our country -- and i said this to larry yesterday at the conference. i think we have major trouble in this country because i think many, many, many too too many of our companies are badly run. they are run by mediocre ceos and should be made accountable. --elieve if we don't do this that is my passion. i think warren buffett should do more. >> should he be considered the oracle of omaha? the great leader of industry? when the financial industry is less popular than it's ever been . they hold warren buffett on a pedestal. what do you think about that? quacks i'm not here to defend warren buffett. i think he should do more by corporate governance.

but warren buffett has done -- shareholdersewed like other guys in silicon valley. i don't see him doing that. i think he has legitimately made money. i don't agree with the fact in his position he couldn't do more. start -- ing to mean, i think he's a smart guy and i think he has done well for shareholders. there are things i disagree with them on. it certainly -- i was buying my own business. they started it. i am really looking forward to going at them. i've got to tell you, there's a part of me -- my mother said i have some sort of warrior gene. a throwback to a 13th century warrior.

i would rather fight corporations than these guys. >> you said that you use credit derivatives and warren buffett has called them weapons of mass destruction. >> they are different. don't confuse it. he's calling them that. i think he was more talking -- aboutthe way that derivatives used in the housing bubble. i think most of them will admit it. quacks but fannie and freddie, promoting everyone today as part of the birthright and part of the american dream. everyone should buy a home. are they solely to blame for people lying on mortgage applications? whole wall street housing

crisis, there's a lot of blame to go around. forblame wall street selling. if you understood those derivatives, they were weapons of mass destruction. they were crazy. these guys were selling them. it you can blame barney frank for allowing them to go through if you want to. there is so much blame to go saynd but i find it hard to that warren buffett is to blame. why would you say that? quacks i am not saying that. i am definitely not saying that. does it concern you that we see standards loosening up again? and we can see it back in 2005 and 2006? >> if you really want to be would be, the concern high-yield securities. think about it. it's a no-brainer.

why do you go in, and why are you willing -- the public doesn't understand it. >> people were desperate for yields, where else are they going to go? >> i agree with you. but what happens when it breaks? you had maybe $19 billion in these funds and today you have -- i don't even know what it is. 800 billion? where is it going to go when the fire starts? cashrporations have more on their balance sheets than they ever have before. why does it have to break? >> i guess the answer which is simplistic and probably facetious, because it always does. i could give you reasons why it might rake and i told you one. you can't go lower than zero on federal funds.

if that stops working to make the economy better, people are going to start getting nervous. i could give you so many instances. what do you do when you have inflation? we have deflation. what do you do? we have to become more productive in our own society and company should become more productive. we don't have the right people to run so many of them. that's why say you should have better corporate governance. >> if we are heading for more volatile markets, do you feel better about wall street today now that we are more regulated where the street isn't long billions in risk? >> i think it is better than it was but i'm not telling you it's a panacea. there are many problems for wall street but i think it is a lot better than it was. i don't think you will have the bust that you had in 2008 that you can have a real bad one sooner or later. i'm not telling you next week or six months, the market is going

to bust. i am saying that there could be a break in the market. -- aftering you that you do it as long as i do, your instincts take over and tell you when something is great. >> what is great? >> i just told two of them. apple is great. a few others you will find our great. shorting long-term, it's not an easy thing to do. the cbs derivative is great. all these things tell me you're going to win. it means you have a great risk reward ratio. the risk is much smaller than it should be. let's say you know a fighter. and you know there's one great like a has-been

guy. you say the odds should be 10 to one. and you walk in and they tell you it's two to one or even money. you're going to bet a lot on the favorite. that's what i call a no-brainer. apple was one a year ago when we tweeted it and i think it still is. arean you believe that you saying to me, when we tweeted it? three years ago did you think you would be sitting here saying to check the twitter account. isn't that crazy? crazy but i don't tweet. my daughter does. she took over. she is right here. she's come into the business and she does all the tweeting. i just write them. >> atlantic city. winning trade? what do you think? >> a lot of problems.

i'm getting a little flak on that one but we went into the tropicana when nobody would touch it about two or three years ago. i put 80 million in and we saved it. and is doing pretty well. taj mahal is a tougher story. i didn't even want to put a hundred million dollars into it. it's a complicated thing. but you can't have the union contracts because there is no money. they don't want to believe it. they can either close down or we will put 100 million. even if you didn't pay interest, you just can't have it. people don'ton, want to accept it. they say, we can change the contract.

it's like if you are a spoiled keeps givingfamily you a big car and a big house and you're living really good and the father loses a lot of his money. up my carnt to give or my house. everybody has to make concessions and they just don't want to do it. i won't say they don't want to do it. the union doesn't, i guess. get concessions. concessions we asked for, the unions said the people will get none of them. and they go onl obamacare. the low salary worker is completely covered anyway by obamacare subsidies or by medicaid. they get covered but the union doesn't get the money. the hotels save the money.

