WEBVTT - Giammona: Herbalife has a cloud over it

0:00:00.440 --> 0:00:03.200
<v Speaker 1>A moderation and a bringing together of people in terms

0:00:03.200 --> 0:00:06.600
<v Speaker 1>of a common mission and and thoughtful disagreement. While we're

0:00:06.600 --> 0:00:08.760
<v Speaker 1>talking about the thoughtful disagreement, if you could work your

0:00:08.760 --> 0:00:11.719
<v Speaker 1>way through to get at the right answers, UM, then

0:00:11.920 --> 0:00:16.120
<v Speaker 1>this is all manageable. UM. So that's so politics does matter.

0:00:16.200 --> 0:00:18.320
<v Speaker 1>And answer to your question of how we deal with it,

0:00:18.600 --> 0:00:21.599
<v Speaker 1>we measure what their actions are and based on their

0:00:21.640 --> 0:00:25.520
<v Speaker 1>actual actions, then we make our responses. Ray, I want

0:00:25.520 --> 0:00:27.479
<v Speaker 1>to thank you very much on behalf of Bloomberg television

0:00:27.520 --> 0:00:29.760
<v Speaker 1>doers radio listeners worldwide. It's been such a pleasure here

0:00:29.760 --> 0:00:32.440
<v Speaker 1>at the University of Texas. Ray Dalio. He is the chairman,

0:00:32.520 --> 0:00:35.960
<v Speaker 1>the founder and co c i O of Bridgewater Association.

0:00:36.280 --> 0:00:40.400
<v Speaker 1>Chessker with it, Ray Delio, an extended conversation. We do

0:00:40.520 --> 0:00:42.600
<v Speaker 1>all that around the market opening. You're the bell in

0:00:42.640 --> 0:00:44.440
<v Speaker 1>the background. There was a bell in the background as

0:00:44.560 --> 0:00:47.640
<v Speaker 1>Ray Delio was speaking our opening bell brought you by

0:00:47.800 --> 0:00:52.640
<v Speaker 1>s c I. Today's competitive marketplace requires asset managers to

0:00:52.720 --> 0:00:57.240
<v Speaker 1>become more operationally adapt Imagine transforming your business. That's the

0:00:57.320 --> 0:01:01.560
<v Speaker 1>I's global platform. Do that at SEI see dot com

0:01:01.680 --> 0:01:06.720
<v Speaker 1>slash imagine se i C dot com slash imagine right

0:01:06.760 --> 0:01:09.240
<v Speaker 1>on the screen. It's been a goofy day, markets all

0:01:09.280 --> 0:01:13.479
<v Speaker 1>over the place waffling. Maybe tomorrow's jobs report negative twenty

0:01:13.520 --> 0:01:17.840
<v Speaker 1>four is a first print on the Dow SMB down

0:01:18.160 --> 0:01:19.800
<v Speaker 1>two points. We do have a print in the VIX

0:01:19.880 --> 0:01:22.280
<v Speaker 1>a little bit higher after a good couple of days,

0:01:22.319 --> 0:01:26.160
<v Speaker 1>seventeen point to five. I'm just gonna mention one stock

0:01:26.200 --> 0:01:28.560
<v Speaker 1>because we've got so much to talk about, and that

0:01:28.560 --> 0:01:31.360
<v Speaker 1>would be Herbal Life. We do have an opening fifty

0:01:31.400 --> 0:01:34.759
<v Speaker 1>three downs three dollars thirty three dollars thirty eight sets

0:01:35.520 --> 0:01:38.319
<v Speaker 1>on Herbal Life. We'll get to that, uh here in

0:01:38.360 --> 0:01:42.760
<v Speaker 1>a moment. We look at equities, bonds, currencies, commodities. Let's

0:01:42.760 --> 0:01:44.560
<v Speaker 1>look at the four X report right now, and that

0:01:44.640 --> 0:01:47.720
<v Speaker 1>brief brought you by Interactive Brokers, winner of f X

0:01:47.760 --> 0:01:50.920
<v Speaker 1>Weeks two thousand fifteen award for the best Retail for

0:01:51.160 --> 0:01:54.360
<v Speaker 1>X training platform visit ib at, I, b k R,

0:01:54.520 --> 0:01:59.080
<v Speaker 1>dot Com slash four x, and we think them as well.

