War Games on Wall Street: Taking Stock (07/18)

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July 18 (Bloomberg) -- On today's "Taking Stock," Pimm Fox helps you to think like a professional investor and discover the next "big thing." (Source: Bloomberg)

This is "taking stock" for thursday, july 18th, 2013. in this hour, how you prevent that things are actually hurt in you?

We can show you how to protect your health, you're well, and your sanity in a world that is replete with threats.

And we were sure you banking information that will sober, and perhaps, scare you.

And why hospitals will not prescribe pep.

And at with the year will speak on the senate immigration bill.

-- ed lazear will speak on the senate immigration bill.

First, let's take stock of the markets.

A quick look at the fixed income market.

Before a closer look at today's individual companies making headlines, let's go to carol masser.

Google stock is taking a bit of a beating in after-hours trading.

The tech giant reported sales that shot -- fell short of analyst estimates.

Moving along to microsoft, that company's profits miss projections as there has been shrinking demand for pc's. the company also wrote down the value of unsold inventory.

And then you have chipotle topping analysts' estimates.

The restaurant chain reduced traffic and sales.

Thank you.

U.s. treasury secretary jack hulu is on route 2 moc -- -- is in route to moscow.

We are joined by peter cook for more.

Jack lew is about to engage in some diplomacy.

What does that mean?

Griffey is about to sit down with his g-20 counterpart for something they may not here -- want to hear around the table.

That is, the u.s. is doing pretty well economically and it is time for the rest of the world, particularly europeans, to step up with the growth.

Europe does need to look at what it can do to get growth moving again.

The world needs europe to grow.

And we have been making that case in the emerging economies , china in particular, that they need to go through internal reforms to get their economy moving.

These have been friendly conversations and we have a common interest in a world where there is growth so that we can have the benefits within our borders and across our borders to seek a job creation.

Those are the conversations i'm going to have the g-20 meetings.

For the steps they would like to see that they're not doing in europe now?

It combination of fiscal policy -- in the united states.

At a combination of fiscal policy that was decisive to up getting the economy moving.

We have policies that were very decisive.

Four years ago, the world looked at the united states in the financial crisis and there was a lot of explaining to do as to how that has happened.

Four years later, we are growing again, not as fast as we would like, but steadily in the right direction.

The core of our economy is recovering.

The resilience of our economy is clear.

We still have more work to do.

We are in a place now where the example of the united states is actually a good one.

We are in a position of strength with unemployment.

We're still at 7.6% growth.

Growth may be under 1% for the second quarter.

If you look at the u.s. economy, i never miss an opportunity to say that we're focused on people looking for work in this country, making sure they have the opportunity to find work.

The fact that they have made progress does not mean that we are all the way there.

Look at the core economy.

It is growing at 2% right now.

It might be growing a little faster at the end of the year.

This is a year with tremendous headwinds.

We have a payroll tax cut that went away.

We have spending cuts take effect.

Notwithstanding those very strong headwinds from government policies, some intentional and some unintentional, the core economy is growing at 2%. if you look at europe, 2% is far beyond their expectations.

And the headwinds will not be there next year, so we should be doing better as we get into next year.

Part of my conversation with treasury secretary jack lew on his way to moscow.

One thing he will not be doing is negotiating the fate of edward snowed in.

He tells me the position of the u.s. on edward snowden is clear.

It is not on his agenda for this trip.

For more on that, tune into "bottom line" this sunday.

Thank you.

Google reported its results after the close of trading today.

I would like to bring in jon ehrlichman, our senior west coast correspondent, and from chicago . a -- and from chicago, are other guest.

What did google report?

The revenue for the first quarter was big, north of $11 billion.

This is an economy that continues to grow at -- a company that continues to grow at a strong rate.

However, the earnings per share came in below expectations.

That is one reason the stock is down after hours.

We noted that the cost per quake, which is a measure of what advertisers are paying every time you click on an ad, the percentage was down year over year.

It was explained in part in the conference call as the shift to mobil advertisements, some of which are not generating the same amount per click as the traditional desktop search.

One of the things google has been doing is shifting a lot of its clients' advertising campaigns to -- away from the traditional desktop campaign to the world of mobile.

In a lot of weight, google is seeing a lot of benefits from mobile.

And this might be a side story.

Google prices are up about 30% this year.

And the shares in after-hours are trading down four 0.5%. bill -- are down 4.5%. bill, our margins going to be affected by the mobile platform?

I think you're out huge threat for existing internet players that are trying to figure out how to monetize on mobile.

And you have new companies that are mobile first that are building great experiences.

It is a huge opportunity for people to build in a great mobile first experiences.

