edinburgh. janet yellen sent stocks to record highs, gold plunges. what is that about? alibaba phrases this evening. this is bloomberg "surveillance," live from our world headquarters in new york. thursday, september 18. i am tom keene. joining me is scarlet fu and adam johnson. we get to our morning brief. we could go for five hours. >> nothing brief about the brief. starting in switzerland, the national bank cut the overnight -- overnight, they cut the inflation forecast for the next two years. saying the risk of deflation has increased. when a big mac costs 15 bucks in zürich, you're not bringing the capital flow and. fallina, new home prices in 60 cities, up from 60 four last month. the broadest decline in 3.5 years. >> a busy day. initial jobless claims,

building permits, and housing. 9:45, the bloomberg consumer comfort index. earnings, oracle and red hat after the bell. the senate votes on whether to appropriate funds for the training and arming of syrian rebels. petro poroshenko is addressing congress. he is going to congress in an appeal for support. >> some pageantry there. i thought the headlines were pretty perfunctory out of ukraine. >> in what sense? >> nothing like bombing or missiles are people dying. will beder what putin doing as petro poroshenko meets with obama. >> there is a cease-fire there and people are still dying. >> let's do a data check. something off of the janet yellen comments. futures up 8. 10 year yield higher. currency markets really show the move.

euro-dollar 1.2873. hydrocarbon churn. brent crude, under 100. vix, 12.68. weaker 108.67.a gold, massive support at 1200. on the watch for a break of support of gold. we're t that point. pairs. the major asian financial crisis as seen through the relationship of south korea and japan. here's the success of south korea. stronger korean won. wanted.what abenomics getting back to where they were after the 1998 crisis.

a story away from the major players. >> the conversation between japanese electronic players and korean companies. how much lower does abe want the yen? >> how does china, singapore, or south korea respond? >> thank you for bringing this to my attention. weakenedas effectively against the south korean won from the rate of 16 to 10. that makes a toyota more competitive. >> anecdotal reporting. i was in a hyundai limo. gorgeous. >> was it white? >> black. >> i'd like to see you in a white stretch. >> we have a lot of ground cover. >> let's move on.

>> voters in scotland decide the fate of the 300-year-old union with britain. i was looking up numbers, this marks the 51st independence referendum worldwide since the end of world war ii. the first was iceland's break from danish rule. south sudan.nt was in the 1990's, you had countries leaving the soviet union. >> this is one of the smartest things i have heard. 50-some since wwii. >> this would be the 51st. not like it is unusual. scottishbec, the turnout is huge. >> so far, 27 votes in favor, 23 against. >> some limited coverage. huge audience in the

u.k. and they have different rules. >> under u.k. laws, regulators want to make sure voters are not influenced by anything they see on television. >> they would be influenced by you. >> by any discussion of what is happening. >> either for or against. >> we go to anna edwards in scotland. >> the yellen effect. you told us about the stock market making new highs. dollar with a5, yen.r high against the the fed kept the considerable time in the language. johnrio gabelli and taft. >> here's how i defined attention, you still say considerable time and on the other hand you introduce a 2017

forecast where rates go from 25 basis points now up to 3 and 3/4. >> the punch bowl. >> does it still taste good? >> i missed you yesterday. >> alibaba pricing tonight to begin trading tomorrow morning. we find out if alibaba will be the worlds's biggest ipo. one thing that is unusual is that early investors will be able to sell more than $8 billion on the first-day, 1/3 of the shares that could be sold. they are not bound by lockout. >> what's the skinny on the pricing? bet?6 to $68, a side >> it's -- have some context

about the company in a little bit. our front page. we do say good morning, worldwide. and welcome to our viewers in the united kingdom. the polls there open and scotland. aret bloomberg television honoring the rules of broadcast on the day of the vote in the u.k. no discussion of poll results or to sway voters. anna edwards is in edinburgh for a good discussion. anna, if you were to lock the royal mile today, what would you observe? >> you would see a lot of people on their way to polling stations. thanks for having me. a lot of people, 4.3 million, have registered to vote. 97% of the potential electorate in this vote. if you're over the age of 16, you get to vote. fairly unprecedented in britain. if you are from any commonwealth

country and you are living in scotland you are eligible to vote. eligible to vote via post. a simple majority system. we wait until 2:00 in the morning. >> i thought the "financial times" had a fabulous article on their cover this morning that really touched upon the mood in the emotion of a typical family in scotland. are they lined up outside polling booths? what does a voting list look like this morning? atmosphere -- we have spoken to a few people. it's a mixed atmosphere. there is some tension and some emotion. we've been hearing how emotions are running high. polling booths have been open from 7:00 this morning and are open until 10:00 tonight. the votes are then sent to 32 way tothey find their

edinburgh at the royal highland center, that is where the final results will be announced. around breakfast time. we start to get the numbers at 2:00 in the morning. 9:00 your timee, this evening. it will not be until breakfast time in the u.k. that we start to really understand what has happened here. i was interested in your conversation about the turnout. i have a statistic courtesy of the university of reading. the number to beat in terms of 6%, that was the recordbreaker. if you want to get the highest turnout in any democratic election on any subject since 1945, that is the number to int, 97.6%, new zealand 1946. >> anna edwards from edinburgh.

she will be with us through bloomberg "surveillance." extraordinary, 46 miles from 385 miles to glasgow, to the shetland islands. exercise. >> 97% turnout is stunning. >> we don't know anything like that in america. looking at the politics of america, heating up. taft'sp's -- john "stewardship." he's with rbc wealth management. robert is a democratic strategist. he knows every vote in kansas and a lot of support for vice president joe biden the years. let me turn to the fed meeting yesterday. we will talk about this later. it seems, after what we observe, janet yellen controls our markets. is that a sane statement?

