for the world economic for him. >> our show is even hotter. the french>> drugmaker. and two of the richest men in the world. .ennis o'brien oleg deripaska. steve schwarzman is the ceo of blackstone group. steve, here we are once again. how does it feel? >> good to see you. >> nice to see you too. you have come here for many years. >> how many? >> i think the answer is money. i do not know whether it is 15 or 20. it is a lot. >> seeing people here and hearing the stories about

dysfunction, does that make you feel any better about the path forward? >> i think the u.s. is on a pretty good path. we probably will have less political dysfunction this year. for a variety of reasons. everyone was a loser from last year. it isms of job us itself, a fascinating place. you run into so many people from all over the world. it saves travel. >> davos is a savings opportunity. >> is an economical use of time. when you meet people privately, it is 15 minutes or half an hour. you can transact a lot of business. you can learn a lot. that point, people talk about the usefulness of private equity firms. that is a reed or a brahman or of what is happening in the economy. from yourhat you get

portfolio contrast or compared to what you hear from people here? >> we're in indicator. we operate all over the world. we tend to outperform and do better. we see the same kinds of stuff directionally. the u.s. is doing well. we're doing quite well in europe. a lot of people were scared to buy real estate. we see the same trends there. with the emerging markets. they are starting to recover. we have really hit bottom. pretty much in the whole emerging-market area. >> president rouhani gave a conciliatory speech today. he is looking to attract foreign investors many believe. do you buy it? had a small private meeting with president rouhani in new york before he announced what he was prepared to do in terms of making a deal.

just from being with him for one hour and asking questions, as a person, he is quite intelligent. he is quite direct. he is quite smart. in a way, he lays out what his population needs. they have had about as much sanctions as they need. that is creating real hardships, which was the design of it. i am not a foreign-policy expert to know what is going to happen from here. he fact that he is at davos, used to run a think tank. he is a very comfortable in the world of ideas. than ahmadinejad. >> i have heard u.s. questions of people before. what did you want to know from rouhani? >> i wanted to know if he could

deliver. a deal. to listen fascinated to his analysis of his own situation. and howretty logical the elections went. >> confident? >> he was pretty confident because he was elected by 70% of the vote. it was five candidates? something like that. he felt like he had a mandate to make a deal. the question is, their country wants to have certain types of ability to process. will the western countries agreed that? this is over my pay grade. >> what is not is the decision as to whether or not, should the opportunity present itself, blackstone would invest in iran's? >> we're a long way from them.

this is a forbidden country. >> not for much longer. >> that is why he is here. >> things change. for americans, nothing will change unless we basically make some type of arrangement. we tends to be pretty cautious. though iran has been around for a very long time, you would have to learn and see if things normalize. get some sense of what is going on. it has been a very productive country with a smart population. they have been well-educated. >> the ukrainian president was banned. you must come to look for interesting places to invest. do you think there are opportunities there? >> mostly, i try to invest in places that i would like to visit twice. that is a simple role. >> that is a fantastic rule. bermuda, barbados --

[laughter] >> perhaps not all of them. >> he did not like jamaica. issue of some of the countries that have been through ofot of trauma with a lot political uncertainty, typically that is not the kind of place that we go. 7 yearst for 3, 5, period. if something goes wrong politically, then you're trapped. we lay countries with a strong rule of law. the ability to have liquidity. we are somewhat selective as to where we go. explainwould help to why so much of your business is still in the united states. we're curious to know how you think tapering will affect blackstone. >> i do not think it will affect us very much at all. the fed is doing a remarkable job starting from the depths of a financial crisis.

helping the global economy and the u.s. economy to write itself. without an enormous amount of help from other sources. believe that there are some very smart people, janet yellen -- they are going to sorease interest rates quickly as to throw the u.s. into a no growth or negative growth situation. >> they might yet create volatility in markets which could snuff out access to the loans that firms like yours need. >> there's a lot of liquidity in the bank world. u.s. banks are in great shape. they are under went. we could make a lot of money in our credit business with the volatility. we do not look at the slow increase in interest rates. we are the largest owner of

houses in the united states. everybody thinks that if interest rates go up, housing prices go down. actually, the last 26 years that interest rates have gone up, housing has gone up. every year. just the opposite of what people would think. goally when interest rates up, it is because inflation is going up. that is good for housing. generally -- or interest rates go up because the economy is growing. that is a good thing. we do not live in fear. tapering in the credit area -- we canceled all of our bonds that are fixed-rate. >> as of when? >> as of probably sometime between the first and second quarter. >> for quite a while already? >> one of the big themes is doing good.

investing in things that are socially conscious. do you believe that? >> i think that you can make good profits for your investors. you can do good things. for example, we are very big in the wind power area. we are very big in solar. there are all kinds of things that you can invest in. they're good for society. one thing that we're doing is going back over all of the things that we own. figuring out how we can make them more energy efficient. it is good for society. it is good for our -- >> the bottom line. >> we have a whole group that is specializing in doing that. >> i am a skeptic grid every time we heard jpmorgan earnings, people talk about what is going on in investment banking. what is happening in sales and trading. there's not a shareholder out there who is talking about their great philanthropic efforts. it seems like that is a big

theme here. there's a disconnect. ours, we do aike lot of philanthropic things. we have a foundation that is dedicated just to job creation and entrepreneurship. we basically go to universities all around the country and set up hubs where we can get student business plans and get them mentors and help them to raise money and create jobs. >> are they asking you to do this? >> no. stuff,ple love doing whether it is sponsoring schools or having the kids come in and tutor them. the people who work in businesses today like to be involved with the community. they like to feel that they are making a contribution. friend from the carlyle group was here telling us that

