certainly aware that the situation across libya was becoming more dangerous and that there were particular concerns about eastern libya. the piece that was libya, al qaeda establishing sanctuary? ms. clinton: i am aware that was certainly among the information provided to me. there was another particular piece that was talked about after the ied attack. al qaeda expands in libya. were you familiar with that? clinton: i was well aware of the concerns we all have about the setting up of jihadist training camps and other activities in libya, particularly in east libya. agree the cia between 2012ry and september and

and over 500 pages of intelligence. of how many pages of intelligence? a specifichad division of the state department under you that was called intelligence and research. of they keep you up to speed did they 400 cables give you speed on that, where you aware of them? ms. clinton: i cannot speak to specific reports but i can agree with you i was reefed and aware of the increasingly dangerous upsurge in militant activity in libya. sureat did you do to make our men and women over there were protected, knowing how much the threat had grown, especially

in benghazi, because a lot of people say that really in the summer of 2012, security at benghazi was worse than it was during the revolution. with respect to not only the specific incidents that you referenced earlier, but the overall concerns about benghazi, i think i've stated previously there was never any recommendation by anyone, the intelligence community, the defense department, the state department officials responsible for libya, to leave benghazi. the two incidents that you mentioned because in part, as i responded to congressman smith, we had so many attacks on facilities that went back to 2001 that certainly also happened in other parts of the world while i was there.

each was evaluated and there was not a recommendation. furthermore, there was not even on the morning of september 11 while chris stevens and sean smith were at the compound, chris had spoken with intelligence experts. theft of no credible to the intelligence community against the compound. ambassador was pulled out of tripoli because of threats on his life. -- thereon: there will were threats of people associated with gadhafi after publication of things he had written made public by wikileaks. you were aware of the two attacks at the mission facility in benghazi. mr. morrell in his book states there were 20 attacks on that

facility. are you familiar with the other 18? there were two that we thought rose to the level of being serious. >> where you are familiar with the other 18? aware ofon: i am not 18 others and i would point out and i'm sure the former deputy director made this point when he cia state ing, the libya. the cia had a much bigger presence than the state department, despite the overall decline in stability. some might argue actually because of the overall decline instability, it was thought to be even more important for the cia to stay there, and they also did not believe that their facility would be the subject of a deadly attack either. sometimes the discussion gets pulled together when really, we had chris and sean dying at the state department compound, which

we are discussing, and we had our other two deaths, tyrone and glenn, at the cia. >> reclaiming my time. if you talk to the cia contractors that were at the annex, and you asked them how they were on -- armed and equipped, and then if you would or could, talk to the diplomatic security agents that were at the facility, i think you will see there was a big difference in the equipment they had to protect themselves. knew of the two major incidents but you do not recollect the other 18 that mr. murrell says happened. how many instances would it have to say, we need to look at the security over there? would it have been three major

instances, 30 instances, 40 instances? instances would you have been made aware of that of thatve made aware would have made you say, we will protect our people. chris stevens is a good friend of mine and we will look after him. how many would it have taken? i made itn: of course abundantly clear that we had to do everything we could to protect our people. what i did not and do not believe any secretary should do, was to substitute my judgment from thousands of miles away for the judgment of the security professionals who made the decisions about what kind of security would be provided. know that sounds somewhat hard to understand, but we have a experts who ie have the greatest confidence in and who has been so through --

through so many difficult positions because practically all of them have rotated through afghanistan, pakistan, iraq, yemen, and other places. they were the ones making the assessment. no one ever came to me and said, we should shut down our compound in benghazi. sim not saying shut it down to it i am saying protect it. i am not saying shut it down. i'm just saying protect it. when you say security professionals, i am not trying to be disparaging with anybody, but i do not know who those folks were, -- ms. clinton: they were people who risk their lives to try to save -- >> you said the mission you gave ambassador stevens was to go into and investigate the situation. going to investigate his situation, it seems to me you would have to get out into the country to investigate that. i do not know if you are aware or not, but there were not even

enough diplomatic security for him to leave the compound without asking the cia operatives to assist them. were you aware of that? we had an agreement with the cia to help supplement aid.ity and to come to the it was a mutual agreement. agreement,a written but we are posted with the cia in many places in the country, in the world. it is important to have a good working relationship and we did and unfortunately, despite all the weapons, and despite the , two ciation contractors died that night. >> to follow-up on one thing about ambassador stevens. you got a lot of e-mails from sidney blumenthal and you say mr. blumenthal was a friend of

yours any had your personal e-mail address. you say chris stevens was a friend of yours. he asked numerous times for extra protection. been mr. stevens, and i think anybody watching this would agree, if i had been mr. stevens, and i had had a relationship with you, and i have requested 20 or more times for additional security to protect not only my life, but the people who were there with me, i would have gotten in touch with you in some way. i would have let you know that i was in danger and the situation had deteriorated to a point that i needed you to do something. did he have your personal e-mail? ms. clinton: congressman, i do not believe that he had my personal e-mail. has a the e-mail and he

direct line to everybody he had worked with for four years. officials in the state department had gone through difficult challenging and dangerous assignments together. he was in constant contact with people. yes he and the people working for him asked for more security and some of those requests were approved and others were not. we are obviously looking to learn what more we could do because it was not only about benghazi. it was also about the embassy in tripoli. and i think it is fair to say that chris asked for what he and his people requested because he thought it would be helpful, but he never said to anybody in the state department, you know what, we just cannot keep doing this, we just cannot stay there. he was in constant contact with people on my staff, other

officials in the state department, and i did have an opportunity to talk with him about the substance of the policy. with respect to security, he took those requests where they belonged. he took them to the security professionals. i have to add the diplomatic security professionals are among the best in the world. i would put them up against anybody. i just cannot allow any, to be in the record in any way --ticizing or disparage disparaging them. they have kept america safe in two wars and a lot of other terrible situations over the last many years. i trusted them with my life, you trust them with yours. they deserve better and they deserve all the support the congress can give them because they are doing a really hard job very well. >> all i can say is they missed something here and we lost four americans.

>> the chairman now recognizes the gentleman from kansas. referred a couple times as being important to diplomatic >> i had a chance to read that. it ran 25 pages but it did not have a word about diplomatic security in the entire 25 pages. then i read the remaining pages. you know how many pages of the 270 had to do with diplomatic security? theclinton: it is about bounce of risk and reward and not only about diplomatic security specifically but about the larger question of our mission in the world. there was no balance. you talked about a lot of

improvement. it did not have anything to do with diplomatic security in any material way in that report. about being disappointed. i heard you use that several times are you are disappointed. ?hy don't you fire someone and kansas, i get asked constantly, why has no one been held accountable and not a single person lost a single paycheck, connected to the fact that we have the first investor killed since 1979? how come no one has been held accountable to date? well, congressman, the accountability review board pointed out several people working in the state department who they thought had not carried out their responsibilities adequately, but they said they could not find a breach of duty. rules and the laws that govern those decisions were followed very carefully. mr. pompeo: i am not ask you what you did.

