>> live from bloomberg headquarters in new york, this is "market makers" with erik schatzker and stephanie ruhle. >> jpmorgan gets hammered by a drop in trading revenue. wells fargo plus profits rise thanks to more lending -- wells fargo's profits rise thanks to more lending. bill ackman wonders how to spend all his money this year. looking for net profits? the russian billionaire who bought the brooklyn nets wants to unload the team. it could be a record-breaking sale. welcome to what is going to be a

very exciting show today. i'm stephanie ruhle. you are watching "market makers." erik schatzker is on assignment. bloomberg press contributing editor william cohan is here. tell us what you did yesterday? >> i had a little visit with jamie dimon. we can layer it in as we talk about bank profit. >> would you say he is doing great, good, not so hot, crapola? >> i think he is doing amazingly well given what he has been through. >> amazingly well given what he has been through. i want to take you through the top global business stories of the morning. no one thought retail sales would be this bad. sales were down 0.9% in the month of december, the most in almost a year. that is almost twice as large as

the most pessimistic estimate. another big drop for copper today. the metal fell almost 6%. the main reason is slowing demand from china. the bloomberg commodity index is now at a 12 year low. oil's losing streak has now stretched to four days. you thought i was going to say it turned around. it has not. goldman sachs warned that oil needs to fall to $39 to rebound for the markets. this morning, goldman sachs head of commodity research was asked if the price could go even lower. >> absolutely. we calculated the number at the level at which the bottom core

tell companies of the united states go into default. you can always undershoot as a process begins to adjust. >> we will get the latest data on oil stockpiles in less than 30 minutes from now. it may be the biggest tech ipo to come out of new york since 1999. etsy is working on a public offering, working to mays -- raise $300 million. think about the world's biggest craft fair and fleamarket in the comfort of your ipad. on to a story that bill and i are always following and i am not talking about crafts and fleamarket's -- i am talking about bank earnings. they kicked off today. jpmorgan said fourth-quarter profits fell nearly 7% claiming high legal costs and they cost in -- drop in fixed income

trading revenue. wells fargo profits rose. i want to bring in allison williams from "bloomberg intelligence." what part of the report stood out to you the most? >> for jpmorgan, they are focusing on the headline drop in fixed income trading. equities are up. the earnings are taking a backseat to what is happening in the markets today. >> everyone has been saying, fine, let banks look more like utilities. wells fargo does look more like a utility and we seem to like that. >> i don't think we should get -- >> oh look, we just started and he is arguing. >> if you look a jpmorgan's

earnings, $28 billion for 2014. wells fargo, $23.1 billion. both of those banks are really raking it in big time. to make, the may be blips and they may be putting a lot of money aside for legal expenses and they have not smoothed out and gotten that behind them, but these are cash cows. >> it is hard to find anyone on the street on the sell side who agrees. anyone you speak to -- >> the could jamie dimon's investor letter last year. he said the same thing and he does not -- he is not wrong. >> we have a clip from his call. >> there are reasons you have

global multinational banks. this company moves $6 trillion to $10 trillion per day. you cannot do things globally in certain countries if you are not in 20 countries. what do you think -- >> what do you think? >> a lot of people think about going back to glass-steagall and breaking up the banks. we cannot move backwards. >> we have created national champions when it comes to banks. that is one of the biggest outcomes of the financial crisis. >> one more time? >> national champions. >> you think if you say it's lower i will understand it? >> they have these banks that

cannot buy or sell. we have these big national champion banks that the state is propping up. i defy anybody to argue on that one. i think the government is backing of jpmorgan, wells fargo, morgan stanley, goldman sachs. these are our national champions. >> did you ask him? >> not about that specifically, but in general, this is a new golden era. >> we are the king of the hill and this is a great time to be a banker? >> for the rank, we can debate -- for the rank and file, things are down from 2006, 2007. they can still make more doing that than anything else. let's not feel too sorry for them. these firms are raking in the money. these are cash cows. >> to your point, they are

raking in the money, from but from an investor standpoint, the returns are not the same because the capital targets are higher and that is what investors are looking at. >> i think return on equity is going to be an outdated motivation allies in big banks against capital requirements are going to be higher and it is going to be meaningless. where it had had a big impact was how management got compensated. i think that is going to go by the wayside. >> the way they use return on equity to compensate management. i think there is going to be a new metric. these firms are not really set up for investors, they are set up best for the people who work there, but they are really making a lot of money now and i don't see why that would stop anytime soon. there is much less competition. the raw materials that they used to make their products -- cash and deposits -- are free.

