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tv   MONEY With Melissa Francis  FOX Business  April 18, 2014 2:00pm-3:01pm EDT

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how are you doing, debra, deirdre. let's get on with it. netflix stream a raging river. new evidence that the video provider crushing cable. that has given beaten down netflix another look. charlie gasparino will join us with an exclusive. he is hearing about one of the most talked about ipos expected on wall street and it is not what the "wall street journal" is reporting. behind the wheel of the world's fastest car. the american success story, clocking in at a whopping 270 miles per hour and you can buy this markets may be closed but we're open for business. adam: is the streaming giant really a cable killer?
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here is jonas farris from max fund.com and jonathan hoenig from capitalist pig hedge fund. both are fox news contributors. jonathan, let me start with you. netflix stock plunged what, 20% the past month? is that indicator we're talking too much about people cutting the cord? >> netflix i wouldn't call it a cable killer, adam. it is a entertainment revolutionizer. apart from the stock, i can remember wasn't too long ago you had to the big pile of vhs tapes, wasting online at blockbuster to get entertainment. netflix changed the game. they're a threat not only traditional movie studios, the traditional movie studios but all forms of entertainment. for the stock, it has been loved for quite some time. i'm not surprised to see it give back its gains. it is not a stock i love but it is revolutionizing the entertainment field and all those who compete with it should
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be scared. adam: what jonathan just said would seem something they said in the '50s, that television would kill movies, it never did. movies are making more money than ever before. is netflix really a killer? is there enough room on the plate for everybody? >> depend what you're talking about killing. there definitely will be a change in how we consume programs. it will basically go the itunes individual strongs. you won't have to bundle to get all that stuff. in that sense it is damaging cable. i have a place where i use one of these little boxes. i don't pay for cable. a lot of money for infrequent use and get a lot of money from hulu. adam: you pay cable for internet connection. >> cable the internet business is awesome. until netflix coins their own internet service they're not going to do like google, they need comcast in the equation. the bundled cable content, that part has got a questionable future in my opinion. the road for particularly young people on up and most valuable
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resource to advertise. adam: jonathan if i were investor would i not grow to netflix. maybe we should look at less expense sieve companies producing content to deliver directly over the internet? >> well a rising tide lifts all boats, adam. when it comes especially to entertainment companies, when one does well you all do well. disney is one on my plate at capitalistpig.com. the real beneficiary of all this, i think jonas is absolutely right the cable companies will need to change their game. the traditional over the air broadcasters will need to change their game. the consumer is the ultimate beneficiary for all this competition. their experience on every level is got gotten better, tremendous higher quality and lower price competitors come. i wish we have competition in school systems and post office like we have in the entertainment world right now and netflix is the best example of that. adam: jonathan and jonas, don't go anywhere, we'll come back to the discussion in another way. right now target it is aiming its bull's-eye at amazon.
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the retailer announcing a expansion of u.s. sun description service. fox business's jo ling kent, she has more on this. who are they taking aim at? >> adam, the secret service first of all nearing its investigation of target's massive data breach last year. as this is happening the big red retailer rolling out a new shopping experience to lure customers back and take aim at amazon. target is changing subscription program to allow orders online with regularly scheduled delivery all for free. target announced it is adding 1600 new items from household products to office supplies to makeup and coffee. the minneapolis based retailer is trying to attract customers 5% off across the board of products plus free shipping and free returns, similar to amazon prime. again this is going to be free. this move comes after it launch ad baby supplies prescription last fall according to executives they kel tell ap that has been driven by very strong demand.