>> absolutely. she is like the minister in a church where all the congregants believe in the miracle of immaculate withdrawal. [laughter] that's a phrase i heard the other day. >> i knew you were going to say that. >> as long as she does not say anything in the liturgy to contradict that, the markets are hearing what they want here. any indication of recession on accommodativees, monetary policy and no recession, the markets are going to continue the rise. ourow does this fold into politics? a monetary leader moving the economy around. >> washington is relieved rates are going to stay at zero. cheap money has been good for the economy and good for politicians. they are relieved. >> they are relieved. what is a say in terms of the

public faith in the federal reserve? not so long ago, everyone was yelling for ben bernanke's head. the anger has dissipated. thehe public faith in federal reserve is where the public's faith is in a lot of institutions, at the lowest it has been. i don't think it is a yellen matter. you just loook at -- you just look at the numbers. >> you have been a bull from 2009, what did the gloom crew get wrong. >> we are about to put out a white paper, jonathan galolub is our strategist. >> he was on the show, he likes industrials. the industrial renaissance in the u.s. the early toin middle stages of a secular bull market. cycles, at the super

1950-19 70, 1980-2000, 2010 to what? maybe accommodative monetary policy is not the only thing driving. >> john taft and robert. on bloomberg "surveillance today. >> one of the things that might be percolating, small business. you want to focus on it. a live panel. erik schatzker sits down with the founder of this network, michael bloomberg. lloyd blankfein of goldman sachs. warren buffett. >> an awesome lineup. >> the michigan governor, rick snyder. a small business is not happening in detroit. 8:30 today. perhaps that's one of the things gettingathan golub is at, it is percolating from the ground up. >> a lot to cover on bloomberg

"surveillance." go time for alibaba. the chinese company gets ready nyse.e its debut on the a look at some of the key businesses that drive its bottom line. we will be right back. ♪

2017.ty until futures up 8. gabelli, a legendary value investor. we talk about janet yellen and your equity markets. this is bloomberg "surveillance." welcome worldwide, particularly in the u.k. an important day for those in the u.k. scarlet fu and adam johnson. >> important day for executives

in china. china's biggest e-commerce company, alibaba, will be pricing its ipo tonight. thanoks more in revenue amazon and ebay combined. you need to know who alibaba's biggest competitors are. our reporter has spent years covering this company. we contextualize the businesses. one is alipay. >> alibaba spun that off in 2011, it is now owned by another parent company. interesting about this line of business, this is the largest online payment service in the world. pay goes that if ali 5%blic, the company gets 37. of all proceeds with no cap. there's a lot of upside for alibaba to the extent that alipay goes public. that is a dynamic not many

people understand. >> it also makes me realize that yahoo! better not sell any of its alibaba shares. the better alibaba does, the better yahoo! does. >> it makes it the biggest chunk of its market cap. >> john who owns about -- yahoo owns about -- >> they will get diluted and have 16% at the end. off as wants yahoo! soon as possible. we have talked about how it would be advantageous for alibaba. they can jump in and acquire all of yoahoo! >> a couple other chinese companies trade. weibo. these are competitors of alipay. >> if you step back and look at alibaba.

you mentioned their consumer to consumer platform. another group is their online video platform, like youtube. weibo is the social messaging platform similar to twitter. twitter is not allowed in china because of censorship rules. when you look at the upside u toudo.l, probably youk . you can have advertising. it is more lucrative. also the fact that you can connect at with the online much place. you can foresee a venue where you can buy video content. >> many businesses of alibaba that will soon be more familiar. >> an interesting point that not a lot of people are talking about. twitter is not allowed in china.

you are talking about a huge influence of wealth gathering up tomorrow when they go public. washington is not capable of not engaging with that type of wealth when it gathers up. a consumerking about online company were some of the most important issues being debated are. privacy and security. you overlay the chinese government, it is going to get, get it. alibaba'say competitors, well-funded in washington from a political ambulatory perspective. they will not let these guys skate into their markets. >> we will be checking in tomorrow after the shares price, that another nfl running back has been suspended. jonathan dwyer of the arizona cardinals.

between the question of the day, what is the nfl's next step. tweet us @bsurveillance. you are watching bloomberg "surveillance." we have a lot to talk about. ♪

>> good morning. bloomberg "surveillance." futures up 8. dow futures up 58. >> i chose this with our guest in mind. president clinton and president obama. this comes from another strategist, karl rove, in "the wall street journal."

is this a call to arms to soften the conservative agenda? >> they've got to do it. this is a call to the key building demographic in any midterm election which is independent voters. rove knows that the extremes of the republican party have been driving people away from the party. particularly when elections get nationalized, which the senate more tend to be representative statewide. say the same thing on the democratic side. democrats have to mobilize their base and appeal to independent voters. >> do you agree that they have to speak to the middle class of america? we saw that in iowa. >> you solid with vice president

joe biden in iowa. he will be in denver and texas. >> the economy election. >> when is it ever not? >> it is changing from tax cuts. it is more about income inequality, parity in pay for women. "my career, my future could be better than my parents'." robert, former chief of staff or vice president joe biden. our panel later today. erik schatzker sits down with michael bloomberg and warren buffett. ♪

>> bloomberg "surveillance good morning,. will speak to the fed, alibaba and an important vote in scotland.

tom heightened fears of a terror attack in australia. authorities say islamic state --itants planned to head behead a citizen to shock and terrify the public. toronto mayor rob for has cancer. he will go under 40 days of chemotherapy. they say his cancer is rare. mayor onew his bid for friday. finally, another nfl player accused of domestic islands. jonathan dwyer was arrested yet yesterday in phoenix. gray card he has taken a leave of absence as he appeals a conviction for assaulting a former girlfriend. let's ask our twitter question of the day. what is the nfl's next step?

