tv First Up With Angie Lau Bloomberg May 12, 2015 7:00pm-8:01pm EDT
first thing this morning and asia, to new zealand where we see a quarter of 1% gain. from jedome remarks wheeler on the country's financial stability report saying they plan to enact lending curbs to counteract housing prices. where counting down to the opens in australia, japan, and korea. in japan, this was the view yesterday. check out chicago pointing to a lower open after wall street closed in the red u overnight. the yen is weakening right now. in new york on the news that verizon is making a $4.5 billion takeover. the deal works out at $50 a share.
we have brian joining us from san francisco. brian, how will this help verizon? an interesting deal. there is a lot of surprise in the u.s. when you think about aol, you think about the huffington post and all of these cool brands, even the dialogue business. it is about the quiet building alo has been doing around advertising technology. they are getting some cool, cutting edge stuff that helps place ads all over mobile devices and verizon can use that ways togy in a lot of help match that stuff together and hopefully drive new sources of revenue. angie: how does this deal changed the mobile advertising landscape? brian: that is the big question. verizon is huge. more than 120 $5 million in annual revenue. now, they are pushing themselves
to direct competition with google. we're going to have to see how this shakes out. has been a ways, it google and facebook world in the united states and with verizon getting into this, we have to see if they have to new competition. i think a lot of people would love to have a third player. we will see. angie: really interesting. that deal worth $4.5 billion. brian, thanks for that. over to new york where we will talk about u.s. justice department wanting the parent companies of several global banks to admit criminal guilt over rigging foreign-exchange markets. we have been tracking all the latest developments. gregg, why is it significant the banks are asked to plea guilty at the holding company level? has: the justice department
been criticized for years as being too soft in its reaction to the financial crisis and it has been extracting guilty pleas last year. now with this come it is going to get guilty pleas from two major u.s. banks -- citicorp and j.p. morgan chase. at the holding company level. and take thesece law seriously. angie: a real move toward accountability as well. the justice department may scrap be no prosecution deal. greg: this is another sign the justice department is responding to the perception they haven't gone very hard on global banks for past misbehavior. case, with ubs coming ubs cooperated and helped the this program but they
struck a good deal a few years ago, a nonprosecution agreement. the justice department has been cycling -- signaling it might carry over these old agreements if these banks continue to misbehave. that continues to be the case. we are reporting the justice department will likely pair up that nonprosecution agreement. it is all about overall behavior and not just per incidents. morgan chase,j.p. if this happens, what did be a first for ubs banks -- would be a first for u.s. banks? a strange way, it might provide some benefits to the banks even of the top executives will not like the fact it will be a guilty glee at the holding
company level. it could ease some regulatory burdens that would fall on the guilty plea at an operating company level. this change the ethics investigation? will it continue to go forward? this is the first wave of major banks the justice department is dealing with. it will not be the last although it is clearly winding down. it is not in the growth phase. this is a significant endpoint. the state banking regulator conducting its own probe. the probe in general is starting to wind down. angie: thank you for detailing that. on all oft more today's top stories at our new digital destination. bloomberg business bringing together the best of bloomberg news and new digital content.
also on bloomberg.com, china's push for reserve currency status. plus, will teslas new battery be the biggest rollout ever for a new product category? we crunch the numbers on bloomberg.com. we may see more weight cuts in india this year. theumer prices rose at slowest pace this year in april, up 4.8 percent as factory output came in below estimates. continuing to tr to boost capital by selling a $8ond stake for up to tw billion. they say the proceeds will be used to promote future expansions. a crisis of confidence
following the collapse of oil prices. gloves and berg said they're acting against the best interest of the mining industry and need a better understanding of supply and demand. following mining profits, the australian government is facing a double when he. -- whammy. we have paul allen for the budget. a surplus really relies on a fairmont of optimism, doesn't it? paul: he has been very optimistic over the last 24 hours and he unveiled a smaller than expected deficit.