are askinghat lp's for is that portfolio companies want you to think about the way that they are managed differently than job creation. they are part of the calculation when it comes to managing them. do you get that from your lp's as well? the same for general electric or any responsible group of people who are controlling assets. we have 80 companies just in the private equity area. forgetting all the other things we do. with 740,000 people working there. $120 billion of sales. we try to manage our companies to best practices. >> how much more complicated has it become to manage risk in the last five years? you have so many different businesses. how do you have your hands in

all of these pies? when banks do it, they get in trouble. >> we figure out a system that manages the firm like a small business. we do that through the use of technology. if you just take the real estate business for example. every monday.ing it lasts for 1.5 hours. firm,e every part of the whether london and mumbai or hong kong or other cities. they are tied into the call. we go over every transaction that is being worked on everywhere in the world. in that room is everyone from the first-year person to the most senior partner. >> that is a big room. bringsuse of televisions everybody in. that allows us to have all of the people in that business -- 150 people -- here everything

that is going on. be able to figure out relative risk and relative return based on what is happening in india versus what happens in canada. this is a teaching moment for us. it happens every week. knowhance that we do not --t the risk is on something if we grow, we just add one more screen and include another group of people. we figure out how to run the business like it is a small firm. anybody can talk. >> you make it sound so easy. one more question. where is there tension in blackstone? in the way they render business? -- we way you describe it actually do not have tension. when i started, i came from lehman brothers. one of the interesting things was that this was an adjusting company.

it looks like nobody stabs you in the back. they said, you're right. at our firm, we walk up to somebody and stab them in the front. i was sort of horrified. i would rather be punched in the face then stabbed in the back. >> it ended up being the case. one oyster to blackstone, we only wanted to hire nice people. set up a meritocracy, nonpolitical. about pretty ruthless making sure that those are the people who work at the firm. >> blackstone, ruthless nice guys. >> thank you very much. steve schwarzman is the founder of blackstone group. here with us in switzerland. will speakack, we with the ceo of coca-cola. we will also talk about herbalife. shares are plunging. bill ackman could be dancing in the streets in new york.

we will have that in a few. ♪

>> you are watching "market makers." breaking news on herbalife. the shares are plunging. fromis after the senator massachusetts released a letter saying that he is calling on regulators to look into the business practices of the company. as you know, bill ackman has been shorting the company. originally, he outright shorted the stock. they did not have a good year last year. the stock rose by 139%. key is saying there is nothing nutritional about possible. schemes that promise financial benefit to result in economic ruin for vulnerable families. he is also saying that he has

been contacted by constituents who say that they have been victimized by herbalife. complaints about improper pressure and financial hardship. this incidentally is what ackman has been arguing all along. a lot of people have been against him on that bed, including carl icahn. this is just the latest. this is the plus column for ackman after a series of disappointments. it is not clear what will result from the request or with other there will be an investigation or what it would yield. now back to davos. >> i expect the bill ackman probably has some jim beam on hand. he was celebrating with us last week. it is extraordinary. this has been a rough ride for bill ackman. he has said i believe in this. i will take it to the ends of the earth. we are actually saying possible hope -- nobody is on his side.

>> it is just a glimmer of hope. a 10% move is not going to change enough for bill. yet. >> what has he been trying to do? give regulators to do something. it only helps his case that he has different motivations. >> and influence. we need to move on. the great story, we might come back to it. we need to talk about coca-cola. >> i do not like al herbalife shakes taste. but i like checking coca-cola. few brands in the world are as recognizable as coke. the stephanie brandis almost as recognize bull. we have the man responsible for the brand here. >> great to be here. >> i want to talk to about one thing they were drawing attention to. the plate of unemployed youth.

in countries like spain and italy. really, it is a problem around the world. how do you turn talk into action? >> the issue about the youth unemployment is that if we do not do something, the social peace is going to crack. all of us are going to be much more soft. last year, we started at the international business council discussing this issue. we said let's convene a meeting this year, and 2014. it might stop national government leaders. my -- the governors from around the world and ngos. and we had the young global shapers. the 20 there'll to shape the dialogue. when you listen to them, they

have a different view of the world and what they are expecting. we got all together in a room and i think we middle our progress, talking about new ways to induce youth employment. we have great mayors from all around the world. johannesburg, latin america, buenos aires, rome, madrid, big governorseat of the largest provinces in india. we had the prime minister of québec there. we had a great dialogue about how to create more apprenticeships. had to get internships. how to partner with universities to create a 21st-century model for education. there is a huge mismatch between business needs and what universities produce. the easiest way is to hire people. what kind of commitment is coca

cola making to reduce youth unemployment? >> let me tell you, we have a program called five by 20. that is going to create economic empowerment for 5 million women by 2020 outside of the four walls of the coca-cola company. we have a ifc is a partner. we identify women entrepreneurs in countries all around the world. we have provided microcredit for them. mentoring and training. it is audited by a third party. 2013, we had 337,000 working entrepreneurs that were not there before this program. the commitment is to reach 5 million by 2020. that is real progress. >> you said you sat and met with the global shapers who are here. the tech people.

when you were 26, did you ever think that this is how a business would get done? wouldu think that a ceo sit down with 26-year-olds and change the world? >> not when i was 26. i did not think that was possible 10 years ago. i think it is wonderful. learn, have to especially in the western market, to leverage technology better. -- onk that if technology the one hand, it is a big challenge. it actually eliminates jobs. if we leverage it properly, we can actually create new jobs. we have to redefine work. work does not have to be done in a certain place. work can be done at home through technology. homework programs. more apprenticeships. more short-term work. these have to be created. we have a lot of commitment from