>> what does this make for boutique investment banks? >> to that point, i think that is why you see the change in conversation structure at the banks. i think investors are demanding -- >> and they are right. wall street compensation got out of whack in the mid to thousands because hedge fund guys, who were putting their own dough on the line, were making money and they were saying -- you had guys paid $500,000 two years later getting paid $3.2 million. >> it really began in the 80's. -- 1980's. that is when the conversation started getting out of hand. >> he did go to lehigh. >> he started a firmware he put

his own money up so good for him. he deserves the benefit of that. >> we are seeing a continued rise in the fee-based boutique. we are having blackstone spin off their business. we are seeing boutiques spin off in particular areas. >> all right then. allison, think is so much for joining us. allison williams from bloomberg intelligence. bill has not been kicked off the show yet. the economy needs retail therapy. it did not get it this holiday season. how bad the december sales numbers really were. >> for activist investor bill ackman, volatility is a good thing. what is not a good thing for big

bill? ♪

>> this is "market makers." the dell posted another triple digit point move today. we have recouped almost half of our losses. european stocks are also in the red. copper futures are down by 4% the world bank cut its growth forecasts for china and the world. take a look at the vix. it is just under 22. we had a couple of big spikes that begin in mid-october. that followed a quiet period through the mid part of last year. let's get to the flight to quality. the retail sales report is stoking concern that the u.s.

economy is slowing down. the 10 year yield, 1.83%. >> thank you, scarlett. moving on, we have got to talk retail. retail sales numbers fell sharply in december. it was more than even the most pessimistic forecaster had predicted for the holiday season and it comes despite the plunging gas prices that economists were saying would lead to a pickup in consumer spending. i have got to ask what gives here? i would like a chance to say i told you so. do people really go to a walmart and buy more junk when their gas costs less? >> these numbers would suggest i think not. economists think it will happen, it just not happened yet there are still people holding out

hope. the overall headline number includes gasoline station sales. even when you throw that out the number was still disappointing. a lot of the sales got pulled into november. november numbers were relatively strong. sales were down 1.6% in december for electronics. that seems to suggest that people were buying tvs early with november deals. >> the success of black friday madness -- black november -- hurt december? it is not like people are buying more stuff. we are all gaming the system. >> sales are another reason numbers may have been disappointing.

let's talk about the gasoline dynamic. the gasoline benefit might come with a delay. if you pay with a credit card, you are not really thinking about what the savings are going to be. when you fill up your tank week by week, you are looking at your week by week savings, not your year over your savings. therefore -- you are saving two dollars per week. one economist i talked to said the government is not measuring this correctly. he was particularly perturbed by the e-commerce, direct sales -- >> that means all the herbalife products you bought for friends and family. [laughter] >> it also includes e-commerce and it was down 0.3%.

he said the methodology is not right. >> how about the year over year? if you take the whole holiday season did we spend more? >> yes. the national retail federation crunches the numbers and they back out things like building materials. i know stephanie likes to get two by fours in her christmas stocking. >> obviously. >> retail sales were up 2.4%. it looks like a lot of that was spaced out differently. the next question is, what happens next? wage growth is static. economists are hopeful that is going to change. >> you know what a think the problem is? people are big into sales. it is a big problem. >> you look at your inbox. every day it is a sale

promotion. >> if you are somebody who pay three tale, it depresses you. -- pays retail, it depresses you. the person behind me and the person in front of me had a coupon and i did not. i walk out feeling depressed. >> you are working too hard. you need to get your hands on those coupons. >> come on now. thank you very much. bill, i love having you here. he is going to stay. when we come back, we are talking about another bill -- bill ackman. he says it is a good time to be an activist investor. that is true, if you are bill ackman. we are going to hear from him next. ♪ ♪

>> bill ackman is spending some time in london this week and where better to spend it than the bloomberg studios? he spoke with francine lacqua and guy johnson. francine is with us from our london bureau. tell us some highlights. it was a wide-ranging conversation. you think he is charming. >> he is charming and he has a very tough life. he said his toughest problem is that he has 4 billion dollars to $6 billion to spend. that is a very nice problem to have. he needs to find a place to put it safely and make more money. we talked about volatility and he was very bullish about the future. >> one of the factors that

people are not talking about -- the rate of new business formation and the rate of growth of companies that you have never heard of is probably the fastest ever in the history of the global economy and there really is only one silicon valley. i think we have a number of venture buttes that are very favorable. what is interesting is that in an economy performing as well as the u.s. is expected to perform, you would see rates rise quickly. but the combination of low cost of capital plus a meaningful improving economy is an unusual event. stock prices are actually attractive in light of that. >> apart from getting more pr for pershing square holdings, what is your biggest concern for 2015? >> i need to find a place to put $6 billion.

it is soon to be lying around. we have to find a place to put the capital. we have always been able to find one or two new things. i do think it is a very favorable environment for what we do. >> despite the volatility. >> volatility is a good thing. right? if you are long-term investor volatile till it he -- volatility is in a -- a positive thing. >> when you have gdp growing at a nice rate, interest rates are low. he claims it is an ideal for -- moment for corporate america. >> did he speak about anything specifically about europe? >> he thinks his stock is

undervalued. it was a pr drive. we wanted to see if there is anything if he was interested in. he did give us a nice scoop that he was looking at tesco. you have heard about it in the states because it is the third grocer in the world. they have had trouble in the past. last year, the shares were down because of a profit overshoot that resulted in a fraud investigation. he said, they would rather invest in the u.s. for the moment. >> bill ackman has always been a highly confident individual. >> that is a nice way to put it. [laughter] >> now that he is on the cover of bloomberg markets magazine and had an incredible year, do you find him even more highly confident than usual? >> he was maybe a little bit

more subdued. he was quite charming. he said he is looking at opportunities in europe. >> you -- we have to leave it there. stay with us. ♪

>> live from bloomberg headquarters in new york, this is "market makers." >> welcome to "market makers." erik is on assignment today. we have bill cohan here to help us out. most days i think it is a travesty that we don't have a commercial cam on the show. even when erik is not here bill delivers great content during the commercials. we knew they -- need a commercial cam. we are going to breaking news.