over 35.1 billion australian been forecasted in advance continues to shrink over the coming years to 14 billion and just 6 billion in 2018. it does rely on a fair degree of optimism. that would require trend growth. currently, we have below trend growth. we're talking 3.5% gdp growth. 2007 was the peak of the mining boom. our debt continues to rise. 2017.l be at 18% gdp by it is pretty bad by australian standards. we have not been at that level since the last recession more than 20 years ago. when i spoke to joe last, he assured me the credit rating was safe. he is optimistic and upbeat.
here's what he had to say. >> we see a balance and the australian economy from mining construction to mining production being carefully managed. the non-mining side of the economy, which is 90% of the australian company, is getting a lift out of this budget and we see in numerous opportunities for new growth and exports into asia. budget --t is this was this budget more about rescuing the government politically then fiscally? : the buildings behind me unsurpassed when it comes to gossip and rumor about politics. doing the rounds this morning is did we just see an election budget? last year's budget was a complete calamity. it was unpopular among coalition entities.
this time around, we see something quite different. it is hard to imagine too much of this getting rejected by the senate and of course, the government doesn't control the senate so it couldn't but forward anything too controversial. that begs the question of how the government controlled the senate, what kind of edge it would we have seen? politicians hate dealing in hypotheticals, especially when with uncomfortable inferences about the political motivation. joe told me this is not about the government, not about him, this is about what is best for australia. one cannot help but feel the country is being softened for an election. angie: thank you so much for that. we will hear more from joe hockey and more on the australian budget a little later in the show. get a full interview with joe in around 30 minutes. coming up next, two weeks after
angie: just two weeks after the worst earthquake in its history, nepal has been hit by another powerful tremor. the latest shock killed dozens and injured more than 1000. tuesday's seven point three magnitude quake brought down buildings and triggered landslides, including this one sewn by a red cross worker. the april 25 tremor killed more than 8000 people and nepal since reconstruction will cost at least $10 billion, half of gdp. the refugee crisis in southeast asia's worsening with malaysia joining indonesia in saying it w boatloads back out
to sea unless they are actually sinking. leaky wooden vessels carrying 1600 people have reached land in the past week. human rights groups say as many as 6000 more people are stranded at sea. >> the situation now requires a regional solution. it is no longer possible to say this is any one country's but thailand, malaysia, indonesia need to come together and have their navies go out and rescue these people and they need to push very hard on the government and the right to abusive policies. criticizeding has the head of the philippines military. the chain is claimed in full by china and in part by vietnam and malaysia.
they will construct a naval base on a neighboring island. the chinese foreign ministry says the general's visit proves the philippines are a rule violator and a troublemaker. beijing claims nearly all of the south china sea, richard natural resources. how's do a quick recap of markets closed today. u.s. stocks extended at the global retreat. hit the 1%.dustrial nasdaq selling off as well. let's get a closer look with patrick. he is joining us from new york. it looks like treasuries stabilized but then it was equities turn for a bit of a route. patrick: i think he will see a continuation of choppy markets. q1 saw a number of headwinds for the u.s. economy. the strong dollar hurting exports, the week oil price
ex, and the consumer being reluctant. i think we will see an improvement. but, the market is going to look for some evidence of that. there were some good rebounds in the second and third quarter. evidence is not as clear as it was last year. i think people are going to want to see that evidence and want to see it in the economy and because earnings were not so good in the first quarter either. angie: let's break down these headwinds. the first is strong u.s. dollar. we get that. lower oil prices. we get that also. doesn't lower oil prices also put more dollars in the pocket for the americans? why are they spending?
patrick: it does but the inclination was to save rather than spend the windfall. maybe they are concerned about the employment outlook, which is one reason the good jobs numbers last week a reassuring. the one really consistent contributing for the last several years to u.s. gdp growth has been concepción -- consumption. it has been a very steady contributor and it hasn't been from real leveraging, it hasn't, from wage growth, it has come from expanding employment. to see employment continue to expand, not only is that a sign out fairly resilient growth, but it is also a driver of growth. angie: what do you make of the comments coming out of san fomcisco saying that every meeting is on the table for a
rate increase? once to i think the fed get away from zero and i think they want to do it because it gives them more flexibility and i think they want to do it because they want to see whether they can raise rates. there is a lot of excess liquidity in the banking system in the form of reserves. they want to see whether their tools work. that is very different from saying the fed is on track for consistent rate increases. i think the fed will be very patient even if they raise rates by 25 basis points in june, i don't see that as an indicator they are on track to consistently raise rates unless we see evidence of inflation above 2%. angie: we believe it there. thank you so much for joining us. samsung has big plans to connect our daily lives and appliances to the internet.
