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tv   Market Makers  Bloomberg  March 20, 2015 10:00am-12:01pm EDT

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>> live, this is "market makers ." stephanie: the roller coaster ride in the markets. between the fed and the strong dollar, it has been a wild week. what that little blue box tells us about the economy. tiffany's bricks that profits will plunge the first three months of the year. getting away scott free. no one on wall street has been convicted for helping caused the financial crisis. a whistleblower tells us why not. welcome to "market makers."
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bill: erik schatzker tweeted from somewhere in east asia. stephanie: he tweeted a picture of a goat. i cannot believe it is the first day of spring and it is freezing out. i'm going away next week. will you be here? bill: i'm going away, too. to visit my parents in florida. stephanie: lovely. you don't want to hear about our vacation plans. the top business stories of the morning -- you have to pick up the pace. they have told the prime minister that greece must submit a more concrete reform plans of that bailout talks can speed up. greece is quickly running out of money after four hours of talks in brussels cyprus put a positive spin on the issue. >> i hope after this the
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liberation -- deliberation, all the sides will try to do their best to overcome the difficulties as soon as possible. stephanie: no firm deadline for when greece could run out of money. eurozone officials say this only a matter of weeks. american airlines flying high today. at the close of business, the company will be added to the s&p 500. little over a year ago, american was in bankruptcy. matt miller asked the airline ceo why it should be part of the index. >> we should be in the s&p 500. we are the largest airline in the world. those are metrics that get us well into the s&p 500. this is an airline in bankruptcy 15 months ago before the merger.
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to be in the s&p 500 15 months later shows the strength of the merger. bill: we will be hearing more in the next hour. stephanie: they have gotten a lot about of this slogan -- nike just did it. shares rising this morning. nike posted fiscal third-quarter profit that did be estimates. one reason, its in north america where sales rose 6%. watch out for that strong dollar. shares of ibec shared at the open. the company's experiment told drug for alzheimer's forward progression -- the drug produces a protein that causes plaque in the brain. the results are positive enough that biogen is skipping mid-stage testing.
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alzheimer's has little -- there has been little done to help at this point. regulators have given amazon the ok to test drones for delivery. the company has warned that if the faa did not act quickly, it would move its drone research program to other countries. the agency says amazon can test its drones but only within 400 feet of the ground during daytime and within sight of an operator who has a pilot's license. several big companies getting into the online tv business. hbo showtime and sony have talked with comcast about having their webtv traffic treated as managed services. that would help them avoid the growing congestion on the internet and gets into a gray area of whether that would violate the new net neutrality rule.
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it has clearly been a very big week for the federal reserve. they have opened the door for a rate hike in june by simply dropping their patient stance. let's ask bob michael, the global cio at j.p. morgan asset management. let's start with patient. it is out of the conversation. >> it doesn't mean impatient. they are doing the same thing investors are doing everywhere. the are weighing the pluses and minuses. the argument for raising the fed funds rate is obviously the economic environment is much better than it was years ago when they went to zero interest-rate policy. the labor markets improve, you don't need emergency liquidity. on the negative side, they look at core inflation. she was transparent about that. the strong dollar has tightened financial conditions. the fed is looking for an
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opportunity to get up zero. the have taken the safeguard off monetary policy and are ready to pull the trigger. a tightening in september or december seems pretty reasonable. bill: it seems every time janet yellen or the fed or fed watchers think they are about to raise interest rates, the market pledges. people don't like the fact that interest rates are suddenly going to rise. it seems like there is a bit of an addiction and withdrawal syndrome going on here. we cannot get rid of the morphine drip in our arm because people will have to talks of vacation issues. -- detox issues. >> there is a hiccup in the markets. equities tends to correct a bit and government bond yields rise. they are try to soften that because they realize that the economy is recovering.
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it is not very robust. they are not trickling into a lot of growth and inflation. they are trying to get the funds rate closer -- this time around they can raise the fed funds rate and may be front and goes up a bit but the long and should be supported by slowdowns in europe and japan. it could be a benign normalization process. bill: how concerned are you about the strong dollar? >> we are pretty concerned. it is good to see the u.s. doing relatively well and that is reflected in dollar strength. on the other hand, you have to look at a tightening and financial conditions. stephanie: and what is going to do to summon a companies. -- so many companies. it is hurting tiffany's. bill: if they don't make their
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numbers, they can blame the strong dollar. >> it has become a big issue for the fed. they are front and center with it. if they are the one central bank that begins raising rates, that will add more strength of the dollar. we think he can go another 20% from here easily. bill: isn't it great for american consumers? >> it should be. bill: you can only take so many trips abroad. >> we are the one country that benefits the most from the decline in oil prices because oil is denominated in dollars. if you're in europe or japan, you see energy prices decline but when you translate back from dollar to your base currency you are not seen that much. this is what is wearing the fed. consumption has gone up. if we are reaching some kind of tightness we should see that in price pressures and we are not yet. stephanie: why do you like
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high-yield? >> corporate balance sheet look great. companies are very practical in the way they are managing their leverage. credit spreads are pricing at a multiple of where people rates should be. you can go out and buy high-yield companies at a 6.25% yield. or you can put your money at -.2% in europe. bill: because of qe all around the world now, hasn't risk been mispriced consistently for five or six years? in a less qe oriented market, it should be yielding 12%. when gets to a real yield investors will get murdered. >> you are asking me to fight what is going on. bill: just to acknowledge. stephanie: interpret it. >> i do acknowledge it.