ms. clinton: i followed the law and that was my responsibility. mr. pompeo: you are telling me you had no authority to take anyone's paycheck, you're telling me you are legally prohibited from doing that? in the absence of finding dereliction or breach of duty, there could not be immediate action taken, but there was a process that was immediately instituted and that led to the institutes -- decisions being made. mr. pompeo: to keep them on as employees. that was the decision that was made as a result of the processes that you put in place. the folks in kansas do not think that is accountability. i want to do some math with you. could i get the first chart please? do you know how many security requests in the first quarter of 2012? libya. to benghazi and

there were just over 100 plus. in the second quarter? 172. andmany were there in july august and in the weekend a few days before the attacks? 83 by our count. over 600 requests. you have testified this morning you had none of those reach your desk. is that correct? you 150enthal wrote e-mails. it appears from the materials we reachedt all of those your desk. can you tell us live security requests from your professionals, the men that just testified, which i agree, arkham -- are incredibly professional and capable people trained in the art of keeping us all safe, none of those made it to you, but a man who was a friend of yours who had never been to libya and did not know much about it, at least that is his testimony, every one of the reports he sent on to you that

had to do with situations on the ground and libya, those made it moreur desk, you ask for of them? you correspond with him, and yet folks who worked with you did not have the same courtesy? as you are aware, he is a friend of mine. he sent me information he thought might be of interest. some of it was in some of it was not some of it i forwarded to be followed up on. the professionals and experts who reviewed it found some of it useful and some of it not. he had no official position in the government and he was not at all my advisor on libya. he was a friend who sent me information that he thought might he and some way helpful. i have never had anyone send me a couple of pieces of intelligence with that level of intelligence. that is a special friend. ms. clinton: it is information i checked with him that he forwarded on to address someone who got the vast majority of the

information i acted on from official channels, i read a lot of articles that brought new ideas to my attention, and occasionally, people, including him and others, would give me ideas. they all went into the same process to be evaluated. we pompeo: the record received today does not reflect that. simply does not do it we have read the e-mails and read everything with you get our hands on. you just described all this other information you relied upon, and it does not comport with a record this committee has been able to establish today. take a look at this chart to the left. you will see the increasing number of requests, over 600. i think data matters and the pictures are worth a lot. the increase in requests, and the bottom line is the increase in security. you will note the slope of those two lines is very different can you account for why that is, why we have increasing requests and no increase in security? youclinton: i can only tell

that i know a number of requests were fulfilled, and some were not. again,m my perspective these are handled by the people who were assigned the task of evaluating them. i think it is important to that although there were problems and deficiencies discovered by the accountability review board, the general approach to have security professionals handle security requests, i think still stands. -- i wish: i want you you had listened to those security professional spirit you describe mr. stevens of having the best knowledge of libya of anyone. your words this morning it when he asked for increased security, he did not get it. i just talked to you about requests for additional assistance p riley not go through the numbers in detail. it shows the increasing number

of security incidences at the facility, the state from debt state department facility in benghazi and libya. and again, it shows the increase in security being nonexistent or i assume your answer is the same with the respect -- with respect to the fact we have no corresponding increase in the amount of security? ms. clinton: i have to respectfully disagree. many security requests were filled. we would be happy to get that information for the record. i cannot really tell what it is you're putting on that poster, but i know that a number of security requests were fulfilled. mr. pompeo: it shows the number of informatics security agents since the beginning of 2012 and know they were there since the murder of four americans, is no different. ms. clinton: the decision, as i post,, was that the namely embassy aaa, on behalf of benghazi, requested five diplomatic security personnel

and they did have that on the day that chris stevens was in benghazi. unfortunately, that proved insufficient in the face of the kind of attack they were facing. -- thepeo: put the nests .ext poster up please the one on the left is mohammed, the head of a jihadist group based in benghazi. the man on your left, or you where your folks met with that man within 48 hours before the attack? i know nothing about any meeting with him. mr. pompeo: on the day he was killed, mr. stevens sent a cable talking about his meeting. were you aware of that cable? him,id they, referring to

they wanted a meeting, they were here and they asked us what we needed to bring security to benghazi. your officials were meeting with this man on the ground discussing security two days before that. but in august of the same year, the united states government said this very man was a young rebel leader who allegedly fought in iraq under the flag of al qaeda. were you aware that our folks were either wittingly or unwittingly meeting with al qaeda on the ground in benghazi, libya, just hours before the attack? ms. clinton: i know nothing about this. mr. pompeo: i think that is deeply disturbing. the fact that your team -- we do not know exactly who. ms. clinton: it would be helpful. mr. pompeo: one of your employees. i do not know which one. perhaps you could enlighten us or we could get the record we need to do so. we have not been able to learn

that today. we do notn: since have an ongoing presence of state personnel in benghazi, i do not know to whom you are referring. quite thank you for coming again to answer our question. months,over the last 17 there have been a number of allegations made with respect to you and when the facts and the testimony and the record do not support that, we seem to move on to the next new allegation one of the more recent ones is that republicans are claiming because he received e-mails from mr. blumenthal, that he was a primary source for intelligence. ,e claimed blumenthal was secretary clinton's primary advisor on libya because nearly half of all of the e-mails sent

to and from secretary clinton regarding benghazi and libya prior to the terrorist attacks involved sydni blumenthal. he also claimed that mr. blumenthal was, and i'm quoting again, one of the folks provided for her the largest volume of information about libya. was sidney blumenthal your primary policy advisor or your primary intelligence officer? ms. clinton: of course not. was he the primary source of information you were receiving on libya? ms. clinton: no. ms. sanchez: who were you receiving information from and what form? there has been a specific emphasis on e-mail communication only. ms. clinton: as i testified earlier, i did not primarily conduct business on e-mails with officials in our government and i think the e-mails that have been produced this far have demonstrated that as well.

as i said, i got intelligence briefings from the intelligence community. i had a very experienced group of senior diplomats who knew quite a bit about libya. the deputy secretary bill burns had been our nation's capital diplomat who it actually negotiated with gadhafi. prior to entering in by the united states to support our european allies and arab partners, i sent a team to meet with representatives of gadhafi to see if there were some way he would back down and back off of increasingly hysterical threats against his own people. we had people like the ambassador i referenced earlier who had served in libya and had the occasion to serve and meet with gadhafi. group ofvery large

american diplomats, intelligence and some private citizens who were experts in to ourho were available government. we took advantage of every person we could with expertise to guide our decision-making. ms. sanchez: would it be fair to say you received information from ambassador stevens? from eastern affairs? the director of policy planning jacob sullivan? the national security council? intelligence community? defense department? this weekend, one of the colleagues went on meet the press and i wonder if we could queue up the video. he had this exchange. could we please play the video clip? >> it goes directly to the security issue. relied in they -- she

mr. blumenthal for most of her intelligence. it is absolutely factually correct. take a look at the e-mail. you will see. >> it is actually not correct. ms. sanchez: that clip for me defies all logic. i think andrea mitchell correctly calls him out on a falsehood. secretary clinton, what did you think when you heard that clip? ms. clinton: that it was factually untrue. i think your questioning and is ai have stated today much clearer and more factual description of how we gathered information to make our decisions regarding libya. ms. sanchez: with your answer that you believe it to be factually incorrect, i want to add the washington post fact checked her medially awarded that claim four per no egos, the worst rating possible. i will quote them on what they said about that.