things. >> it is not really about the technology -- it goes through certain transitions. withphone has been running apps. the smart machines are the next big thing and we believe it'll make our lives better by having these things available. scarlet: how big do you think the business will be? >> it depends on the numbers. i think the bigger opportunity is not a hardware but the software and services that will enable these things. scarlet: smartphone sales accounted for 76% of profit a year ago. now it is less than 50%. why is that happening? what trends do you see? >> we had some competition we had to deal with from the low end.
market ine particular. as well in the high end we are dealing with other competitors. number units,at it is a big business. scarlet: number one in the market has changed magically in the last year. >> you have to make great products so you can recover. we announced our next generation to recover. scarlet: where'd you see the most competition? cellphoneow end makers? how do you take them on? there are different players playing in different places. we are in our own brand and our position is to drive the marketplace. i think we have different
competitors and markets. scarlet: where'd you see the market moving when it comes to what people want in their phones and how much they want to pay? you have a lot of new devices. do people really want those? you -- we are .sing the same chips this is the chip. it is the size of a ladybug. it is so tiny but if you want to enable new applications, you need to have low power that can go on for days and you need to have a smart side and a performance and connectivity. these are things we announced today. scarlet: there's a question about leadership at samsung right now. your chairman suffered a major health incident.
who is running samsung now? who is leading the vision? >> we are very well organized. if you look at our device solutions, it is actually making record profit and record revenue. you mentioned about mobile phones. our consumer electronic business, we are number one. scarlet: who is setting the vision and who will be leaving sam some forward? -- sam some forward? is no one person. we all have parts that drive the team. angie: you can get more on that in all the days top stories and watch us live wherever you are on the bloomberg app. and if you use twitter, it is now easier to stay in touch with us. " i amrst up
angie: it is 7:30 in hong kong. that is a live look at one of the ferry terminals bringing in the workers. you are taking a look at the skyline of hong kong. you 30 minutes away from the opening of trading in australia, japan, and south korea. you are watching "first up." the top stories this hour -- alo sword in new york after verizon said it was buying the company for nearly one $5 billion.
verizon paying $50 per share and once to tap into their expertise in mobile advertising technology. the deal comes months before verizon starts its mobile streaming service and just two weeks after the worst earthquake in its history, nepal hit by another powerful tremor. magnitude quake killed dozens, brought down buildings, and triggered landslides. the people 25 quake killed more than 8000 people and nepal's as the construction will cost at least $10 billion, half of gdp. and the budget announced tuesday, the deficit in the next fiscal year will be just over $35 billion. revenue sliding due to rising unemployment and diminished mining profits, net
debt is poised to rise to 28 21 year high. -- to a 21 year high. tim cook is back in china this week. he is on a mission. stephen engle joining us with the more. stephen: he is on environmental mission. he wants to get the sustainable energy project really going. china builds so many of apple's projects -- products through those a joint ventures they have. apple arem cook and going to have big demand for the apple watch and big demand for the iphone 6. more shipments in china in the first quarter than the u.s. even though smartphone shipments overall in china sank for the thet time in six years in first quarter. they had those problems with the china,r watchdog in
which prompted tim cook to apologize to the china market but the is pushing these environmental issues. he met with the highest ranking female in the chinese government and he will work with the world wildlife fund two-minute one million acres of forests across china. they will fund a five-year project to plant trees and implement standards that use less land and water. they also named more local project for their solar .n western china a shanghai listed company is part of that power. both of these stocks we have the share prices.
some power up 25% year to date. you get associated with apple, you get a boost in the stocks. angie: what about apple pay here? stephen: tim cook is said to be in talks with alibaba. they are the largest online payment system in china. there are a number of different to get- hooks they need around, including the standard in the chips in the iphone 6 not meeting the standards set by the bbo c. tim cook says he is bullish on apple pay for china. angie: thank you so much. now for a look at some the corporate stories making headlines.