>> good question. >> we saw eli meeting -- eli manning saying, man up. >> gold south. finally on the 1200 watch on gold. 12.24 per ounce. certain,one thing after the financial crisis, the commonwealth has shifted and the haves are happier and the have-nots drift. yellen is part and parcel of the widening wealth gap. siemens have fought. control ofllen in the dynamics of our societal wealth? >> no, janet yellen is in

control of the steady upward increase in equity values over the last five years with accommodative monetary policy. the income and equality is a social phenomena. a critical one but she is not a key player. parse theto difference between two ideas. when we say income inequality and wealth inequality, what is the difference? >> i don't think there is a difference. the point is, the average american doesn't believe they have made any progress. they have gone backward. that is fueling this resentment of anybody they perceive as doing better. we just released a report that shows high net ultrahigh networth individuals are moving up in terms of their rank and value of portfolios.

bring in a chart that shows investing is actively seeking risk. that willingness to take on risk has increased. talk about the layers of anxiety that you see from your data on top of that. we have this current abnormal situation of low interest rates, price imperfection, not encouraging. >> look where we are coming from. this location -- in our lifetimes. 2008, 2009. every day that goes by, the memory fades. you can see it in the numbers. about our risk appetite index. investors are willing to go further out of the risk spectrum. among the data we picked up is that international equities are

as high as they have ever been. that is an indication they are willing to take risk. >> even with a level of discomfort? >> people are always worried about the future, but the other thing is where do you go if you are a retiree to get yield? there is no place to go. to get it you have to go out the risk curve. you, the imageto that comes to mind is a rubber band. on the one extreme you have janet yellen keeping rates low and on the other you have the chart scarlet mentioned where people will go farther out on the risk spectrum. , so how a rubber band do you quantify how it can stretch? market strategist talk about the benefits of correction. a 10 to 15% reach raise been in equity to mind people the market can go down. when we have had a long.

without a correction, we need one. the huge success with the roosevelts and the century-old debate of a good talk receipt. as we go into 2014 with a widening wealth gap, is it a plutocracy? >> you're talking about the widening wealth gap, but the risk of that earners and wage earners are seeing is that can i get some play to fill the things i need in my life so i can keep one or two or three jobs. i know you don't speak for the republican party but how do republicans respond to the layup for democratic politics? >> i have written on this. >> you have to be delicate here because you are working and not advising rand paul. >> i wrote an op-ed for the new york times called the cry of the

true republican. i think republicans have gotten kidnapped by social issues. that has deflected their focus from what has traditionally been a focus on the economy and individual rights. how do democrats keep those disaffected republicans? >> they have to be for things like higher minimum wage. >> that will not help me with republicans who can't stand -- in 2000nk you will see 16 the republican party and democratic party come to the same issue and have the same conversation about how to help someone and suburban philadelphia with a household income of $100,000 do better? here is a thing you can coalesce around. inequality in wealth and income hurts economic road. you want the economy to grow you have to have some connection between the top of the middle and bottom. were --e democrats

worst nightmare for years from now? have mitt could romney -- >> he is effectively saying what we all said, it is a weird name i'm sorry, if we beat him two years ago we can beat them in two years. >> the wealth dynamic within politics is -- >> you john wrote about warren buffett. he seems to bridge that gap between wealth and the struggles of the everyman, which is ironic. >> he is worth so much money but he talks about how the money he has doesn't matter to him in terms of quality of life. an incredible uber common sense. a matter of fact you want

to tune into the bloomberg panel hosted by eric, he is sitting with michael bloomberg. and mr. buffett. they will also be joined a governor rick snyder of michigan. this is a small business event in detroit area mr. buffett is very apropos to this. participatingyou what would you ask mr. buffett? >> he has said some fabulous things about the obligation we all have to manage our wealth in a way that leaves the world a better place. i think that is one of the most important issues for people in the 1%. what do you do with your wealth to make the world a better place? taft,, one of our guest hosts. >> nfl chief roger goodell, how does the league stack up as a business?