looking at her private e-mails is part of the pitcher and it ignores the vast amount of information, much of it classified, that is available to the secretary of state. secretary clinton, would you agree with that statement from the washington post? it seems to me there have been allegations that the work this committee has done has been political in nature and that much of the facts have already been decided before all of the evidence is in, including your testimony here today. when i see clips like that, it's sort of supports the theory that this panel is not really interested in investigating what happened just prior to, the evening of, and merely in the aftermath of september 11, 2012, but that there is another motive behind that. while you are here, i want to make the most of your time and allow you to sort of debunked many of the myths that have been generated over the last 17

months, most of which have no factual basis for those being said. you were seemingly disengaged the evening of september 11, 2012. for example, mike huckabee accused you of ignoring the warning calls from dying americans in benghazi. inator rand paul stated ghazi was a 3:00 a.m. phone call that you never picked up. senator lindsey graham tweeted, where were you on the night of the benghazi attack? those appear to be based on the testimony of witnesses and the document we have obtained in this committee and other previous committees, they seem to run counter to the truth because the testimony we have received states pre-much that you are deeply engaged the night of the attack. what theescribe for us initial hours of the night were like for you and how you learned about the attacks and what your initial watson actions were? ms. clinton: i learned about the

attacks from a state department official rushing into my office shortly after or around 4:00 to tell me our compound in benghazi had been attacked. we immediately summoned all of the top officials in the state department, for then to begin reaching out, the most important quick call was tried -- trying to reach chris himself. then to have diplomatic security people try to reach their agents. that was not possible. they were obviously defending themselves along with the ambassador and sean smith. we reached the second in command in trouble he. he had heard shortly before we reached him, from chris stevens, telling him that they were under attack. we began to reach out to everyone we could possibly think who could help.

with this terrible incident. course of the following hours, obviously, i spoke to the white house, i spoke to cia director pichai us, i spoke to the libyan officials, because i hope to there was some way they could gather up and been partse who had of the insurgency, to defend our compound. i had competence calls with our team in tripoli. conference with officials who had operational responsibilities in the defense department, the cia, at the national security council. ofwas a swirl and world constant effort to try to figure out what we could do. and it was deeply distressing. when we heard that the efforts i

our cia colleagues were not successful, that they had to officers,he security our diplomatic security officers, that they had andvered sean smith's body they could not find the ambassador, we did not know whether he had escaped or was still alive or not. if i may because my time is running short, i just want to point out -- >> you have been watching live coverage of hillary clinton's testimony before the house of benghazi committee. good day. i am mark crumpton. the chairman, south carolina republican trey gowdy, told mrs. clinton she must account for government actions before and after quach or were killed in 2012. mrs. clinton said while the safety of u.n. diplomats cannot always began teed, she has worked to make sure it will not happen again. i tooknton:

responsibility and is part of that, before i left office, i lost reforms to better protect our people in the field and help reduce the chance of another tragedy happening in the future. mark: she said she did not do the vast majority of work over her e-mails. ms. clinton: i did not conduct most of the business i did on behalf of our country over e-mail. i conducted it in meetings, i read a massive amount of memos and a great deal of classified information. i made a lot of in -- a lot of secure phone calls and was in and out of the white house at the time. there were a lot of things that happened that i was aware of and that i was reacting to. were to be in my office in the state department, i did not have a computer and i did not do the vast majority of my work on e-mail. mark: republicans on the panel

challenged mrs. clinton about what she knew and when she knew it about the safety concerns in benghazi. the chairman said despite several prior benghazi hearings, he said these questions linger because previous investigations were not thorough. you can continue to watch the hearing on our live event channel but right now, we want to turn to another big story that has been making headlines and moving the markets. alex and scarlet, over to you. alix: thank you. shares arecal continuing to tumble after research published a report publishing to make its revenue seems better than it is. the biggest shareholder bill ackerman -- bill ackman bought an additional 2 million shares

yesterday. here to talk about the report is the man behind analysis, andrew, the founder of the research and he joins us exclusively now from los angeles and also our own true armstrong is joining us and he has been following this story closely for bloomberg news. thank you so much for joining us. it is an incredible story yesterday when that news broke from your research firm. number one thing you are accusing them of and what is your proof to back it up? >> if you read the story, you will see what i'm accusing them of spirit it is not so much of an accusation but we see it. the specialty pharma company that they are running many of their prescriptions through, last week, a unique document came out which came from their general counsel requesting a $69 million payment from a small pharmacy in california.

then it came out to be that the pharmacy does not actually own the money to valiant, but they all the money to, instead, a specialty pharmacy company, which, if you read the southern investigative service, it is a shadowy organization. then it came to the ownership structure of it. it seemed to be then that valiant was issuing an invoice to themselves. it has been 24 hours since i have put this story out. the reason why i did not respond yesterday is i wanted to hear the company's response. i wanted to hear the analyst response, and i wanted to hear philip yours's response. been 24 hours and i am more confused today than yesterday about the chain of command there. >> we do have those statements out right now.

so what is your response? you had seen what they have to say. they say no. in fact, we are recording revenue properly. out there explaining some of their relationships. that, given the externally claims you have made, phantom accounts, you compare them to enron, what is your response to what they say is a dismissal of your claims? >> we'll start with the claims made by valiant that -- that they do not go it, but they run through valiant. valiant has been over discussed in wall street's in the past. it is a hedge fund darling. person heard about philidor until three days ago. they do not own them but they consolidate their financials

underneath them. when they gave that as an it is not me.sly, look at what the market is telling you. street saying hey, we do not trust your answer. is morend part extraordinary. why philidor would have the same number and the same contact information as one of the pharmacies they supplied to, which was the subject of the $69 million invoice. the response was philidor provides web services and i.t. support for the pharmacy. valeant, which apparently controls philidor, which philidor in turn provides i.t. services for pharmacies, valeant is making websites for pharmacies? and pharmacies are outsourcing the chief privacy officer for philidor?

none of it makes sense. is in thell do this next few days. i include with it responding to the companies. he will see three different stories. the responses are amateurish. >> you say the stuff does not make sense. a lot of people are asking a lot of questions. it is less focused on illegality and fraud and some of these comparisons. do you feel that you have really -- the smokinged gun, as if you have nailed this thing down. it seems like a bold claim to me. >> it is a bold claim and not my job to actually prove it. if you gave me subpoena power, six months. i will be no doubt able to

prevent. on the publicly available i can show shared ownership of something and then i could show invoice of one entity to the next. that is fully call a lot of smoke. they spoke with valiant last week and the smoke keeps increasing on a daily basis. once everybody saw the decideds, wall street that this folks -- this moke is actual fire. scarlet: you mentioned you might compile the responses but what further action could you take?