founder of china's two biggest internet companies are said to be taking part in a $1.2 billion share a cell. mads back by ali baba's jack are buying in. 465 million shares to take advantage of the rally in chinese stocks. kevin martin is hired by facebook to oversee its global access efforts. mark zuckerberg spending billions to help developing countries get online. hang seng trying to boost. 5% tore offering almost many managers which would cut its own holdings to less than 1%. they say proceeds will be used to support future expansion. it sold another 5% stake in february for around $2 billion.
those are some of the top corporate stories making headlines this morning. tehran's biggest beer spending big on property with sales going flat. at hotels,king shopping centers, and real estate projects. worked?as this strategy linda: it could work. they are in a strong financial position so they had the resources to expand and it is not their first venture and property. they are just wrapping up their investments to compensate for the slowdown in the beer business. the government imposed higher alcohol taxes two years ago and that is to put a lid on
consumption. military government has said it will strictly enforce alcohol advertising laws. this is the new plan. billion --nvest $8 $3 billion over five years and properties. 60% of the budget will go to commercial, the rest to residential, including luxury condos. class, inowing middle the long term, there will be demand for hotel rooms, exhibition space. this strategy could work. angie: highwoods properties space is getting -- thailand's property space is getting pretty crowded. there are a lot of risks, aren't there? linda: it could be challenging. the brand is synonymous with alcohol, not property.
they will probably have to spend more on marketing and development. brand recognition will be key to success. it can work. did exactly tycoon that. he expanded his property investment two years ago and acquired a luxury condo developer. thatu talk about risk, lies in sentiment. thailand has cut its growth production. an economic slowdown could hurt sentiment in the overall property market. however you look at it, it es pay tooes a did diversify your business. angie: thank you. hong kong has been losing its status as the neck of luxury shopping. occupy hong kong protest and
a corruption campaign have heard the regional sector. we spoke with the world's largest july on whether they are ewler.ng strategy -- jul in terms of the march retail numbers for hong kong, painting quite a sad picture. we see falling 3%. the 16th monthly us in decline. how would you describe the jewelry sector right now? >> hong kong last year had an epic challenge. ,e had some occupy protests which have affected tourists. today, they have a different choice in terms of travel destinations. hadoes that mean you have
to refocus and reassess the market and maybe go to where those clients are going? >> in the long-term, we are optimistic in hong kong. decade, we have benefited from the chinese tourists. it is time for us to reconsider our positioning. we have to diversify our customer sources. , butnly china tourists southeast asia customers or customers from the united states. the market should be driven by customers. developinghina people. even the high middle class has been increasing. this is our target customer. is the top five when it comes to retail rent, the most expensive.
do you expect that to change and will prices go down? i expect in the coming years, i can have about 20% of a rental reduction. >> what about shutting down stores? locations, weme might consider shutting down one or two stores. hong kong has been affected by and the crackdown of corruption in china. the spending power has been decreased. angie: coming up next, finding a balance. with the break, we speak the australian treasurer about the budget and how the country is shifting away from mining. ♪
making headlines around the world. john kerry has held talks with president vladimir putin. they met in the black sea resort to make and worked peace deal for the crane. later, carrey tweeted their discussions were full and frank and thank the president for devoting two hours to their meeting. againstd ukraine escalating the conflict in the east. greece is still clinging on after finance ministers met in brussels. they raise the funding cap by more than $1 billion to $80 billion. athens was told to turn promises into action or risk running out of money. the german finance minister says the atmosphere has improved although there has not been much new substance. el nino is back.