>> we followed this because we have been monitoring the plunge and oil prices. oil prices have stabilized. there is an inventory of 5.4 billion barrels -- million barrels. there was an unexpected drawdown of crude oil inventories last month -- week. we are looking at inventories larger than anticipated. crude oil is now negative, down about $.14. the low was $44.20 yesterday per barrel.

perhaps that does mark the bottom for now. >> general motors has predicted strong numbers when a reports next month. the company is saying that 2015 is looking even better for profitability than the last year. matt miller is live in detroit. it is like heaven for him. >> g.m. is blowing its own horn for 2015. they said the 2014 earnings looks better than expected. minas all of that pesky recall stuff. the problem is that global growth for the economy -- entire industry is slowing down this year. mary barra said that china is a problem.

china is a maturing problem for them and the shares are down another 2%. gm shares are down about 15% over the past year. they had a tremendous amount of recalls and this past, rough year. they will continue to pay out the accruals this year. a little more than $1 billion. they will pay a lot of money to build new cars. they said customers are willing to pay up for the freshest models. they are going to introduce 27 new models this year. they're going to be $9 billion in this year -- in capex this year. >> are they going to step up and

try to compete with tesla and a big way with an electric car? now what? >> they tried a hybrid car. the fault has a gasoline engine and electric motors. they are showing a refreshed bolt. -- volt. a tesla cost $100,000. a volt onl $40,000. >> if you get a tesla, you are going to go for it. >> of course. they are not competitors. i priced out a tesla at about $125,000 to zynga everything i wanted -- choosing everything i wanted. it is really a luxury product.

it is not a luxury car for someone who wants to save the environment and save money. the bolt is going to be about $30,000 and it does not look sexy like the tesla. it will be a different kind of car. if you are driving an electric car chances are that electricity was made by dirty, dirty coal power and it is probably much nicer for the environment if you drive a gasoline engine like everybody else. >> we are going to let you get back to rolling around the floor of the car show. we know that it's what you like to do best. do you like tesla?

>> i like them. >> i think they are really hot. i do. i'm not good at driving, but they are pretty rad. it may be a sellers market if you are trying to sell a pro basketball team in the nation's biggest media market or as i like to call it, the best city in the world. the brooklyn nets are up for sale. stay here. ♪

>> welcome back to "market makers. another nba team is up for grabs. steve ballmer has his hands full already. what is mikael prokhorov going to do if he wants to sell his majority stake in the nets? you bought the team back in 2010 for a cool $220 million. steve ballmer paid $2 billion for the l.a. clippers.

it might not be a bad time to cash in. i want to bring in scott. he broke the news. scott, tell us. >> he has decided to get out. we don't know why. they are saying this is business as usual. that is not what i'm being told. he has gone out and he hired ever court. -- evercorp/. we are not even sure what assets are out there right now. if you are a buyer and you are in the new york market and the berkeley center is there and your team is going to be playing in said barclays center -- >> losing in barclays center. >> you want the team and the arena. >> i actually want to bring in

ryan chilcote. he is our moscow man. what do you think the rationale is? >> i think it is twofold. this is something that mikael prokhorov would be happy to say. you never know how much something is worth until you put it on the markets and sell it. that is certainly part of it. do they want to sell it? i think they would love to sell at least a stake if they think they can get some money. he can get much more money than when he bought the team. i am in russia and it is crisis time here again. the ruble has fallen 60%. he can make more opportunity for himself back home with that

money. >> who is going to be the buyer? the guggenheim guys. is this going to be a hedge fund trophy? >> it is going to be a trophy asset. it is the largest sports and media market in the world. it is going to be a trophy asset. it is sports. in addition, it is a sound investment as a lot of these investors are starting to see, even at the prices we are going to see. >> do you think it will be in new york buyer? who do you think wants the nets? >> given that this is new york this is going to garner interest nationally and domestically, but

internationally. yes, there will certainly be a number of interested buyers in the new york marketplace but i think the reach for this franchise is going to be further the new york orders. >> how do owners make a return on a $2 billion investment? getting a return on $2 billion is a lot harder than what mikael prokhorov paid for it. >> it is. if it is just a team, i would argue that you are not going to be able to control some of your inventory so it might be a little less attractive. they can number.

is there the opportunity to secure than -- the asset of the arena? there are a whole lot of questions that would drive the price in addition to just obviously just -- the notion of it being a trophy asset. >> who is going to be sitting courtside with jay-z? >> the question is, what is the trophy premium that is going to have to be paid if you've been getting new york team? the economics favor what steve ballmer did in l.a.. >> it is a lock for a long time. 15 years. they cannot renegotiate that. >> they wish they could. >> the fire of the nets will not

be able to do that. >> ryan, what do you think that -- prokhorov is going to do? selling the team would make me think he is going all in russia. >> perhaps. there are big opportunities here. he is a commodities guy and commodities are not doing too well right now. the money is big. he does not have to sell the whole team, but he could sell a large stake. i just want to say one thing. you guys keep talking about returns. the nets put prokhorov's name on the map. whoever comes in to buy a stake

or the nets themselves would be buying a little bit of that access. >> really? wait a minute. >> building a brand name for yourself. >> do you need to buy a sports team to do that? >> here is the problem. >> bruce ratner has been trying to unload his 20% stake in the team. who is going to fork over $400 million and get no say in operational franchise? bruce ratner has been trying. unless there is a clear path to majority ownership at some point such a deal makes no sense. >> david einhorn was going to do

that. >> much lower in. >> it obviously has to go to a hedge fund guys. go by the atlanta hawks. >> we don't have any more time. i want to go back to rick for a second. how much does the team sell for? i'm going to use this video over and over. [laughter] >> listen i don't mean to deflect. it is going to go well north of $1 billion. >> we know that. one more time. put a number on it. what do the brooklyn nets sell for? >> make yourself famous. >> just the team? >> yes. >> i would say $1.5 billion. >> i would say $2 billion. trophy premium. $3 billion with the arena. >> there you go.