Does this mean there will be more deals, more acquisitions on the part of companies, such as google?

Particularly for google, i think there is a real commerce aspect.

We do not have as much realistic on the device and you're not going to.

You cannot show as many ads.

Demonstrating more effective is for that is probably the route you have to think about.

I know they're thinking of going to any commerce approach for things like google wallet and things like that.

I think that is how you demonstrate greater effectiveness on the mobile advice -- device.

Given that the android operating system is owned and run by google, but they're having trouble monetizing the on-line payments world.

Google might take issue with that.

The android business is one that a reference on their conference call as one of the champion businesses for them.

And one that they never would have known initially would become what it has.

Larry gage, the ceo of google, likes to take these earnings calls as an opportunity to talk big picture, the fact that this company will keep spending in a big way on things if things is important -- are important, which do not necessarily make sense today, but will make a lot of sense a few years from now.

He likes to use the word focus to make people, at least investors, are not overly concerned at what they're spending in their big areas.

Google is willing to spend now to continue to get it right.

And to your point, they're not getting something right just yet, and to keep figuring it out because there are more and more people on line than ever before.

Increased competition between the eyes and android and the phones that use that operating system.

Which is the preferred platform for users as well as developers right now?

I think there is a big -- a bit of a shift under way.

Ios, from a commerce perspective right now, two-thirds of commerce is on the ios.

But android is very quickly out shipping the android -- the iphone.

The reason you have more androids shipping that iphones, android devices tend to be lower and devices.

Over time, they also become primary computing devices.

75% of commerce on mobile is happening on ios.

Bill, thank you for joining us from chicago.

And our thanks to jon erlichman.

Just ahead, money in the bank is not as safe as you think.

What happens when a computer hacker goes after a financial institution.

That is next.

? a bad day at round rock.

Today was supposed to be the day that dell shareholders not to vote on a buyout.

The vote did not happen.

Cristina alesci is in round rock, texas, the side of the company's headquarters.

What is the latest development on this oppose the dell deal?

The latest development is that michael dell and silver lake are not seeking additional financing from lenders.

That was probably a key component if they are, indeed, going to increase their bid.

Earlier today the special committee decided to delay their vote.

Michael dell did not have the support of shareholders.

And many are holding out for a bomb and the price.

The fact that they did not seek additional -- a bump in the price.

The fact that they did not seek additional financing is an indication that may be going away.

Maybe there is a thing called schmuck insurance to guarantee shareholders a bit of the upside.

The fact is, shareholders will vote this thing down a matter what.

They're not looking for an extra 50¢. they think there's a lot of upside in the company.

Take a listen to what one of them said earlier.

Michael dell is not trying to be nice and say, i'm going to help you shareholders out and buy this company.

He knows that it will go from $13.65 a share to $25 a share in a few years.

I want to keep this public and do those changes in the next few years.

Obviously, there will be a lot of litigation out of this deal, just the way it was handled.

Even the fact of adjourning the note today -- the vote today will solicit some scrutiny from the court.

We will have to tell you how this all plays out.

Cristina alesci, reporting from round rock, texas, the site of the headquarters of del.

Let's campaign -- continue with computers, technology and online threats.

There was a drill today called quantum dawn to and it showed how well banks are prepared for cyber attacks.

We are joined by the founder of a popular hiking conference.

Used to oversee the marine corps cyber warfare unit.

And also joining me is the managing director of security compass, a company that helps financial institutions battle cyber attacks.

I want to start with you.

You cannot tell me any of the banks they work for, because then you have to kill me, right?

That is right.

What we do with high confidence, so i cannot really talk about the banks.

But what we are doing today is unprecedented.

Unprecedented in what way?

It is the second time they have had this kind of mock attack.

Right, it is larger than the first.

It is done in a way that it is distributed.

One of the key things about quantum bond 1, they were experiencing certain attacks and experiencing these things together.

Now the idea is that you are all in your own office and your own building.

If you have a similar type of attack, how do you collaborate with one another?

Intel, conference calls and making sure your pc need together while not -- you know, conference calls and making sure you are piecing it together from not sitting in the same room.

How you do -- a deal with these attacks?

Rex -- i would say that the financial industry in general is largely unprepared for a large scale type of attack.

If you look at the financial industry itself, it is resonant with this new quantum dawn 2. you had over double the numbers.

Banks are scared of what could happen and they're protecting against it.

David, what kind of grade would you give the major banks in the u.s. for cyber security?

If i had to give a break right now for the financial institutions as a collective, for capability and retinas, definitely an f. do you agree?

I would agree.

-- i would agree.

We're focusing on wednesday as a threat at a time.