australia expects it to be substantial. el nino typically brings drought and australia.a it raises the possibility of more typhoons in the pacific. forecasters expect the effects of el niño to last through 2015. president obama's proposed trade agreement with asia is now in doubt after his own party blocked a bill giving him the authority to fast track the deal through congress. our chief washington correspondent peter cook has more. peter: the president's fellow democrats find the presidents trade agreement a major blow. effectively block the senate from taking up trade promotion authority. while there is still time to
regroup and try again, the reality is this is a major blow to the president's trade agenda and it means is top legislative priority may now be out of reach. falling mining profits and rising unemployment, the government and australia is facing a double when -- whammy, . trajectory. good we see the rebalance in the australian economy from mining construction to mining production being carefully managed. thenonmining set of economy, which is 90% of the australian economy, is getting a lift out of this budget and we see them or miss opportunities for growth and exported to asia. the forecast in this budget is $40 per ton. do think the worst is over for
the commodity? >> we hope the worst is over. if it recovers, that is well and good. i have been conservative in the past. i am being reasonably conservative now. >> the reserve bank of australia thinks it will be flat. why are you so optimistic? inwe can see great potential a range of non-mining areas, particularly in advanced manufacturing. we will see manufacturing exports in peru. foree great opportunity expansion and service sectors, particularly demand for tourism services and health and financial services out of asia. >> what are the key drivers lacking in australia is a comedy -- economy? what is his budget going to do
to revise the animal spirit? not just the small business, but the big business as well? >> we had 2 million businesses employing half the workforce in australia. we are giving small business $5 billion in tax cuts. have aicular, they can tax reduction on any items they buy up to $20,000. it is a big incentive for small businesses to get out there and have a go. oil prices on the rise. is china coming to the rescue of the ailing government again? >> we are being conservative in relation to her expectations. >> do you think this budget will sure up the prime minister's leadership? >> this is about what is doing what is right for australia.
our best days are ahead of us and we are sure we don't miss that opportunity. angie: two weeks after the worst earthquake in its history, nepal hit by another powerful tremor. the latest shocks killed dozens of people. the quake brought down buildings and triggered landslides, including this one film by a red cross worker. the drummer last month held more than 8000 people. for more on that story, --are joined what is the latest you can tell us of the latest quake? i am going to ask that question again just in case our link is a little patchy. can you hear me?
wondered what the latest was in kathmandu. this latest quake that has killed more than 41 people. havinght, we have been problems with the lines into kathmandu. this is the latest earthquake in nepal that killed at least 41 people, injured more than 1000. this is a little over two weeks after the tremor last month that killed thousands and injured 18,000 more. coming up next, we will go to break and check out this story. nintendo setting to release its first mobile game later this year. could it be another super smash? details when "first up" returns. ♪
angie: welcome to the stock exchange. we have a reporters to tell us about the stocks they are keeping an eye on. >> abu dhabi and oil today. middle east oil in focus. this is the unit of gs holdings in south korea. ofre are reported when part a concession for an abu dhabi oil project, a $22 billion project. this stock is up. they are also a retailer. i spoke about their retail shop last week. angie: ok, cool. >> we will talk food now. earnings were up 41%, net income up 52%.
they forecast income to go up 45% next year. they have raised their dividend from a share up from 80. looking good for right now. are you saying investors could be hungry for meiji? dna, social media platform operator rolled into one. there was a lot of excitement in march when they announce this venture to roll out mobile games. for nintendo, it was their first move toward mobile gaming. for these guys, it was a chance to partner with a very established name.
a lot of franchises -- donkey kong, super mario. they announced yesterday they the firsttroducing target coming up with five games in march 2017. we don't know what the gains will be but we know they are targeting world-class it's with massive reach. angie: i will guess there will be a protagonist and then you control the character and then you save somebody at the end and then there are obstacles. like people challenging you. and then if you accrue enough points, you get to the next level? i am just guessing. >> to get the sharpest sword, you have to pay maybe two yen. this is really how you
monetize games these days. >> i hate it. angie: free to play but once you get into it -- annoying and the crash notifications on facebook. is that how it works? you have to invite everybody else to get to the next level? >> you bribe your way through life. [laughter] angie: that is the verdict from the stock exchange. hour.n an we have got breaking news right now for you. japan's surplus coming in at 8.2 trillion yen. that is about estimates surveyed by economists.
>> bill gross's note to prove he's still got it, that he still has the touch that made him one of the greatest investors of all time. the one-time bond king tells me how he defines success, how he invests his own money, and how he is giving away his multimillion dollar fortune. on this special edition of bloomberg's "encore." i thought somehow i might have lost my touch. what effect it could have. that's half $1 billion. >> welcome to encore.