i love that arena. that slate gray. thank you all. rick is the manager director at park lane. scott is never afraid to put a number on it. ryan chilcote joining us, giving us the inside scoop from russia. i was going to think bill, but he is here all day. when we return, how to stay always in fashion. one top industry executive has written a book on it. ♪

>> welcome back to "market makers." i can't stand it when someone introduces someone else and they are sitting there. it is a personal pet peeve. we are changing the rules. this is bloomberg. we love to have you, bill. you always hear what they say in

the fashion world. one day you are in and the next a you are out. our next guest is a fashion ceo. he has seen it all. now he is dishing on what it is really like to work with world-class designers. mark webber is here. he is the author of the new book "always in fashion." i'd like this i to dress me. welcome. >> hi. how are you? >> we think it is so glamorous and so fantastic. then you look at retail numbers and ideas like you are in today and out tomorrow, what is it really like? >> it is glamorous and fantastic, but it is almost a -- also a business. it is about people investing and making money and the proper return on the business. >> you are someone who has been fired from prominent positions. [laughter] >> wow.

what a start. is that because you don't want to only be in a fashion world were designers are all about reactivity and not about making go? -- dough? >> you can please some of the people some of the time, but not all of the people all of the time. abraham lincoln. there are various differences and points of view. leaving my first company, the board and i did just nazi eye to eye on a number of things. -- dudnot see eye to eye on a number of things. >> you wrote this book. as a fellow author, i'm curious about it. >> you've written a book? >> a few. who is going to be unhappy?

>> there are going to be a lot of disappointed people if they are looking for dirt. >> but you talk about your firing. >> i said that i think support board was really courageous and their decision to let me go. they did an excellent job of making sure there were no shortfalls in my leaving and the new guy coming in. i admire them for that. having said that come of book was written with the idea that i believe that this is the greatest country in the world. anybody who puts their mind to it has a chance to be successful. i wrote a book as if i was perennially 23 years old. >> there you go. tommy hilfiger, donna karan, ralph lauren. who is the best?

>> what a question. i think they are all great. ralph lauren has done the best job of building a lifestyle that everyone can enjoy and appreciate on a global basis. >> how about bernard are no who runs lvmh? what was he like to work for? >> who? >> exactly. [laughter] >> he is a very gifted confident executive. he runs a great show. he is very hands-on, but very hands-off. he graduated from the best schools. he lets the people he hires run the businesses. i was part of the executive committee group in paris. i always enjoyed my time with him. while you were listening to him, you were learning.

>> there is no sexier company out there. you made a name for yourself in the luxury market. in the last 10 years, luxury consumers now want deep discounts. that is so anti-luxury. anti-hermes. >> every brand that you own or manage you have to manage it differently. louis vuitton never goes on sale. that is just the way it is. not every brand is managed to that way. >> did good you make a mistake of going to urban? >> i can't speak to gucci. they have had their ups and downs. in every industry, people need to reboot, recalibrate, come back with a new strategy. gucci has done it two or three times. >> great to get your thoughts.

mark weber is the author of "always in fashion." ♪

>> live from bloomberg headquarters in new york, this is "market makers." >> prices, good for consumers, but what about business? we will hear from an extraordinary ceo. doubling down. some companies find it was a losing that. and a 1% face-off. welcome to the second hour of "market makers. "

so: is here to help us out today. retail sales took a nosedive last month. it is the biggest drop in almost a year. almost every ring that was down led by electronics and clothing stores, the number one likely to prompt economists. that will be what will cause them to scale back their growth forecasts in 2015. fourth-quarter profit fell almost 7% over jpmorgan down. a 23% drop in revenue for fixed income trading, the golden child of the bank and at wells fargo, thanks to increased lending, it has been expanding through loans. ann shares of tesla motors are down. electronic carmaker will not turn a profit until 2020. elon musk says tesla ran into

speed bumps in china last year. >> we had more than enough demand to make up for china. we will fix the china issue in pretty good shape toward the middle of the year. >> elon musk says these problems have been more than offset. let's see if hollywood gets wall street right this time. brad pitt will star in a film version of michael lewis's book about investors that make a fortune in a subprime mortgage. no word on who brad pitt will play theater christian bale and ryan gosling will also be a movie. obviously, i am going to see the movie and i'm going to be excited. no offense to john paulson and my friend greg littman, but ryan