100 plus ceo's yesterday. the beauty of this program that we were talking about yesterday -- it is a multiyear program. next year, we will come here. what has worked? what has not worked? how many people have been employed? which countries and cities? how did the funding get done? what did not work? what is the learning and had we go forward? >> what you say to the person who says that sounds great. he likes big ideas -- last year it was obesity, this your unemployment. how do you persuade people it is not a flavor of the month? >> i am talking about it now. you will ask me about what happened next year. >> so what happened? we talked about obesity. what has happened in the last year since we have a conversation? >> i will give you one example. global weight commitment program that we had in the

united states. it has just issued a new report. -- the foodnated and beverage industry is coming together and they have billioned six plus calories. calories per person per day. as a result of innovation, as a result of the work that has been done. weight a healthy amendment program. i think that is real progress. 78 calories per person per day rid >> no one would disagree that you're doing right thing. you run coca-cola. you need to sell the right thing. >> the real thing. >> i feel connected to the scan because i grew up with that. i desire to my whole life. he gives me a sense of nostalgia. my kids do not have that feeling. soda is not something people

want in their kids's hands. how do you sell these? >> we sell a wide portfolio. we sell another 3500 product. we are growing coca cola and all of our other beverages. the most important thing for us is balanced growth around the world. beverages are a result of the good things we're doing. innovation, for every single one of our brands. a no calorie or low-calorie option available. choice, it ist also about inducing more exercise. more movement. we say that everything has to be done in moderation. except play and movement. could develop a low or no collar sweetener that tasted just like sugar -- i know you're trying, with debbie this over

bullet? >> i do not think there is one silver bullet. there are multiple programs that lead to one of balanced growth. we are working on multiple programs. >> what is the most promising? >> you work on new packaging. that is a great driver. you work on new kinds of platforms and new products. form relations. plan is likeistic it's co2 a good place. topics -- itswitch is not unrelated to packaging. let's talk about advertising. coca-cola has sponsored american idol. the ratings have plummeted. 18 sponsors pulled out. you are in it and fortis and it. what will you do? >> we have multiple programs that create content. content,s to co-create not just sponsor a program. >> i don't like that idea.

>> partner and help to create content. that is the future. >> talk to us about that. a lot of people here about native advertising. they do not understand what it means. what does creating content made to coca-cola and how big of a part is that going to be? maybe in dollar terms? >> i do not know. people are looking for personalization, customization. >> do you mean that this can with my name on it? >> today, that is what they want. they want a dialogue. program thateate a they want to listen to -- >> like what? >> music. we have world cup coming up. we have worked with a lot of music producers to get different kinds of music up on stream. we have 74 million -- >> it is exclusively coca-cola

and those producers who have the rights to that music? and it is not a sign of a coke? >> is a song about the world cup. >> creating an experience. >> a customized extremes. you tohard is it for decide what faces and names should be associated with your brand? coca-cola is a wholesome, exciting, world of dream product. when you think about celebrities, they are not so wholesome. it, thear whole set queen of england can have a coca cola. you can have a coca cola. >> i have one of these by the way. you have done a film with ridley scott. will they ever do a feature film that coca cola? >> i think that coca cola can do multiple films. whether they call it future phones are not. >> feature-length. >> eric needs to work in an imax

theater. he wants to tie a celebrity into the film. i can help you. [laughter] >> we are not in the future film business. we're in the business of communicating in different ways. >> we talked about music and film. what is the next frontier? films worked on is about the plight of polar bears. there's a lot of recognition in theaters around the world. you do things that can help people to think about the problems and issues in the world. whether climate change or health and wellness or other things. >> what role you play in the olympics? fila mixer coming up. up, itime the olympics, is a good time for the world. there are a lot of good things that come out of them. >> are you afraid of what might

happen in sochi? >> when people get together, there is a certain concern. any not think it is in -- bigger in any particular place. there is always a concern. there is always a lot of security around. >> there sure is. >> when it's one hell of it that. >> thank you for joining us. ceo of the coca-cola company. we will send it back to you. stocks are down in a big way. by that is happening in new york and i hear. u.s. stocks are at their lows right now. we're seeing the essence i've 500 trackingp overseas losses. the s&p 500 is losing one percent off by eight percent points. jobless claims or at the lowest in a month. that is positive. housing data was mixed to lower.

that was a disappointment. you can see the treasuries are rising this morning as part of the trade. yields are coming down. 2.80% is the latest rate. gold prices are at a six-week high. were signs of a stronger demand in china. the lunar new year is next week. gold tends to pick up around that time. we're also keeping our eye on a couple of individual movers, starting with netflix. they reported earnings yesterday. a few outdated there response. they were raised to a buy. some raised to a hold. customer growth topped analyst estimates. were new subscribers this quarter. they're also looking into different pricing plans. 9 subscription could go

$6.99$11.99 or down to depending on the number of subscribers. also, i know that you have mentioned this. it is worth pointing out. herbalife shares are tumbling. falling as much as 15%. they have come back a little bit. they are off by 14%. this after ed markey of massachusetts put out a letter saying that the company's business practices should be investigated. perhaps they should be operating outside as a pyramid game. a good sign for bill ackman, who has been so vocal about his short against herbalife. back over to you in davos. >> all right. sounds like there is a ton of market action. herbalife, as you recapped. a lot of questions still linger for dell.

the company went private in a $25 billion transaction. tom keene and david kirkpatrick said down with michael dell earlier this morning. >> an exclusive interview. >> have a look. part isroduct hardware still an important part. value is shifting into new areas. software, these are areas where we have invested tremendously. we have done 30 acquisitions in the last five years. we have built enterprise business in new areas. certainly, as a private company, we are intending to focus more on those areas. >> before you jump in, we have questions for mr. dell. please, the michael dell ad on television is a home run deep to left field. you went back to where all of these companies started. i had goosebumps.