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target recently started online ordering ordering with a store pickup option, adam. that generates 10% of target's online business of the really target is late to this game as well. sears and walmart, they have been doing it for several years. take a quick look at target's stock, down five% year-to-date after the company reported disappointing earnings in the aftermath of the data breach. compare that to amazon. that is down 18% year-to-date. but amazon actually raising the price of the prime service by 20 bucks to $99 earlier this year. overall, adam, target needs all the revenue it can get. analysts estimate the breach cost the company of half a billion dollars. adam: a lot of people love target, sears, you buy it, drive the car, never get out, bring it out to you. that will be interesting competition in the brick and mortar retail space. thanks very much, jo. >> absolutely. adam: turning to the landmark supreme court case that has big boys of broadcast running scared. abc has a challenge to the streaming service, aereo yesterday. the verdict from the highest
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court in the united states has the potential to create major issues for network television. joining the discussion now, deadline hollywood's legal editor dominic patton. he also joins jonas and jonathan. dominic, let me start with you, who stands to lose the most, broadcast or aereo? >> well i mean lookings if the broadcasters, lose, adam they will look potentially losing retransmission fees. if aereo loses, one of their major backers, barry diller said, they will probably go out of business. someone is going to win and someone is really going to lose. adam: jonas, who would you back in this game? broadcasters are prone to a little bit hyperbole, aren't they? >> i don't think i back the diller thing i think it will fail anyway. if it is legit and allowed to essentially steal the content, we'll get back to that in a minute. other people will do it too. i don't know what their future is either way. that said, they talk about put little antennas and capture and rebroadcasting i could see it going both ways, look the
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content providers own the content. it is theirs. they have a right, you don't own the songs you download. you think you do. really you don't. not only cd they can say how it is used but broadcast always since the '20s a public good. i could see the court saying once in the air and public good, if a company wants to get in there and collect it and rebroadcast and charge you to see your own airborne content i could see it going that way even though owner of content -- adam: jonathan i will advance this 10 years. if everything is going online anyway this is already decided. assume aereo wins, everything, it is much quicker progression to direct deliverly over the internet. am i wrong? >> well it will change the game again. i think jonas is alluding to the big issue here, adam which of it is intellectual property. what reits did for real estate i think you will see internet continue to do for intellectual property and that property has tremendous value and to the extent that the traditional over the air broadcasters are hurt by other new competitors ability
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to, in jonas's words, i think he is right, steal that content, i think that will change the game tremendously. adam: okay. >> it is in the courts right now. adam: jonathan you've done something no one else can do, internet and intellectual in the same sentence. have you been to tinder lately? nothing intellectual about that. thank you very much. we have to get to breaking news. reuters is reporting that the united states state department will extend the government comment period on the keystone xl pipeline that means a final decision on the project would come after the november 4th midterm election. imagine that. timing it after the elections. weibo making a big splash on wall street but next week may be the real test for investors appetite for ipos. which, what to watch as we await the biggest debut of the year. tech heavyweight alibaba. a deal on ukraine already falling apart less than 24 hours after an agreement. pro-russian separatists refuse to leave.
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adam: we've got new details about high frequency trading platform virtu and its ipo.
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joining me fox news contributor charlie gasparino and jonas max ferris and jonathan hoenig. there is a lot of talk about virtu. >> they're scuttling the ipo. people close to the company say it is not off the table. they have not pulled the s-1 which is the official documents but it is pulled in the near term. the way they're describing it to me that "flash boys" has on the market and potential valuation bringing company to public. as you know it is high frequency trading firm. what they're saying it may be two weeks, it may be six months. we don't know. we should point out from initial speculation they pulled it because they got a subpoena from eric schneiderman whose office, new york ag is doing an investigation. what i understand they have not gotten a subpoena. they are not one of the firms that received a subpoena in this inquiry. they're saying it is not inquiry related but controversy and hysteria related what came out of "flash boys."