What would be an example of something like this?

The threat of the year last year was distributor non service.

When a bank is just getting pummeled with requests that are unresolved and there is downtime in the on-line services.

These are the kinds of services that a retail.

-- retail client would experience.

In my experience that the banking it down friday, he may not be able to log in.

Those are the types of disruptions that they're trying to cause.

Is there a solution other than hitting them back every time it happens the experts at the areas.

-- it happens?

I think there is.

Security is taken seriously to protect our information, and electra property, or our financial data to consumers -- intellectual property, or our financial data to consumers.

Until you make security an integral part of the business and account for that risk, you will see these small-scale attacks have a major hindrance.

And it is just one of several hundred that a bank or financial institution can experience.

And we're just seeing the tip of the iceberg when it comes to the top -- the amount of attacks that are out there.

We are going to discuss more about cyber attacks and how to prevent your wealth from disappearing into the ether.

? this is "taking stock" on bloomberg.

I'm pimm fox.

Quantum dawn 2 to place on wall street today.

It is about cyber attacks.

I'm joined by my guests in chicago and here in new york.

What can't they do to prevent attacks -- what can they do to prevent attacks from hurting their own bank accounts?

Eni user can take traditional precautions to make sure your password are secure.

These are basic things that a lot of times are not being followed.

And keeping track of how many funds you have and one count versus another.

The onus will be on the company's to make sure they have the controls to protect you.

And making sure that their systems are resilient to the types of attacks we are seeing.

David kennedy, who are the attackers that are trying to break into these banks and is there something in the complexity that aid them getting in?

You have your various kinds of hackers pattern you have this three hackers and then the organized crime and then you have those to embed themselves in the u.s. economy.

With all three, they're getting into our critical infrastructure and causing amok.

These things cannot figure out how to stop attacks from all these different attackers.

Thank you, gentlemen.

It is 26 minutes past the hour.

The s&p 500 today moving higher.

Up by eight points, 1689 pin the dow jones a gain of 78. the nasdaq was higher by one point.

Sales of aceegene are down today after more people died using the product than those who were given therapy.

? this is "taking stock" on bloomberg.

I'm pimm fox.

Chipotle reported earnings at the end of close today.

It topped analysts' estimates in earnings and it fails.

-- its sales.

Carol masser joins us with more on the company and its strategy.

We look at the whole company philosophy.

It is all about food integrity.

That is what the company lives by, the key executives live by, and you spend some time with them like i did, it is all very clear.

Chipotle is known for serving fast, quality, mexican food.

Making a tv show?

We are creating a series that we have called armed and dangerous.

It is about a likable, but misguided, a group of people whose job is to spin the most egregious aspects of industrial agriculture in a positive way.

It is all part of the companies and traditional marketing player.

We don't do the same kind of advertising everybody else does.

If we were in a typical advertising campaign, it would be about a sale for a limited time only.

We would -- we do not do that.

We have to find other ways to tell our story.

In targa -- in stark contrast to its competitors compaq -- its competitors, they opened 20 years ago.

We find they opened the restaurant in an airport.

Part of the stipulation is that we are open during the breakfast.

And we have some items that we spice up and that as part of the breakfast burrito or tacos.

It is delicious.

Can you expand that?

We will see how it goes.

Right now, we will continue to serve it there.

It is a possibility.

One new item that is on the menu, sofritas.

Jiabao they began selling it s begin dish in its california stores.

There were a lot of vegetarians asking for this kind of thing.

But will there be enough to bring in new customers?

The most important marketing that we do today and in the past is what you'd do in each restaurant.

Do you love what you eat?

I mentioned food with integrity.

And you just mentioned manti moran talking about the experience in the restaurant.

They care about where the food is coming from.

They wanted to be natural, organic, and they want the animals kept in a good way.

They really care about it being healthy food for their customers.

I was going to say, grass fed, all organic tofu.

The free range tofu, perhaps.


They own all of their restaurants.

There are no franchises because they want to maintain the quality of the food.


And same-store sales are up 5.5%. and that is a significant number because for the first quarter, they had been seen sales coming down.

They have also been talking about maybe not having to raise prices.

This is something people have been pushing them to do, but maybe they do not need to do it.

Also a programming note, remember to watch tonight on bloomberg tv "inside chipotle" tonight at 9:00 p.m. eastern as carol masser takes you in side the restaurant chain.

Shares of morgan stanley are at their highest price in more than two years today.

The session was up four 0.3%. the move came after estimates topped -- after revenues topped estimates.

Detroit became the largest u.s. city to file for bankruptcy.

It is seeking court protection from creditors.