>> it was good. >> i appreciate that. >> go into the shape of the evolving pc industry. what do you have in your hand? how significant is this device? >> we have our new eight inch tablet. >> hold the so the camera can see it. >> is this a shameless plug? the other guy does not have this today? >> this is the eight inch tablet. it is also a full pc. it runs microsoft office. you attach it to a full monitor. you take it with you and connect to the wall. >> is this where the industry is going? >> it is interesting. pchink that the depth of the has been talked about quite a bit. it turns out there are still a million of these devices sold every single day. >> are you kidding? a competition basis, india

is an example. this is been hugely successful. how do you differentiate here versus the person after mr. ballmer? what is the distinction of this product versus high-end apple or microsoft? business is taking off in 2013. it doubled from first quarter to second quarter. it doubled second to third again. third to fourth, it tripled. there is product differentiation. differences in services. do youl issue is, how integrate this securely into a company's operations and make it work? not just about the product, it is about software and services and understanding how it works within a company. it really makes people more productive. >> you are going to try to shift

the lions share of your revenue. are you going to be thought of primarily as a hardware company and five years? we would love to see our other businesses grow that fast. we still have a substantial business in hardware. it is a good business for us. it is a great foundation for us to build relationships. >> entre, if nothing else. >> information management, we are entering this whole age of data economy. >> and tom keene is here with us. exciting and good on you. interview with michael dell. what was your biggest take away? >> this is a dramatically different michael dell that i met five months ago. he ishrilled to say that a big consumer of bloomberg news. >> on his tablet. >> you got that right.

what was great about him a year ago is that he was in the throes of that transaction. it was amazing how different he was. imf was so rested versus the grind. michael dell looked rested. >> you have to imagine how much expectation was built up into that transaction. $25 billion buyout. not just for us, the for michael dell. >> his name is on the front door. >> this kills me about the interview. it has been less than three months. already, we are less than 90 days and michael dell is already talking about the luxury of being a private company. it has to be a lot better. >> the most interesting financial part of the interview was the discussion about revenue going down or challenging. what do you do? both on camera and off camera, it was interesting how sensitive he is. there's a revenue line and price

dan amex. he made a sharp distinction between his dynamics and lenovo's. you ran into christine lagarde, managing director of the imf. --king the halls >> she walked up to the one person in davos who has the worst french on the mountain. that is made. she was with francine lagarde. >> is there a sharp distinction in her view? >> i think so. we did not talk about that. what i would say is that her institution has been out front on this slowing economic growth. whether developing country or emerging-market. ian bremmer noted that two of the four bricks have gdp less than the united states. i did not realize that. the people that you talk to everyday deal with a more sluggish economy. lagarde is widely -- simple is a

slogan. that is what they told you. they are the one thing less complexity, more simple. this ties back to lagarde. more cautious global outlook. >> the saddest part is that you do not have time to tell us how your nouriel roubini party was. that is your annual -- that is your dojo, your dream team. >> it is 3:00 in the morning. just in time for london tv. you so much. our own tom keene, helping us break down for you what is going on in davos . >> when we come back, why is it so hard for big pharma to develop new drugs? that is next on "market makers." stay with us. ♪

>> you are watching "market makers" here in the swiss alps. we're at the world economic forum. steve schwarzman, the ceo of -- thank youd now for spending some time with us. his is not a bad place. do you feel better about the prospect for 2014 then 2013? >> absolutely. last year, we were dealing with the comparison. we have the patent put behind us. we have a pretty robust headline. we have one of the top five pipelines in interest-rate today. >> talk to us about specifically, people tend to focus on individual drugs. they get excited. certain drugs have a lot of promising given markets. there was a drug that you hoped

to use to gain a fair amount of share. the multiple sclerosis business. it was rejected. how much of a letdown was that? >> it was not a total surprise. actually created a contingent value and recognized that it would not be an easy thing to bring along to the market. this is a drug that has been developed for quite some time. has been drug that approved by 30 countries in the world. we are seeing patients who have gone five years without a relapse. we believe that the drug is working. that is important for patients. that is why we are in this industry and thinking about appealing. >> realistically, what are the chances that an appeal will work? if you look at appeals in general, 15-20% are successful. >> it is worth trying. >> without a new trial? >> we cannot possibly without a new trial.

this is the way that. >> it is what it is. >> it comes to market or does not. the multiple sclerosis market is different. when you look at our business, the u.s. market is always the biggest. you have more patience in europe than in the u.s.. china can still be a big success. we have a whole raft of new products coming along. we have an oral therapy -- >> also for ms? >> also full multiple sclerosis. 50% of new patients are an oral therapy. they are a good job getting their share. we have a new drug to lower cholesterol. pcsk9. this will be one of the hot classes in the industry. it reduces your ldl by 50-60%. il4ave a drug called and

four german titus and asthma. we have an il6 coming in. it is something hard to believe. this could affect half of the world population. all of these are coming along. we have a lot of innovation. when i look at the underlying performance in the business with no real pastent -- >> why is it so hard to develop a drug? is it the science or regulatory environment? >> it is all of the above. you have to be humble. we do not understand everything perfectly. one of the reasons we acquired the other company is to get an understanding of target. you have to understand the disease and the targets that translate into the outcome. when you are in rare diseases, you get very good genetic targets. one of the things that we did recently is -- in the

participation, there was some hot technology. that will probably be used for a wide range of drugs. because in rare diseases you know the genetics behind it, this is a great place to do that. for our company, it is not innovative -- it is how you access innovation. we have been trying to do that. >> you have an adjusting relationship with regeneron. you have a cardiovascular drug. you own 15-15% of the co mpany. >> that would be a good way to screw it up. there is just a good culture that is needed at every stage of research. there's a stage where you have to be rigorous and you need deep competencies in certain areas. there is a spot where you need to be a little bit more risk-taking and think about new things. on has a fabulous platform in antibodies.