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i don't like looking across europe and seeing have the market with yields that are close to negative or at zero. i don't like looking across the global economy and seeing 25-30% of world sovereigns showing inflation below zero. that is the world we are in. central banks are printing money every day and buying bonds and forcing bonds investors like us to sell the mark -- stephanie: are you worried about europe? >> i'm not worried about europe. the ecb is doing the right thing. there is structural reform going on across europe in places like spain. you will see somewhat of a recovery but it needs the help of central banks. what would worry me -- stephanie: the morphine drip. >> we saw corporations abused
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liquidity in the market and you began -- increasing leverage dramatically. you begin to see a tremendous amount of m&a and share buybacks. you are seeing some of it. given the level of yields and where they can borrow, you are seeing some share buybacks and dividend increases and m&a. you are not seeing the volume we saw in previous peaks in 2007. you are not seeing the issuance -- bill: we are seeing a lot of it. stephanie: not as much. it's different than it was in 2005. >> bonds are great because they are being issued by entities where the regulatory pressure is for them to increase capital and get out of risky businesses.
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as a lender of our clients money to bar worse, that is a great bar were to lend to -- money to borrowers, that is a great borrower to lend to. the ecb is providing unlimited the quiddity. -- liquidity. when the liquidity rubbed it gets pulled out from under the markets and there is no more qe -- rug gets pulled out from under the markets and there is no more qe -- stephanie: would you be a buyer of european financials? >> we are. bill: new management. >> we are a buyer of their hybrid bank debt. alternative tier one are great value. if i can go back to one of
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bill's original questions about the morphine drip, the credit cycle doesn't end until central banks have finished tightening monetary policy. 12-18 months afterwards, that's when you see the accidents happen because they realize they have burst whatever bubbles have formed. we have not even begun to tighten monetary policy. we have had 20 central bank using's this year and it is the first day of spring. stephanie: if they raise rates to quickly come it could be disastrous. the one great? -- do you agree? >> of course. they were throwing 50 and 75 basis point increases at the market every meeting. now the market is expecting 25 basis points every other meeting and will they ever get to their optimal rate of 3.5? we will see. i don't know if they can make it all in one go. stephanie: thank you so much for joining us today.
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bob michael. we have a lot more to cover. we will stay on the strong dollar beat. one of the world's largest luxury jewelry chains, tiffany's. time is running out for the justice department. will prosecutors ever get a wall street conviction? bill is shaking his said it saying they should, but they won't. ♪
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bill: it is time to bring you up-to-date on the top stories of the morning. president obama urging iran's young people to pressure their leaders on the nuclear deal. in a youtube video making the persian news, he argued that freezing the nuclear program could lead to a better relationship. >> it could help open the door to a brighter future for you.
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you have so much to give the world. this is what is at stake today. this moment may not come again soon. stephanie: the wall street journal says that talks with iran have stalled over economic sanctions. iran wants sanctions repealed immediately. the u.s. and europe want the sanctions to phase out over years. oil headed for its fifth weekly decline in a row. there are slight -- signs that the glut will get worse. opec needs to keep pumping oil in order to maintain its market share. the cartel has resisted calls to cut back production. we have to talk basketball. 16 more games today. if your bracket got busted yesterday for the first time in 20 years, two teams seeded 14th be number three seeds. georgia state stunned baylor on
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a three-point shot with less than three seconds to go. the panthers were down by 12 points but stormed back to square the last 13 points in the game. alabama birmingham knocked off iowa state. this one killed many brackets. vegas loved the day. how about notre dame? squeaked through a win. those are the top stories. coming up in 10 minutes we will be asking the question, will wall street ever pay the price? no single banker or trader has been convicted for wrongdoing in the financial crisis. we will be speaking to a whistleblower. plus, tell the truth. we know your march madness bracket was busted.
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we will look at today's games and what brands are doing wrong when it comes to mobile advertising. one guy who is doing it right. let's talk tiffany's. shares looking rather tarnished this morning. the world's second-largest luxury jeweler says profits were hurt by the rising dollar. julie hyman has been looking at today's numbers. i feel it every day we are talking about the fallout of the strong dollar. tiffany's is the latest casualty. >> just over half of its sales from international sources. two of its big markets are japan and europe. two of the currencies that have done the worst against the dollar are the japanese yen and the euro. in japan, sales were up 1%. however if you converted into dollars, they fell by 13%.
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if you look at europe, sales were up 9%. convert them into dollars, they were unchanged. tiffany's says it will continue. it will see a 30% decline in profit as a result of what's going on with the dollar. things should turn around in the second half of the year with earnings rising in double-digit percentage terms. in the meantime, it will be a rocky ride. bill: i assume this will spread across the luxury goods sector? >> it could, potentially. depends on where the companies are based. the unique thing about tiffany it is getting a double whammy from the dollar. not only is it suffering in these foreign markets, but in the west because of the strong dollar. a lot of the folks who shop at tiffany's are foreign tourists. they are not making as many trips or they are not spending as much when they are here because they are not getting as
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much bang for their bucks when they convert them into dollars. there is not a lock it can do in terms of currencies except for trying to hedge in some ways. there was some optimism expressed by investors and analysts in terms of its fashion strategy. it spend a lot on marketing its new t line, its lower-priced line. there was no halo effect. tiffany's is recalibrating. it says in halo effect is now starting to come. people are starting to buy the other stuff. bill: the stock has had a nice run. >> it had good this year, it has not been so nice. the comments they are making for this quarter is similar to what is said about the holiday season. shares are down 18%
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year-to-date. stephanie: you know what's inside that little blue box? a whole lot of nothing. "market makers" will be back in just a moment. stay with us. we are talking ncaa wall street whistleblowers. we have a lot. ♪
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stephanie: this is why bill came to bed. he blew the whistle on -- why bill came today. the day march really went mad. there are a lot more games to play. you could still win at. -- win it.