It has seen its population slipped to 707,000, is 7% slide since 2010. and tonight on "bottom line" we will look at our business investment in south africa helped to end apartheid for congresswoman maxine waters.

She was won and who in -- a move pushed pension funds to invest in south africa in the 1980's. thanks very much, mark crumpton.

Yesterday, demonstrators from the gay rights group act up's took to the streets in 100 degree weather in new york to protest outside one of the world's largest hospitals.

I'm joined now by the assistant health commissioner for new york city, as well as carol masser.

Can you explain what this protest was outside mount sinai hospital?

What was it about?

There was at a gay man who had an exposure around the fourth of july weekend who presented to the emergency department.

Exposure of what?

High risk exposure for hiv.

He was asking for a post exposure prophylactics.

That is when you take a 28-day course of hiv medication to prevent yourself from getting infected.

And the mount sinai d.r. sa said it did not exist.

It was not until act of bought involved that this man was finally given treatment.

Delay is a big issue because you have to be given this treatment within 72 hours to prevent infection.

Lie with the hospital said the therapy does not exist?

It that is unclear to me.

These are cdc recommendations from 2005 that if you have such a high risk exposure you should be treated.

And it is concerning because if you think about it, where are you going to go after this kind of exposure?

You go to the emergency room or urging care or your primary care doctor and if these people do not know about post exposure prophylactics, that is a problem.

The the thing about care versus after care, and seems to me that you would want people to have it.

It could prevent the costs going up later and treatment being much more serious.

A lot of insurance companies to actually cover the the most exposure prophylactics.

It is about $600 to $800. not to pay out of pocket.

-- you have to pay out of pocket.

And there is a center that provides this for free, using grants that we received.

Is it possible that whoever was in the rear emergency room was not necessarily trained or did not -- whoever was in the emergency room was not necessarily trained or did not have the information?

I don't think it was a malicious event.

-- i don't think it was a malicious event.

I think it speaks to the need for training.

Last summer, the fda also approved pre-exposure prophylaxis.

Before you have the high-risk sexual encounter or whatever it is.

It is sort of like the birth control pill.

You take birth control pill every day to prevent pregnancy.

And with pre-exposure prophylaxis, you take it every day to prevent hiv infection.

It is very controversial because people ask questions like it is -- whether it is expensive and what its effects are and whether it will increase high risk activity.

If you are trying to prevent infection and opportunistic disease, which is the severe disease you can get if you have aids, you're definitely preventing costs.

But it is not clear whether they have done formal cost effectiveness studies with pre- exposure prophylaxis.

Could you give us an update on what is going on with the arthrocare act?

Rex as you may have heard, the house again voted to repeal the delay of segments of the individual mandate and it for your mandate.

The employer mandate, the obama administration had already said they were going to be delaying by a year.

The individual mandate is very unlikely -- it is unlikely the senate will pass a delay in that mandate.

As an example, insurance premiums in new york state might decline as much as 50%, right?

But it's very contingent on having the individual mandate.

If you do not have the individual mandate, but insurance companies are not allowed to deny coverage on a basis of pre-existing conditions, you actually drive up health insurance premiums.

I want to thank you.

Coming up, we are speaking ed lazear edabout how congress can make reform a reality.

? this is "taking stock" on bloomberg.

The u.s. house is dragging its feet when it comes to taking on the senate passed immigration reform bill.

Some lawmakers feel that legislation could completely fall by the wayside.

Our next guest says the house should fix the flaws and get it to president obama's desk.

I'm joined now by ed lazear, chairman of the council of economic advisers for george w. bush.

Explain exactly where the immigration bill is right now in congress.

The house is looking at it right now and they are thinking about passing it, or dealing with in totality.

But what is more likely is that they will pick it apart and perhaps, cent pieces back to the senate.

There are many good -- send pieces back to the senate.

There are many good parts of the senate bill.

It is a step in the right direction.

We tend to have immigration right now based on primarily family connection.

Nothing wrong with that.

I think reunification is an important goal.

But many people want to play for our team and the question is whether we have a system of getting the best individuals coming into this country, because we have the ability to do that.

The senate bill at least take a step in the right direction.

Some things need to be repaired, but it is basically a step in the right direction.

And the debate also focuses on illegal immigration, preventing illegal immigration in the u.s. as well as encouraging, as you describe it, the kind of immigration we would like to see.

I wonder if you could give us the kind of balance that exists.

Right now, the primary incentive for illegal immigration is there are incentives to come into the u.s. we looked at the differences in wages, skilled and unskilled, coming across the border and moving from, let's say, mexico to the united states in agriculture.

The difference in the wage they could get with something like $10,000 a year.

Those are strong incentives.