they also have something better. they have replicated the human immune system inside a mouse. we can rapidly validate targets. we also have an option to enter into products coming along. we codevelop them. we bring something, they bring something. the dream of their people is not to work for big pharma. we get the best of both worlds. you can bring so much of her understanding. r&d want to move from an company to a commercial company. they acquired a suite of patterns from mark. they are doing research in the same space. if we had bought it, we would have screwed it up to. nothing against merck. you need to keep the a time he

of companies. bring something to the partnership. our vision is to have a whole range of partnerships. >> he says autonomy and humility. i know it is a hard question, but how difficult is it to run a company and later company in france with hollande as president? >> things are very difficult in france, no question. the economy is not performing as expected. as bigt of us, though, companies, we do a percent of our sales in france. we are global. we are able to compete with everybody else. >> but you are traded in france. is there an hollande discount? >> we have seen in 2013 a euro discount. that has gotten narrower. it is still there. we are quoted in new york, though. >> great to see you, chris. afi, the largest

drugmaker. >> i think you should say merci. >> this is is what makes they do. kers comingt ma up. ♪

>> is 56 past the hour, which means we are on the market. we continue to see stocks hit their lows. the s&p 500 losing more than one percent as we look at trading. just at one percent at the moment. falling withre financials and materials leading the decline. 25 out of 30 members lower. the only stock keeping them from

falling further are mcdonald's, at&t, and verizon. treasury prices are higher. manufacturing shrinks. this is according to a report. that is also giving a boost to gold prices. gold futures are up by almost two percent. that is a six-week high. we will continue to monitor these risk adverse moves. back to you in davos. >> thank you very much. we are in davos. the sun is beginning to go down. it is cold, but we will heat it up. >> we are going to share some of erik's interview with the ceo of citigroup, michael corbat. then dennis o'brien. ♪

the world economic forum in davos, switzerland, this is a special edition of "market makers." welcome to "market makers." i'm stephanie ruhle. they're punishing eric and i for having such a good diamond davos, switzerland. it just got really cold. >> another big hour here on bloomberg television. two of the richest men in the world will be here. irish telecom mogul dennis the ceo of the biggest alumina manufacturer. the story everybody in the markets is talking about.

the u.s. senators asking federal regulators to investigate the nutritional supplements company which is under bill ackman. peter cook has more. tell us what this really means. all, no publicly traded company wants a u.s. senator questioning his business practices, especially someone like the senator in massachusetts who has a track record. you can ask a long list of energy companies who tangled with him when he was over in the house when they entered his radar screen. he has been taking on companies in the past and doing damage in the past. he lists in these letters regulators extensive complaints from herbalife -- from his constituents, including one who lost her entire retirement savings. this is potentially a pyramid scheme, it favors the

compensation program, rather than favoring the general public. he has other complaints he's hearing about. come these pressuring employees to sign up family members. they have been targeting low income and vulnerable citizens. he is asked the fcc to investigate herbalife's business practices. he sent a letter to the ceo, asking for explanations to specific questions as well. in a statement, he says there is nothing nutritional about possible permit schemes that promise financial benefit but result in economic ruin for vulnerable families. i look forward to receiving responses to my inquiries, again, after news broke -- herbalife down as much as 13% in trading. markehe says he wants his answers from the company. >> peter cook, thanks.

one other person probably asking n't be knocking on his door. >> we need to talk about banking. we had opportunity to speak to some big thinkers -- the ceo of citigroup. talked about why citigroup can't be all things to all things. listen to michael corbat. >> we don't put ourselves out there and talk about just being a universal thing -- we want to make sure we are there positioned against what are customers and clients want to do. the financial institutions rub world come you see modification taking place. financialry large institutions calling themselves universal banks and saying, we will be anywhere providing any service to any client. then you see others that are focusing more intently on

certain markets where they feel they need to be or can afford to be because of the cost of capital that it takes to participate in some businesses. >> as we look at the industry, from our perspective, we are not going to be -- people should not want us to be everything to everyone. that is not what people thought of 10 years ago with citigroup. would you agree that that is a change? >> we have gone through a significant transformation. taking our company back to our roots of being the global bank. draw ongs that we can behalf of our customers and clients -- if you look at the asset management business, there a lot of things that we shed as with thesei holdings non-core assets. these are things that did not fit with who we are and who we want to be. >> is there anything you want to do now that is not part of ?iti's future questio >> i think we have the right

business mix. you took four percent of your operating expenses out of the cost. would you want a similar amount out in 2014? year is wedid this introduce a series of metrics so that people can view what we wanted to do. we want to create balance. we put out an efficiency ratio. what are we going to spend to earn that question mark put targets out there. we want the balance of growing revenue and cutting expense. we have to make sure that we create the right incentives in each direction. corbat, the ceo of citigroup. he is all about execution and cutting costs. he is all about turning citigroup into something that is not your garden-variety coming universal bank providing everything to everyone. when i sat down with corvette, we talked about, what happens to citigroup during the taper question mark how difficult is it going to be for a financial institution of citigroup's size be anage what promises to

very tricky exit from unprecedented monetary policy? here's michael corbat. when you go back and look at rate transitions, they are never skewed. we as a world going to this one probably a bit better than we have historically. we after a member that taper is actually tapering, not taking. it is what is removing -- it is in it andwhat's getting back to where we should be. there's a tremendous amount of confidence -- >> there's a tremendous amount of confidence to manage this without creating market volatility. why is there so much confidence when this is unprecedented questio? >> why are we beginning to taper? becoming a better

place, particularly the u.s.. our full engines are coming in behind it. it should create for a better transition. >> does the international breaths make these things more difficult because you have sizable operations in so many countries that are on one hand adversely affected by the fed's withdrawal of liquidity and, on the other, still stuck on a phase of quantitative easing questio? >> you look at the emerging markets -- >> you are not in the 3% trend? >> our unbelief is around 2.6-2.7. probably around 3.25. ,% with recovery in europe we're going to see growth in emerging markets still at more than twice the rate of the

developed markets. when you think about the mix of our franchise, good presence in europe and the u.s., we have the balance of that. withat was my conversation citigroup's ceo michael corbat earlier this morning. i can remember a time when a guy who looked out into the future and said developed markets growing at two percent would have sounded like the gloomiest prospect of all time. yet, to a guy like michael corbat, it actually feels good because where we have been. >> we are aimed in the right direction. we heard it yesterday -- christian from bank of america said the same thing. they're not trying to be all things fall clients. yes, they want to be a universal bank who offers a myriad of products, but they need to offer that premium service, but it is not everyone. the way he described the fed taper to a bit of a cakewalk.

