tv Lunch Money Bloomberg December 27, 2013 7:00pm-8:01pm EST
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>> welcome to "lunch money." we tie together the best stories and business news. here is what we have today. in energy, we're going to be looking at the economics of crude. our movie -- -- how to win an oscar. in motors, connecting flights. textron makes a deal. company chiefs are doing it differently from no marketing to know managers. the best of 2013, what better way to finish the show than with cars and tanks. we will kick it off with nation and a true and to the holiday season.
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>> 1.3 americans -- 1.3 million americans will have their only steady income disappear completely. the emergency unemployment benefits and tomorrow. the date for the emergency unemployment compensation program. this is the program that has been lit -- renewed and renewed since 2008. it is trying to cushion the impact of the recession. >> this was extended unemployment benefits normally provided by the states. this has been renewed 11 times since then. it allows up to 73 weeks of benefit. >> is not just 1.3 million americans losing these benefits immediately. we are talking about over the course of next year, more out of work workers will fall out of the program. on budget and policy priorities estimates nearly 5 million people will eventually lose out if it is not renewed. will increaseber by 73,000 people on average
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every week that we continue to block extension. and is both a moral outrage another congressionally conflicted blow to our economy and its unprecedented whenever unemployment levels have been as they are today. democratat -- the majority whip is not the only democrat upset here. >> because congress did not act, more than one million other constituents will lose a vital lifeline at christmas time reading a lot of job seekers without any source of income at all. i think we are a better country than that. we don't abandon each other when times are tough. >> this is so unconscionable. >> there are a lot of things that should be done but the first thing is to make sure those people that are waiting and waiting to find a job still get the important check that
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they deserve. >> this is an intolerable situation to us but we also want nd and sequestration -- e sequestration. yes.o's don't make a to pass a butave -- a budget but here is a republican that rationale -- rationale. >> that they offered nothing to pay for which would've blown a hole in our deficits. a 13th extension of this emergency unemployment extension from the 2008 crisis -- we have a lot evidence showing it will prolong unemployment. our focus is getting people back to work. we want jobs and policies that help create jobs we don't have people going on unemployment in the first place. if the president has a plan, i will certainly look at it. i would argue his real focus ought to be creating a better
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environment for our economy and creating more jobs for the american people. >> that is the bottom line. republicans don't want to add on these emergency benefits unless there is a way to pay for them. there is some good news here potentially. whenr up -- at a proposal lawmakers return, a four-year extension would cost $25 million -- $25 billion. >> we are going to be talking energy. crude awakening for oil. prices at -- are above that or above $100. take a look at this. twomiles above the earth, russian members of the international space station are having a spacewalk. they are installing two cameras on the exterior of the station.
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>> this is "lunch money." i am adam johnson. abovee awakening, all $100 for the first time in two months. what about the impact on the mideast? syria is still an issue. --what happened with lebanon when you have this government official who was a casualty and a very big backer of the syrian insurgency. this is not a first bombing we have seen in lebanon. we will expect more in 2014 but if you want to watch the oil story -- that is where you can see it hitting the oil markets. >> good point. iraq is the eighth largest producer in the world and the ron is the seventh largest -- iran is the seventh largest.
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any chance of a strike by israel? long as negotiations are ongoing, i don't think we will see a u.s. or israeli strike. the question is what if you don't get a final deal? what a iranian hardliners discovered a deal. what would happen with the expectations there do not materialize? >> a lot of moving parts. production has risen 50% in the past five years alone. we are second only to saudi arabia. that is one of the reasons why supplies are little less of a concern. had the same amount of disruption as we had in 2011. nearly 3 billion merrill -- barrels are off the market because of libya and problems in nigeria. the difference this time's around is north america. have a north
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american story, we would have a much higher price environment. do we get another big producer go off-line? if we have problems in iraq, that will propel the higher price environment. north america alone cannot offset problems if we have the situation in iraq. >> how much you prices have to change board really to be a to american business or even consumers? a situation like 2011 where we are in the 120's ation, that is when the u.s. government starts talking about psr relations. i think everyone is going to watch for do we see something happening? right now north america can seemingly offset these problems. we are not in the low rice environment but we are still trading in a range.