0:01:59.120 --> 0:02:01.360
<v Speaker 1>For support. We look at equity markets with SEI and

0:02:01.440 --> 0:02:06.360
<v Speaker 1>the opening and Interactive Brokers assisting us with our FOREX brief.

0:02:06.440 --> 0:02:10.600
<v Speaker 1>The Euro a bit stronger fractionally, I wouldn't elevated dollars

0:02:10.639 --> 0:02:14.840
<v Speaker 1>through the day. Michael Purvis fascinating this morning on a

0:02:14.919 --> 0:02:19.000
<v Speaker 1>weaker Asia currency call away from Japan, UH with an

0:02:19.000 --> 0:02:21.480
<v Speaker 1>attendant dollar strength. We was that's one of the big

0:02:21.520 --> 0:02:26.919
<v Speaker 1>mysteries going into this year. UH sterling near one on three.

0:02:26.960 --> 0:02:30.680
<v Speaker 1>And we'll leave the foreign exchange at that um as well.

0:02:30.720 --> 0:02:33.480
<v Speaker 1>Michael McKee and Tom Keen. And now we need to

0:02:34.080 --> 0:02:37.359
<v Speaker 1>chat on herbal life with someone who's followed the soap

0:02:37.360 --> 0:02:42.560
<v Speaker 1>opera and actually the serious accounting business behind this. Creigiomonis

0:02:42.600 --> 0:02:45.760
<v Speaker 1>with Bloomberg News. Good morning, sir, good morning. You know

0:02:45.800 --> 0:02:47.800
<v Speaker 1>I saw the headlines. I did a shot out on

0:02:47.840 --> 0:02:51.280
<v Speaker 1>Twitter to Herb Greenberg, who works at a private capacity

0:02:51.280 --> 0:02:54.520
<v Speaker 1>and helps the NBC out as well. Herb focused as

0:02:54.560 --> 0:02:58.959
<v Speaker 1>I did, on the actual accounting ballet. So let's talk

0:02:59.000 --> 0:03:03.200
<v Speaker 1>about that. These are not gap questions in these headlines

0:03:03.280 --> 0:03:05.720
<v Speaker 1>this morning, right, That's right, nothing to be restated. It's

0:03:05.760 --> 0:03:08.680
<v Speaker 1>not a number that analysts, some analysts even having their models.

0:03:08.680 --> 0:03:10.600
<v Speaker 1>It's not something to do with the SEC. It's a

0:03:10.680 --> 0:03:12.960
<v Speaker 1>it's a mistake. It's an embarrassing mistake. It's not good.

0:03:13.000 --> 0:03:16.040
<v Speaker 1>But it's not an issue of being restating results. It

0:03:16.160 --> 0:03:19.040
<v Speaker 1>is a mistake. Of of things that would be in

0:03:19.080 --> 0:03:23.600
<v Speaker 1>the annual report. New members, new accountability, and that obviously

0:03:23.680 --> 0:03:27.440
<v Speaker 1>a market reaction, but it does fold into the top

0:03:27.520 --> 0:03:31.520
<v Speaker 1>line revenue, which is price and units. How do you

0:03:31.600 --> 0:03:35.960
<v Speaker 1>take non gap miscounting of new members and bring that

0:03:36.040 --> 0:03:38.720
<v Speaker 1>over to the revenue line. What questioning will you have

0:03:38.760 --> 0:03:40.560
<v Speaker 1>in the next few days. I mean, I think the

0:03:40.600 --> 0:03:43.640
<v Speaker 1>big thing for them is sort of the psychological impact.

0:03:43.680 --> 0:03:45.280
<v Speaker 1>This is a company that has a cloud over it.

0:03:45.360 --> 0:03:47.480
<v Speaker 1>There's suspicions. There's people on both sides of this issue,

0:03:47.520 --> 0:03:50.720
<v Speaker 1>but obviously high profile questions from Bill Ackman, who's made

0:03:50.720 --> 0:03:53.280
<v Speaker 1>a three year battle with them. So this is a

0:03:53.280 --> 0:03:55.480
<v Speaker 1>company that has suspicions around it. They've made a mistake.