>> this is bigger than me and it is nice i got the discussion started. a lot of phone calls being made as i sit here asking for actual accountability for philidor, not pharmacy others have the same backend administration and there are a lot of questions being asked. i think a few brokers firms actually suspended coverage not because they do not believe in the valeant business. they suspended coverage because the questions were answered. it is an on investable company if you do not know. two weeks ago, the argument pricevaliant was about gouging, cutting r&d spending, and raising prices. like it, but it is legal. it is a legal policy. it might not be the way to build a business and it might be a way to exploit the health care system, but it is legal. what they are doing right now

appears to be illegal. >> when did you get into the trade, how big is your position, are you still in it, and how long will you be in here? what is the end goal? we talked to people like phil ackerman in herbalife. what are you trying to achieve? >> i don't want to see anything anywhere. it is not personal. a little bitbe personal-care and i assume you have a financial stake in the outcome. how big is it? andrew: if you start making things personal, you will go broke rule fast. it is not personal. it is as this. i want to see the truth come out. once the truth comes out, i will let the market dictate what will happen. i cannot force the issue. --ike mr. ackman, who thinks i know he has probably spent $50 million with herbalife right now

trying to force the issue. i cannot boards the issue. it is bigger than me. i think right now, the shareholders, instead of mr. ackman buying 2 million shares yesterday, if i were him, i would be on the phone with the ceo asking for answers immediately. amazing is i think mr. ackman gave 170 slides why people should short herbalife. i wish someone could give us three slides as to the actual ownership structure of the specialty pharmacy companies with valiant. say how big you guys are into this short position? andrew: i do not discuss my trading. scarlet: have you done anything to change your position? andrew: i don't discuss my trading. alix: part of what will happen now is you are really going up against bill ackman. he added positions yesterday, the biggest portfolio holding. how do you feel about that? what is your relationship with

him? i am not going against bill ackman p he runs a hedge fund. he could sell out of valeant tomorrow and move onto another stock. alix: he made it clear he will deftly not do that. andrew: i am not talking about his children. i'm talking about a company that he owns. i think you made a mistake. he has made mistakes in the past and he will make mistakes in the future. we haveat i mean is seen through herbalife that when bill ackman gets behind or against a company he really believes in one where the other, he will fight to the death of that company. it seems like valeant is the company he is really supporting. andrew: that is wonderful to i wish -- i missed the ball because i should have gone up against him at jcpenney. there is no going up against bill ackman. investment on valeant has anything to do with bill ackman whatsoever. you're saying is very dangerous.

i don't think any investor should ever buy a stock because of bill ackman or even for that matter warren buffett owns a stock. do your own research and your own due diligence. similarly, you should never short a stock because i come out and say short a stock. the look of the messenger. look at the message. we know mr. ackman is very successful. he owns a beautiful apartment. he is a billionaire all those great things. who cares? at the end of the day, look at what valiant is doing. what are the risks currently facing the company and what is the sustainability of their business model? that is what you have to ask yourself. >> one other question about the industry, there was a lot of noise yesterday are there other pharmaceutical companies that might be doing the same thing. do you have any reason to believe some of the other entities out there that have made comments saying it is not otherke her eisen and large drugmakers, any reason to

believe there are more of these or additional reports you are looking into elsewhere in the industry? at this point in time, i do not find any other companies using this type of operation. it is funny you say that. it makes you even more valeant'sle about business that other companies yesterday without even being asked, immediately said, we don't own a specialty pharmacy. a specialtywning pharmacy, and i do not know the legality behind that, but it has know thestart legality behind that, but it has become a start with -- a scarlet letter in the past 24 hours. there is a problem. >> you brought of the ignore the messenger, but i'm sure you are well familiar with the spirit you have a section on your website that a trust is this. people out there have questioned your character before and you got into a fight with a try cleaner at one point, you have been sued a number of times. and some company you were

involved with earlier your career resulted in sanctions. how do you respond to people out there saying we should not listen to the sky because his character might not be up to snuff as a credible researcher and messenger on these companies? andrew: don't listen to me. i have been writing this for 14 years p.m. my newsletter and track record speaks for itself. i'm a well-rounded person, i have many different facets to my life. i do not wake up and go to work in the just come back. there are many different things that happen in life. i've lived a nice 45 years or you can look at my track record. it speaks for itself. also, if you do not like what i have to say, i do not care. read what i write and judge the information in a vacuum. if people have not learned anything in the stock market in the past 10 years, how absolutely ridiculous it is that every single day, there are by recommendations from goldman sachs and morgan stanley in the biggest names on wall street and stocks seem to go down every day because goldman sachs has

invited it necessarily will go higher? absolutely not. information being presented. do not be so concerned about the messenger. alix: you laid out a really strong case of why you think what valiant is doing is illegal. technically, owning a shared ownership company and owning -- you are a distributor, it is not actually technically illegal. you might not like it and you might not like the ceo and you might think they are too aggressive, but what did they actually do that went against the law? andrew: it seems to be this. this is a question. it is not definitely, throw the handcuffs on him and let's take him to jail today. it is something that needed an answer. look at the stock price today. wall street was not happy with the answer. the question was, there was a $70 million invoice that seemed to be unpaid by the pharmacy or for those who are more familiar with the story, you will see

there are two different pharmacies. there are two different websites that are registered. it has turned into a crazy story . maybe something that they will write about in books one day. that being said, if you're writing yourself an invoice is for $70 million unpaid, what is the purpose behind it? theer, as written by attorneys in the lawsuit, someone is pulling a big fraud on valeant, or valiant is trying to hold the wool over somebody's's eyes. in this case, it could be an auditor. scarlet: explained to us again why valiant would be like enron. the title of your report was the smoking gun, pharmaceutical and ron. why is it enron? andrew: what is the title of my report? scarlet: could this be the pharmaceutical enron? andrew: exactly. the title was could it be. not that it is it when i write could it be, it is the situation

p people remember enron was using the high losses from offshore entities. they were using shadowy entities to hide losses. is valiant using shadowy entities to book revenue? that is a very valid question today. that ifention the fact you look, and i go in detail in my report, and if you look at it, you will see similarities between the responses and the posturing of the management of valeant compared to the posturing of the management of enron. it should also be known that trial,he last day of they still blame the short-sellers for enron. scarlet: you say your job is to ask questions to put it out should do their own due diligence. what answers have you gotten that you're comfortable with in the last two days? i am moree only thing certain about now is that i am more uncertain. exactly what i told you. look at the responses,

and it is not just me, but the analysts of the company. it is surprising to see this because there is no doubt that in the next year, valeant will have to turn to wall street to raise money. that being said, watch and analyst today say, we do not really understand what is happening here, that is quite alarming. there is no real answer. i am supposed to now believe that valeant has a pharmacy company that sets up websites for other pharmacy companies and the privacy officers of a local pharmacy, they subcontract out to this pharmacy, which runs its financials through valeant, though no one has ever heard of it, and not to mention the fact that if you go look at philidor, they were denied accreditation in the state of california because they did not properly disclose who owns them? it is an extremely shady organization. that is it. pharma,ant a specialty this is not to mention, it is a