>> good morning, bloomberg "surveillance." i am tom keene.

let's celebrate our top headlines. a bad 1, 2000 homes threatened in california with this out-of-control blaze east of sacramento. 2500 firefighters are on the scene. consumed 44 square miles of trees and brush. they're calling it 5% contained. >> the net effect of the drought. >> a new investment chief at the largest and pension fund in the u.s., calpers. he is handling the job on an interim basis since the death. they will pull all $4 billion out of the hedge fund. a loan program is i'm to fend off inflation in europe falling short of targeted lending. banker thinks the

recovering should be built more on reform. spoke exclusively with axel. >> europe will not come back to growth this quickly. everyone is looking for quick fixes. that is not going to work. europe has to do the hard work, the reforms and eventually regain growth. to stimulate growth without foundations, would be short-lived and not be sustainable and another bump in the development. i don't think it is wise. more of manus cranny's exclusive interview on our website,? -- bloomberg.com. line of amazing the conservatives off the bank in germany, using the same words. there is a germanic view which i

heard there, this is an important interview i urge anyone -- >> he doesn't think that anymore much mark >> there is a big pushback against mario draghi. takes.""whatever it our single best chart is on the most american of sports, american football. it imagines the nfl as a formal business. takesith the billions it in, it is technically nonprofit. if you added all up the nfl revenue is $9 billion per year. eric of bloomberg tv the head of 500arch, screened s&p companies with a similar market cap and revenue. if you look at the nfl's peers would be precision castparts,

striker, discover financial, not the big-name companies you would expect. billion it of $9 trades at roughly five times revenues. five times sales. >> is the nfl overvalued? that is one question to ask. a lot of people say it doesn't have competition. the nba and major league a small don't capture the public in the same way. can'tproblem here is i what a valuation of an entertainment business like i can someone making knee joints, like striker. it is in industry comparison that has challenges. the nfl is a lot more sexy. >> it is and i'm surprised at the comps. they would not be the comparables that i would pull. >> yeah like disney or --

>> yes see with apples up. for the nfl this is the worst nightmare. people are looking at it they see the culture problem but the nfl is trying to heal with it on apr basis. -- a pr basis. >> with just your marketing campaigns of the rbc or minnesota vikings -- >> a number of minnesota companies have pulled back from their affiliation with the minnesota vikings because of adrian peterson. radisson and target pulled all their jerseys -- >> had eu adapter this. you have a luxury box to go to? >> that will not cause pr problem's. it will be the promotional things you do and you run away for the time being. >> then come back when the fire dies down? >> when you can tell your

constituents you're satisfied with the actions the team has taken, at that point it is safe to come back. >> we moved on from arguing about the redskins name haven't we? >> national women trying to decide whether to put a boy cat on the nfl. -- boycott on the nfl. and you look at who is making decisions, it is moms. is a lot of questions about the nfl sports in general, one is the concussion question, the other is being a nonprofit, and the public funding of stadiums. there will be hearings on this topic. the nfl has just hired cynthia hogan who was chief counsel for senator biden, she is really smart. >> i wonder if the boycott will happen. of nfl fans are women.

more women watch it than other events combined. it is ingrained. >> i don't think this is hiring lawyers and lobbyists, is about i have a ninth grader at home and i don't want them to read or hear about this garbage. >> it is a bad example. it also speaks that we have elevated athletes. just because someone can throw a ball or tackle somebody, that doesn't make them someone we want to look up to. they're on a pedestal for the wrong reason. >> look what happened to tiger woods. he lost sponsors. you are watching television, watching golf and your wife walks through and says i can't believe you're watching that guy. the same thing could happen to the nfl. >> and he has yet to recover. what is the nfl's next step? they always seem a step kind. >> that redskins debate you said

we are not talking about. or theas the black skins yellow skins they would've changed the name. >> one thing we are not speaking about is the boston red sox. they have the longest summer. samuel kennedy is the chief operating officer of the last-place boston red sox. jeter is retiring for the yankees and the entire red sox team will retire.

>> this is bloomberg "surveillance." adam has our top headlines. >> we only have a couple of minutes before the 7:00 our so i want to go right to the main issue which is politics. .n election coming up here in seats onave lost six average since 1900. this week six seats -- this year six seats would sway the senate.

that to me is amazing. what we have seen since 1900. what potentially makes this year different and distinguishes it from other midterm races. thehe biggest issue is unpopularity of old parties. one of the reasons the president , what iso as well keeping a close this time am ad, new hampshire, iowa north carolina, alaska, arkansas , is that the republican party is also incredibly unpopular. you have this race to the bottom. halperin's book, let's triple down. what is the methodology of the two parties as they single out kansas. is there a new calculus? >> the democrats know every

party. the party who first enables and grabs the newest technology wins the election. republicans are catching up on two levels. the use of technology, and money. but the democrats are still ahead in both. that is the key. you are part of that machine bill clinton wants to be a part of to help his wife. 200 are codifying characteristics and going after each voter individually. cannot be duplicated? >> when i worked for biden and 88, it was the first year you could buy the list of new hampshire voters that came on a digital printout. now you can find individual boaters and policy preferences. >> the republican comfortable electorate is dying off. are they going to find a new

constituency? >> i agree. >> i don't know if that is the case. i am a republican that is irrelevant in their own party. >> why? i am socially liberal and economically conservative. you can't find a moderate republican. rockefeller republicans. >> thank you so much. glad to have you back. camp gemini and the manager with a terrific report. the united states wealth report. thank you so much. let me do a four x report right now. -- 4x report right now. it's interesting janet yellen. it blows the rape point 08. blows through a

point. during -- up. >> ♪ >> this is bloomberg

"surveillance." >> scotland votes on independence. anna edwards will join us from edinburgh. says stocks are at a record high and gold plunges. this is bloomberg "surveillance ." live from new york. it is thursday, september 18. i am tom keene joining the scarlet fu and adam johnson. ."r guest host mario gabelli little bit on this uproar with the nfl. >> does my scottish bowtie look good? mellon oh tie. andrew carnegie, scotland. it is not yes or no, it is in between.