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ifwe get a good blowout, things get worse in iraq and nigeria, that is when we see it go higher. advocates are leaning on the keystone xl pipeline which will carry a lot of that oil produced in canada all the way down to the gulf coast. >> of the keystone xl pipeline is a 2000 mile final double pump oil from the canadian tar sands to the south refineries in the gulf coast. approved,eline is what does that mean for jobs? direct andate 42,000 indirect jobs nationwide during the building phase. 4000 our pipeline construction jobs. the pipeline is only expected to create 35 permanent jobs. as for oil profits, a recent report or cast a razor -- a razor thin profit for oil companies. the recent shale boom created a boom in united states dropping
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down prices. but oil can make it to the gulf coast by the pipeline, it could reach a benchmark. stayed in canada, the projected benchmark is $69. not so fast -- that $20 premium does not mean big profits. canada's heavy crude is one of the most expensive to produce. it needs to get at least $65 a barrel to break even. and transport costs including extra lubricant needed to get through the pipeline. it drops to $5.50 a barrel in the next can market facts -- in the mexican market. owner of the proposed pipeline stand to lose a lot. the company is sunk $2.3 billion into the keystone project. alsother companies could be hurt.
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the next best option is railroad. barrels ofd 50,000 oil every day is moved by train in canada and that is expected to increase by the end of 2014. rail is much pricier than the pipeline. that means rail investors like warren buffett could win big. the longer the pipeline gets pushed back, the higher the demand for rail. >> over half the respondents to the bloomberg national poll says they believe the pipeline would benefit u.s. energy security. season, and the weinstein company are experts at going for the gold. we will explain how they do it. we will take you behind the scenes of the biggest private collection of armed vehicles in the world. as we had to break, here is something i don't want to drive. an icebreaker to the rescue. dozens of scientists are
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contender. we caught up with mr. weinstein at the premiere and asked them how he does it year after year. >> for us the awards are a way of getting publicity to movies that deserve it. movies are going to open, comic book movies. i saw the new hunger games. it is really good. people will flock to that. i understand that, but it is a way of putting the light on films and maybe aren't as commercial as they say. i am telling you, i will put this movie up against any other movie. is actually more than mr. weinstein lets on. they explain how they do it and the competition and how they working behind the scenes. these oscar campaigns start months and months earlier at film festivals where these movies are screened and they start to compile these critical
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acclaim's. hopefully, they get more claim right ahead of the marketing release of these films. then, critics in new york and l.a. report these films with even more praise which gets them recognition at the golden globes. it is this huge process. it is a marathon of the campaign. the weinstein's are probably the most successful at that. that is saying a lot. what they have been able to do is pick movies that have universal appeal and take those films and help them find an audience. some of these films go straight to video and yet with the weinstein's they are able to find an audience. like the artist, a silent movie in black-and-white and they found an audience and went on to win a best picture ochsner -- oscar. >> is this happening behind-the-scenes? ands the phone calls calling the right guys and
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people to show up at parties. from the director to the screenwriter and then the big stars, they are all involved in the campaign process. it is a whole cast effort. >> did you think that not only are these people who really understand the film industry and what is going to resonate, a sort of have their finger on the pulse of news and what is current and what people are looking for? ,> and the released mandela they could not have time did better. they could have known that this man was going to pass. idris elba -- they did know he was ill but he gave a stunning performance. he is definitely in contention for some nomination. lee daniels the butler -- that is another film that is getting a lot of praise, maybe not so much at the golden globes. forest whitaker and oprah
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winfrey are getting huge praise. you can definitely see them coming into the oscar picture as well. >> here is a movie that a lot of award nods. it stars judi dench and steve coogan. the film is based on a real story about a woman who sets off to find her child that you put up for adoption 50 years earlier. >> i wanted to tell it as a film. that was about four years ago and here we are today. it seems to be getting a lot of attention. >> did you always want to play the role of the investigative third -- journalist? >> i just wanted to produce it and get it made. i toyed with the idea of directing early on and then when judi dench came on board, i got cold feet. i didn't want to be pushing around a dame.