specialty pharmacy that only has one customer and that is valiant , one supplier, excuse me. so they are buying a pharmacy that they are the only customer of the pharmacy, the only seller to a pharmacy, and they have been running their financials but no one has ever heard of them until two days ago? that is a problem. >> the enron comparison, m ember. the company is not around anymore in a meaningful way on the equity markets. what is your target price on valiant? that is more difficult. if you look at it, valiant is a combination of all the companies they bought and they pretty much but everyone for debt. that is their debt. now we worry about the equity of valiant and what is the equity, the actual stock price? big problem,have a obviously. we saw two days ago when the stock fell off on earnings,

because the debate that has been happening recently is about them raising prices. they cannot raise prices. to theircompetition drugs. right now, i do not think they could acquire mcdonald's franchise right now. i do not think anyone will sell them selves to valiant whoever's speaking right now about it. you can put that away. and you saw the quality of their acquisitions. by the way, no sense to mcdonald's. -- no offense to mcdonald's whatsoever. breakfast all day is perfect. you see the quality of their acquisitions going down. want tong said, if you boughtat is what they these companies for, not to mention the fact they overpaid for everyone one of the companies they bought, so they , so if they lose a little bit of the tax inversion

strategy and the inability to raise prices, there is an argument out there, is this company worth its debt? if you want to slash the research and develop by firing the 2000 people who work there, they have actually build equity by doing that, and then you want to say fine, they paid $30 billion and we will put on an that is where, the numbers seem to fall, somewhere in between. but if you believe what we see now is just a hiccup, and everything is wonderful, and there will be great prices and buy up the companies and this is just short-term noise, then maybe the stock deserves to be where it is right now. alix: talking about what kind of thenue has exposure here to specialty pharmaceuticals, it is 10 to 15% of valiant sales. they made $18 billion. even if what you say is true that it is illegal and someone

messed up and someone will have to pay for that, so what. it is $900 million. can't they have a huge business model that could offset that? it is what percent does that $900 million bring to the bottom line. that is the first thing, not to mention that this is a situation of a turn of punch bowl to her hundred million dollars compared to eight dollars. he saw this invoice being questioned by wall street, who knows what is real and what is not real. i understand there might be a small part of -- this might be a small part of their business to we do not know. pharma toof specialty their profits question market goes to get -- directly to the ability to repay debt. for your time, your research was fascinating to read yesterday. we really appreciate it. thank you very much for your time.

that was an amazing conversation. did you get your questions answered? >> i did and i appreciate him .oming on we are hearing a lot of stuff out there on the market and i do not think anybody has totally on.ed out what is going it is good of him to come along with us for a few minutes and explain. he said he was disappointed by the analyst responses. most people still have a fairly optimistic take on the company, looking at analyst recommendations. 17 buys and seven holds. alix: the business model is sustainable and it has gotten so been up because of drake -- drug pricing anyway. >> the one thing we have to look at, we did see one down today. it was a big one. downgrade the stock because of it. what they said they were

downgrading was not because of what andrew is saying in his report, but basically saying, there are a lot of real questions about the fundamental as this model here and not the accusations he is saying her he said he thought they took care of a lot of us but he said, is it sustainable to continue to use the model to charge very high prices and have a captive ,harmacy where you drop these or is somebody going to crack down on this, either the regulators or the insurers or the pairs who would probably like to spend a lot less money on drugs if they could. that is the question really here. thank you for being with us. we will be back. ♪ buddy- nice place, nice car what happened?

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scarlet: good afternoon. alix: here is that we are watching at this hour. the man behind the valeant report tells us that the pharmaceutical company appears to be doing something illegal. this, as the stock falls further today. scarlet: more stimulus for europe? further action is hinted at as the economy shows little signs of getting up. eloquence and is still testifying before the house committee about the 20 12 -- 2012 attack on benghazi. firstly want to head over to the market where julie hyman has the latest. you have an keep an eye on the markets, and we are at a session

high. julie: while we have been talking to andrew and been hearing the benghazi hearings, it has been a good day for tocks, thankful -- thanks the head of more stimulus coming to europe. part of it has to do with earnings in the united states. part of it is likely to do that due to -- existing home sales coming it better than estimated. be aso looks to broad-based rally. mostly green on your screen with the exception of health care, not to mention the belly and situation. -- the valeant situation. we are seeing a couple of earning standouts in -- dow chemical and three point -- freeport and -- we are viewing options in the

agricultural unit, they might tell it. dow has been tearing down its different lines of businesses ,nd it's numbers miss estimates but some analysts are telling us that maybe this was the kitchen and quarter and was getting out all the bad news, and that could be why we are being them buying in the shares. asterisk of the other earnings and movers we were watching today, some of the other standouts include mcdonald's which has been gaining after its numbers beat estimates. it looks like the ceo has -- the ceo turnaround plan has bared some fruit. islooks like the stock having its best one-day gain in seven years and ebay, and its first report after the paypal setup -- spin off, showing strong numbers. as always, you have some winners and some losers and that is the case today. we are seeing on the losing side, i mentioned help their shares, kennedy helps shares not

in the s&p 500, and operator of hospitals and we are seeing hospital stocks take a hit as the company -- as the company numbers disappoint. lower earningsng and its chairman said he is going to embrace alternative funding sources but did not give details so those shares are down and american express still suffering from the loss of its big cobranded partner cosco. i want to end on valeant. are -- shares are down another 15%. they took a little bit of alike lower during your interview with andrew left of citroen. it looks like investors are pretty about all these questions. that's pretty spooked about all these questions. alix: now we want to check in on the bloomberg earthward news. mark crumpton has more from our news desk. >> former secretary of state

clinton clinton has told the house benghazi committee that there were no delays he medially the 2012 attack on the u.s. compound that left u.s. ambassador christopher stephens and the other americans dead. the panel chairman said the committee is looking for the truth about the diplomatic compounds request from our security, equipment and personnel. he said the safety of u.s. diplomats cannot always be guaranteed. >> we will never prevent every act of terrorism or achieve perfect security. we inevitably, must accept a level of risk to protect our country and advance our interests and values. >> chairman doughty also took section to a committee member suggestion that publicans had already reached a conclusion about what happened in benghazi. he said this is not a prosecution, it's an investigation.

president obama and pakistan's prime minister are meeting at the white house. strange --hared a strained relationship with one concern being the concern of pakistan's nuclear arsenal. discussders are set to financial -- pakistan also says it is trying to stall these talks between the afghan government and the taliban. u.s. defense officials say a u.s. operation in northern iraq in springing doesn't -- succeeded in springing dozens of kurdish captives but resulted in one u.s. soldier dying. washington post reports as many as 70 kurdish captives were set free. an official announcement from the pentagon is expected later today. warplanes attack refineries and other facilities in syria's omar oilfield.