gosling, christian bale, brad pitt, that is an uber hot trifecta. i am not sure of anyone in the subprime crisis who i would think would be a brad pitt or a christian bale. >> ryan gosling, john paulson. john paulson needs to grow a little beard maybe a beanie. i think that is an obvious choice. >> you think ryan gosling is an obvious choice for john paul. >> obviously. if you are out there, john, let us know if you disagree with that. just saying, could be an option for hollywood. >> i know brad pitt loves a story, but for me read it, ryan gosling, christian bale? seriously? we have got to move on because i am very excited for our special guest host of the hour. more than 50 different restaurant brands including the

rainforest café, bubblegum trip -- it also owns five golden nugget casinos across the united states. welcome to you for the first full hour. the last time you joined us, the viewers that, bring this man back. a true american ceo. i have got to start with oil prices. for someone who runs restaurants, for people who spend less money to fill the tank is a positive for you. you are based in texas, whose countries are suffering because of this. >> nobody is suffering yet. we all have to remember if you take the average family let's say the husband and wife make $100,000 a year, all of a sudden, with the reduction in gas prices and in texas right now, you could buy gas in some cities at $1.95 per gallon. even at 220 and 230, if you take

filling up your tank one day a week and remember, the rest of america, we use cars and we are a two-car family. all of a sudden, you're talking about 30 or $40 a tank and you are saving $2500 a person. all of a sudden, a couple couples is five dollars a year to go out and put whatever they want. televisions, restaurants whatever. in december we were up over 4%. that is a darn big number when you are talking about a $3 billion company. it had a huge impact. what will happen in texas and houston, that is another story. because we are home-based, we have so many different types of this this is their aquariums and amusement parks, we do almost $1 billion in the area. but nationwide i think it will have a huge impact on the

consumer actually going out and spending money. >> in your hometown, what is it like? >> right now, it is fine. what i am hearing right now is no jobs are being replaced in their brain maybe one or two people in a day and kind of doing it slowly. everything that started is still happening. you just do not shut it off. you know that. it takes a while to shut it down. no different no matter what you do. you do not just turn it off. everybody finishes their projects going on. you get down to the high 30's hello 40's. i said it here a few months ago. houston will struggle. it always will. all these economists want to say houston is diversified economy. baloney. we aren't oil town. everybody i do with, all my friends, everybody is an oil but me and that is the way it is.

>> you are a restaurant guy, a casino guide. you have proven you are willing to take a brisk sleigh comes to restaurants picking up distressed restaurants presumably at a good price. i mean, that is a very tough business. what is your thinking about buying these eight prominently well-known restaurant chains that have fallen on hard times, and why, based on that philosophy, why didn't you go after red lobster, a big jane -- chains picked up. >> when i went public in 1993, i used red lobster as a great example about how seafood works all over america. i would say, red lobster, 720 restaurants so, look at all

this room for growth. that is all wall street wants to hear is growth. it is an elephant. it just did not do anything for me personally. but it was a great deal because they own so much real estate. >> but one more time, why wouldn't it have been a good deal for you? i do not understand. >> i just did not focus on it at the time. i did not want to hire 700 more people and have to transfer them down to. but it texas here they let the office continue to operate. if you really want to know the truth, human capital did not have the time to focus on it. we were building the golden nugget, we were building the late charles golden nugget, and you just cannot do everything at once. in a different time, could we have looked at it, because i would have thought it would be a good dividend company.

we were only grow three or four or 5% but it is a cash flow machine and we will pay 7% dividend. >> you approached golden gate and said, would you sell it? it does seem like it would fit well with your overall strategy. >> if golden gate goes in and screws it up, it would be a great opportunity. if they make it successful, it would be too high of a multiple. >> did you say, i wish i would have done it? >> that is exactly what i said. >> were you approached by their bankers? >> for sure. once again you cannot do everything. even though we would like to, it was just the wrong time and we did not focus on it. i would send it out there all by itself in a separate company and say, this is a great cash flow machine. >> talk about the economy. we closed the book in 2014.

it is 2015. you pay from chambermaids to executives. how does the company feel? >> i think the country is doing very well right now. people are making more money. that is why, i will say it again, i see all these reports that there are no increases in wages. i just looked at all the wage increases for 2014 and 2015, and everybody is getting a wage increase. there is not an employee that works for us that did not get a wage increase. every single employee that work for us got a wage increase in 2014 and are getting one in 2015. just not -- is not true. everyone here bloomberg i am sure got a wage increase. >> just switching the gears a little bit, with the market basically reallyevery single strong, any thoughts about going public for yourself?

>> never. >> why? facts first off, i would not be where i am today if i'd ever gone public. it is the great american story. you have 12 restaurants here you go public in 1993. you wake up the next morning, and you are trading at 40 ge and are worth $100 million. it is great. and i did more follow-on offerings than anybody. every time i did it, i sold a bunch of cash and stock and took down a lot. when the stock would do well, i would buy it back. i did this for 20 years and when the whole world came apart in 2008 and 2009, i took the company private. i could not believe the opportunities there were in the stock market. if you go back and look at where stocks were, it is scary. we all know history repeats itself.

when things are really bad, we forget they will be good again. when things are really good, like right now, we forget they will be bad again. they will be bad again. >> why wouldn't you want to go public right now and things are hot and say, great, use guy -- you guys should buy it. >> because there is no reason to. i look at my cash flow and i do not need the capital. i'm big now and i do not need to raise as much capital as i need to raise. i can raise more capital. >> because it is so cheap. >> it is a great debt market. if you prove yourself over so many years, which i have been fortunate to do, right. i say that, but not really. we will talk about gaming in a little bit but not as much. remember, i'm cash flow businesses. when you have cash flow businesses, is easy to borrow money.