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thought the way we were writing martin's character -- the way i had been writing his character, i put a lot of myself into it. it was a hybrid of martin and myself. if anybody could play this part, i thought i can. i knew if this film was not being produced by me, then i would be way down the casting list. i figured i would give the best part to myself as an early christmas present. >> you can watch the full interview on bloomberg.com or just go to our app. moviex revolutionized the business but not everybody in the business is happy about it. ken burns is big on the access to content that next at -- that netflix provides but he is not hot with how they share revenue. we caught up with him earlier
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this year. ♪ my traditional platform has been for 30 years distribution that reaches the largest number of eyeballs. every kid in america had memorized the entire primetime schedule. now we know we have hundreds of choices. we cannot possibly memorized. . with the access. i am thrilled with the idea that i want to watch three or four episodes of house of cards, i want to be able to do that. king, ithe consumer is is not the almighty network guy or programmer saying that you should watch it now. this is liberating for everyone. we have been convinced that it works. there is not really the model
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that that sends us into the future with any real confidence. now we are in a new area where the middleman reap the lion's share. he are too many middlemen getting too much stuff. netflix is going to make a deal largebs and we do get a share of that because we are the most-watched. it does not completely offset what the decline in the old hardcopy dvd sales represent. this suggests there is a coming struggle. getows united artists together as they did earlier on and say this is not working for us. that will be an interesting turn of events when the folks who are there are saying, this is not as good for us as it is for the people who are not doing anything except just pressing send.
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>> this is "lunch money" on bloomberg television. i am adam johnson. today's moving picture is where the video is the story. in beirut, a car bomb killed lebanon's former financial minister. it also killed five others and injured 50. he was a leading figure opposing the regime of syria. the scandal in turkey moves closer. a second wave of investigations are focusing on its family and now prosecutors have accused the prime minister's government of obstruction. turkey zeroattling
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which is fallen to a record low against the dollar. from -- fors blamed multiple pileups on the roadways. dozens of vehicles involved in chain reaction crashes. staying with motors, we are talking and we are taking to the air. textron, a manufacturer of cessna aircraft, is buying a company. one major asset from the purchase, their king air models. that is the rolls-royce of airplanes. they are gorgeous. with this addition, textron will sell everything from tiny single engine cessna 100 series. they are fun and effective but they are slow. then they will get the citation business jets. -- $20ld 20 billions billion of products last year including things you might not expect. check it out. ♪
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f carts? i guess you need a way to ferry yourself back and forth. maybe a little vertical integration in the works. companies with no managers and no advertising -- how do they make it? we will talk to a few ceos doing things differently. why buy a car when you can buy a tank or at least for the day? you have to see this guy walking on the tarmac in phoenix international airport. cops say he climbed over a fence and started banging on the
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all these customers started looking up and laughing and saying what is that, what is johnny cupcakes? that is a funny weird name. and theore shirts word-of-mouth cap spreading and before i knew it, i was selling out of the trunk of my car. popgan poking fun at culture, replacing icons with cupcakes on t-shirts. there would be a statue of liberty holding a cupcake instead of the torch. our famous logo is the cupcake and crossbones that pokes fun at the tough guys with this golden crossbones shirts. comingou have people into your stores thinking it is a bakery? >> every day. i set my stores up as a bakery and we displayed t-shirts. the stores do not smell -- sell food but when you walk in you smell vanilla. people walk in and say, where are the cupcakes?