he has so much confidence in the ability of the fed to unwind this liquidity injection. his excuse, as you heard, for rational reasoning, it he does not believe this is a tightening of monetary policy. he says withdrawing the liquidity and it pays of quantitative easing is in principle as it was to put it in. we have to wait to see how that goes. >> that is michael corbat. he is the ceo of citibank. when we come back, we're kicking off our billionaire hour. we're going to be talking cell phones. if you have a cell phone in the developing country, this guy has your number. will be speaking with the irish telecom billionaire, dennis o'brien. >> we will be talking about what controls -- talking to who controls the world's biggest aluminum company. we are streaming on your smart phone, tablet, and on bloomberg.com. you can watch all of our news on demand on apple tv. ♪

>> welcome back to "market makers." the special davos edition. verizon and at&t may dominate the mobile phone market in the u.s., but it is a very different story in the developing world. the major player in markets all especially int, developing countries -- dennis o'brien is the chairman and founder of that company. he's also the richest man in ireland. i wish i was. welcome. great to see you. you're a man who spends his life on a plane. why come here? a crossroads. everybody is converging on this crossroads in january. it's great to meet people who you would have to travel 15 hours to get to. >> you said the biggest challenge we face is politics. there are a lot of politicians

here. >> you need politicians to run countries, because business people have transitioned into politics. obviously -- they are business people here, but global politicians as well. >> the countries you would like to expand in -- who are you seeing here? what kind of progress are you making? >> there is a mixture of things we're doing at the moment. we decided to do a search in the next few months where we are investing more in our networks in terms of percentage of turnover. we see an opportunity now in our markets to go the whole hog. to go all the way to 3.5 g and grounder networks on the to businesses in our markets. >> even in these countries that have such depressed

economy's question mark >> they are paying their way. there is an opportunity to get people broadband, very fancy data networks, exactly the way you expected to happen in a developing -- developed market. if you look at the next 10 years, all these economies are going to be very well developed. >> red region are you most excited about? -- what region are you most excited about? >> papa new guinea is one of the most exciting places. you are building cell towers there? they are on the turn. there is a great investment seminar for them tomorrow. all i are looking at them as a manufacturing place because of requirements and how close they are to the u.s..

you're seeing great opportunity in all of our markets to invest more money. >> what about cuba? >> it is an outlier. i don't think anything will happen very quickly and cuba. it is interesting to read that there are these groups in apartments and houses that begin to get more vocal about change and reform in cuba. but still, a way off in my mind. see the sign, will he be the first man in cuba? >> we have developed good relationships and cuba. there are restrictions in joint business with cuba as well. it is all going to change. all the bold countries in the world are coming into the fold. if you look at it, three or four of them in the world today. i believe you have to forge relationships and countries to change them. you can't ignore them. a great example is myanmar. the fact that the u.s. led the way they're in terms of trying to get reforms on the train, as

such. if you look at the progress of the last 18 months in myanmar, it is insignificant. >> steve schwarzman, when he was talking about investing all of the world coming said they targeted countries that have a strong rule of law. you don't. >> we have a mixture of it depends on what industry you're in. if you're in a basic industry, the telecommunications, like we are, managed from all parts of the economy, you can take some risks. >> what does that mean? >> you can invest in these countries because it is a basic necessity to have a mobile phone now. maybe in certain industries, you would not invest in that country. >> we hear so much about the promise that mobile technology offers to industries like banking. you're in the mobilephone business, or at least the wireless services business.

how can do t your company take advantage of what the banks want to do in places like africa? >> mobilephone company's will end up competing with banks because it is very difficult to get a bank and their system to integrate or work with the mobile phone company. there are a couple of examples, com in kenya.i going to be a deposit taker? a lender? >> in the immediate term, deposit maker. to the banks are working with stop this way of doing things. when we invest in the u.s. company called boom, we are particularly excited because we interesting technology for taking payments from the u.s. to mexico.

i think the technology is great. >> you are growing exponentially. icel to go for dig public? itsould the market get his head around investing in pop new guinea? i'm not sure. you have all these analysts who have never been to these countries. they may not like them. we have been able to do what our bondholders -- three years of work. -- through years of work. >> there is no company that does what you do, but is there another company in another industry that is found its way into similar markets that is publicly traded? and look to my own industry

i say look at what they have done in africa in three or four years. the way they have gone in and are now the second largest cell phone company in the continent of africa. they have a very similar business model. we have taken bits of their business model as well. i like the way they have gone into the emerging markets in africa and have created a whole new industry at. >> what kind of phone do you carry? >> i carry a nokia at the moment. >> what do you think of blackberry at this point? >> everybody loves blackberry. have ady says, i used to blackberry. i think they need to change. they need to maybe have a dual operating system with android as well. maybe just change their business model. reinvention.ut everybody has to reinvent themselves every year, every couple of years. >> it's not too late for them? >> i hope not. they have a significant amount

of cash on their balance sheet. it's all about leadership. can the management find their intout of the desert building a product that is going to be another cracker question mark >> mobile technology excites you for sure. if you had an extra 100 million dollars lying around, what would you invest in? what is most exciting out there? is a mobile operator in thailand, i would invest in him. lyricalof the turmoil in thailand, i would stick to what i would know. >> the stuff you know, you really, really know. dennis, thank you for joining us. and very special treat for eric and i to see the man who is always traveling around the world. he happens to be in davos. he is the chairman of digicel. >> there is a bit of blood on

the floor at the new york stock exchange. on the markets is next on bloomberg television. stay with us. ♪