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>> live from bloomberg headquarters in new york, this is "market makers." stephanie: welcome back to "market makers." would you agree, i often say the best part of the show are the commercial breaks? bill: because we get to chat? i learned that stephanie is big in defense -- much color than usual. -- calmer than usual. stephanie: the brawl over the mall is not over yet. simon property group making what
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it calls its best and final offer for macerich. the price is $23 billion. that is $1 billion more than the previous offer. macerich said the previous offer wasn't seriously undervaluing the company. you leaders met late into the night in brussels. greece is running out of cash. european leaders are warning the prime minister that he is running of time. >> we agreed upon the fact that we need to speed up the process. we should not lose any more time. we discussed speeding up the process. it was done in mutual trust. stephanie: the eu wants greece
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to submit a list of economic reforms as it promised to do a month ago. there is no firm deadline but estimates are that greece could run out of cash in just a few weeks. shares of nike are up and running this morning. courtly earnings beat analyst estimates and orders may rise -- nike warns that the stronger dollar will hurt sales and profits in the next fiscal year. in new alzheimer's drug shows promise. that has shares of the drug's maker surging this morning. the study says the drug reduced cognitive decline and the number of proteins blamed for causing plaque on the brain. they are skipping mid-stage testing and going straight to the final stage. it is the first major eclipse of the solar age. the moon blocked 80% of the sun's light across europe for three hours this morning. in germany, that briefly halted
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output from thousands of solar panels. they provide 40% of the country's power on most sunny days. electric grid operators switched to natural gas and coal plants to make up for that lost solar power. it has been seven whole years since the financial crisis and you know the number -- zero wall street bankers traders or executives have been convicted for their roles. eric holder says the justice department has less than 90 days to come up with new civil or criminal prosecutions against wall street. the question we are asking, where should prosecutors be looking? richard is a citigroup whistleblower. he served as the former chief underwriter for citi's consumer lending group. what is the problem, richard?
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richard: i wish i knew. this is absolutely incredible. the only thing i can tell you is that the lack of prosecution does not indicate a lack of evidence. stephanie: really? is it about a lack of effort? richard: i would say yes if i had to guess at this point. for one thing, eric holder is sincere about pursuing this he will call the whistleblowers. they know where the evidence is. they can point to that. that's why we are whistleblowers. the concern i've got, there has been a lot of evidence submitted and i have personal experience on this. stephanie: are you saying you
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have damning evidence against citibank executives and the justice department is not interested? richard: i will tell you, i have met with them and pointed them to some evidence. i gave it a lot of of evidence and testimony to the financial crisis inquiry commission. the fraud recovery and enforcement act dictated that the financial crisis inquiry commission has a mandate to investigate was their wrongdoing involved in the financial crisis? if they find wrongdoing, they are to turn the evidence over to the attorney general. i testified extensively behind closed doors. i gave them written testimony that they requested and i made a
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brief presentation on national television. i submitted my written testimony and when i submitted it, the congressional commission forced me to remove some of the most damning evidence that i had in my written testimony. i have asked four different assistant u.s. attorneys, have you seen the evidence i submitted to the financial crisis inquiry commission? have you gotten any referral from the financial crisis inquiry commission? they have and they are from different offices, also. they have said no. they have not seen it. the concern is, did the congressional commission fulfill their legal mandate to not only investigate but also turnover this evidence to the department of justice? bill: that is a great question.
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you are not unknown to the american public. you have been on 60 minutes, you've been on other live tv -- i have written about you in the new york times. you have made your evidence known. you wrote letters to robert rubin when he was chairman of the executive committee at citigroup. we are faced with a situation where the attorney general has given his troops you were than 90 days, now 70 days since he gave his order. what is happening here? there has been whistleblowers at j.p. morgan chase and other places. why isn't the attorney general calling you guys and following up on this? the clock is ticking. richard: i have no idea, bill. i have not talked to the department of justice in over a year-and-a-half. quite frankly, when your article appeared on me in september of
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2013 i was in the process of talking to them and they cut off all contact. i have not heard from them since. stephanie: you were a whistleblower against citi. you are representing the american people, looking for justice. the department of justice is not calling you. what are you doing? richard: quite frankly, i am so upset about this, i instructed my attorneys in washington to send a letter to two congressional committees. both of these committees have oversight responsibility. in fact, this letter was mailed yesterday. they should be receiving it today. in this letter, i specifically related my experience with the commission my being forced to remove testimony that i gave them. let me give you one example. i spent an entire page of written testimony explaining to the commission the false
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representations given to the purchasers of mortgage backed securities. i was forced to remove that for my testimony. that testimony was not given to the department of justice. if it was, it was not passed on to the assistant u.s. attorneys and church of prosecuting. stephanie: have you called elizabeth warren? >> i'm trying to go to the committees of congress. i will not say which ones they are. they have not had a chance to assimilate what i have sent them. i have asked those committees to investigate what happened to see if the commission has fulfilled its legal responsibilities under the fraud recovery and enforcement act to investigate and turn that evidence over to the department of justice. i have not seen any evidence that the department of justice even got it. stephanie: wow. richard: i have also asked them
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in this letter to pursue in looking at has the department of justice received my evidence and are they proceeding and investigating and possibly pursuing charges. that is what i am asking the committees of congress to do. if they are going to take their responsibilities seriously i am hoping they will look into this because the american people demand -- we have to know what is going on. stephanie: i think you should call elizabeth warren. thank you for joining us this morning. a former chief underwriter for citigroup. thank you for joining us this morning. eight years, that's amazing. bill: the clock is running out. stephanie: when we return work came to a halt and a lot of offices yesterday afternoon.