Essentially, what we need to do to stem the tide on illegal immigration is to make sure we remove the incentives.

The easiest way to do that is to have employer checks.

Border security, although important, is not going to do the job because almost half, and perhaps more, after the legislation would come in by overstaying their visas.

You could have a fence two hundred feet high and if people come in on a visa and overstay, that will not solve the problem.

The only way to solve the problem is to have employer verification programs.

Ed lazear, what needs to happen in the house to make this a reality?

Who needs to change their mind?

What the house needs to do is to focus on those things that are most important to the american economy.

And that means, primarily moving even in -- even more in the direction of their approach.

Allowing for family reunification and a merit based immigration, even a points system allowing people to pay a fee to come into the country when they evaluate sufficiently high the.

But primarily trying to emphasize that the labor market in general should determine who gets to come into the united states.

If the house recognizes that, and this is the viewpoint of many a may be opposed, if they recognize that then they should be able to support this legislation.

What role did the members play in this debate in ongoing legislation?

-- what role do employers play in this debate in ongoing legislation?

But employers need to make clear that immigrants are a valuable resource to that and the growth of the economy depends not only on growing our own, but bringing people in from abroad.

We get a tremendous amount of technology and human capital from people who were not necessarily raised in the u.s., but very interesting coming year.

They become very good citizens.

They're productive citizens.

Not only do they help themselves, but there are significant spillovers to the rest of the economy.

If employers push that and make that clear to their representatives in congress, that would be helpful.

Thank you for joining gas, ed lazear, from hoover institute at stanford university.

Coming next, will look at what wall street has on its agenda for tomorrow.

I will bring a carol masser for the bloomberg brief report.

Happening in moscow, the group of governors and finance ministers in the g-20 will be meeting.

They will discuss inflation policies and the effect of the global stimulus program.

Also tomorrow in california, a federal court judge holding a hearing on the final toyota billion dollars settlement.

We will also get earnings from general electric and more.

For more, go to bloomberg.com.

We have covered concerns in banking as well as health care.

Next, we will get a little bit of a state.

We will with you a way to where the wealthy gold -- we will with you away to where the wealthy go for the jury's camping.

? this is "taking stock" on bloomberg.

I'm pimm fox.

The dog days of summer are here.

We want cool spots, cocktails, and maybe some watches.

Of course, you got to be able to afford them.

Here's a report on just how much camping has changed.

Joining me now, and of rosenblum.

There are lot of threats in the world.

The idea is to prevent yourself from going crazy world dealing with a lot of the threats.

One way to do this is glamping.

What does that mean?

It is a luxury campaign.

It is people who like the outdoors, hiking, fishing, but they do not necessarily want to stay in a tent.

There are resorts that are better than a tent, but kind of campaign.

Correct there is one in colorado?

Yes, presto ranch , colorado.

It has a farmhouse in the middle of it.

That is where the dinner is served and you go and have a communal dinner.

They use local ingredients from the ranch.

And during the day you can hike and fish and from the walkie wilderness.

How much does it cost?

I think it is about $700 per night.

It depends on what kind of tent or yurt you are getting.

Do you get the but their service, too?

That is different.

That is at a resort in montana.

Let's say, you want some s 'mores.

You just contact the brother and he brings you all of your ingredients.

And how much is that?

Cracks about $1,200 per night.

There are two in montana, right?

Rex vf, another called mont -- rock creek.

If you're interested in horseback riding, you can go there with your family and you can learn how to herd cattle.

I think that is the most expensive.

But then you get typed in at night.

The tent is heated and you have a bathroom and egyptian cotton sheets.

And there are different levels even if you're a beginner.

And you can call someone and have a drink delivered to your tent.

I'm sure you can, yes.

There are drinks have been worthy of attention this summer?


And there are a lead people drinking them, of course.

Well, ceo types, exactly.

There is one called as strawberry/. it is a british drink made with hendrix gin and a model -- and they muddle fresh strawberries into the gym.

And there are mint leaves as well.

Another one is called the pan schupp.

. pimm's cup.

It is also a british drink.

And they mix that with ginger beer and fruit.

It is very refreshing.

Have you have one?

I have had that.

I have my own little recipe.

We're also featuring some very high end men's diving watches.

All of these different fashion companies are coming out with a diving watches.

You can technically go scuba diving with them, but they're very expensive.

Harry winston ocean divert as well as a leave baton -- if louis vuitton.

You do not necessarily just have to wear them to the beach.

They are nice enough to wear to the office.

You can find all of this in the latest edition of bloomberg business the space week -- businessweek as well as online.

The dow jones industrial average higher today as well as the s&p 500. ?

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


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