>> do you have a view on obamacare? >> it will take longer than derivatives to talk about. i have studied it quite a bit and i think in certain cases, it's good. it is something that i think is not bad. i'm no great fan of obama. but washington has so many other problems, i think obamacare is something that could be good if it was working properly. that said, i don't want to get into it because there are so many questions. you sat down with obama, what advice would you give him? what advice does he need to focus on most? >> i don't want to sound like a one trick pony, but -- >> stallion. wax one trick stallion. isn't it pony? but i like you saying that. aboutd say do something

corporations in this country. make ceos accountable and have the ability to get rid of some of them. and the shareholders really don't do it because the laws are such that the laws protect these guys. to break the law now. we do it. it for years, we've studied how to do it but it's very hard to do it and i am talking against my own business. it should be a lot easier to do it. how can this possibly happen in corporate america? >> that is my whole point. that is what i would say to obama. you actually believe corporate governance can be addressed? >> you just asked me what i would tell him to do, not if we could do it. >> do you think we will see real changes?

companies want to get out of this country and we are not making real improvements to stop them. you might see a change happening in corporate governance and the reason is maybe unintended consequences. you have the advent of all these index funds. and they are getting money poured into them. i don't think larry does enough. i like him and i think he's a good guy. he says he does and thinks about it. but there is one thing that might be an unintended consequence happening because of the popularity of index funds. fundsof the other mutual are getting hurt. why should you pay them a next or 1% when you can get it for .33. by pretty much the index stocks are pretty much overweight or underweight.

something to happen there because it's their livelihood now. these guys are pretty good analysts. they find a company that is undervalued and one of the reasons tom a i believe is the management is mediocre. i get calls from these guys behind the scenes telling me that i ought to look at this or this one. they are already talking to me. want performance. how do they get performance to beat the index? look at the money i have made these guys over the years. chesapeake, just to name a few. they say, you know what? it's almost we want you to help us, or we are with you.

it is changing from that aspect and i think management is becoming more aware of it and trying to do more things than for four or five days. the only way you can get a ceo off a golf course is fila 13 be on him. make a clear and i hope that it's not taken out of context. ande are many good ceos very good ceos. involvede few we got with, we were not looking to change them was apple. and then the only thing we did that i think we helped quite a bit was get them to do a bigger buyback. they will be getting 17 billion in just this quarter. it really feels it is undervalued. that's good.

had you feel about hertz global? >> the rent-a-car? it is tough to talk about because we just got on the board. obviously we bought it and we are involved with it, and i think that like anything else, i hope we can help and we've helped in the past with a lot of companies like this but i would rather not talk about anything we've just gotten representation on. >> herbalife. >> we are on the board also. i can only say this. i never sold a share and you're laughing at me on that. it went way up and way down then back up a bit. people don't believe this about me but i really don't buy for the short-term. to me doesn'te matter until you buy or you sell. what you have to be

thinking if you are a successful investor. activist, what should his time horizon be in terms of getting involved and being invested? on this.e with larry some activists urged to short-term oriented -- our to short-term oriented. we are not. at us, we are not short-term oriented but some are. is right on that. unless there's a reason for that, you know? way up orck goes doubles in value, maybe you sell it although we never sold apple. >> before we go, are you looking at all at the ecb? you had dinner with ben bernanke and other attendees said i am nervous about europe. i don't think they can do whatever it takes. are you worried? one of our major positions a

short on the euro-dollar so i will say that we sort of guessed right on that and i think europe has major problems. we own companies there. western europe is really a problem. and there's a little bit of what i talked about in atlantic city. you have to get realistic. the thing about atlantic city is we are not really hurting. understand. have to the unions are telling a lot of hogwash. lower-priced employees are better off if they go to the obamacare. europe is the same thing. you have to get realistic in france and spain. until they do, it would be short the euro-dollar. >> look at the peripheral countries.