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did you see any of those upsets? we will be speaking march madness. ♪
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stephanie: welcome back to "market makers." it is time to bring you up-to-date on the top stories of the morning. bank of new york mellon has agreed to settle claims it defrauded clients in foreign currency transactions. $714 million. federal and state lawsuits say the bank promised clients it would give them the best rate possible. instead, the suit says bank of new york mellon obtained the best rates for itself. first-quarter sales beat estimates at one of the nation's biggest homebuilders. gross profit margins bell because of higher land and construction costs. -- fell because of higher land and construction costs. shares have been up as much as 6% today.
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regulators have given amazon the ok to test drugs for delivery. the company had warned that if the faa did not act quickly, it would move a strong research program to other countries. the agency now says amazon contest its drones but will only be able to do it within 300 feet of the ground, during daytime and insight of an operator who has a pilot's license. coming up in 10 mins, companies doing it right. we will speak with the founder of a leading mobile marketing platform. plus, american airlines flying high one year after narrowly missing pickups he. this missing bankruptcy. -- narrowly missing bankruptcy. russian lawmaker tells us was standing up to vladimir putin has cost him.
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march madness is in full swing. brackets are breaking down across the land. for some, it was a great first day of games. also our own bloomberg brackets for a cause were some of the biggest names in finance are playing for their favorite charities. looking me gets to participate in this. 36 of us. guess who is on top right now? john donahoe of ebay and jimmy dunn of sandler o'neill. donahoe will be playing for second harvest food bank and jimmy dunn's will go to student sponsorship programs. jimmy dunn has notre dame as his final winner. kevin plank has envy.
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john has kentucky. i had iowa state. bill: that was the killer. of course. espn hyped iowa state so much you could not help but that them in your bracket. stephanie: 99% of the people on espn brackets, their brackets were broken. at the bottom of our 36 the ceo of i heart media. the cofounder of fortune -- a huge wrestling guy. those two at the bottom. today alone things can move rather quickly. bill: your friend sally, unc fan. she barely escaped being beaten by harvard yesterday. n.c. state barely pulled it out.
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there were a lot of close games, it was really exciting. stephanie: a good day for underdogs. those who say watching basketball is not exciting -- bill: foaming at the mouth almost. duke plays tonight at 7:00. hopefully they won't blow it. we don't want them to be the first number one seed to lose to a 16 seed. stephanie: i want to make sure he gets his charity dollars. you can follow along on the bloomberg terminal or online at interactive, fantastic. you can see all the players. what you cannot see is the smack talking between these players. jim chanos is trying to short other participants. side bets across the board.
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anderson wants a full hip-hop performance. we will see. when we come back, why do so many advertisers get it wrong when it comes to mobile? the guy who shows companies how to get it right. ♪
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bill: welcome back to -- stephanie: welcome back to "market makers." our next guest says most brands have a totally wrong when it comes to targeting mobile phones. he's the cofounder and ceo of a leading mobile marketing platform used by brands like coca-cola, dreamworks and buffalo wild wings. tell us, what are companies doing wrong? >> most of these guys have jumped into the mobile app space and not really understood it that well. there is a bit of a gold rush. bill: consumer companies.
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>> you name a brand, they have an app. a lot of brands have multiple apps and don't know how to get users to come back. that is what we focus on. stephanie: you make apps better. what do you do exactly? i'm not going on all these apps. >> a good example, if you get off a flight, knowing what carousel your bags are at. we figure out who the people are , build a profile around them and get these messages out. stephanie: inside jetblue's app ? got it. >> or starbucks if you walk into a coffee shop we might trigger a free copy to you. -- free coffee to you. bill: any concern about the big brother aspect?
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stephanie: is it enough? if you walked into a starbucks and suddenly had a push notification that your coffee was free, you would be amped. >> exactly. bill: is that happening? >> is the fine line. the more personalized and targeted, the better the results. stephanie: we say we don't like it but when you are on facebook or twitter and someone offers you something that connects you, you click. bill: the bigger point of this big data mining that you are doing to help us get things you think we want, any problem with that? >> it is all opt in. we are trying to share the most relevant content to that person and that is the whole premise of mobile marketing automation.
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if we are giving you stuff you want -- if you don't want it, you can delete the app. we are anti-spam. we don't want to send everyone promotional messages. bill: you are asking people to give you all sorts of stuff so you can give them set that is relevant. that seems like a theme across the whole social networking society. >> it definitely is. people don't want to sit down and set all their preferences for every single thing they receive. we have to provide value and start having a bit of background data around what will soothe what customer. stephanie: with social media platform is most valuable to you? >> they all act very differently. things like snapchat at the moment. stephanie: do you like that meerkat nonsense? >> we were live streaming our event. it is interesting.