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adam: assume "flash boys" had not been published, wouldn't the fact they're coming to market, when they come to market big money is getting out and haven't revenues from high frequency trading shrinking anyway. >> we could have a debate later about "flash boys." i think it's a lousy book. i think it is make assertions from the market. adam: aren't they making what they want to make? >> this is all hysteria following this book. regular heattores are scared. investors are scared. they had good meeting with investors last couple days. one problem they had they would not get the valuation that they needed. vinnie viola, chairman and founder of virtu said he wouldn't shell shares for many years. at some point you shell shares. but for many years, this is not because he wants to cash out. this april boy was to build something. i know the guy pretty well. good guy. we should point out they did not receive subpoena. this book, i think as thin as it really is, i think it is thin, michael lewis, i don't believe
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that when michael lewis says something is bad it is bad. other people may. securities & exchange commission. maybe preet bharara, the u.s. attorney's office but they can't do this deal right now. adam: let's broad inch the discussion. i want to bring in jonas and jonathan to talk about the ipo market in general because we've seen a bunch of ipos this year and just this week a lot of them priced lower than what we expected. what is your take what is happening with the ipo market, jonas? >> the ones that are coming in sectors down 20% last few months so they have to price it down. when the ipos come out they're apps and biotech companies. >> right. >> where were the biotech ipos in '05 when, before it was started outperform the s&p for year after year after year. now you have this hot move and all of sudden everyone wants to buy ipos in the biotech area or app area. is there momentum gain. probably. if you want to make investment for three years. this is like buying dot-com ipo
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in '99. don't think you will hold it three to five years around make money. >> that is why the virtu ipo is anomaly. this is not a high-tech company. this company didn't lose money for the last five years. adam: bring you in while charlie answers his phone. real quick, weibo did pretty well. they priced low but closed 19% higher than the market. >> that really has been the exception. both charlie and jonas hit the nail on the head here in this case. when a particular sector does well that bring as lot more speculators, maybe perhaps some suspect companies get funded. that is good for everyone. allows innovation to move forward. to charlie's point what sun fortunate. this is not question of overheated part of the market. this is government force. this is government regulation. coming down on what are terrific companies. adam you alluded to the fact that high frequency companies are seeing their margins shrinking. it is very competitive business. >> jonathan what is real -- jonathan what is really scary
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about this we had issues involving high frequency trading, even worse fragmentation of markets where there is 40 markets around the world, we had issues involving that for many years. what caused regulators to do something about it right now? a book. adam: all "flash boys." >> completely political. adam: i have to stop right there. we have run out of time. this discussion will continue especially with gaffs parrino around you know it will continue -- gasparino. charlie you have a tip you have to check on your machine. news coming out of ukraine right now. the deal with the u.s., russia, ukraine already starting to fall apart. leland vittert is live in donetsk ukraine. what is the latest. >> that this deal could bring an end to this crisis seems very well-founded. russian separatists in the eastern part of ukraine are doubling down on demands couple hours ago. we visited them at their
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headquarters which is the regional parliament building they took over here in central ukraine. the young men there said that they would rather die than leave that building. leader of the pro-russian separatists says that he is only going to leave if for some reason the government, in its entirety, president, prime minister, et cetera, agree to leave office. there is referendum he wants here in eastern ukraine about the future of this area saying that there's a possibility that either they want to become their own state or possibly even become part of russia. back to you in new york. adam: how is ukraine responding to those who won't get out of those buildings? will they use force? have you heard of any force being used? >> well that's really the big question here. the ukrainians are trying to walk a very tightrope. they don't want to roll over and cede this area to the pro-russian separatist it is. there is a lot of coal here that's very valuable. at the same time they don't want to use force and provoke a response by the russian army who
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has thousands of troops along the ukrainian border. so the ukrainians right now said they are talking about constitutional reforms. doesn't look like though right now that's enough for those separatists still in the buildings. back to you. adam: leland, thank you very much. for more on this we turn to steve moore, chief economist at the heritage foundation. also a fox news contributor. steve, good to see you. i want to ask you as we go into the weekend, seems as if putin were going to make a move, he seems to do it when the world is attention elsewhere, this would be the weekend to do that. will he? >> boy that's a scary thought. but this story, that the russians are not with this agreement. greatest non-story of all time. there is old saying there is no honor among thieves. look, when have the russians ever really stuck to any kind of treaty agreement or any kind of peace agreement? so this is a very tenuous situation. i think you raise a good point this weekend things could really flare up in a big, big way. i think obama to some extent
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brought this on ourselves by being very weak in terms of negotiating with, with putin. adam: there's a tom clancy book, not quite along these lines but i think it is "red storm rising." where you have nato confrontation with what is then the soviet union. is there any way to avoid this? economic sanctions, are they working, do they work? >> you know economic sanctions very rarely work and they haven't worked in this instance. by the way we should have learned that in cuba, right? we had economic sanctions for now what, 40 years? it not led to any kind of change in behavior in the cuban government. i don't see that as working. i've always said from day one of this, i said it on fox business news, the only way, the leverage that we have over what's happening in ukraine is to, is to continue to develop our energy resources, drill, baby, drill. build liquid lng terminals and so on so we become alternative source of energy for the european countries. this is all about energy.