because of ecb intervention. it iss the reality that hurting the european economy because we've ignored the fact that a lot of it is a rotting pile of garbage. >> you are being much worse than i am. i don't think it's garbage. scandinavia is pretty good. i think some of these countries have to get realistic and i think they might. lowerings finally interest rates and they are lowering them pretty dramatically. maybe it will be a time when you cover the euro. >> when they say they will come in and buy bonds back, it makes many people feel like maybe you have no powder left. can find experts talking about what they are doing in europe better than me. i look at things very simplistically and just short of

the euro-dollar because it was simple to think about. i look at simple things. one day you and i will be talking, i believe and you will say you are right about that bubble but it might be three years from now or five years from now and i hope we are able to do it. you can find much better experts. you want to talk corporate governance, ebay, apple may be. pay attentione to to europe. there were many investors i can know everything there is to know about a tech company in texas but they didn't know where portugal was on a map and that took people down. >> were they investing in portugal? >> because this is a global economy. >> you got to be worried about this market. if you think it's a global economy and you know that you really have problems abroad, worry a bit about this market.

that will affect a lot of our international companies. 40% of revenue comes from abroad somewhere. it can belar goes up, a problem for a lot of these guys. if the currency of a foreign country is going to hell, it doesn't do you much good because no one will give you a dollar for it. but i'm not going that far yet. i'm not that concerned about it yet. help theil prices may economy worldwide for a while. and you haven't asked me about energy and i will throw this in for what it's worth. energy stocks, we own a lot of them. buy them yet don't

but they are getting to a point where they are very cheap because i don't think oil can stay down forever. you with that but i'm not going to tell you what to do tomorrow. >> your mother told you you had a warrior spirit. upyou weren't going to end the financial giant, what would you have done for a living if you started all over again? any other industry? what would you have done? thought ofer really it. i was a really good student in school and i went to a tough high school and somehow got into princeton. i got really in the philosophy. some of these guys in silicon valley and you laugh at it but they are trying to be great philosophers because they think they've made money. >> carl icahn, the philosopher. thank you so much. at the world according to carl

and he should've been a philosopher. thank you for watching. >> put that back on. >> i am signing off. from the robin hood investment complex. ♪

>> is time for bloomberg television on the markets. the s&p 500 spurred by a couple of things and looking at last week. and we drop overdone closing numbers,

showing the marissa mayer's turnaround efforts are finally making some progress. there was a lot of pessimism around her performance. business.ying almost everybody was expecting that same type of decline this quarter. the consensus was above wall negatived was about two. obviously they've got the big windfall from ali baba which wasn't really counted and to the estimates of the $.52 is really

comparable to about $.33 where the estimate was in the $.32 were wall street was. and not as bad of a quarter as a lot of people thought it was going to be. >> on the markets, i'm julie hyman. ♪

>> you are watching "bloomberg west," where we cover innovation, technology and the future of business. i'm emily chang. raise money in a funding round led by google. other investors include kleiner perkins. the company says it will use the funding to accelerate product development and commercialize its mobile wearable system. why do tech giants want to be part of it yeah co fo?

i will bring in the codirector of the augmented reality sector. leap'su seen magica ?technology yeah >> i have seen their vision and i hope they can deliver what they are promising because it looks fantastic. million worth$500 of faith in it. what do you make of the interest in this company yea? >> augmented reality user interfaces will be huge if someone can finally deliver a system that is usable. if google believes that it is going to succeed, that is a great tisign. qualcomm has been one of the main benefactors and main suppliers of augmented reality technology for several years.