0:03:55.520 --> 0:03:57.200
<v Speaker 1>That's That's what I think people are going to focus

0:03:57.240 --> 0:03:59.720
<v Speaker 1>on as far as how could this happen? This is

0:03:59.760 --> 0:04:02.240
<v Speaker 1>eas a big you know, it was down to thirty percent.

0:04:02.280 --> 0:04:04.720
<v Speaker 1>These weren't sort of rounding errors. These are big mistakes

0:04:04.720 --> 0:04:07.000
<v Speaker 1>that they made. But like you said, not a gap question,

0:04:07.480 --> 0:04:10.720
<v Speaker 1>what's the time period involved? Because if you have fewer

0:04:10.760 --> 0:04:13.640
<v Speaker 1>new members, it would imply for an investor that your

0:04:13.640 --> 0:04:17.200
<v Speaker 1>sales may be lower and you make less money. But

0:04:17.279 --> 0:04:19.560
<v Speaker 1>if these are old numbers, were we would would we

0:04:19.560 --> 0:04:22.000
<v Speaker 1>already have the sales figures for the period, right, So

0:04:22.040 --> 0:04:24.200
<v Speaker 1>it's fourth quarter numbers they And the other interesting thing

0:04:24.200 --> 0:04:26.960
<v Speaker 1>here is that they only started reporting these metrics in July.

0:04:27.160 --> 0:04:29.600
<v Speaker 1>These are new numbers that they have just started to

0:04:29.640 --> 0:04:32.360
<v Speaker 1>put out. So some analysts are saying, you know, maybe

0:04:32.400 --> 0:04:34.920
<v Speaker 1>we're gonna make excuse them. It's an honest mistake. That

0:04:35.000 --> 0:04:37.520
<v Speaker 1>database just isn't up to what it should be. But

0:04:37.560 --> 0:04:39.440
<v Speaker 1>so these are newer numbers, and it's dealing with the

0:04:39.440 --> 0:04:41.960
<v Speaker 1>fourth quarter, so it's hard to draw an implication yet

0:04:42.000 --> 0:04:44.560
<v Speaker 1>as to what it means for future sales, leaving aside

0:04:44.600 --> 0:04:47.279
<v Speaker 1>the accounting questions, but for future sales, that's right. I

0:04:47.279 --> 0:04:49.040
<v Speaker 1>had one analysts say that, you know, these numbers aren't

0:04:49.080 --> 0:04:51.279
<v Speaker 1>even in my model. If they had put the numbers

0:04:51.320 --> 0:04:53.880
<v Speaker 1>out correctly, it would not have changed my view of

0:04:53.880 --> 0:04:56.279
<v Speaker 1>the stock. That's how one analysts put it. But again

0:04:56.680 --> 0:04:59.000
<v Speaker 1>there's a psychological issue here because this is a mistake.

0:04:59.080 --> 0:05:02.800
<v Speaker 1>These are big gaps. I mean, I my amateur take

0:05:02.960 --> 0:05:07.159
<v Speaker 1>is first quarter is the first quarter of fifteen January

0:05:07.200 --> 0:05:09.640
<v Speaker 1>through marchers at a different calendar, that's right, So it's

0:05:09.680 --> 0:05:12.520
<v Speaker 1>January through March. Not much change but then there were

0:05:12.600 --> 0:05:15.240
<v Speaker 1>big changes through the summer. You're telling me the cell

0:05:15.360 --> 0:05:19.240
<v Speaker 1>side can ignore that, you know, that's it's a very

0:05:19.240 --> 0:05:20.960
<v Speaker 1>it's a fair question because he said, like I said,

0:05:20.960 --> 0:05:22.960
<v Speaker 1>these were not rounding errors. This is one number was

0:05:23.040 --> 0:05:25.839
<v Speaker 1>they said it was actually more like thirty. One number

0:05:25.880 --> 0:05:28.040
<v Speaker 1>was sixteen or seven? They said it was more like three.