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>> clearly you want to sell a lot. what is the trick between making a limited edition? >> not only will assure its beast -- be limited, most of the time we will not print again. >> no advertising at johnny cupcakes, but what about no managers? a portland startup called treehouse has done exactly that appeared since getting rid of middle management, the school has seen enrollment jumped 63%. he only needs to answer 10 e-mails a day from his team so how sustainable is this model? >> there are a lot of bigger companies that have 10,000 employees. over $3 billion in revenue and they do not have managers either. we are hoping that if they can do it, then maybe we can. >> can ask a technical question?
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you make the point -- i know you talk to one of our producers and you say managers communicate messages from top to bottom. i think that is a valuable thing to have. they settle disputes. they help people manage their careers. they keep their teams motivated and happy. good stuff. teams fromy field things that are very superfluous. how is this bad? what do you do in an organization when you don't have that? >> of those are all good things but the problem is most managers and up getting affected by the power and they end up micromanaging and not really serving their team. great managers are a servant. the trouble is it never really works out that way. we found a way where people can communicate, able to stay focused, able to stay coordinated without a person.
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>> is there a financial incentive here? were you able to change the financial structure so that if they brought in clients, they got a greater portion of the revenue? >> no. what we found that people are tremendously motivated to do what they think is right. we give them complete power and we give them total control. we say, you are smart, you can figure this out. we give them very broad goals. you, you arered smart, we believe you can figure this out. they control it. >> empowering people, i like it. hours.os way after working, i play roller dobry -- roller derby. i love everything about it. i love the physicality and
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aggression and competitiveness. i love my team. working together to win together -- winning is really fun. we are a site that connects -- connects communities to share goods. instead of buying a lawn mower, you can borrow one from your neighbor. most people like lending their stuff so it comes people helping each other. i did not expect it but playing roller derby has really taught me how to be an entrepreneur. you are constantly getting hit but you have to get back up and go again. it is the idea of perseverance. the separate little losses here and there and you just have to yet yourself up and keep going for the good of the business. female entrepreneurs have a set of unique challenges whether it is being underestimated by your peers or even just outnumbered by them. i work in technology and there are not many of us.
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they are too confident or too aggressive to be seen as not lady like. we struggle with this. in roller jerry, you learn that being aggressive and confident is what makes you win. i think i will play until i cannot play anymore. i am proud what this sport means the women so i don't see any reason to stop. if roller skates are not fast enough -- a lambo so hot, it is not for sale. that is gorgeous. it is theow you how best of 2013. that is coming up next on "lunch money." look at this as we had to break. peru, thousands are gathering to watch competitors slug it out with their fits trying to use -- trying to settle public disputes. a lot of people are getting into the action. they got a few whip carrying
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10 hour shifts. 20are working when hundred -- 120 plus hours a week. have five unique buildings here. we have our stamping where it starts off a. steel go into a blanking line where we shifted over to our body shop. that is where we have a lot of automation. and ited the whole body is all in our body shop. we send the car over to our paint shop. shop, it goes over to the final assembly building. we have a battery installed operation which is a very unique operation because we actually
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installed the battery in the back compartment of the car. that is one of the most exciting points because that is when it comes together. you have the overhead with a body shell and then you have the powertrain underneath. you put the two together so that when you leave that point, it is almost a completed car. we are at the flat top with the cars come off before they go to predelivery for final inspection. before theytoe ends go off to the customer. from start to finish, it is about 20 hours. from the seal all the way to the finish, the final product. >> italian sports cars, maybe they are more your thing. we have an idea for you. there are only four of these pups in the world. >> this is the new lamborghini.
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platformed off the which is our flagship car. it is unmistakable. every once in a while, we want to push the boundaries and bring up something that is very unique in terms of styling and performance. we also want to keep it limited. themilt a total of four of with three of them being already presold. are going tocars longtime lamborghini customers in north america with one of them going to the middle east. the people dumber interested acted quickly and that was it. in terms of the performance, the car is 750 horsepower. the interiors comprise with different elements. there is a lot of carbon fiber within the interior. there is a carbon skin that covers an lot of the elements of the dashboard.
