and becoming less material.

-- mercurial.

It correct what about the mission today?

-- what about the mission today?

That's tim cook hobbit?

Yet outstanding.

The couple is lucky to have him.

It the expectation is that apple is set up for some really great products to come out.

For example, they have a great opportunity.

It is speculation, but they have a great opportunity with where rebels.

With the iwatch.

What people have not focused on is the incredible value with itunes.

It has 560 million credit cards in information.

Imagine if you took that to iwatch and made it easy for people to do purchases.

You could hear leverage their best asset, which is an to and services.

What is your opinion of the film?

Steve wozniak said it was not much to do with anything he remembers happening.

But it was fun.

Coming up, head into the kitchen and grabbed the jimmy dean.

Later, jeff bezos on the "washington post." ? breaking news in the pharmaceutical sector.

Bolivia stearns has the headlines.

Correct a biotech company is upping their offer to buy a rival.

They're upping their offer from $120 trichet -- a share to $130 per share.

Onyx said the $120 per share were significantly undervalued.

More "street smart" after the break.

Amazon founder and ceo jeff bezos has put his money in strange places.

There was the company that wanted to send people into space.

Then there is a non-profit called the long now foundation.

This company's goal wants to build a clock that takes one to year forever.

-- that ticks once a year forever.

Maybe his purchase of the "washington post" is not that weird.

It is a reputable print brand and could be coming -- and it's coming at a time when print could be on the verge of extinction.

Will this be a whole new direction?

You have been around a print for many years.

First, your reaction to this deal done i did this surprise you?

Correct absolutely, more that the grahams' decided to sell than jeff bezos been interested in buying.

Why is that?

Correct the paper has been in the family for so long and the family has been so -- the paper has been in the family for so long in the family has been so closely identified with the paper.

It for jeff bezos, but he then innovator who had had an interest in reading, and interest in long form journalism for a while.

What do you think he can do of but this publication?

Correct all of the talk, of course, it's about local when it comes to newspapers.

In terms of print, that is where the revenue will still come from for a while.

What is exciting is that the "washington post" is one of a half dozen brands that could become a very strong digital product.

If you are in seoul, in saudi arabia, the "washington post" confirms everything you need to know about power in america.

And that is what is happening, you think?

The five or six brands, whether the journal, the "washington post" cannot the "the new york times" -- bloomberg -- thank you.

It that these will be recognizable brand of around the world?

I think so.

Jeff bezos is considered a veteran.

It has been only 20 years since he started amazon and he adds at least 20 years ahead of him.

Think of the innovation that could take place.

Correct -- here is an interview where he was just as surprised as you.

Take a listen.

I think it is good news.

It is the iq2 newspaper because it had not been making money.

-- is a real value to the newspaper because that had not been making money.

I think that is right.

The big one coming up is what the tribune company does with its newspapers.

It is clear that they're going to be a television company and they have papers that they will like to get rid of.

Think of bloomberg 's purchase of business as base week.

-- businessweek.

What has been the secret of bloomberg reinventing "businessweek"? that has been different.

You had the editor in chief pushing a run the world to get this product.

That gave us the opportunity with the weekly that no one else could do.

And so it is leveraging a platform?

Correct.

And by extension, is a the "washington post" more of an amazon platform?

Yes, but i think as jeff bezos pointed out, he bought this as an individual and i do not think he will dilute in any way the focus of amazon has a place where all kinds of people can get their message across.

And it has caused some people to question whether or not it is a vanity plate as opposed to making money.

Wealthy people will buy papers because they want to own them, but you also have people want to see this technology expertise and are excited about potential.

I think there really is a future year and is not just a vanity purchase.

An opportunity to make money?

I would go further and say that he is one of the least gain people you'll ever meet, jeff bezos.

-- the one of the least vain people you'll ever meet, jeff bezos.

He does offer -- operate a longer time horizon for most -- than what most public companies operate under.

Which is good news if you're thinking about changing and shipping in -- an industry and moving into a ditch or platform.

Do you think it will be completely digital box -- digital?

I think it will become a and sooner rather than later.

Ended the tablet that effectively enables that to occur?

It is a mechanism and by the mobil is where the future is.

It can be adjusted easily a smart phone as it is a tablet -- it can be just as easily a smartphone as it is at tablet.

And you see all a la carte programming?

That will be one model.

There are half a dozen brands that are strong enough that people will want to consume everything they offer.

It collects a pleasure having you on the show.

Coming up, the bull case for cbs.

We will tell you how cvs plans to profit from the affordable care act.

? collects a time for our next big trade.

Stop picking out on hildebrand's. it our next guest want none of it.

What is wrong with sausage and hot dogs?

Over the next 12 months for health shier brands, and you will see the is a significant deceleration for profits in the commodity cycle.

There are many moving parts.

What is going on behind scenes?

We are seeing a pretty good crop developing for summer corn and soybeans.

We are seeing the prices coming down.

Cosco down, which means you are not under as much pressure.

You can afford to grow your heard, so the animals can get older.

They are not slaughtered as fast, and that reduces the supply of pork available in a sausage.

Is that the logic?

Yes, and you can take advantage of that to raise possibility -- profitability.

What about demand?

The consumer side is still relatively weak for retail grocery in general.

We are hearing from consumers.

It are certainly difficult.

We are seeing larger inflation for at home prices going forward.

We surely are.