we welcome all of you in the united kingdom, because of very strict rules on what we can or cannot say. >> here in the u.s. you cannot have me, or anyone have opinions regard to scotland. that violates -- >> if mario starts to go will have to put a sock in his mouth. >> i can't even talk about quebec? financial markets cut its inflation forecast. that's what happens with a big bank, money stops coming in and you have deflation. china home sales. prices have fallen and 68 cities. 830 jobless claims. -- bloombergloomer consumer index.

earnings coming out today oracle and red hat. the senate votes on whether to appropriate funds for the arming of's syrian rebels. that is a big deal. it is double-barreled because the ukrainian president is going to congress to appeal for support and then he's going to the white house to meet president obama. obviously it is very political. >> let's look at some of the details, injures up eight right now. plunges 12.25. i am not on a 1200 watch yet, but boy this gets your attention. 12.65. let's get to our company news. >> we go over to europe. the german pharmaceutical company will focus entirely on its light science businesses

including human, animal and plant health. meantime, apple has updated its privacy policy to let users know. apple's new operating system encrypts messages so they cannot be accessed without a pass code. this comes as apple moves into help and payment technologies. bekos teams upff with bowling. they will have you him up with a u.s. alternative to rocket engines. --ted alternative >> good morning everyone worldwide, as we mentioned before a welcome to our friends and the united kingdom. the polls are open in scotland. 380 five miles to the shetland islands. anna edwards has reviewed it all.

she joins us in the shower -- shadow of david hume's memorial. good morning, a mood of excitement, anticipation, dare i say nervousness. a very misty edinburgh morning. million people have registered to vote so they should be headed to the polls today to make up their minds as to whether scotland goes forward alone or stays part of the united kingdom. that is the question today. a simple yes or no answer. a simple majority system as well. it's not based on constituency. it is a stunning simple majority. we will get the results coming in at 2:00 a.m. a.m. local time. >> do i understand it is a very

is a cold vote? there are pieces of paper and a mechanics that gets it to 2:00 a.m. or 3:00 a.m. friday morning? >> there is paper involved and technology but these polling booths are cast far and wide around scotland. there are small communities that have to be served as well. there are 5500 polling locations to be set up. schools, libraries and community centers. i understand there is a caravan being taken over -- commandeered you might say, up in the west. 52 voters are registered to vote in the caravan. we will see how many turn up. there is a headteacher, a principal warehouse has been commandeered, you can vote in churches and hotels and in fact

some hotels are offering caught tales while you vote. -- cocktails while you vote. my geography in scotland is limited distillery to distillery. sothe rhetoric has been strong on both sides, as you are making your way around edinburgh, is there a collegial feel or more of an edge, almost bitter between those who say yes and no? high onons have run both sides. we spoke to businesses on both sides of the argument. about their own personal feelings. campaign, things remain fairly calm but tensions have been rising in recent days. i would say the atmosphere is both tenant and -- tense and exciting. 9:00 in new york.

that won't be when we know the answer, the results will trickle through over the following hours. by 7:00 in the morning, rectus time and the u.k. we should have those numbers. in the u.k. weme should have those numbers. >> thank you so much, anna edwards. to look at finance and investment again, equities and stock markets like janet yellen's prescription. the dow at record high has plummeted. -- as gold plummeted. much of your standing returns are beholden to janet yellen? >> 100%. bernanke -- ben bernanke. 4.5 trillion dollars is a lot of money and buying power. >> do you presume that earnings

will continue and as you know as an analyst, it matters at the top line as well. increased revenue growth? >> revenue growth is a question of real gdp growth and everyone is trying to raise nominal growth. growth, 2.5% real and 2.5% inflation, that is fine. or is $75 trillion growing at 5% global gdp. the margins will be maintained and tax rates will be interesting areas >> what did you learn from janet yellen yesterday? emphasis on the tabling -- table they gave that says 18 months from now the fed funds rate will go up there for the instrument -- interest margins spread will rise finally.

the market has started anticipating that with banks and financial sectors and companies with large cash balances. >> you're not doing anything necessarily? >> we have been there. the thing that would intrigue us for medically would be a long and 8 -- drop in long-term capital. forecast of rates of 3.5%. what do you make of that? >> i think they are practical. they lowered the gdp growth rate they stomp a grid. we don't pay a lot of attention to the changes, but we look at that. it sounds like we are going back to historical norms. long overdue but not a slingshot. >> that is a reasonable change? on march 15, 2015 rates go up. the ides of march.

>> lots to talk about on the market this morning. kenner with us as well on a discussion of baseball and football. >> something you want to tune in to watch today at 8:30. a sitdown with michael bloomberg and william buffett. and governor rick snyder. a small business event happening 8:30troit area and live it , right here. >> he really says a lot about the autumn of wall street next year.