it was part of a plan to target islamic state's ability to make money. the refineries generate up to $5 million per month. a second victim has died of the attack at a school in southern sweden. authorities say a masked man entered the school cafeteria with a sword. one teacher and a 12-year-old boy were killed, two others were wounded. swedish police shot and killed the attacker. that's a look at the first word news. you can always finally this news on bloomberg.com. as we have been talking about, our conversation with andrew left of century on research did not seem to help the stock in -- and valeant pharmaceuticals continues to plummet. shares overall, when you compare to the world index, have been underperforming. it has been a steady decline, especially prominent last couple

of days. i want to bring in our guest now, rob morgan. also bloomberg's senior financial correspondent will be here to talk about european central bank. i want to start with you, rob because you are neutral on it. you heard our conversation with andrew left. you heard about citroen's concerns about the company and its business model. that this make you more reluctant to invest? >> i am somewhat reluctant and i follow the bigger names. i'm not a active follower of valeant. this battle makes me less hesitant to jump into valeant. model bad fors the whole industry? i don't think so, i think it is a company specific thing. scarlet: what we have seen is a rotation into the guys that have

not done very well like energy stock and health care stock. morgan stanley have publicized that it's because because -- it's because we have seen a peak dollar. what the you think about that? -- what the you think about that -- what do you think about that? ,> it was amazing to watch mario talk the euro down this morning. you could track it as he talked. it was down at 1.11 right now. the fed is tracking a different kind of dollar, that's something to keep in mind. if you look at the dollar against major currencies, that is one story. the other story is we have a lot of other -- a lot of trade with other economies that don't have these major currencies in the dollar looks different and it looks like it is still climbing, there. me is a and for steadily rising dollar.

i don't believe we are at peak dollar. that implies a number of things and hurts u.s. big caps and hurts small caps. for u.s. investors investing overseas, it hurts international investing. i think the dollar continues to nudge up from here. >> you are a oil nerd. >> commodities nerd. >> whatever happened to peak oil? scarlet: that was never a thing. [laughter] >> we talk about currencies, the most interesting outcome, a fascinating ecb presser was the fact that mario was very open and explicit about the fact that his staff are doing research on what denmark and switzerland and sweden have done to prevent capital flight and manage their own currencies which is bring their policy rates below zero. he is willing to keep moving that down.

-- we actually need to see lower for this kind of lending that we need to see. to your point, negative, negative, negative. >> the harm that we thought we'd see what the negative interest rate, people dragging their feet going to cash, it has not happen. that's because banks have been reluctant to pass that on. >> that has embolden draghi -- emboldened draghi. he will be emboldened by this to try to -- even more exotic type things. >> how low can you go before people start buying bulk and pulling cash out? >> we are now at -.75 in denmark. what happens? in switzerland, won started it would -- stated they would start charging negative interest. >> there is a limit, but we are not there yet. scarlet: we are not there yet.

in terms of what draghi said, is he depending on what the fed says next? >> i don't think so. i think it's baked in that the fed is going to raise rates at some point whether it's december or 2016. his decisions are predicated on that. i think he strongly handled today and that they are going to try to supply as much liquidity as they can, even behind -- even beyond the qe they are doing and qe2 and qe3. twist -- and they do a can they do a twist? >> the fed did it, so they could probably do their own version. -- whenlk about you in we talk about qe and what it might look like, we can change the makeup of it. all of those options on the table, that was much more than he thought. when we look at set policy and mario draghi, what he wants to do is maintain a differential. as long as we knew that that was

going take off, he had more options. now that the fed may not, i think that puts more pressure on him to actually changes policy because he's not going to get any help from -- on that differential. alix: at the interesting way to put it -- that's an interesting way to put it. there was no miscommunication and policy -- in his policy. >> i think paul gordon in london flag a really good way and that he's going to be vigilant and he leaned on that word. that was what trish a used say when it policy move was -- he also said twice, so clearly this is a rehearsed line, this is not week and he but work and assess. they don't know which policy is the best, they are figuring it out. >> i think he relates to how much pressure each side is on. draghi is under some pressure to get things going again, whereas

billn, there is not this pulling out there and a huge way to raise interest. i think they should raise rates and others are saying that, but the pressure differential is less on yellen and more on draghi. >> he was talking about looking at data. she is doing what he calls wait and see, he is actively pursuing -- scarlet: what are you doing in terms of your money? >> i still like stocks, now and i still like typical sectors -- cyclical sectors. when the fed does raise rates and i think it will be december, and the old market is not going to come to an end, but it will start to test it will start the beginning of the end i will get a bit more defensive, get some of the chips off the table. i'm still aggressive. >> what happens -- alix: we have to leave it there.

i'm sorry. much.you both very scarlet: as we go to break, who -- we want to give you a glass of what's happening on capitol hill where former secretary of state hillary clinton continues to testify before congress. this is the benghazi hearing. know that the record is complete. ♪

scarlet: welcome back. over toto hand things julie hyman. we are looking at a triple digit rally on the dow, almost 2%.

i will you something that is not rising, the one group that is not in this rally, it is health care and specifically hospital stocks. i wanted to dig deeply into it at'sse we are seeing decline and committee health systems down 34% right now. the company released its preliminary third-quarter results that were short of analyst estimates. , the cap and he did not see an uptick in uninsured patients, it saw a decrease. however, it may have been a drop in the number of patients enrolled in state exterior -- insurance exchanges that affected the company's result. overall, it's hospital admissions were down, and this is affecting other hospital stocks as well. declines and big tenet health down 20%. the and i want to look at longer-term for the hospitals here, going back five years.

index of hospitals versus the s&p 500, adjusted for percentage changes and you can see that the hospitals have been doing very well, in part, reaping the rewards of health care reform. some analysts say maybe that affect is starting to wear off and now we are seeing, where -- where as we've seen these stocks up about 132% over the past five years, they have come down 40% since they reached a peak in july. definitely some winning performance there. waning performance there. texas instruments coming up with sales predicting profit to be estimates because of resilient demand for chips. alix: thank you so much. scarlet: still ahead, last year's nba finals, the second-highest watch of all-time

-- watched of all times. we head over to bloomberg radio. ♪

scarlet: welcome back. alix: getting in the game, basketball fans are anxiously awaiting the nba regular season, which begins next tuesday. scarlet: how do you know? alix: i like sports. for more, we go to carol matson and tory johnson. >> welcome everybody. back with us in studio is the president of the boston celtics. you're getting ready for a new season. you have been working on new players, new coach, talk to us about the changes in the impact it's having.

>> we are very excited about this season. we ended last season on a great note. we hope that that is sort of our starting point going into this season. we made a couple of acquisitions that will make us a better team. brad stevens has an amazing job getting the most out of the roster. we had a guy last season, isaiah thompson, who made a huge difference for us. we start the season dealing like we are going to be right in the mix. >> going as planned? you mention to be before we get started that you discover back from playing in europe. is everything going as planned? >> it is, in fact, europe was a great way to get and started, to get the guys together. they are traveling together, every bus ride. it was a great way to get -- integrate a new guys into that team and do some bonding. we feel like we are hitting

stride. we've got disco more preseason games to get ready and a few more practices. we feel like the season is one where we can make a real step toward. the businesss in of basketball, right now, least of all -- not least of all is the salary increases. we have seen a lot of changes across the league in terms of valuations of teams and i don't know which is a bigger deal, he reduced price or the -- in a different kind of city. what do you think is the big driver of those big increases in values of the team and some of the money? >> he's talking about some of the prices and values of the teams that we have been sitting -- seeing the past couple of years that have been trending higher at this point. >> i think it's indicative of the point that the nba is a great place -- in a great place. if i were to make a big investment in one of the big