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anything they can get with initial explosion of users is doing something right. stephanie: you are coming to the states. why not go to the valley? >> we work with big brands. all of these guys are based in new york. if we are in the valley, we would be flying every two days. stephanie: why do they need you? i don't have internal people that can figure this out? >> if you focus on one thing you can do it a lot better. that is the premise. you bring in these things and we can outperform internal things. stephanie: what brand is getting it right? >> oreo is doing interesting stuff. they have 6 million users. bill: you can push oreos my way. stephanie: the ceo of carnival
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mobile. we will be back. stay with us. ♪
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>> live from bloomberg headquarters in new york, this is "market makers" with erik schatzker and stephanie ruhle. stephanie: the skies are friendly to american airlines. it has rolled out a bunch of planes and today is being added to the s&p 500. what a difference a year makes. standing up to vladimir putin how one russian lawmaker was the only one to oppose the annexation of crimea and now that guy is paying the price. it was the crisis of their lives. the meltdown that threaten the financial system could survive
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the storm and what happened to those who didn't. welcome to the second hour of "market makers." bill: i am bill cohen who is in for erik schatzker. he has been tweeting about goats from asia. stephanie: i miss him. we're going to talk in the next hour about wall street fat cats and what happened to them after the crisis. bill: yesterday i believe you said you agreed with me about my observations about wall street. stephanie: i do think that before the financial crisis things were lopsided. it did not make sense he was getting paid. bill: it should be better for shareholders soon. a thinker on the break -- brink of a good run -- i think we are on the brink of a good run for shareholders. stephanie: where do all those
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bankers go? hedge funds and private equity funds. when you don't make money and you work at a hedge fund, you get zero. at a bank, they say, you manage 15 people, here is two bucks. bill: or 2 million bucks. stephanie: let's take you to the top business stories of the morning. one of the stocks moving the nasdaq today. a new study that the company's experimental drug for alzheimer's slows the disease. a reduced cognitive decline. the results are so positive that biogen is getting to skip amid stage testing and go to final trial. european leaders have told the greek prime minister that greece must submit a more concrete
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reform plans so bailout talks can speed up. greece is running out of money quickly. after 4 hours of talks at the eu summit, the prime minister put a positive spin on the issue. >>prime minister: their intention to try to do their best, to overcome the difficulties of the greek economy as soon as possible. stephanie: eurozone officials have said it's a matter of only a few weeks until greece runs out of money. the obama administration is expected to release a long-awaited regulation list on fracking today according to the "wall street journal." the rules will cover the process of injecting water and chemicals to tap into oil and gas reserves. they would only apply to oil fields on federal land.
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some environmental groups call it unsafe and wanted band. there is a twist in teslas time to upgrade the software in its model s. instead of requiring owners to come to a dealership, tesla will deliver the software over the internet. the first upgrade will deal with the range anxiety. it will include an alert aimed at preventing drivers from running out of power. just the way we wanted to celebrate the first day of spring, with more snow in new york city. forecasters say a storm will dump up to 1/2 a foot of snow on the northeast and mid-atlantic today. we are supposed to have four to six inches of wet snow. disgusting. for once, boston will get a break after a winter of record snowfall. boston may only get an inch or two. to the s&p 500's latest arrival
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american airlines, lending tonight. the world's biggest carrier joins the s&p after the close of the trading day. the ceo has more than doubled the stock since bringing americans out of bankruptcy in a merger with u.s. air and 2013. now parker is spearheading a campaign to win back market share from persian gulf carriers tried -- carriers. >> it is something we should have consultations about. stephanie: bloomberg's matt miller does not just loved cars he loves planes too. matt: i had a great day in tuesday on washington, d.c. i was wearing something else. i sat down with doug parker from american and i talked with jim seldon. -- james hogan.
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i talked to everybody because there was a big conference there and i was running all over d.c. the big american carriers have joined together with their unions and presented this big report to the u.s. government which they say shows that these three middle eastern carriers have gotten $42 billion of subsidies over the past decade. stephanie: from home? matt: their owners worried these plain companies are government ownsed. he said, we have a shareholder. their shareholder makes an investment in the business that is owned and then we make a return on that investment. he shows his quarterly earnings every quarter. h'ee's saying, we made money. bill: this isn't happening in
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the u.s. where they are feeling outcompeted, right? matt: they can't fly in the u.s. fortunately for doug parker, the domestic u.s. market is closed to outside competitors. bill: what is he complaining about? matt: transatlantic routes are what they are fighting about right now. right now you can get on one of emirates' brand new planes and have your own cabin with a shower in it and a gorgeous flight attendant bringing you whatever you want at any time -- stephanie: are you for real? matt: for $900. the economy ticket on american is $1100. bill: but you're not getting the shower and stewardess and cabin. matt: they are undercutting. these middle eastern carriers are undercutting what the u.s. carriers say they can offer and they are doing it on better
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planes. the american carriers say they are hampered because i don't have these $42 billion of subsidies. bill: american airlines was allowed to do its merger with u.s. air in bankruptcy. they got the bankruptcy protection. stephanie: thank you. matt: what james hogan would say is this is just a b.s. protectionist move to keep hold of the market share they have as these oligarchs of the u.s. carrier system. they got bailouts after 9/11. they got bankruptcy protection where they got to get rid of billions of dollars of debt. stephanie: there you go. don't cry for me argentina. how can they possibly be complaining about these middle eastern carriers. they get so much benefits. matt: the middle eastern carriers are an easy target.
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this is what doug parker's job is. since he came out of bankruptcy with his debts wiped out and labor negotiations made easier his stock has more than doubled. bill: crocodile tears. stephanie: with your stock up that much, i have a feeling he doesn't even flight commercial. he was able to fly with dropdead gorgeous air hostesses? matt: flying with different 20 years ago. there was a different kind of staff on american airlines and everything. stephanie: this conversation is about to go down. that was a horrible word choice. thank you so much. coming up, meets the russian legislator who is the only one to vote against annexing the crimea.