>> we will talk about casinos in a few minutes. we are. we will talk about those in a few minutes. thank you. you two are both going to stick around. we will cover casinos and more when we return. i will not say the battle of the billionaires but to extraordinary business leaders we will talk about income inequality and their opposing views. luckily for both of them they do not have to worry because they're both rich. ♪

>> welcome back. i and stephanie ruhle and our guest host for the hour, a conglomerate that runs more than 500 restaurants, hotels, and casinos across the country. i want to focus on casinos. maybe an oversaturated market. now the dozens of them have opened up in cities across the united states, the golden nugget

brand has locations in mississippi and most recently, louisiana. we wanted to take a look at the health of the gaming industry and we're are joined now by brian miller. i will let you start. he is your dream guest. what do you want to know from him? >> a great way to start is the golden nugget casino. it is essentially a play on houston. i am sure you had big ideals for that property. just looking at the markets right now, with all the exposure to the market, how much this oil and gas hurt you in the short term and medium term? >> all the lng plants and everything seemed to go -- you are still dependent on the city of houston. if you look at the sign-ups for the 24 karat, they are still 84% houston.

what we forget about lake charles is it is probably one of the last underpenetrated markets in the united states. people think, you own a casino and you make a lot of money. 56% of casinos in america probably make no money. it is a tough industry. it costs so much to operate. his $500,000 a day to make payroll and turn out the lights. eating in your restaurants and hitting up the slot machines. when you look at lake charles, what you have got as you go all the way to the left 1000 miles there are just not that many properties. you have 16 million people in

the houston area. we are where everyone wants to come. a great combo of us in the resort together. kickoff courses. they're just not casinos. >> what do you think about the rebel situation in atlantic city? you have got a golden nugget there. >> it is so funny. when the bankers talk to me and i was on a roadshow and we said we could buy this debt for $509 i said, you better be able to buy it for $200 million. they look at it -- the whole structure, the person that developed this he turned it over.

>> this is a really good point. what exactly about it? >> you're talking about glenn who did buy for pennies on the dollar. he bought it for $95 million, $2.4 billion. you are building -- building him as a competitor. >> does not make any difference. he does not know he has been hit over the head with a baseball bat. >> if they gave you the keys you would say, thanks but no thanks. >> you can call wells fargo right now and ask him if they were to carry a small note, i could have had that property. i had no desire. it does not work. >> you're going to have to do 300 million in revenue. the brand-new property, the first new property in almost 10 years.

if you look at the golden nugget and where it is in atlantic city, it is killing them right now. i think part of the reason behind that -- >> we try not to the that nice to our guests. >> it is doing ok in a bad market but one thing i do not think people realize is when you skip the ac connector that really connects the poor got a an golden nugget, you do not have to drive through the atlantic city to get to those casinos. the state of atlantic city really helps those properties. >> it does. when i started looking atlantic city a few years ago, i was trying to say, do i want to be at the boardwalk or take this opportunity over here and i decided, in the end, i am better off being, for 40% of the game revenue, i think we can get to versus the eight other properties on the boardwalk, it ended up being the right decision. i almost flipped a coin but 100%

made the right decision. we are over there all by ourselves. we are coming in to go through those three resorts. we are doing well. >> there is much talk of these central casinos in that area where originally fracking was going to take place. do you want to get in the game? >> we do not know what will happen. i am more worried about the meadowlands, if they approved gaming there. it would really kill lennox city. does chris christie or the government wants do that? atlantic city is basically on the verge of bankruptcy. it is really scary and letting city. they keep raising property taxes and it has got to stop. classic chris christie approves

the land, he is basically putting a nail in the kaufmann? >> if you have got that debt, you are in trouble. i knew i better not have it in this property. it has worked out. >> you have one thing in common. you both love the cowboys. bloomberg industries analyst brian miller. sticking around, we have got a lot more to cover. ♪

>> get ready for debate between a couple of guys who really made it. the issue is income inequality. ♪

>> live from new york, this is market makers. >> welcome back. author and editor bill:. owns brands like morgan state house, bubblegum trend, and the golden nugget casinos. that is not all. we have got a lot to talk about and we will focus on politics and income inequality.

mick is a venture capitalist that made a fortune as one of the investors in amazon back in the 1990's. he has been an outspoken out -- advocate for the middle-class. he joins us now via skype. what argument are you making in terms of income inequality and helping the lower-class? >> well, i think it is just very obvious that if economic equality is to rise, that will not end well for anyone. it is ad for democracy and terrible for the economy. so, you know, you know, what is important in a successful capitalist economy is to create a balance between the amount of value extracted by owners like me and your guest, and workers that we employed. you have a super dynamic, super fast growing economy.

if that gets out of balance, you end up in a bad situation. i am advocating we bring it back into balance a little bit and if we do, these will be rosy for everyone. >> what you think? >> i think this country is a great democracy, but the background of every democracy you have to have all types of. where you have executives, your middle-class, but what tilts the country is the guys with technical background. your carpenters, welders, plumbers, electricians. but these people make is a lot of money. anybody who wants to work hard and go out and make money today. everybody does not make the same amount but they do not have the same stress. they'll even get off the job 3:00 it is over with. this casino i was told in lake charles, we needed 2000 and structure workers and we could never get above 1500.