sports leagues right now, it would be the nba. it is what all over the world, boston celtics games can be viewed and 80 different countries. we also have a very young, tech savvy and digital audience that is very desirable to marketers. it's a good time to be in the nba. there are a lot of good, young stars and a lot of excitement about the season. that's what drives vibration, the strength of the business and the business with the media revenues coming in for the league over the next few years, as well as the strength of all the teams getting smarter and better about their business is what is driving these valuations. it feels much better to have a winning team, but how important is that in terms of revenue and the bottom line? >> it is certainly helpful. >> is it a big difference? >> it depends on how you run

your business. we pride ourselves on running a strong business independent of the teams winning record. you don't want to be twisting in the wind with wins and losses because candidly, that is out of your control. try to run ae strong business that always invest in the team. winning always puts a little more wind in your sales. not run a great business so we can run off a profit, it's run a great business so we can reinvest in the player payroll. >> joe like i was a part owner of the celtics and -- now he has a championship in the bay area. i wonder what the one thing you think he learned as a part owner of the celtics, that he was able to take and have great success. >> he is talking about the championship with the warriors and what it took to have a winning team.

look in your guys learn in terms of having a winning franchise? >> the warriors are a good example of a good team concept. they did not have one guy, they had a cast of good players. the warriors, the way they play with pace and space, the way we like to play, so it's good to look at the team and they we can be that team as we keep moving forward. >> thank you so much. scarlet: still ahead, the u.s. government in danger of running out of money in just a few weeks. we are starting to see some fallout. ♪

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what. you don't have a desk bed? don't be left in the dark. get proactive alerts 24/7. comcast business. built for business. >> welcome back to the bloomberg market day. scarlet: we begin with the

headlines on the bloomberg earthward news. mark crumpton has more from the movie -- -- from the news desk. >> hillary clinton is on capitol hill today defending her record for and during the fatal 2012 attack on the u.s. for medic compound in benghazi -- u.s. diplomatic compound in benghazi. have longtors question the former secretary of state about security arrangement at the facility. a line of inquiry that reemerged today. >> those requests and issues related to security were rightly handled by the security professionals in the department. i did not see them, i did not prove them, i did not deny them. mrs. clinton told the panel that the u.s. needs diplomats to advance u.s. interests around the world, even in dangerous places. she also sits -- perfect security can never be achieved.

a member of the panel questioned her on the issue of taking response ability. >> how come not a single person lost a single paycheck connected to the fact that we had the first ambassador killed 1979 -- since 1979? how come no one has been held accountable today? >> the accountability review board pointed out several people working in the state department, who they thought had not carried out the responsibilities adequately, but they said that they could not find a breach of duty, and the personnel rules and the laws that govern those decisions were followed very carefully. >> i'm not asking what they did, i'm asking what you did. >> i follow the law, congressman. >> you are telling me that no authority to take anyone's paycheck, you were legally prohibited from doing that.

>> it is my position that in the absence of finding their election or breach of duty, there could not be immediate action taken, but there was a process that was immediately instituted and which led to decisions being made. >> just moments ago, the hearing adjourned, but not the war some nasty ironwork and exchanges between the committee's chairman and the ranking member of maryland. we will continue to monitor the hearing and you can always watch it on bloomberg.com/live. officials in israel say two palestinians stabbed a jewish man at a school bus stop outside of jerusalem. authorities fatally shot one of the attackers and wounded the other. inwas the latest incident more than a month of violence. israeli prime minister -- israelis prime minister

discussed the issue with the u.s. secretary of state, who said he will present plans for defusing the violence to palestinian and israeli leaders over the weekend. -- president assad decide whether or not to run and wartime conditions in syria should not be an obstacle to the vote. the cooperation council refused to acknowledge the previous election. el niño is back and it's effective -- it's effects are beginning in parts of the world. it could be one of the three strongest el niño weather patterns since 1950. officials say we should expect major disruptions. that is a look at the first word news. on can find the latest news liberty.com. -- on bloomberg.com. scarlet: the u.s. government is

running out of money. the secretary of treasury says on november 5 we will meet the -- he will hit the debt ceiling. may have delayed a dose joe auction that was scheduled for next week. we are joined with a look at just how big of a deal this really is. what is the big take away here? >> first of all, it's somewhat political. the treasury is telling congress to get their act together. it's early for them to be postponing the october 27th auction. their argument is that we don't know whether they will be able to settle on november 2. it in checks another layer -- it injects another layer. you got ecb coming out and injecting more stimulus and promising more stimulus down the road, driving yields down over there. that's why you are seeing deals coming down on these notes you

and ostensibly, theoretically, the risk falls to the u.s. scarlet: you showed me this luncheon yesterday, it is the implied yield of one-month treasury bills and look at that spike. we have seen a huge spike up, but nowhere near what 2013 -- and still away from 2011, the last one. >> i find this part interesting because of you look it right before the spike upwards, you will notice a massive spike downwards were they yield was -- where the yield -- that's pretty compelling, and there were a couple of options where the bill came out at a 0% yield effectively. mediately after that, the concern about a potential lack of debt ceiling agreement is leading to such a sort of technical disruption in the market.

scarlet: people are struggling to price in the possibility or risk of that happening. what does it do in terms of liquidity, because that has been the buzzword in the market all year long. >> years long. it hit fever pitch as of late. scarlet: the new york fed had a meeting this week when they discussed the treasury issues. the treasure liquidity issues and how they can awesomely be addressed. s another level of uncertainty. you have traders who do not know what to make of anything. you had the fed coming out and saying they will raise rates and it's just not happening. you see all indicators of economic -- pointing to an otherwise weaker economy. bond traders are looking at this and more people are saying you could use a lot of money if yields rise. layer ofcts another

uncertainty. he was talking about how mutual funds now own so much of the credit market, about 25%, the idea being there -- that they are not in it to -- for sentimental reasons. >> i think that people have been saying that going forward, if yields rise, and people are going to not like their bonds anymore. that has not happened, and yes they do -- which will funds do own about 5% of u.s. corporate debt market right now. it is hard to see how that will really shift dramatically, going forward and a lot of mutual funds have prepared for a potential shift. scarlet: yet another concern. thank you so much.

up, the mets reaching the first world series in 15 years. bondholders are celebrating as well. they've actually might see some higher revenue coming in. scarlet: i might go. hollywood is also turning to the bond market, the organization planning the oscars is looking into building a museum to house movie artifacts. seeker,he u.s. job labor secretary joins us at the top of the next hour. jobs at the lowest in four decades. ♪

scarlet: welcome back. it's time for the bloomberg binges -- business flash, a look at some of the biggest is this new stories right now. advised buying the stock downgraded the shares, citing questions about valeant's close ties to pharmacies that is to beat its drugs. valeantesearch accused of inflating sales. cc $6 million0 that 55 -- by 566 lien dollars. the bank ceo is to reduce costs in the securities unit. scarlet: it's a done deal, a vote to ratify a new contract between the edit our coworkers and fiat chrysler broke through. they voted overwhelmingly in favor of the revised contract.