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always been about energy from the very start. adam: it would take a couple years to get -- >> of course. that's true. but let's get started. i mean i think it send a message to the russians, if we get started right now. you're quite right, it will take a couple of years, nonetheless, this is opportunity to move forward and to tell putin, you know what? we'll compete with you head-to-head in western europe so they're not dependent on you for oil and natural gas. adam: steve moore, thank you very much. have a happy holiday. >> you too. happy easter. adam: coming up innovation that wants to change mobile payments forever. merchants about to get a whole new way to avoid swiping transaction fees all together. there is no missing this bad boy. this is the fastest street-legal production car in the world. 270 miles per hour. and we've got the real thing right here on "money." don't move. all stations come over to mission a for a final go.
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xfinity...the future of awesome. adam: update you on the story of the hour. fox confirms that the government will extend comment period on the keystone xl pipeline. that means a decision on the conversal project will come after the november elections. people with the. current credit card companies are charging 3 or 4% per swipe this can add up. new innovate i've idea by level up is allowing cheaper, faster way to allow merchants to avoid high swipe fees. founder and ceo of level up. thank you for joining us. , if i understand this correctly, level up user, transaction through one at a
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time, you wait until a whole group and send the group through and one charge versus 30 charges, right? >> exactly. >> the way level up works for user they can pay at 14 how -- 14,000 businesses with the phone. it is much easier for business. even though consumer linked credit card to app, we can bundle transactions together to only send them across credit card networks as a group. as you mentioned that results in 70% of reduction of fees to the business which they end up passing back to the consumer as saving through the level upapp. adam: are you dropping your fee that you charge to process these transactions to zero? or do you still have to charge a little something to make some money, don't you? >> so over the last year, level up charged merchants 2% in payment processing, 2% flat, all in about half the price if they were processing credit cards directly. our pledge to merchants as our
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algorithms to make moving money more efficient drive our costs down we'll pass savings on to the merchants. on wednesday for the first time we actually dropped our processing fee for merchants from 2% to 1.95%. and we're going to keep dropping it over the next couple of months, lower and lower. adam: got to ask you this one quick question. wouldn't this be a business killer for level up? some kind of reader that would be across the universe in which all you have to do is have a program in your smartphone that translates your credit card into a code that can be read and boom? you don't have to do level up? it is just one generic? wouldn't that put you out of business? >> so, not necessarily. there are a couple of things that make level up really unique interesting and for both the merchant and consumer. at end. day it end up being a lot more than processing money cheaply. but the biggest thing, when you pay with level up, that qr code on your phone that gets scanned
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by the merchant's reader is not actually your credit card number. as security reasons it's a temporary token that changes very reapedly over time. when you swipe a card there is risk that your card number gets compromised. when you pay with level up it is secure, temporary token and then you're paid and grab your coffee and head on your way. adam: all right. appreciate you being here. would love to continue the discussion. perhaps on another occasion we can expand it. congratulations. you're doing more in your 20s than we do by the time we hit 40s. all the best to you. >> thank you. adam: cheerio. no they didn't. general mills changing its tune after getting an ear if you recall from angry fans. you notice the grocery bill inching up on you? the drought that has shoppers sweating grocery bill. the eggs will cost you more just in time for easter. more "money" coming up.
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>> died, boiled, you may see for when you see that the eggs. jeff flock is hitting so far with how much we can expect to pay. jeff. jeff: this is definitely not chicken feed out here. this is in fact chicken feed. that is non-gm over corn that you feed them. >> yes. with minerals and other items. jeff: i wish you could feel that. that is actually nice and warm right now. eggs are up 7% alone in the last year. exports also moving up about 32%
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in the last year. tremendous demand. overseas. these are naturally raised. >> yes. these are free range. as good as you are going to get. jeff: that looks like a green one. >> that is one of our heritage breeds. jeff: they are out here doing their work so everyone can have a happy easter. easter prices, though, kind of up, adam. adam: thank you, jeff flock. summer barbecues are about to get a lot more expensive. how high will prices go? john, let me start with you. the price of beef is. the price of pork is up.
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the price of orange juice is out. the price of eggs is up. >> we saw an inclination of companies play poor earnings on the weather. you saw last month, last month you solve future prices go limit of eight times. you also have the swine disease going. travolta's estimates would be raised also. all of this is basically supply and demand. a very basic problem. adam: the prices of oranges are going. >> it will fuel into the bigger prices. the cure for high prices is high prices. these are competitive markets. people see the high prices, they will plant and they will raise more animals and the prices will go down.