>> this is market makers. i'm scarlet fu. eric andeturn to stephanie soon. the top news stories from around the world. the housing industry just wrapped up its best year since 2006. previously owned homes rose in december for the first time in four months. they gained just one percent. n blamedtors associatio

bad weather. wall street is in the red today. it is a global selloff of stock. carried a0 losing .9% report shows chinese many factoring shrank. we had that housing report, which is somewhat disappointing, even as jobless claims showed u a drop. justin bieber has been arrested in miami beach. according to police, he was drag racing and a lamborghini. marijuana and drank and alcohol. he resisted arrest for little bit as well. he is the man to see in russia. biggestols the world's aluminum producer. his interest in everything from coal to automaking. stephanie and eric will be speaking with them from davos in just a moment. plus, tune in tonight for a special interview with bill

gates and michael bloomberg. e the titans arr myth that poverty cannot be eradicated. this is bloomberg television. ♪

>> live from the world economic forum in davos, switzerland, this is a special edition of "market makers." i am erik schatzker, here with stephanie. you're watching "market makers." let's talk about the russian economy. it is dominated by a handful of wealthy and powerful industrialists who control the country's big metals. we are honored here to have one of those titans of industry here. runs thepaska h largest aluminum producer. pleasure to have you with us. a businessman. hassinessman who i

invested millions of dollars of his own money to bring you look next to sochi. i take it you will be there? >> of course. the limericks are overcome, do you expect to get a return on investment? over, doympics are expect to get a return on investment? >> they are developed by private sector -- residential development. in russia, we only have 100 12 miles of territory where you can -- 120 miles of territory where you can enjoy winter and summer. >> sochi? >> are you concerned with the security talks that you won't get such a massive crowd in sochi? the olympics go everywhere. same as athens and everywhere. >> you mean it's going to lose

money? >> it is a very narrow balance. do you think the way the country went about developing and a not soing in voluntary fashion people like your self -- is that the right way to do it? >> i am from south russia. it is a great opportunity. there'll be more than 200,000 jobs created after the olympics. and this travel industry and service industry -- it is a great opportunity. first of all, in the south, we don't have many industries. we have oil, agriculture, but not like the siberian parts of russia in terms of industrial opportunity. europe, weastern

have a good demographic. in the south, there is a growing number of people who need new places to work. whatn you talk to us about is happening in the ukraine? you have factory there. >> we have a factory in the south. in the safe zone. seeou don't believe what we happening in kiev is going to spread to the point where it endangers the business interests of people like yourself throughout the country question ? >> there is no connection. the country is always divided between east and west. even language is different. n understand indust ukrainian. i am very upset to know what is happened -- the country

will grow, but in the reality, there is no benefit. >> what would you like to see happen? >> they need to calm down. >> what is going to make them calm down? what is going to be the catalyst? from where we are sitting come it looks like the situation is getting worse. >> people are dying. >> i'm not next bird on what is going -- i'm not an expert on what is going on and kia. -- on in tf. kiev.ng on in a ukrainian issue that is going on there. -- it is a ukrainian issue that is going on there. >> there are many business people who come to davos to start to understand different reasons that the world look at international investment. we were speaking to steve schwarzman from the blackstone wasp and asked him if he

investing in russia. what does russia need to do to attract foreign investors to build their confidence in the region? >> a lot of things. >> like what? improving ourkeep legal system. you will never change it overnight. don't forget -- more than 20 russia was the soviet union. we have all legal institutions which were trying to protect state properties. there was no private property. you can have private business. -- you could not have private business. you could end up in jail. judges imagine the same still in place? 20 years is not enough. we need a legal system based on people who are capable to judge.

it takes a long time. kinds ofu make these improvements with the current government in place? >> of course. it's not government. it's about people. any government will go and lose direction. -- in thetransition 1990's, it was a lot of views that it could be done and 5-7 years. perhaps 10 years. how long it will take to come to a point where it will be back to the same security level as it was? same with russia. we may need 25 years to go through this transition. >> what is it mean for the prospect of change? -- what does it mean for the prospect of change? >> it is improvement. >> it represents improvement to

you? how about the relationship between russia and the united states? from where we said, admittedly, our perspective is limited come it seems the relationship is deteriorating. >> you have to distinguish state department and russia foreign ministers. they have relationships of normal people. we understand each other. russia -- alcoa, developing in russia with the metals they have brought to us and manufacturing, they benefit with the investment. we can walk together, developing russian local markets. earth science -- it used to be more. about education creating exchange.

agenda whichficial -- every aspect, not just russian and u.s. interest. we have a lot of those things in common. we have great territory. to go muchortunity more fast in developing better ties. >> the aluminum business -- your company is the world's largest aluminum producer. aluminum prices have suffered. alcoa has suffered tremendously to. , two. what you see being the catalyst to drive prices higher? >> output on the supply side. we have been very optimistic. >> the oil industry knows how difficult that is. handle it.t they they handle it very well. they're are very cautious about real supply, balance, and that is what helps them to keep

prices healthy. with good return. there is a lot of optimism about china, india, we need to see the balance. outside of china, there is imbalance. there is a deficit in the current production numbers. the good story is, we have consumption growing. consumption will grow in the next 4-5 years by 6%. you can see a premium in the united states and europe. they are at all-time highs. the current demand is very healthy. >> how important is it that we see automakers like ford beginning to use aluminum and its single most popular product,

the f1 50 pickup truck, which fomost of the years was steel? >> it will not change overnight. go, as we said, the olympics is coming. what sport is russia going to take the golden? >> i cannot guess. gold in?he >> i cannot guess. >> rush is going to win the entire sochi olympics. -- russia is going to win the entire sochi live picks. >-- sochi olympics. >> when we come back, we'll be talking about president rouhani of iran. you'll fin♪

welcome back to "market

makers." steffi and i are here in davos, switzerland. it is the world economic forum. one of the feature attractions this year, resident rouhani of -- president rouhani of iran. , theng about many things softening of sanctions, for example. investment opportunity in iran. >> you can welcome our all-star from london. she knows what he has to say. i did not invite francine into the conversation yet is because she might be having some mike problems. >> i'm so cold, i don't know what is happening anymore. >> we will talk about john mccain. senator john mccain with whom he sat down with earlier today. he had some things to say about iran. >> indeed he did. rouhani is coming here with the message today. he is very dynamic.