0:05:28.120 --> 0:05:30.280
<v Speaker 1>So big, big questions about what's going on at this

0:05:30.360 --> 0:05:32.080
<v Speaker 1>company that they would be out on a conference call

0:05:32.120 --> 0:05:34.400
<v Speaker 1>with those kind of discrepance. Do we allow somebody with

0:05:34.440 --> 0:05:36.840
<v Speaker 1>a Bowden tie to come into the studio? I mean,

0:05:36.920 --> 0:05:39.040
<v Speaker 1>I don't know if that's part of our agreement here.

0:05:39.120 --> 0:05:41.320
<v Speaker 1>Did anybody sell this stuff up at Bowden when you

0:05:41.360 --> 0:05:43.719
<v Speaker 1>were there? That's right? Well, I am representing a boding

0:05:43.760 --> 0:05:46.240
<v Speaker 1>college proudly today as always with I'm glad you noticed

0:05:46.279 --> 0:05:49.440
<v Speaker 1>that. That That was But but but did anybody drink this

0:05:49.480 --> 0:05:53.000
<v Speaker 1>stuff or eat this stuff at Bowden when you were there? Mike?

0:05:53.040 --> 0:05:55.280
<v Speaker 1>Have you ever tried it? Uh? No, I have not

0:05:55.360 --> 0:05:57.920
<v Speaker 1>tried it. Um, there's some in the kitchen captain at home.

0:05:58.040 --> 0:06:00.760
<v Speaker 1>I'm going home today, he said, try herbal. I've never

0:06:01.400 --> 0:06:03.480
<v Speaker 1>tried it. All right, we'll get a full report for

0:06:03.560 --> 0:06:09.400
<v Speaker 1>the is you mentioned? Um, there there is this other

0:06:09.440 --> 0:06:12.560
<v Speaker 1>accounting issue going on, and it has been for some time.

0:06:12.600 --> 0:06:15.720
<v Speaker 1>For those who only dip into the news every once

0:06:15.760 --> 0:06:17.760
<v Speaker 1>in a while when somebody makes an outrageous claim one

0:06:17.760 --> 0:06:20.880
<v Speaker 1>way or the other, what's the status of that. So

0:06:21.120 --> 0:06:23.440
<v Speaker 1>the stock before today was up for the year, and

0:06:23.480 --> 0:06:26.440
<v Speaker 1>it surged like last week when they put out in

0:06:26.480 --> 0:06:29.400
<v Speaker 1>a filing that they were nearing a resolution with the FTC.

0:06:29.520 --> 0:06:32.159
<v Speaker 1>So interesting word resolution. The market took that as a

0:06:32.160 --> 0:06:33.919
<v Speaker 1>positive that maybe they're going to get out of this

0:06:34.000 --> 0:06:37.560
<v Speaker 1>without you know, major implications. But we've also heard from

0:06:37.560 --> 0:06:40.120
<v Speaker 1>people saying they said resolution, they didn't say one way

0:06:40.160 --> 0:06:43.000
<v Speaker 1>or another. It was purposely vague statement. So we really

0:06:43.040 --> 0:06:45.040
<v Speaker 1>don't know. There's some sense that they're nearing a quote

0:06:45.080 --> 0:06:47.800
<v Speaker 1>unquote resolution with the FTC. Whether that's good or bad,

0:06:47.839 --> 0:06:49.640
<v Speaker 1>we really don't have an indication. I want to be

0:06:49.640 --> 0:06:52.720
<v Speaker 1>clear before we let you go. Price Waterhouse is their

0:06:52.839 --> 0:06:56.279
<v Speaker 1>auditors are not involved in the headlines. We saw this

0:06:56.360 --> 0:06:58.719
<v Speaker 1>more that's correct. They're not restating anything. These are just

0:06:58.760 --> 0:07:01.360
<v Speaker 1>a mistake that they made bad numbers on a conference call.

0:07:01.400 --> 0:07:03.559
<v Speaker 1>But this is not an issue of gap or SEC

0:07:03.800 --> 0:07:07.800
<v Speaker 1>and they're not restating. Forcing me to try herbal Life tonight.

0:07:07.839 --> 0:07:11.880
<v Speaker 1>Thank you. I think, thank you, thanks so much, full

0:07:11.920 --> 0:07:15.840
<v Speaker 1>report tomorrow if I survive. What's it gonna do for

0:07:15.880 --> 0:07:18.160
<v Speaker 1>me herbal life? Does it let you lose weight? Or

0:07:18.200 --> 0:07:22.440
<v Speaker 1>is it gain weight? What's it? Do you know? Nutrition?