i know this is a very secretive company but how does magic leap technology differ from oculus, what facebook bought for $2 billion? leap wants to give you a wearable that can go out into the world and augment the world. oculus is not meant to be that. they wanted to be in home and connected to the game machine. into thep is going out world with some sort of lightweight wearable that will let you have experiences in your everyday life. glass, itgoogle projects the image directly onto your eye. what are the implications of that? >> they will be able to make the device a lot smaller and a lot lighter. theink this is always been direction the technology was going to evolve. google glass was a nice first

and but you can look around see the people wearing them a year ago, myself included, are not wearing them anymore. the usefulness of it was not sufficient. is looking to make that step to a technology that users will actually adopt. call itlike to cinematic reality as opposed to virtual or augmented reality. what is the difference yea? say augmented reality for someone, no one knows what that means. cinematic reality gives a much and intuitive feeling about the kind of experiences they are trying to design. i love the video of the submarine flying through the sky . i think it communicates their vision better. and what her future possible

applications of this? is it entertainment. it reminds me of something i see on game of thrones. >> it is definitely not just for entertainment. ,e are working on technologies enhancement for people that have vision deficiencies. i know people working on augmented reality applications for teaching people how to do vehicle orrepair a repair a reactor core where you have a nuclear reactor and you've got to get in and out very quickly. those kind of technology designs have been worked on for a while but what we lack is a nice platform to deploy them which is why you don't see them in common usage yet. >> there were interesting it in's with phd's and optics. what do those jobs reveal about

what they are working on and their approach to it yea? >> it tells me they will need some custom hardware and objects. has are hiring someone that experience making high-performance graphics cards. designs, experience making custom integrated circuits and mass-producing them. working on some kind of wearable that we'll have custom objects and some sort of laser or diode technology. it will have custom integrated circuits. it sounds like they are in the process of building a whole bunch of very high performance specialized technology to make this work. they will not be able to take off-the-shelf the shelf parts and assemble a device. when facebook bought oculus

before there was a product on the market, there were skeptics out there. ofterms of the future augmented or virtual or cinematic reality, how ubiquitous do you see this kind of reality coming in our daily lives? around withalking virtual reality glasses on or is it going to be something occasional? >> i think it is possible that everyone will have one whether we wear it every minute of every day, i would not expect that but i would expect it to at least be as common as game boy or at least as common as the tablet. youink it is going to give possibilities that you won't have any other way and it will open up applications and entertainment that people are going to want to be involved in. it's a question of making the technology work and getting the price down. i really think people are going

to want this. >> what kind of research are you working on? what work remains to be done from your perspective? >> the biggest part of the work is that what you have a technology platform, what are the great uses for it? we are member how terrible webpages were when the web first came out. they didn't know what the web was good for. we are going through that same thing now. what my group focuses on a strike to develop applications that are really useful to people. we don't just want to build a student thathave a is presenting an assistive device for people that are colorblind. prototype that we are working on that will allow first responders to see around corners in a building. the person has a headmounted display that lets them look

around and explore the environment without having gone through it. we will see a ton of applications and we are at the stage of figuring out which applications make sense and which ones don't. much.nks so what happens when you combine technology with wall street finance? a startupu inside looking to disrupt the brokerage business, next. ♪

>> i'm emily chang and this is "bloomberg west." your investment strategy might be good but what if it could be better? that is what betterment, the start up disrupting the

brokerage business is aiming for. an approach driven by technology to deliver results. looking at part two of our city.""new hack a pigeon, old board games -- >> executive decision, finance, wall street -- people say it looks more like a second-grade reading room. >> silicon valley culture meets wall street finance. >> half of the company has a tech background. this whole side of the floor is engineers. start up a strike to rewrite the rules of investing with user-friendly technology and low fees compared to what traditional money managers charge. 0.15 percentle as

for managed portfolios and dts. >> we use technology to automate a part of your life that previously you had to spend a lot of time doing. job in stine quit his financial services and launched in 2010. >> i build this product for me and my peers because i was getting ripped off by the financial services industry. >> they use software and algorithms to manage their money. management,ng, tax dividend management, better than you can do them on your own. the result is you get a better return on your money in less time with more peace of mind. >> it's not easy but they are expanding rapidly. they manage nearly $1 billion in assets and expect to grow or times a year. has really reinvented the financial services from bottom to top and that lets us provide a better customer experience. we have our own statements,

around tax integration, your money moves faster because we are managing that process. expanding the new york office space to add to its roster of 70 employees. >> this is a great place to attract tech talent. a city where people want to be and it makes it easy to attract great engineers. this is obviously an exciting company for them to work as well. >> shelby joins me from new york. are they really disrupting the financial industry yeah co do they have something to worry -- industry? do they have some thing to worry about? >> they announced they are partnering with fidelity to let "old school" investment in visors -- advisers use their technology. we're bridging the gap between brokerage firms and technology.