>> bloomberg "surveillance." i am tom keene. alibaba, itbout begins trading on friday and then begins the day -- they over wahoo. lions share of its $42 billion market cap. our guest host for the hour is mario gabelli.

dow's shares have risen. it has become a tracking stock for alibaba. everyone is talking about whether it is tech friendly or eight tax efficient way. they're selling 120 million shares on the ipo. i don't member whether that includes a green shoe or not but they will have to get more in on the extra 15%. within that framework they will pay a tax. ,hese are shares they bought listed in hong kong, there is a tax in hong kong a 15%. they have stated they are paying full cash back, the question is the other 400 million shares that they have. will they pay a cash tax or have some clever way of deferring and paying later. clearly that is an element in your valuation in yahoo!. there are some ways to do it. >> this is something the company

has been very coy with. either way they will get a lot of cash and what they do will be a big question mark as well. on $10ou pay 35% tax billion, you can employee analytical minds to differ. >> it's just simple math on the bloomberg terminal. andlibaba opens it $83 $.64, that believes -- that means alibaba is worth more than all of you who. >> which would make sense when you consider it is a real business that sells more products than amazon and ebay. yahoo! has cash and has yahoo! japan. those each have certain valuations. >> can alibaba be something in america? >> alibaba is a staggering success.

one of the particular things is the route to market in china that it represents. most of their business is through something that looks like ebay. brands likef burberry and new balance happening at a staggering rate. coming up, mario gabelli on hedge funds.

>> futures up on a nice morning. kannarick we'll talk sports in a minute. voters in scotland head to the polls today. today's vote marks the 51st independence referendum worldwide since the end of world war ii. the first was iceland's break

from danish rule. the most recent was the creation of the south sudan. police detained 15 people and rated a dozen facilities in australia. plan tos claimed to behead a citizen in an effort to shock and horrify the public. in the nfl, another player accused of domestic violence. they deactivated jonathan dwyer. meanwhile defensive end and great party has taken a leave of absence. headlines buttop we need to pose our twitter question of the day. what is the nfl's next step? started with ray rice, a delusion. >> i gave up on my beloved red sox as they went down in flames to the oakland a's. coco crisp went zero for five in

this red sox still couldn't get it done. to stay with the team for 162 games. ist i want to know, baseball's future? it is white, it is old, it is slow. to gete you going to do baseball's's asked back. -- act? >> we have to connect with that next generation of fans. if we don't get them to the ballparks when they are children we won't have them for life. we need to address the issue of our demographic. it is clearly critical that we ,onnect through mobile devices television and the internet. it is one of the reasons we partner with the folks at sapient. millionnvesting $100

over our ballparks. to work on encouraging younger fans to be there. we have to deal with it. >> do you change your methodologies or processes at the red sox after what you observed in the last two weeks at the national football league? it is a brutal issue for the nfl to deal with these societal issues that are more import and then sports. whether it is domestic violence or child abuse. position theyhe are in but we would be foolish to think these problems don't exist in other sports. we haven't necessarily changed policies but it absolutely puts all of professional sports on notice. >> bill you are the chief officer, my question to you is marketing. there is a much bigger issue.

has this been simmering under the surface for a long time? seem to have been simmering if you look at the trend over the past 10 years, a small bat sales or youth sign-ups for a small and softball, those are in decline. been simmering. the challenge for baseball is how do you engage younger fans. that is why technology and social media are so critical. ,> and the issue with the nfl what is the number one thing they need to do? >> we all understand what they hope for, the challenges we don't know what they stand for. that is what they need to address right now. it has a brand problem and say clearly and definitively this is what we stand for and don't stand for. here,ook at baseball first place, last place, first place. i saw you the joy of 12 months ago.

jeter doing that joy of retiring. it is skewed to old people. what is your action plan to speed up the game? >> it starts with enforcing the rules on the books. the rules that stipulate that a pitcher must deliver the ball within 12 seconds. the rules that govern inning breaks for 2.5 minutes. that doesn't happen. with the umpires and players association to get that done. our next commissioner is committed to doing that. you start with those rules. there are other ways to fix the inaction. those are the periods of time that other fans. stepping out-of-the-box, cleaning the mound. there are things we could do to chip away. nomar garame -- blame

cia for longer gains? -- games? jeter, ing of derek wanted to give you a baseball signed for a another number two. hopefully that will mean as much to the yankees -- >> thank you. >> that is to thank you for your loyalty airing this difficult season. they're not above writing our fans. >> i'm going to cry. guys were in the west it would be 25 games. this is like frank mill's own. plays happy derek jeter his final game of the season at fenway park. it sounds like a religious

moment. the last shall be first and the first shall be last. >> there is literally a tear. >> sam is his new best friend now. >> 26 games >> this is bloomberg

"surveillance." our guest house mario gabelli and bill kanarick. we will learn tonight if

alibaba's ipo will be the biggest in history. a few select investors could reap big dollars right away because they will be able to sell $8 billion worth of shares on opening day. the birthday bash in the bluegrass state. jim beam was born 100 years ago today. bronze of his namesake will be unveiled. wright eight just reforming -- rite aid jesper for -- reporting earnings this morning. cut its outlook. it anticipated lower profitability. that is your company news headlines this morning. >> as we have been reporting all morning, jonathan dwyer becomes be fourth player to

suspended for domestic violence. pepsi is a major nfl sponsor and the ceo says i am a mother, a wife, and a football fan. i'm deeply concerned with the nfl's mishandling of these issues. she encourages roger goodell to do the right thing. bill is with us for this hour. define for us, how do you do the right thing? >> you have to do it quickly. saying, ceo of pepsi is people are looking to understand what does the nfl stand for. we know it stands for increased profits and increases significant your ship. one of the things -- viewer ship. one of the things that makes it stand out is the live performances. wellald's, radisson -- >>