0:07:22.520 --> 0:07:24.960
<v Speaker 1>Health and wellnesses? Uh is the pitch. But I think

0:07:25.000 --> 0:07:27.360
<v Speaker 1>like you raise a good point, which is this issue

0:07:27.400 --> 0:07:29.280
<v Speaker 1>of customers. And you know, you say you haven't met

0:07:29.280 --> 0:07:30.840
<v Speaker 1>anyone who's tried it, and there's a lot of people

0:07:30.840 --> 0:07:32.320
<v Speaker 1>out there that say where are all these people that

0:07:32.360 --> 0:07:34.559
<v Speaker 1>have tried it? That's obviously the big question that Acman

0:07:34.640 --> 0:07:38.120
<v Speaker 1>is raised. Customers, thank you so much, Thank you on

0:07:38.280 --> 0:07:40.600
<v Speaker 1>herbal life and will follow us. Fifty it's solf here,

0:07:40.600 --> 0:07:43.160
<v Speaker 1>it's it's moved south. In the last ten minutes, fifty

0:07:43.200 --> 0:07:45.600
<v Speaker 1>three handled down to fifty two and five eights. I'm

0:07:45.680 --> 0:07:49.800
<v Speaker 1>quoting eights this morning. Michael mcgld school. Roger Altman was

0:07:49.800 --> 0:07:53.480
<v Speaker 1>in earlier talking about Sterling Hole. Max talked about a

0:07:53.560 --> 0:07:56.680
<v Speaker 1>name for the past and uh, if Mr Altman can

0:07:56.680 --> 0:08:00.560
<v Speaker 1>talk sterling home X, we can quote in a Bloomer

0:08:00.600 --> 0:08:05.560
<v Speaker 1>surveillance this morning in quarters eights or sixteens brought to

0:08:05.560 --> 0:08:08.400
<v Speaker 1>you by Interactive Brokers and same group. If you're looking

0:08:08.440 --> 0:08:12.120
<v Speaker 1>for global futures contracts with low trading costs, look no

0:08:12.240 --> 0:08:15.760
<v Speaker 1>further Interactive Brokers. As the Industry Leader learned more at

0:08:15.800 --> 0:08:20.080
<v Speaker 1>Interactive Brokers dot com slash sam group. That was very good.

0:08:20.160 --> 0:08:24.040
<v Speaker 1>He was very good on some of the new ones, gifts,

0:08:24.080 --> 0:08:25.760
<v Speaker 1>good impression of what's going on. As you say, it's

0:08:25.760 --> 0:08:28.520
<v Speaker 1>a it's a story stock for most people, it's just

0:08:28.840 --> 0:08:32.880
<v Speaker 1>you defended out based on the headlines. So Herb Greenberg

0:08:32.880 --> 0:08:36.440
<v Speaker 1>has been nant out on Twitter this morning on taking

0:08:36.480 --> 0:08:39.560
<v Speaker 1>this from the gap hysteria and the accounting hysteria over

0:08:39.640 --> 0:08:42.760
<v Speaker 1>to what we heard from Craig gm on, very very good.

0:08:43.280 --> 0:08:47.520
<v Speaker 1>I'm smarter on herbal life. Unlike the last three years,

0:08:47.600 --> 0:08:50.760
<v Speaker 1>I sort of ignored the entire topic. That ten you

0:08:50.880 --> 0:08:55.640
<v Speaker 1>yield one five percent West Texas South, thirty seven cents,

0:08:56.040 --> 0:08:59.520
<v Speaker 1>thirty four dollars, twenty cents of barrel brent two dollars

0:08:59.520 --> 0:09:02.839
<v Speaker 1>a way, thirty six dollars, forty nights cincer barrel gold

0:09:02.840 --> 0:09:05.360
<v Speaker 1>pulling back up three dollars up one dollar. Just sort

0:09:05.400 --> 0:09:08.760
<v Speaker 1>of a back and forth job. Stay tomorrow. Bill Gross

0:09:08.760 --> 0:09:12.680
<v Speaker 1>will join us and is always from Princeton. Alan Krueger

0:09:17.520 --> 0:09:19.240
<v Speaker 1>time to check in out with Michael Barr and get

0:09:19.280 --> 0:09:22.040
<v Speaker 1>the latest world in national headlines. Mike Tom, thank you

0:09:22.120 --> 0:09:25.160
<v Speaker 1>very much. Donald Trump is firing back at Mit Romney.