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he's no longer welcome in his hometown. there's a place for him in new york. it's friday. time to play the yearbook game. check this guy out. he's a ceo, graduated from memphis university school in tennessee in 1962. this picture was from his freshman year. send us your guesses on twitter, send it to the show at market makers at bloomberg tv. you can send it to me at s ruhle. let us know. cutie pie, that guy. ♪
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stephanie: it is time to bring you up-to-date on the top stories of the morning. the price of oil rebounded today thanks in part to the drop in the u.s. dollar. west texas intermediate rose more than 4%. it is now trading at more than 45 bucks a barrel.
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if it closes that high, it will be oil's first weekly gain in five weeks. several big companies getting into online tv, they're looking to get preferential treatment. according to the "wall street journal," hbo, time and sony have talked to comcast about having their webtv traffic being treated as a so-called managed services. that would help avoid the growing congestion on the internet. it also gets into a gray area about whether that would violate the new net neutrality rules. nike is just doing it this morning. shares of the world's largest sporting goods company are up more than 4%. nike's orderly sales and earnings beat estimates. the company says orders in north america will rise 15% next quarter. nike is warning that the strong dollar could hurt profits overseas. those are your top stories of the hour.
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coming up in 10 minutes, astrazeneca may be on the verge of releasing its next blockbuster drug. we will be speaking to a top executive. wall street's wizards, who made it through the crisis successfully? bill cohan has a great magazine piece out on just that. this week is the anniversary of russia's annexation of crimea. it was condemned at the time by dozens of countries and a u.n. general assembly. it has strong support and russia. the russian parliament voted 443 to 1 in favor of it. who was that 1? he was vilified by state media and even his own party. he has been exiled from the country at least for now, hoping to return later this year. ilya sat down with us and our own resident riot -- russian expert, ryan chilcote. guest: there is a decision of
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federal bailiffs that prevent me from coming back home. ryan: even though you're in the russian parliament? ilya:a yes. i participate in the elementary activities remotely. stephanie: do you want to go home? ilya: of course i want. stephanie: how safe are you? ilya: it doesn't matter for me because it is my job. already there were political murders at that time. my boss went to jail for 10 years. it was clear what we are dealing with. stephanie: your life is at risk more today than when you got into this 10 years ago. ilya: most likely yes, but so what? it is still my job right ryan: why did you vote against the annexation of crimea? ilya: you see the bloodshed in
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eastern ukraine, it was clear that is what would happen. we are now enemies with ukraine. now we're talking about nato coming to ukraine and weapons supply to ukraine, which would never have happened before. stephanie: who killed boris nonesuch -- boris nemsa? ordered vicodin -- ordered by putin? ilya: most likely no. in russian history in 1934 it was not commissioned by stalin but stalin used it to start great purges in 1937 and campaign on great terror. stephanie: gary kasparov compares vladimir putin to adolf hitler. ilya: i think it's quite exaggeration. putin is a mediocarracy who
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appears to be leader of the country. he paves the way to somebody like hitler. somebody like hitler might come from eastern ukraine. ryan: one of the questions everybody asks in the west is how much longer will vladimir putin be in power. you said he thinks -- you think he faces a real test of his leadership in 2017. ilya: great tradition in russia to make revolutions in 2017, we continue. the situation is pretty similar like it was in 1914. there also was a great war started and we were in that war, protecting our brothers in serbia and the whole population was surrounded hail to the chief, roll forward. it was a tiny sect of bolsheviks, the only sect that
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was against. in two years the situation changed dramatically because of the downturn in the russian economy. we started a great shuffle within the circle and that is what we see now with assassination of nemtsov. ryan: russia's finance minister just said the worst is behind russia. ilya: i think it's wishful thinking. in terms of oil prices, that is absolutely true. financial liquidity crisis the trust of the investors is zero. nobody wants to go in russia. most capital business people are going into exile or momentarily emigrate and they are coming here to the united states. ryan: where was mr. putin those
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last 10 days? ilya: i think he was at his retreat next to st. petersburg. hanging out with his new child. i think the whole story about the new child was a decoy. i think he's a pretty lonely person and he was just surrounded by the security guard because he was sure it was not the security guards who ordered the assassination of nemtsov. ryan: you think he was combination of on vacation and trying to do investigation as to who was behind this? ilya: yes. i think it was to make one step back also out of precaution, most likely security detail was warning him it is not safe to be in the middle because whatever might happen, they are not controlling the kremlin. the murder was carried out right
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by the walls of kremlin. ryan: you're just speculating, right? you don't know much more about what is going on in the kremlin than we do if you're sitting in new york city, do you? ilya: i do have people i am talking with. i have different understandings in the process than most western media described. this is a result of power struggle from within kremlin ranks. stephanie: what is the state of the opposition right now? ilya: our major task is to reunite before 2016, when it will be parliamentary elections. our biggest problem, that we don't have such a vision. we see what is happening in ukraine.
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they came totally unprepared to their revolution in the country is in shambles right now. we need to work with those who actually came here to the u.s. to create a shadow government. stephanie: is there something more the west could do to put pressure on putin? ilya: success of ukraine. make the illustration that west can bring success. it's russia's believe that west is corruption. if you showcase of the ukraine can be successful, then we see new relation. stephanie: that was russia's duma deputy ilya ponomerov and our own ryan chilcote. here is a guy who is a member of
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parliament, can't even come back to the country. he is super gutsy. bill: and very articulate. he told us he was thinking about trying to go back in may or june. stephanie: "market makers" will be back in a few. we are playing the yearbook game today. we will find out who that guy is. when we come back we are talking about wall street and all the guys who did not get in trouble. guess who loves tracking them. ♪
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stephanie: when we come back the search for the next lock buster drug. astrazeneca is taking aim at heart attacks. it's friday. it's time to play the yearbook game. he is a ceo, graduated from memphis university school in tennessee and 1962.