radisson with the minnesota vikings. action invery swift terms of suspending their relationships and the specific layers. we are looking for the nfl to do something similar. >> beyonce knowles to be associated, how do you change the thumping -- something and defined what the something is that let's people behave this way. of nfl fans are women. understand ifto you look at the ratings of sunday night's game, it is up 8%. women are not stopping watching and they're not stopping to go to football stadiums. when those things start to happen you will see a big change. >> some women showed up at the jame -- game wearing ray rice's jerseys and saying whatever

happens is between a couple and has nothing to do with the rest of the audience. i find it incredible. here at bloomberg view, she synthesizes it by saying it is about a culture where controlling the image takes priority. it is sponsors to gain more power and impetus to enact meaningful change in america's sport. >> they're not pulling back from advertising. >> anheuser-busch which also made a public statement, and have expressed their discomfort. >> when does that happen? >> i don't know. i don't have the crystal ball. but that will be the tipping point. when advertisers start to pull their dollars or when female fans stop showing up and watching, the whole game changes. >> sports are tribal. the way you spoke about the red sox before you can see the

passion. you have to keep passion in the sports and the fans but you have the equalizer which is the advertising dollar. but they will come back. >> fans are advertisers? andans have not disappeared advertisers will come back. they have to meet -- reach massive audiences and they can't to it online. in the short term they can make a point. >> would it be rude to intrude and say that what is missing is the legal process against these alleged acts? where is the law away from business and commercialism to say, we don't care that you are a fancy dance hockey player or football player? nflhe challenges for the are integrity challenges more than legal challenges. >> that's fair. >> are you saying there is a

rush to judgment? >> i'm saying that these people willave screwed up a time find resolution in the legal process which is something that will provide comfort to women watching. >> there is something else bigger. what needs to happen specifically in order for teams to say, this is unacceptable, you are no longer given a chance to be part of this organization? why haven't they gone there ahead of this whole thing? >> that is the fundamental challenge. , theve seen teams respond vikings as an example. what will be interesting is what extent are teams aware of these issues yet haven't done anything before it was revealed on a public stage. will we start to see that occur.

as we see proactive measures that will give fans and consumers confidence. >> we need a statement. you have to sign it before you sign your contract. >> a code of conduct? what about eli manning coming out and saying you have to man up? >> we see the conversation among fans on social media. the volume is staggering. leaders, which eli manning is demonstrating he is, have to stand up and make a clear statement that we stand for more than touchdowns. >> our twitter question of the day, what is the nfl's next step? what should they do given all of this? >> the day after janet yellen said interest rates will stay you -- low, futures are higher. up by eight points. >> our guest hosts mario gabelli

." the california pension fund sends it packing. though the performance is , shouldsub gabelli they have done hedge funds in the first place? you shall be an eight page report, some good performance but a lot of underperformance. >> let's go through some numbers. from $100 billion to $2.4 trillion in hedge funds. are all hedge funds equal? what are the benchmarks? in addition to that, we all know that the last five years have been a feast for equities. a big tailwind and a good performance. what is their net exposure.

a mathematical number. within that framework they're not owing to perform. if the markets are fairly bad, hedge funds will perform. is doing the wrong thing at the wrong time. >> matthew levine of bloomberg "view" says the idea that you can go to a hedge fund is an idea of what you're doing with long or short stock, but you own the stock anyway. it is self-defeating. it drifts away because it is a big hunk of money. journal which had a brilliant article about the rise and fall of performance investing, within that framework havean have -- can't 10,000 hedge funds that all take smart pills. some will not do well and some shouldn't be in business. it is the objective of the hedge fund.

last year we had michael steinhardt gross 30% a year for 28 years. 8:00 our. ♪ >> bloomberg "surveillance."

i'm tom keene. a most interesting hour at 8:00 this morning. detroitbloomberg, in with the governor of michigan and a guy named buffet. he will be there as well. does warren buffett like wall street? >> he loves the diamond. >> he gets paid very well. how does tom know this stuff scarlet? >> scarlet is dressing for scotland. >> no totally neutral. you are asking about warren buffett. he is a big champion as you know of the small investor and the small business environment as

well am a so he's talked about how do we get the rest of the country back on the economic track. it is no surprise that he would join lloyd blankfein and the governor of michigan to talk about how to bring jobs back to detroit. bring us back to detroit and the auto parts industry. the model t and the big ship -- >> you have got a global marketplace. the united states consumer will buy 17 million cars. that is peeking out. -- peaking out. the united states and the rest of the world next year produced 91 million cars. if you're a parts producer and have technology that can go -- and you will benefit locate facilities outside of the united states.

those companies are out there as well. thesee companies like that have a story. >> a reality check on detroit. it is doing great right now in detroit but i went there a few months ago with steve case. he was talking about how do we get cities back on track. it isality check is that great to talk about creating jobs, but the city is still blighted. half of the lamp lights don't work him a blighted ill things, you have seen that yourself -- blighted buildings. you have seen that yourself. street and into a there were riots because i just kept driving. new york changed because of mayor mike and giuliani and detroit it and. yet to go back and redress the

cosmetics and that is knocking down buildings -- >> and the political situation as well. the corruption. >> if you wanted to start your own business that is located in detroit because of people who want to work an empty factories. >> if i wanted to create a tax-free zone like andrew cuomo in new york -- that could work. >> small business in detroit will be the topic of the panel later this morning.