out, they wiping them make them more efficient and manage the process. help us do our jobs but i will always want to see your beautiful face, emily, on the television. >> thank you so much. >> they are utilizing technology to make it better. >> all week long on bloomberg television. the senate judiciary committee oversees mergers and antitrust issues like comcast bid to take over time warner cable. a chair that committee has advice for comcast. ♪

>> welcome back to bloomberg west. i'm emily chang with cory johnson. senate judiciary committee chair patrick leahy is asking comcast to strengthen its commitment to net neutrality by pledging to never create internet fast lanes on its network. paid prior to rize and is the product -- practice in which netflix pays comcast to obtain preference for it its data on the provider's network. and afounder of bondage

pioneer over voice over internet protocol, he joins us from new york. first of all, comcast says it is reviewing this letter about fast lanes but has no plans to do so. how do you see this actually ?laying out yeah co netflix raised the ante by making their consumers outraged and going to the consumers. they are trying to leverage rules and regulations so that they look like the good guys and everybody else looks bad. fighting anyone against neutrality -- the solution that netflix is pushing for is that if they have their way, it will happen overnight and it will be

silicon valley's fault. everybody becomes regulated. 11 years ago, i went to washington with a law that said voice communication on broadband is not to be regulated as a telephone service and for 10 years we have seen great innovations and communications. things like face time and they don't want to be regulated as a phone company. all of these go away overnight if the internet gets regulated. >> i think this is sort of a fundamental issue, a political issue about philosophy and whether or not you think that these businesses should have to carry services at their cost for the benefit of society or not. created oneyou have of the great businesses and telecom history on the backbone of this open internet, you have

suggested maybe there should be favored players? >> that's not fair. there have been telephone services, people have paid different amounts of money for different types of services. aremember growing up with modem and now i get 50 megan my apartment. my apartment. we all want an open and free internet and to be able to allow people to connect in a meaningful way and embrace communication of that entrepreneurs can develop innovative services. if we fail to do that, we will have a really bad time in telecom markets and in america. in terms of whether or not people pay for the opportunity for better service, in 1996, i would've had dial-up internet but i chose to have broadband and paid extra. we'll would have that choice for better connectivity but it doesn't mean other connectivity

should be discriminated against. this is not about getting faster access to everything, it's about certain things getting put to you faster when you pay for equal access. of the is perspective people providing that service. if their pipes are not big enough and they choose to increase the size of the pipes, they need to develop a relationship with the providers. there is an issue of business about how to achieve that so everyone is happy. and as long as they are paying for it on both sides, there should be enough room to make a business transaction happen. i am all for open standards and the open internet and open communications. at the end of the day, the more people connect, the better. i want as little friction as possible but and it comes to commercial services, the

businesses should figure out the best possible way using commercial technology to use those services. how you do that is up to the businesses and i don't think it's fair to try to leverage rules and regulations intended for something else. happen, whatn't are the options for the >> no one yeah co says the sec knows everything. the internet happened because the fcc stayed out of the way and allowed innovation to continue to happen. if the fcc were to do nothing, that would probably be the best thing possible. if they were to listen to what netflix is pushing for, to use title ii regulation and turn your phone companies and cable providers and the public utilities, it would be a disaster for the telecom markets and innovation in america. nobody wants to wake up in a

regulated business when yesterday they didn't have to be. i have to invoke something i learned from star trek. the needs of the many outweigh the needs of the few or the one. it will have a dramatic negative effect bringing the united states internet under regulation by three people that are not elected and i think that's a mistake at this time. pottage cofounder, thank you so much. a complicated situation and a complicated issue that will continue to unfold in washington. it is time for the bwest byte where we focus on one number that tells a lot. >> 12%. the odds las vegas sports books gave the san francisco giants. they were given a 12% chance to make it to the world series this year and tonight they will indeed do just that. >> what team got the most yeah ?

? great group of a players, many of which i can't stand. the royals? 6%.as sports pundits did know better. none of them picked the giants. beatoyals are tough, they the giants in the middle of the summer. the royals nearly blew their season because the team was addicted to clash of clans, the videogame. saveng down clash of clans their season because they were able to focus on the next opponent better. for game one, i'm giving them 100% odds of winning. thank you for watching all the onest headlines bloomberg.com and bloomberg

radio. see you later. ♪ . .