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it is important that we maintain that halo product like this. >> wow. still not satisfied? you need a tank. ♪ >> this is a spot where i wanted to come to. the most unlikely thing you were able to find in silicon valley is this collection of tanks and armored vehicles. this is the largest collection in the world. >> the foundation was formed in 1990. the man went from a casual start to the 70's and by the mid-90's he was purchasing and collecting one tank a week from around the world. he couldn't just have one. there are roughly 300 pieces in
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the collection. >> and you have any idea how much he would've spent in the total of acquiring the stuff? >> yes. i probably have an idea. >> can you give us a ballpark? >> it would've been tens of millions of dollars. these tanks were present multiple countries, multiple years, multiple wars, and multiple battles. this is the german 222. it is so rare that people from all over the world have come to look at this. it is loaded with technology. this is an aluminum tank. this tank also floats. this is a large tank. it was run by the u.s. marines. it is big and some are bigger than others. >> is there a massive fluctuation? >> there is. they go from light tanks to medium tanks to heavy tanks.
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and very large tank would be more than 70 metric tons. >> how do you get them up here? it is like a dirt road leading -- >> getting up -- getting them up here is a nontrivial task. getting them down is different. >> i have lived here for a long time and heard about it. i wouldn't say the average person knows that this is here. you drive up the road and you come up to all these tanks. >> we could be your neighbor. the best ofatch bloomberg 2013 online or on your mobile device. just go to bloomberg tv plus. today's mystery meat takes us to a shrine in tokyo. most parents do everything they can to stop a crime. not these ones. sumo,s called crying where parents try anything to get their infants to cry. parents believe it makes them
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>> it is 56 minutes past the hour which means bloomberg television is on the markets. i am olivia sterns. let's get you caught up on whether the markets ended the session. stocks are edging a little lower this evening. they are down ever so slightly after finishing at all-time record highs yesterday. the nasdaq is still trading at a 13 year high.
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we also saw 10-year note hitting its highest level since september 2011. amazon said it had a record-setting holiday season. bloom -- cory johnson have a look at how the company packages. >> heinz ketchup, the bagel bite original slicer, every product sold by amazon starts the same way -- a loading dock of a massive building. inside an army of workers unload the boxes and scan each item. while there is automation everywhere, this is largely a job performed by people, not robots. the team of workers stash the items anywhere for no reason. products are in the first empty space to make for unusual bedfellows.
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hello kitty my speakers. the location is tracked by complex software and assume that something is sold another worker gets notification on a wireless device like a gps. giant isthing kids a picked from the shelf and sent packing. selects just the right box even cutting off enough tape to seal the box. labeled on a and fast conveyor belt and they are down because -- they, gated series of slides. they go to another set of workers putting in the truck like a tetris like task. ship in an pack and incredible architecture and the likes of with -- which business has not seen before. cory johnson, bloomberg.
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>> now for a look at the numbers behind amazon's record-setting holiday season. i am joined by julie hyman. ofzon released a little bit data but they have given us some color. cyberdo know that on monday which was the busiest day for amazon, orders were up 39%. >> that is incredible. -- based on that, you actually can see revenue coming in and let all -- a little ahead of the estimates for the quarter. another big number is the prime number. amazon does not tell us how many prime customers they have signed up. those are the people that pay $79 per rhenium service and free shipping. up onesaid they signed million folks in the third week of december and now have tens of millions of side customers. analysts are saying they are probably in the low numbers.
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>> it is probably 20's. >> prime is such a driver of revenue for them we want to know what the number is. >> it is a driver of revenue because those people could spend more and it also costs amazon more so we don't know some of the ratio that. how much more revenue they get and how much will the cost. >> some research firms have released that it is a positive. >> some things are being close in the third week of december. >> that is different on the markets. i am olivia sterns. ♪
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