senator mccain says he is a fantastic salesman. room,e is so much wengs are so difficult, h went on to talk about russia and ukraine. he does not feel positive. he feels very concerned with the upcoming sochi live picks. he is definitively concerned. -- the sochi olympics. the political climate, the people, the protesters, the unrest, he does see it. >> let's listen to senator john mccain. is a great pr guy. he has a great image. is, when you get down to it, they will insist on the right to enrich. as long as they have the right to enrich, they will be moving forward towards the acquisition of a nuclear weapon. there is no reason for them to

want to enrich these materials. they want a nuclear power plant or a nuclear capabilities for peaceful purposes, we will provide it. >> so john mccain has the reputation for being hawkish, shall we say. talked to the leader of blackstone. he had a slightly different perspective on rouhani. had as manyhey have sanctions as they needed, creating real hardships, which was the design of it. i'm not a foreign-policy expert. to know what is going to happen from here -- >> differing views for different reasons. john mccain, the politician, steve schwarzman, the ceo of blackstone, he is an investor. they don't look at things the same way. >> steve schwarzman continued to say that countries where they

invest have to have a strong rule of law. very different from what we heard from dennis o'brien who said that some lines mean great opportunity. >> we will be back from dallas switzerland in a few minutes. don't go away. ♪

>> you're watching "market makers." we have an update on breaking news that we brought you earlier. the senator trying to look into the practices of herbalife. they are responding in a statement saying that they received a letter this morning and look forward to an opportunity to introduce the company to him and addresses concerns at his earliest convenience. the details on the letter ed markey sent -- he sent one to the federal trade commission director. in his letter come allegations being made by some of his constituents that they have lost money because of

herbalife's practices. allegations that the company is a pyramid scheme. these allegations went public after pushes for an investigation. poses questions to the management and asks that those questions be answered by february 28. he is giving a deadline for these questions to be answered. it sounds like from herbalife's statement that it is going to give the answers to those questions, some of which involve the company's compensation structure and the structure of herbalife in general. how much of its products are sold to outside consumers worse is folks who are inside the herbalife network of its nutritional supplements. we wanted to mention quickly that the shares at this point are down by about 11%. taking a sharp leg lower after

s news came out. speaking of a sharp downturn, stocks are falling here in the u.s. we will be right back with more "market makers." ♪

>> another amazing day here at the world economic forum. not everyday that you get to

talk to oleg deripaska. earlier, steve schwarzman was here. >> truly a power packed day. we didn't even mention the ceo of coca-cola. >> michael corbat. >> senator john mccain. it was a big day here in davos. i had an interview with michael dell. >> tomorrow, we crank it up again. the ceo of goldman sachs and the president. >> he also have steve miller. he is the chairman of aig. it will be an action-packed day. >> that is just "market makers." tune in all day tomorrow on bloomberg. don't forget about our apple tv app. you can watch live streaming videos and our interviews after they have happened. .> on bloomberg.com

we will be tweeting. we will send it back to new york. why? we are done for the day. we have to hit the davos party scene. because it is so cold here, our hands are about to fall off. we will send you to new york where julie hyman has more. >> i think it's even colder here. luckily, i am inside, where it is 56 past the hour. let's get straight to our options insight today. .he s&p 500 is dropping sharply it is below its opening levels for the year. joining me now with his slightly is jerod.ade index we're seeing stocks fall pretty sharply today because of the manufacturing date out of china. there is a lot of concern about how well the growth is going to continue. is it the driving reason behind your bearish outlook or are you looking at something else? >> i feel like the monday morning

quarterback. i was putting this trade together last night. this morning, i said, here we go. lot of folks do not sell in 2013 because they were waiting for the economic data to change. that means there is some pent-up selling out there. we're starting to see that manifest itself. the reason why is earnings are not giving us the affirmation that we need in terms of revenue and economic growth. when you look at the average outlook of a company out there, they are not telling us that things are getting better. we're dancing a big increasing guidance. we are not saying, from a statistical a technical aspect, the s&p is going to the wall. the resistance point i'm looking 1860-1865 call

spread. your maximum risk is $4.20. the cool part is come you have about an 85% statistical chance of the trade working. togethert those traits last night. things are going your way in terms of the economic data out of china. i'm curious about the timing of the expiration here. heretty short trade -- ofe it's january 31 its january 31 expiration. >> i failed to mention it earlier. the reason why a chosen next friday's expiration is, i look at the earnings coming out, the economic data coming out next week, and i don't see a catalyst in those numbers that will propel us past 1860. those options expire friday in the morning.

the friday s&p is that friday morning. that is going to be your mark. again, we are not going to see 1860 by next friday. >> we will check back in with u.s. always to see if you are correct. thank you so much. we appreciate it. we will be on the markets once again in 30 minutes. lunch money is up next. ♪

money"ome to "lunch where we tied together the best interviews and videos. i am matt miller. it is time to break up ebay and paypal, says activist carl icahn. what would you tell your 25 your old self? you will hear what ceos have to say about that. os, how to escape an ambush, if you are a billionaire. and are the billions worth it to nbc