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it seems like all of these stories are some poor consumer because they got richer. i do not think it is all going to be solved by more demand in the market. some of these problems are possibly permanent weather problems. adam: 13,000 cattle, now 10,000. it is a drought. >> we have had worse weather conditions. we will see supply go up in the price go down. if they cannot grow certain things in the volumes that they used to for whatever reason -- adam: let's hold it right there. general mills. cheerios and wheaties, they updated some tiny details in
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their privacy policy. anybody liking their brands online waives the right to sue the company in any way. it is all part of a move. companies preventing consumers from getting together and ganging up on them. general mills is now playing down the face side part of things. it makesy they think of this. what do you think, john? will we stop eating cheerios and wheaties? >> another example of consumer rights being trampled. >> it sounds like a bit of arm twisting. adam: it is like a one-way ticket to hell. >> i do not see how this is different than all of the stuff
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you except from software companies online that you do not read because it is so long. at the end of the day, it is the whole i like them therefore i cannot sue them. i like fruit loops myself. i do not even know if it is general mills. it might be kellogg. gentlemen, thank you. a cultural phenomenon. many are getting ready for a whole lot of green at the end of today. it is all about "money." ♪ ♪ because i got high ♪ because i got high ♪ because i got high ♪ ♪ [ male announcer ] you're watching one of the biggest financial services cpanies in the country at work.
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adam: i am adam shapiro with your fox business brief. michael's announcing it was a victim of a data breach. this investigated found this. nearly 40% of workers feel that they are underpaid. it shows the problem is worse for women. 42% feel unfairly compensated compared to 34% of men. more than half of workers would stay in their jobs if they had better leads and more flexible
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work hours. the xbox one console, already sold more than 7 million units of its populace playstation four. that is the latest from the fox business network. giving you the power to prosper. ♪ to be this awesome. and you...rent from national. because only national lets you choose any car in the aisle... and go. and only national is ranked highest in car rental customer satisfaction by j.d. power. (aaron) purrrfect. (vo) meee-ow, business pro. meee-ow. go national. go like a pro. we are thinkers. the job jugglers. the up all-nhts. and the ones who turn ideas into action. we've made our passions our life's work.
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adam: whether it is on wall street or main street, here is who is making money today. barnes & noble founder sold 3.5% of shares in the company yesterday. the chairman says he will not sell any more shares this year. jimmy kimmel. dedicated to the season three scandal. realizing the severity of the disaster. it ordered him to pay $220,000 to settle charges. hours away from the start of a huge holiday season.
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a treasured day on the calendar of any weed aficionados and sellers are expected to rank in the green. all 50 states will have laws that allow the state recreational use. >> i wish i could predict the future. it seems like it is coming faster than we anticipated. multiple states putting the medicinal cannabis on their ballot. i think it will happen pretty quick. a big swap of the american population believes it is inevitable. i think we are headed in that direction faster than you think. adam: colorado both legal medicinal and recreational
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marijuana. colorado is going gangbusters. washington state will follow suit. will they actually have recreational marijuana for sale? >> yes. we hope so. it is looking better and better every day. that is the secret here. we have to make sure that we are getting it done properly and getting the rules in place so we can choose these candidates responsibly. adam: the attorney general, i believe, that he smoke marijuana. why are we still spending billions of dollars to prosecute people for doing this? >> it is a fascinating question. the other thing eric holder said is he would support removing cannabis away from dangerous drugs. on the list of drugs. we supported that with a recent drug policy that we announced. we separated cannabis from
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dangerous drugs that are illegal. i think withhat ki of tone and language and with more responsible companies on the states doing good work and making in making sure that consumers are happy and safe, i think we are getting down the road very fast. adam: have a wonderful weekend. have a happy four / 20. happy holidays, as we like to say around here. facebook is raising a few eyebrows with a somewhat creepy addition facebook now will tell which friends are nearby and tell them if you are nearby. it is all on a map. not something that is done by default. it will only reveal your location if you allow it to do so. i thought, well, i will just delete facebook. what do you think? >> we do not have to use it.
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you know, this sounds really cool and i am sure a lot of people are excited to do this, but, first of all, it will be a boom. you want all of your friends to know where you are? i do not even know if the public like this. it has not been a hit. facebook has been buying a lot of strange businesses. trying to go into everything. what is that? adam: liz claman, our friend, she is nearby. liz: all right. i will tell you something right now. if any chocolate eggs show up where you are, you better give them to me. as we prepare for the easter sunday dinner and all of that, we hope you were tuning in.