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this picture was from his freshman year. send us your guesses via twitter at sruhle @market makers, @bloomberg tv. give us a little flair. that is how you will get mentioned. ♪
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>> live from bloomberg headquarters in new york, this is "market makers" with erik schatzker and stephanie ruhle. stephanie: welcome back to "market makers." bill: i am bill cohan in for erik schatzker. stephanie: we are two hours into our trading day. our chief market correspondent is monitoring all the action today. scarlet tom our friends in london are headed home good. scarlett: with eu finance ministers meeting in europe, the focus is on europe, but the action is in the u.k.. the footsie has topped 7000 for
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the first time ever. thanks to george osborne's higher gdp and lower deficit and lower unemployment forecast. however, u.k. stocks are lagging behind the rest of europe. the stock 600 -- stoxx 600 up. the swings continue. we have alternated between gains and losses every day since thursday. that's a seven-day stretch. the dow" down by at least 100 points. -- dow closed down by at least 100 points. it is quadruple witching day. it is less likely we will get an increase as early as june. that has left the dollar weaker. the dxy index down 2.1% this
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week, the worst weekly decline in three and a half years, going back to october of 2011. the euro is slowing. crude getting a bounce back as the dollar weakens. we are still near our six-year lows. stephanie: thank you, scarlet. astrazeneca may be one step closer to its next blockbuster drug. the british pharmaceutical company is developing a drug designed to extend patient's lives after a heart attack. the drug passed its second trial with positive results. will this be astrazeneca's next bestseller? i will ask the company's north american president. paul hudson joining us now. what is the next big thing for a.z.? paul: in the last year we've had a record number of approvals.
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the drug was recently at the american college of cardiology in san diego last week. we presented a second big outcome study for belinda -- the drug. trying to make sure we can keep patients alive. stephanie: in general, we have seen a.z. do several small deals over the past few years. what is your m&a plan? paul: we've done a lot of small acquisitions and they may be focused around building on our therapeutic area of focus. we are recognizing what the future. i'm treatments for disease will be and making sure we own those mechanisms. stephanie: is your r&d spend off
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the charts? to own anything you have to spend a lot. paul: we are investing in r&d. we're becoming increasingly more respected for our pipeline. we are running a business, so we make sure we make sensible investments to deliver the most on at, and we run our business appropriately. bill: you could have been part of pfizer right now but you're not. any regrets about not doing that blockbuster deal? paul: what i can tell you is we have come a long way in the last 12 months. what we have developed, how we developed our oncology pipeline we are in excellent shape. we are focusing on being independent. bill: is it important to be as
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big as you might've been if you had been part of pfizer? -- pfizer? paul: we are in good shape. we have come a long way as far as our scientific agenda. we had a very good 2014. we are optimistic about it and what it means to be an independent organization. stephanie: what is a strong dollar mean to you? paul: we will face headwinds globally, but we have allowed for that. like all organizations come -- organizations, we are watching it very closely. bill: biogen now has and also -- now has an alzheimer's drug.
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paul: anything that is good news for science in these patients, we want to be apart of. we have an awful lot going on it in type two diabetes, and oncology ourselves, targeted therapies, small molecules combinations. stephanie: what does obama care mean for you? paul: we are passionate about where the health care dollar get spent,. anything begets access to medicines as a patient is a good thing. we're trying to work with payers and providers to get the best value for the dollar. bill: i always wanted to ask this question -- how do you come up with the names for these drugs? stephanie: i'm with him on that. your new drugs such as -- that
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just got approved -- stephanie: there's not even vowels in those names. paul: naming pharmaceuticals is a complex and difficult challenge. there is a lot of names out there and we have to pick names that are easy for patients to understand. stephanie: there is one with seven x's in it. paul: the research helps us to understand that patients will understand that that -- bill: is it like breaking through all the clutter of advertising? paul: there's more work than you would imagine in working with regulators to choose the right name and make sure it does not sound similar to something that already exists. stephanie: how important is it for you to stay competitive? r&d's cost a ton of dough, but
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you've got to remain competitive. paul: we work on the access and affordability piece. we are committed to making sure patients can afford the co-pay they can afford to get them to medicines they need. we work with savings programs. we're very cognizant of what it means if you are a patient and you have to go into a pharmacy and pay a co-pay. stephanie: it is an awesome name for a drug. dare i say it's brilliant. bill: i have no comment on this one. paul: thank you for fully endorsing the good choice of name. stephanie: they give so much for joining us today. paul hudson, president of
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astrazeneca u.s. some of them went for a masters of disaster. did they? what happened to the wall street moguls who are in charge during the financial crisis? it's friday. time to play the yearbook game. he's a ceo, graduated from memphis university school in tennessee in 1962. let us know via twitter or bloomberg or eat -- or e-mail. ♪
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stephanie: the financial crisis almost destroyed the global economy. i cohost wrote a fantastic piece for "vanity fair" looking at which wall street titans weathered the storm and which went down with the ship. bill's here to talk to me.