these people are making high, hourly rates and have a good life. but you have got to be able to have these people. if everybody wants to be in a accurate, it does not work. >> we are in violent agreement on that. you definitely need all kinds of people in an economy. the only question is how far apart should you stretch it? the argument goes all the way back to plato. the question is not, should there be differences between us and should we make different amounts of money. the question is, what should the gap the between the very richest and the very poorest. this is a political decision based on power not anything else. the gap between the rich and the

poor has grown dramatically over the last years and is accelerating. we are in agreement that we need differences. the question is, should the rich earn 20% of national income, or 40%, or 10%, or 50%, or whatever it is very today, it is about 24%. at the present course and speed it will be 37% in another 30 years. that is a feudal system. . >> this is where i agree and disagree. you have always put your money and done your investments. you are the entrepreneur and you have taken the risk. i have no problem with there isn't inequality and what you make or what i make. i have taken the risk and i signed the notes myself. where things go bad, it is me.

when i think the inequality is sometimes is huge public companies where you get golden parachutes we do not even succeed, where you never sign a note. you do well regardless. that is where the inequality is. you are paid to fail 100% care that is where i have a problem. for a guy takes a risk like yourself or me or other people if you are responsible when things go bad, i have no issue. you do haveyou do well regardless. to do something about inequality when you talk about huge companies. >> i agree completely that we have a crony capitalist system that rewards earlier, which is super corrosive. but also, as a bomb of the scale, we do not pay workers enough. we have a federal minimum wage. a huge portion of our workforce

in this country survives on that. that number is at historically low numbers -- levels. if the minimum wage attracted wages at the top 1%, it would be $28 today. we have to find a way together to raise that in constructive ways so that every worker can hurt as a numbers -- levels. -- can participate. >> how many would minimum wage employees do you have, approximately? >> probably 48,000 employees. next i know you are a great entrepreneur, but i think you have always been on the investors i never truly operated a business. >> that is not true, dude. i am the chairman and -- of a big manufacturing business. thousands of employees. i have run every kind of business. >> you're much smarter than me.

if i paid all hourly of ways $28 an hour, i would not be here today. i love minimum wage going up and i have no problem with it. where some of the issues with it are, you do not treat a rater -- a waiter the same as you treat somebody in the kitchen. so many states want to do the same minimum wage and federally, you make the same amount regardless if you are a waiter or somebody in the kitchen. it is unfair because of the fact that a waiter, they make so much intense there should always be a tech credit. if you have a tip credit, it works out a lot better. >> yes, but, that is actually categorically not true. in washington state, the minimum wage is nine dollars and 54 cents. 435% more than the federal tip minimum of two dollars and $.13.

if you are right that you cannot operate businesses like this there would be no restaurants in the state of watched and or seattle and we would currently be sliding into the ocean, our economy would be so bad. and yet, small business job growth in washington state is the highest of any state in the country. our restaurant business in seattle, washington, is looming. they pay restaurant workers enough that even they can afford to eat in a restaurant. it is not bad for the restaurant business. it is great for it. >> not at all, but i do not think we have many employees that make under the minimum wage. any constructions and, just somebody to pick up trash today makes 12 or $15 an hour. there is a minimum wage problem in america. >> sure but again that is factually incorrect. there are tens of millions of

workers in our country burning either the minimum wage or close to it and there it desperate straits. there is literally no national economic trade-off i raising those wages. when those workers earn more all of us will be better off. in particular you and me. those people will be able to afford the products we make. there is no good outcome for operating businesses and paying people poverty wages. it is just stupid and shortsighted. i am not saying we should raise the minimum wage to $28. that is a stretch. but nine or $10 in small cities and rural places, and 12 or 15 that is very doable. everybody in the economy would be better off here my main point is, in particular, wealthy entrepreneurs area >> your story

you wrote on politico in october is one of the most popular that has it on the website. what has been the reaction from your fellow .1% to what you are approaching? >> fee over time one? >> noted >> you know, very few non-insane and wealthy people continue to believe that -- economic equality gets worse, it will not be a problem. i generally get a good reaction from wealthy people. i do think the disagreement you find comes down to what we will do about it. it is complicated and hard and there will be trade-offs. but, you know, i continue to have friends there >> i just want to talk operations for a minute.

if the minimum wage is raised, talk to me about how difficult or would it be more difficult to run your business is it suddenly, you had to pay your workers 15, $18 an hour? >> there are so many positions you arty do, that what i think you are missing is the fact that every time there is a minimum-wage increase, we go up on our prices and reprice somebody else out of being able seed eat with us. the person you're saying to make more, it works the other ways wealth. if the minimum wage is raised talk to me about howthey cannot afford because they raising prices. look how expensive it is to have generous faith. if it is a tipped employee, i have no problem with the minimum wage increase. you cannot let a waiter and a oiler man make the same amount of money and then the waiters make $300 that night also. that is where i have an issue. >> i am said that it was his argument but it turns out, if you look at the data, i think you will find it is just not true. the overwhelming majority of tipped workers live in poverty because they do not work at a

fancy restaurant. they work at a denny's in a small town and they barely make the minimum wage. >> hold on. you do not just want high end restaurants. you want them all over the country. what you think it really looks like for them? >> first off, a lot of people that make under $10 an hour are younger able there you look at it as a training wage. i do not think if you look at keepanybody 25-30 years old, that they are making minimum wage today. there is supply demand, not of workers out there for all the drive -- the jobs. >> hold on. i am so sorry. the only way i can keep a job is to pay our bills and go to commercial. thank you so much. because you know what, then i will be out of work. thank you for joining us, from montana this morning, an hours show guest host for the hour who is aching around.