>> with the results of the election in scotland or the vote in scotland, adam pozen will join us tomorrow. my mostquestion important conversation tomorrow. with adam 6:00 a.m. posen. posen on the future of the united kingdom. we should know that vote in the vicinity of 4:00 a.m. tomorrow. >> this is bloomberg "surveillance." i'm scarlet fu. it is thursday night so guess

what, nfl games tonight. adam is jacked up for that. >> is the most american event. as millions gather around their iphone 6 plus around their -- to watch the super bowl. that's where we are headed. your demand for digital product at a lesser use. kanarick with us. >> the streaming of sports content receives staggering grosses year-over-year. peoplecrease of consuming content online. no question that that trend will continue. there was also a companion device. if you're watching the game in the stadium or at home, more people at ever -- than ever are doing it with multiple screens. ani was speaking with

economist at smith college and he said the nfl down the road could face problems with media rights. tablets, directv satellite television. down the road when the contracts come out come a they might be smaller as well. do you agree? you have toenge is allow fans to get exposed to football. the reverse is true. if you don't adapt and don't allow multi-screens, the problem is bigger. reality, gary bettman gave me this. boyle, mario gabelli of them new york rangers. this is the future. this is ms g. >> you don't want to dvr, or tivo sports. you don't want to watch them a day later, you want it real-time wherever you are.

give the consumer what they want, when they wanted at a low price and -- if i could write clydesdales and sell me beer digital it would make the same amount as money as television. >> it is also a furniture store with your wife on sunday delivery. you want to be able to watch wherever you are. buys a better bet to budweiser shares with anheuser-busch or to invest in madison square garden or to invest in at&t or verizon? >> or to do a variety of things. many will try to make money. the point is that your company's wills consolidate. -- will consolidate. there is a big play going on to consolidate the million-dollar bear market. wireless communications and smartphones go back to one thing. what is football? what are sports? a travel well globally.

look at the world cup in the context of the viewers. advertisers want a certain amount of customers based on a demographic and that will continue. >> is digital good for lebron james? >> lebron james is the most popular athlete on twitter. not every sport is global. baseball by comparison is local. >> cricket doesn't play well in the united states. >> we were talking about derek jeter earlier. he has a preponderance of twitter followers -- followers in the greater new york area. >> we talk about women and how important they are. they make 45% of nfl fans. 55% watch nfl on tv. are they more valuable to the nfl or advertisers? >> i don't think you can separate those things. advertisers are valuable to the

nfl therefore women are valuable to the nfl. there are also 70% of consumer spending. >> that's were the growth is as well. >> if you look at merchandise sales with what the nfl has done, to grow merchandise sales targeted at women is is a good indication that women are very interested in football. thatis staggering to me is they are still going to games and watching tv. >> one of the reasons we love having you on the show is you find quirky companies with great stories. mario, i want to buy something to participate on the digitization of sports. >> there are a lot of companies out there we are looking at one now that had accounting issues. they do post production and editing, but don't ignore the big companies. when the l.a. clippers itketball team was sold,

marked up the valuation of madison square garden. you're getting the knicks and the rangers for free. the stock went from $48 to $66. if you want to watch sports anywhere, the growth of the hispanic martin you want to of whom -- do you want to own televivo? do the content providers want us to watch on digital? are they fat and happy on tv? you made a film -- you would go to the movie theater. then you sold it to television through networks, then you sold it -- different windows. it's just another aspect of a window in a digital age. speed caps and download ability, you want to watch what you want and you want it. you cannot have a clogged artery in the airwaves.

watch thursdayto night's game. won'till be on netflix, i watch it. but i would have no problem watching on my ipad. >> or the iphone 6 plus. >> let's wrap this all up by asking the question of the day. what is the nfl's next step? >> a specific of domestic violence zero tolerance rule. >> create an integrity statement that every member of the nfl has to sign. coaches, youll as violated your out you get no money. i want something proactive. we have to sign integrity statements here at bloomberg. i agree to the following and if i violated i am out. probation through an independent body looking at the implementation of new player and

official standards. nfl fan, players are regular people with great athletic skills period. >> is that a woman answering? >> perhaps? are you atel of bull right now? >> there is a great deal of opportunity because of engineering, ancillary merger acquisitions are happening in and activists are the new catalysts. cash again and dividend growth, does that go away? >> no and basically shareholder compensation just like teammate compensation has to be a part of the matrix. shareholder compensation includes giving money back or buying back stock. if i management i will reduce my share count. >> huddy respond to the laureate

of yale university who says with these ratios everyone is rich. >> that's what our job is. stocks go up and down in a given day. sony yesterday was down three dollars because of a right off. -- right off. it is a book charge long overdue. when i give you something like amazon i expect you to double your money. when i did you gain or i think you'll get 75%. if i'm looking for next week -- change theforever valuation of sports franchises? >> it certainly stepped it up. we'll see the value increase over time. bills, look at the price paid for a great market but an interesting number. thehe buffalo jills, cheerleaders are what they are called.

are not getting minimum wage. >> thank you so much. ," onberg "surveillance radio continues. " is next.op ♪ >> good morning it is thursday,

september 18 and we are live from bloomberg headquarters. a great show ahead lined up.

we will hear from mike bloomberg. in 30 minutes. what a lineup. to say anything more about that. you'll stay tuned here on bloomberg television. a big day for alibaba ahead. former yahoo! board member will join me on which industry players should be worried. is sir me in moments martin sorrell. he is going to sound off on this other hot topic the heat on the nfl and now corporate sponsors have come back criticizing the leak. -- league. >> and i won't mention scotland. >> no please. here is a look at our top headlines. interest rates