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we are watching markets that are open, including ukraine, which, by the way, popped today. adam brought you the keystone news. we are also looking at a very interesting article that is about to come out. why he is not thrilled with what amazon is doing right now. the stock has just done very, very nicely. we need to tell you again as you are preparing, stephen kidd is your man. he is the cofounder of this company that is an internet version of the food network.
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you have to see all of the things that they are putting up. they are getting tons of venture capital money. we are also going to show how the -- burger is made. adam: it is how a 3-year-old says it. liz claman coming up in just about 10 minutes. thank you very much. the kind of auction you are just itching to be a part of. it is called island. they have been getting the bailout. wait until you hear how much it will cost you. ♪ we asked people a question,
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adam: updating you on the top story of the hour. extending the government comment. they are giving agencies more time to weigh in. listen to what heidi hi kath had to say. it is absolutely ridiculous that this process is continuing four an undetermined amount of time. he has heard all of us when no decisions have been made. you think? it could come after the november 4 midterm elections. it is time for a little fun with spare change. it may be enough for you to own a piece of paradise. cheryl casone is here to tell us a little bit about it.
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>> this is the largest private island in the bahamas. the owner is actually auctioning it off. at one point they listed it for 55 million. they did not get any takers. this is gorgeous video of the island. it has a six bedroom, six bath house. it also has a bungalow. it has a gym. a full-time caretaker on the island. a 27-foot airstrip. you think a celebrity is going to buy this? it is perfect. they have wi-fi, six private beaches. it is diesel powered. it also has its own water well.
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kind of a group of exclusive islands. >> i have $2. [laughter] >> they filmed prior to the caribbean. he could not get it. he bought another island instead. hopefully, it will be a some drug war owner. adam: we will put you in the driver seat of the world's fastest car. street legal.
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you can
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>> talk about the need for speed meet the fastest car in the world, you won't miss it. 215 miles per hour. john hennessy joins us now. >> shutdown sixth avenue, no problem. >> started the week, a lamborghini, 263 blows that way? >> this is 2.7 seconds. the real thing is it's 214 seconds. and that is not even topping out. it is a new speed record. >> we ran from kennedy space center on valentine's day in
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front of the world. >> i was thinking they could be andy pettitte at selling. 150 m.p.h.. ththisis t thing costs $1.2 mil. >> we build 11 cars, it will be very exclusive in addition to being the best. >> use the world record on valentine's day. americans should fall in love with it because it is 100%. >> of cool deal, but there will be a documentary about the car setting the record on national geographic in may and breaking barriers. that is why we are in town. >> who is buying them? >> aaron smith is our most famous client. they are poised for rich guys. we could have a car that does 270. >> i was thinking about that -- >> they are 2.5%. it is a bargain. >> it is a bargain. regular unleaded, runs on -- it
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is a full streetcar, not a race car, from the interior, power windows, everything you expect to lose >> how you get it to go that fast? no carburetor? >> fuel injected 1244 horsepower, it weighs 2700 pounds. the power to weight ratio is incredible and it has the aerodynamics to keep an underground. >> is as simple to drive? >> really is. stop and go traffic would not be the most enjoyable thing but driving through town or going down the highway is easy to do. >> if i happen to pick 1 up and drive it? >> 1,000,002. >> the statement would be i love it. >> the statement is i am the biggest and best. >> we talking about getting newton news vehicles if we got the fox business logo on the side. >> you will get neil cavuto and bill o'reilly out there and they could run away from their fans. >> the thing about these cars is they hold their value in become collector cars alight can imagine -- >> we don't tell that to our
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clients but it is exclusive and the fastest. 50 years from now when i and an old guy, someone for college tuition for the grand kids it will be worth more. >> he lets his teenage son drive, i don't know many of sun that would let their dads drive. >> when is my chance? >>, you like a driving lesson? i hope you are making money today. liz claman, you are up. countdown starts now. liz: fox business open for business. we are live at markets around the world moved on news. a market is hot. armed separatists refused to back down with their standoff from government forces in east despite the latest diplomatic deal. what will it take to break the deadlock? how will the markets respond? we are live on the ground

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