If you look at prices they were higher consistently a few years ago.

Why did they drop off the cliff?

I think going forward in fiscal 2014, it is the reflection of the protein costs in the past four-six weeks.

Explain that in plain english to the viewers.

It is a reversal of the past years commodity deflation.

But if the corn crop is looking good, you said that is because costs are going lower, not higher.

Yes, i'd uri general mills and your purchasing -- if you are general mills and you are purchasing corn, your stock.

But if you're hill sure, your purchasing higher-priced corn.

Bottom line, just don't buy the stock.

Cbs shares are still trading near an all-time high.

-- cvs shares are still trading near an all-time high.

We talk about the big winners and losers in obamacare.

Pharmaceuticals will come out on top.

These are businesses with a fixed cost, but a lot more volume coming soon and a lot more sales coming true.

What they're doing is starting an outreach program to train the pharmacists to teach the customers about the new plant available.

You will be able to walk into cbs -- cvs and find out for obamacare.

In other words, the exchange.

You can't find that at the cbs.

It -- that you can find that at the cvs.

Here is one reason why it does make sense for pharmacies to be a point of activation for obamacare.

The crux of the 50 million americans that do not have insurance, 55% of them filled a prescription last year.

The opportunity for us to get a pointed activation is to find them when they're painful cash for their prescription.

It is a good indicator that they do not have insurance.

It correct that is why it makes sense for them to help their customers navigate the new options.

Jakks, smart.

-- yaw, smart.

90% of dallas had a buy rating on the stock.

-- 90% of analysts have a buy rating on the stock.

I spoke to one and he thinks that obamacare will add about 1.5% in sales to its tv ads in the next year.

That is more than $1 billion and could translate into more it than 5¢ per earnings next year.

That is operating leverage.

Now that makes sense.

Correct and there are a few other bulls out there, too.

Yet, more than 90% of analysts.

Thank you.

You can go running down the street anytime you want.

Soon, you may be able to run with the bulls, too, right here in the usa ? it is time for weird wall street, where bazaar is business as usual.

Talking about pot, the newest vegetable.

One caller on a farmer may soon be selling it.

He is petitioning the mayor of boulder to put an marijuana stand next to the tomato stand.

Against the leaves look similar.

It is all fair game these days.

Almost.

I'd think we have to wait until january.

Apparently, starting in january, you can go into a liquor store that had a license provided by the city and state and as long as you provide your driver's license showing your 18 years or older, you can buy.

I am intrigued matt miller knows this much about how to buy marijuana and colorado.

I found it interesting.

I'm going to colorado's soon and i was wondering if i could just walk into a liquor store and buy marijuana.

I do not yet -- and you cannot yet.

But year after having medicinal need for it, right?

Fact that as a whole other racket.

-- that is a whole other racket.

Duking it gave no out fairly easily.

-- you can get a note verily -- a very easily.

I've got another one for you.

The phrase good samaritan have another meeting.

A man lost his wallet had a back 24 years after he lost it.

The georgia man received a phone call about his missing wallet and had it sent to a man in the mail.

It it still had the stuff that had been there all those years ago, a library card, the high- school id from 1987. is that unbelievable?

That is unbelievable.

That is a good samaritan.

I do not know what took so long, but at least he got it back.

Maybe it just got lost in the mail.

My favorite city in the world as pamplona, spain, and that is where they do the running of the bulls.

It could be coming to a city near you.

Organizers are planning several u.s. cities.

The great bull run is inspired by the running of the bulls in pamplona.

It is set to kick off august 24th in richmond, virginia.

They are really doing this?

I cannot imagine this being successful.

There is a history and tradition in pamplona.

There is bullfighting.

I'm with you.

All right, tomorrow, a test lever earnings actions.

We will see you then.

? it is time for bloomberg on the market.

All three major u.s. indices ending the day in the red kamal down more than half a percent.

-- in the red, all down more than half a percent.

We do want to highlights of after the bell earnings.

Let's start with disney.

It beat analysts' estimates.

Reported record gains.

And 21st century fox reported its first earnings report since splitting from newscorp.

It got its biggest lift from its cable properties.

It is said to release a 24-hour sports channel later this year.

Mastercard and visa are going beyond headlines tuesday how a renewal of -- to see how renewal fees on the the debit cards will impact finances.

It thank you for joining us.

Last week, a federal judge ruled it was inappropriate the inflating the amount banks can -- inappropriate the inflating the amount banks could charge.

Is this a victory for retailers?

This could be perceived to be a victory for the retailers.

But the the ruling suggests that the federal reserve in its implementation, and relieve the interpretation of the law, which is part of dodd-frank, did not go far enough.

There are two components of the law.

One of them is the interchange rates.

Merchants pay every time we scored a card at a terminal.

They believe those fees did not come down enough.

They are saying it did not come down enough and should have been more.

Itis that were to occur, that could help retailers on a per transaction basis.

The other implication is called non exclusivity.

The center that is one of the main sponsors of the law was trying to get more compensation in the industry.

He was suggesting that these and mastercard have too much power.

He hopes that one day we have to see multiple brands all over the card, not only on the back, but also the front.

I could be pain for dinner with a car that is a visa and mastercard and a discovery.

What will be impacted by this ruling?

Important implications for visa and mastercard, given market share questions.

Right now, the the marron 75% to 80% of the signature credit card debt we are talking.

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

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