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they all stayed rich. bill: every one of them. quite rich and quite on prosecuted. -- unprosecutesd. -- unprosecuted. stephanie: name names for me. bill: even though it has been seven years, it is fading into history. before it does, let's go back and see who will talk to us and who will not. one of the interesting things is who will talk and who will not. still playing bridge, and still rich. stan o neil, no. john fain of c.i.t. doesn't like to talk anymore. the people who had more distance and more perspective -- i had a candid conversation about what happened that city. -- at citi. stephanie: what were your
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takeaways? bill: it's every bit as important as the great depression and crash of 1929. it's going to be important historically. this is something we should help historians with overtime. some people like jamie dimon are showing a modicum of contrition. he said things to me like, if it were up to him and he had ruined his company like dick fuld ruined lehman, he would not hesitate for a minute about having money clawed back from him and giving back his fortune. stephanie: let me see that quote. bill: it's a great quote. stephanie: quote --
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across the board, one would have to agree. vikram panda -- in vikram's defense, that's what his job was at the time. that was not his fault. it was his job to run old lane. bill: he made about $150 million from that sale. the damage had been done at citi before he was brought in to fix it or it he said, did i succeed in fixing it completely and changing the culture is much as it needs to be changed? no. it's a work in process. he's very appreciative of the bailouts he got from the feds, from the treasury, and from the american people. it's unusual to hear a guy come out and say that. stephanie: how about gerry connolly -- gary lloyd?
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bill: lloyd, except for jamie dimon, the longest-serving ceo on wall street. he put gary cohn out there. stephanie: i do not think lloyd is ever going to leave. they are close in age. why would you leave the job? bill: these jobs are the greatest. stephanie: they don't pay what they used to. bill: in 2007 he made $72 million. last year he made $24 million. stephanie: you have priority -- private equity guys taking home 800 and million dollars -- $800 million a year, nobody is talking to them about it. bill: he is a center between the
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nexus between capital and politics. stephanie: this jamie dimon have as good of a job as dick fuld? bill: yes. jamie dimon's company is not going down the tubes. stephanie: there you go. if you have not read his piece yet, you better. it's on or go old school by the actual magazine. it's time to bring you up-to-date to date on the top stories of the morning. simon property group is not giving up on that site yet. the biggest mall owner in the united states is making what it calls its best and final offer for fellow mall owner mesa rich. the price, $23 billion including $6 billion in debt. mesa ridge says it will rid -- review the new offer. first-quarter sales beat estimates at one of the nation's largest homebuilders, k.b. home.
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gross profit margins fell because of higher land and construction costs. the average price of a house rose 8% to $330,000. shares of k.b. have been up as much as 6%. regulators have given amazon the ok for drones for delivery. the company warned if the faa did not act quickly, it would move its research program to other countries. the agency says amazon contestants drones on u.s. territory but only within 400 feet of the ground, during daytime, and with -- within sight of an operator who has a pilot's license. it is friday. bill and i already arguing who we think this person is. ♪
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stephanie: check him out, graduated from memphis university high school in tennessee in 1962. i am getting an answer all over twitter. my partner, bill cohan, think she knows who it is. bill: it can only be one guy paul tudor jones. stephanie: no way jose. ha ha ha ha ha! cohanthe answer is fred smith chief executive officer of federal express. i got the answer straight away on my bloomberg terminal. how about on twitter, who is our first twitter responder? there we go. it had to be none other than fred smith.
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bill: and paul tudor jones. stephanie: i'm going to say j.t. is my number one. he's pretty special. keep your eye on the nasdaq. we are 13 points away from a record high. i won't see you. see you in a week and a half. ♪
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scarlet: i'm scarlet fu.
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here's a snapshot of the trading action this friday. stocks are rallying. this has been the pattern of late with the dow alternating between triple digit point gains and losses every day since last thursday. the trend is a jagged move higher with the dow up almost 3% above its six-week low in mid-march and less than 1% away from its record close. the nasdaq at a fresh 15 year high, closing in on topping its bubble era record. joining me for today's options inside is dan deming of equity armor investments. that is volatility making a comeback isn't it? dan: volatility certainly has made a comeback. it's interesting to see all that implied follett ability is under pressure as we head towards the weekend. if you look at how the market has been moving over the course of the last couple of months, there's a big pickup in realized volatility that eventually will
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get priced back into the market. scarlet: why is implied volatility so much lower than? dan: we cleared that hurdle with the feds, and now we are winding down the earnings season for the quarter. we have a period here that the news market is not that concerned with for the next few weeks. overpriced expectations going into the fed assignment. scarlet: i guess i was expecting too much out of the european finance ministers meeting. conventional wisdom is that will add to volatility. have we already seen it, or will we see later today? dan: if you look at certain stocks like nike, there are is still a lot of volatility to play out. you see what's going on in the equity markets and indexes.
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the expiration was early this morning. there's a lot of green on the screens today. i hope that bodes well for my spartan's volatility moving into the tournament. there's not a lot of concern right now as far as market movement. scarlet: are you looking for some downside or upside protection here? dan: i'm looking for downside protection. what i talked to -- right now in the short term the market is look like it is poised to move to new highs. i look at june on this options play and in the next quarter you will see possibility of another year-over-year earnings. during that time we saw the s&p down 8%. as market start to focus on earnings -- there will be some hiccups. this protective spread -- scarlet: have you watched the dollar's movement here?
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the dollar is on course for its worst week in three and a half years. dan: i think basically right now -- we saw the unemployment come out. that moved up the curve, the expectations of the interest rate hike. the fed has made it clear they will stay to the end of the year. the trend is still looks higher based on activity you're seeing in the interest rate environment. scarlet: dan deming of equity armor investments, thank you very much. ♪
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pimm: welcome to "money clip." here is the rundown. the bullish move in the u.s. dollar is done, according to hsbc, its meat has been chewed up. not everyone agrees. a flight fight for fairness. u.s. airlines' take on persian gulf carriers. around the world, a trip to the front lines in eastern ukraine. what cease-fire? in sports, someone's brackets are being busted in an upset.


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