0:09:25.240 --> 0:09:28.559
<v Speaker 1>It is in response to the former Republican presidential nominee

0:09:28.760 --> 0:09:31.400
<v Speaker 1>planning to give a speech later today in Utah calling

0:09:31.440 --> 0:09:35.440
<v Speaker 1>Trump a phony, a fraud, and a boon to Democratic

0:09:35.480 --> 0:09:38.960
<v Speaker 1>candidate Hillary Clinton. Trump made the rounds on the morning

0:09:39.000 --> 0:09:43.080
<v Speaker 1>news shows on NBC. Trump says Mitt Romney is a stiff,

0:09:43.160 --> 0:09:47.079
<v Speaker 1>adding he got killed and decimated in the election. On ABC,

0:09:47.679 --> 0:09:50.720
<v Speaker 1>Mitt Romney was a failed candidate, should have beaten Barack

0:09:50.760 --> 0:09:54.200
<v Speaker 1>Obama easily. There will be only four podiums instead of

0:09:54.200 --> 0:09:57.960
<v Speaker 1>five at the night's Republican presidential debate in Detroit. Ben

0:09:58.040 --> 0:10:00.720
<v Speaker 1>Carson will be a no show, having ago that he

0:10:00.920 --> 0:10:04.360
<v Speaker 1>is on the verge of officially ending his campaign. Malaysia

0:10:04.400 --> 0:10:07.320
<v Speaker 1>will be sending a team of aviation officials and investigators

0:10:07.440 --> 0:10:11.200
<v Speaker 1>to Mozambique, the prewashed shore there over the weekend. There

0:10:11.200 --> 0:10:14.520
<v Speaker 1>is speculation it could be from a Malaysian Airlines Boeing

0:10:14.640 --> 0:10:18.559
<v Speaker 1>seven seventy seven had vanished two years ago. Astronaut Scott

0:10:18.640 --> 0:10:21.679
<v Speaker 1>Kelly got a hero's welcome overnight. Kelly returned to the

0:10:21.720 --> 0:10:24.480
<v Speaker 1>Johnson Space Center in Houston a day after landing, and I

0:10:24.440 --> 0:10:27.719
<v Speaker 1>I saw you use spacecraft in Kazakhstan. Kelly spent three

0:10:27.800 --> 0:10:30.720
<v Speaker 1>hundred forty days in orbit in the International Space Station.

0:10:31.160 --> 0:10:34.080
<v Speaker 1>Global News twenty four hours a day, powered by ours

0:10:34.120 --> 0:10:37.200
<v Speaker 1>twenty four hundred journalists more than one hundred fifty news

0:10:37.200 --> 0:10:40.800
<v Speaker 1>bureaus from around the world. I'm Michael Barr, Mike, Michael,

0:10:40.800 --> 0:10:43.360
<v Speaker 1>thanks so much, shut out to Brendan, emailing in today,

0:10:43.400 --> 0:10:49.360
<v Speaker 1>listening on Washington FM, Bloomberg FM in Washington. Thank you

0:10:49.520 --> 0:10:52.640
<v Speaker 1>so much for your support in our recent to day

0:10:52.960 --> 0:10:55.800
<v Speaker 1>visit from New York. Today Michael McKee and Tom Keed

0:10:55.840 --> 0:11:03.520
<v Speaker 1>and Bloomberg Surveillance. Bloomberg Avalance is brought to by Bank

0:11:03.520 --> 0:11:06.199
<v Speaker 1>of America Marri lynches global cash management solutions, helping you

0:11:06.280 --> 0:11:09.480
<v Speaker 1>manage to protect and invest your global cash, whether where

0:11:09.520 --> 0:11:12.400
<v Speaker 1>the road to glob growth leads the power of global connections.

0:11:12.400 --> 0:11:14.360
<v Speaker 1>Bank of America North America member ft I C