did scrap a plan to create a health care cooperative for employees. you can always get more business news at bloomberg.com. alix: let's head now to the markets where julie hyman has the latest. julie: i wanted to check in on stocks and look at the other classics we have not talked about much. stocks are still rallying on better than estimated economic data on comments rom economic -- from mario draghi. we also have to talk about currencies because we are seeing the euro decline after draghi's comments that he is open to more monetary stimulus. at ae seeing the euro down three-week low versus the dollar, but it fell versus all of it to team major trading counterparts. likewise the flipside, if you

look at the dollar versus a basket of currencies, we are seeing it again today versus the dx why index. on my terminal, i got a look at option on the euro versus the dollar. rose over thehey summer, heading into druggies latest commentary coming back down a little bit into the meeting and the commentary today. we have seen this elevated bearishness on -- what talk about what's going on in the treasury market. you were talking about the postponement of that to your auction. here is the 10 year and what we are seeing, you can see little yield, and as we see, the hovers around 2%. we don't often look at the price of treasuries, but it is worth

noting that the 10 year is the most expensive relative to other maturities across the treasury curve than it has been in about two years time. the 10 year has apparently proved to be the most attractive in the treasury market. scarlet: thank you so much. we have to talk sports and i know you are excited. alix: i am excited. scarlet: the new york mets storybook season continues. last that's victory over the chicago cubs gave the team a first -- a first to the world series. alix: the field will be rocking when it hosts game three next friday night. lively music to the ears of the mets owner and also to the holders of the bonds that the mets could issue to finance the stadium. talk about baseball and bonds is martin braun. let's go back to the building of

citi field. to what degree was it funded by bonds? almost all of it was funded by bonds, about $700 million was issued. they subsidize the construction of the city of by giving the team tax exemption. when the bonds were issued, they were investment grade, the lowest level. alix: not anymore. >> know, they have been downgraded since. they were backed by payments that we supposed to be paid in payment taxes and now they will pay that money to the bondholders. those payments would be made through the stadium revenue, from seats, and since sheehan -- concessions, and advertising. if you know, as a mets fan, it has been painful. had its firsteam

season at citi field. about 3 million people showed up during the year. since then, the team has had in second of losing seasons as that -- and attendance has gone down and the bonds were downgraded for a number of reasons, but also because the revenues were not coming in as expected. scarlet: what happens now when you end up having them killing it, going to the world series. out of this helped them in terms of paying back some of the bonds? team andality of the the bonds go hand-in-hand. if the team plays in the world series and has a great season this year, that's going to boost attendance asked year. is saying that about that fixed like about 500,000 more fans next year -- they expect about i've hundred thousand more fans next year --

500,000 more fans next year. they have an opportunity to refinance the debt because it -- if they get the ratings back up to investment grade, they might be able to refinance at a much better rate. scarlet: is that eminent, then getting the ratings back up? >> it's not imminent, there are a number of things they have to do. they have to get reserve levels up. but -- imminent, scarlet: higher attendance would help pay the way -- pave the way? >> oh yeah, they could generate more revenue, ticket prices have the down about 20% since opening of citi field. alix: how does the debt burden compared to other baseball teams and their stadiums. are these guys outliers or is this par for the course?

>> i could only compare it to the yankee stadium. they issued more did -- more debt, about $1 billion and the yankee bonds are rated one level higher. scarlet: they're not have the issue with attendance that the mets have. >> yes. the mets are trending up, and yankees are going down. scarlet: has are many moment were citi field -- the mets cannot service their debt or came close to not being able to? >> their annual debt payment is around $40 million, and the revenue this past -- in 2014 it was about 200 million so they are not having a problem with operating cost and debt service. scarlet: when we talk about the citi field bonds, what i found interesting was the fact that these are not equally traded on. why is that? in 2006 and issued

interest rates were a lot higher, then and coupons were higher. a lot of people bought these bonds just to hold them because of the income and is not a trading market so it's a very specific credit, so there is not a lot of liquidity. scarlet: can you imagine the emotional tied to your met on? -- your met bond? you can't sell it if you are a mets fan. ofhe holds tens of millions citi field bonds. scarlet: so he's kind of conflicted when it comes down to it. thank you so much. , just how deep are hollywood's pockets? media market is about to find out. ♪

viewership is falling even as broadcast contracts are still there most expensive. the oscars are banking on the generosity of hospital -- of hollywood. a $350 millionng museum celebrity their history. scarlet: i'm a fan of the oscars, you are a fan of the oscars. how is the academy of motion pictures and arts and sciences -- arts and sciences when a deal to tap the media market? they are not building bridges. >> it's because they are a nonprofit, build -- believe it or not. it also means they can tap the many market, they are eligible

for tax-exempt financing for any kind of product they want to do. there are a few nonprofits you might not expect, so the met as well. market --o the money they tapped the money market. how did they back it? it's backed by ticket sales, how would this one be backed? >> it's backed by any gross revenue of the academy, but what they are saying will back these bonds is they are expecting to raise enough money to cover the entirety of the project. [laughter] scarlet: i guess you will be the first in line to see the museum. >> they are legally backed by the gross revenue of the academy itself, that includes the prod cast agreements, but they are raising enough money from its

membership group to fund of the entirety of the project. scarlet: how with a fund that, is it just ticket sales? >> they are asking members for donations, it is p and it's led by tom hanks and a net betting -- annette betting. they're reaching out to all their friends in hollywood and asking for money and the far they have 250 committed and they have received $62 million. scarlet: what if the friends in a pony up the money? what happens then? bethan the bonds would legally secured by the revenue of the academy. they're using their contract with nbc to broadcast the oscars. viewership has been falling, struggling to find the right host for the oscars. there is not much you can really do.

cable cutting has been a huge trend in the industry and there's not much you can really do, take a look at this chart and the viewership was kind of a little bit up and then it took a huge dive last year you another broadcasting agreements are up. at the end of the day, the academy, it's too bad you don't have as many viewers, but the contract agreements are high, then you will often -- then you are locked in. scarlet: thank you so much. alix: we do want to take a quick look at the markets as we head to the commercial break. you're looking at dow jones up a triple digit. they are trading around the high of the session. it has been a consistent, steady rally throughout the day if you take a look at the futures market. move a lot stocks

higher once you had mario draghi speaking about the stimulus in december. it has continued that grind higher. scarlet: that has been the trigger for the buying today for risktakers. -- the persistent effort to get prices to increase. alix: coming up, an inside look at the u.s. jobs picture. labor secretary john perez joins us at the top of the hour. ♪

david: it is 2:00 p.m. in new york, 7:00 p.m. in london and 2:00 a.m. in hong kong. welcome to bloomberg market day.

for bloomberg, good afternoon, i am david gura. a cooling jobs market. john perez has a plan to thaw it . many students will graduate with a lot of debt and no job. el niño spreading mayhem around the world. farmers everywhere are worried about their crops. let's head to the markets desk with julie hyman. going we have this rally on today. a combination of factors helping matters here. mario draghi talking about being willing to put more stimulus into the economy. better than estimated economic data in the united states. earnings