when we return, we will play word association. ♪

>> we have got a few minutes left with the owner and chairman and we will do a quick word association. your immediate reaction. rick perry. >> good guy. question he be president? >> absolutely. >> mitt romney? >> had his chance. >> jeb bush. >> moderate, good guy. he tells the truth and he could get elected. >> hold on. can he get past the primary for the gop parity united states, citizen things. >> that is a problem here might not be able to get the nominations of the good -- could get alexis you're running out there. >> he just said that is probably the republican party.

have you had it with the party? >> no. but i have raise money also for many democrats over the years. >> iphones of the clintons? >> very much so. i have seen build a many times when he was president. >> who do you want to see as president hillary bush? >> both of them would make good presidents. hillary has a lot of experience and i think experience counts. i think jeb bush would make an excellent but -- excellent president. >> your following the structuring and what they are trying to do. >> you have got to give apollo credit. they are so incredible. they have done an unbelievable

job. $25 billion in debt, and you can really only service of the hassles that. moving in and out of it. >> that will test off creditors. >> you've got to give them credit. they have done an unbelievable job doing this. have done an unbelievable job. $25 billion in>> can you name how many ways to repair shrimp? >> at least a dozen different ways, at least. >> what is your favorite? >> just drilled. --grilled -- grilled. you left out area -- >> you lucked out. we will be back in just a moment. ♪

>> what did you think? >> great fun. i do not know where the time goes. it is like being in a casino. you know, it is over. -- next thing you know, it is over. >> tomorrow the serial

entrepreneur is at it again. bradford shall hammer, he founded a website and now he is ready to launch another shopping site. we hope you will be back here. that will be it for "market makers." adios. ♪

>> bonds are rally in stocks are sending for a fourth day.

an unexpected drop of u.s. retail sales for much of september. not growing as quickly as anticipated. a lot of questions about the federal reserve and what it dubs -- what it does next. join us for today's options insight is a senior equity derivatives trader. let's start with the vix, moving higher than you would expect. it is higher than the historical average of 20 versus where it was this year this time last year. is this likely the fear you see or does it need to go out more? less i think it accurately reflect the uncertainty right now. there are so many moving parts to the global economy right now with this inflationary pressures, 30 year hitting a new low. labor markets improving. there are a lot of moving parts. the level of volatility reflects the uncertainty in the markets right now. >> up to 26, which is what we hit in mid-october?

as i do not think that is out of the question at all. if the ecb fails to leave the program, i think 26 is still possible. >> the tone of this selloff is different, isn't it? >> it is. it is more of a global, concern driven selloff. the u.s. is, after all, fairly healthy. it is more about what is happening in china europe, the ecb geopolitical tensions, than it is about domestic growth concerns. >> the retail sales number, we showed an unexpected drop. >> it is a weak data point, but when you look at the payrolls numbers we had any factory numbers that we had, i do not think it is, you know, a cause of too much concern. >> i should also be very clear here, the drop when you backup autos and gas, that is a way a lot of people would want to look

at it. 2.39%, a record low. the ten-year 1.78 91%. when you look at yield like that, to what extent do you see a russian protection -- a rush in protection? >> it has been a little more spread out, not quite a rush. since the tire -- since the start of the year, we have seen quite a bit of trading. the vix above 17 every day in 2015. all of that's year on 29 trading days, you can see the relative elevation involved this year versus last year. it has caused nervousness. >> we are keeping an eye on tesla, its worst day senate -- since october. elon musk, the ceo, making comments about fallen significantly in the fourth quarter. that is housing doubts there it as you mentioned, there is a global concern overall. what do the options look like?

>> it is very elevated. earnings coming up. now this tree announcement. i think elon musk made comments that tesla will be profitable until 2020. most analysts were expecting 2017 horizon. this is certainly a lifetime for investors to wait for profitability. it is raising questions about his the company on track to achieve profitability at some point, and these earnings will certainly shed some light on that. but due out on february 19. -- >> due out on february 19. at its lowest since 2009. what is your thinking here? let's most people in the market are aware of crude and copper. what is not so well publicized is steel, coal, most other commodities are read as well. this is what it is made up of. it has got coal, steel, gold copper. the correlation amongst these

mining sub industries are rising. they're all going down at this point. overnight, european mining stocks got hit very hard. we think it might not be a bad idea to play in the sector going into the ecb mission if druggies delivers what investors expecting. >> after the decline, you are to make money on the upside. thank you so much. that is our on the markets. money clip is up next. ♪

>> welcome to "money clip" where we tie together the best money stories and business news. in thing, a breach of the diamond. if the morgan false as trading revenue shrinks. tesla's white knight? no. bill ackman said he thought about buying but said he at or say out of the retail arena. in motors, little trouble in big china. tesla will not make up half it and so -- until at least 2020.