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tv   Street Smart  Bloomberg  April 9, 2015 3:00pm-5:01pm EDT

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alix: welcome to the most important hour of the session. i'm alix steel and this is street smart. stocks looking for directions as a digest earnings from alcoa and bed, bath and beyond. any dimon worried about a shortage in u.s. treasuries and is a new deal within reach for greece this month question mark "street smart" starts now. here are the top stories we are watching ahead of the closing bell -- terrell electric is nearing an agreement to selling
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real estate portfolio worth as much as $30 billion to blackstone and wells fargo according to a person with knowledge of the matter. an agreement could be reached as soon as tomorrow. the firm says credit siu's may shut down the government that and for next date -- foreign-exchange business and put the securitization up for sale to an american competitor. deutsche bank says credit suites may scale back their fixed income business in emerging markets. john paulson has merger strategy gains 10% this year thanks to consolidation among drugmakers. bloomberg has learned the firm posting again last month using leverage to -- is using leverage to amplify returns. and has declined from a peak of $38 million in 2011. we have less than an hour to go before the close of trading. scarlet fu is looking at the
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action on wall street. looking for direction seems to be the name of the game. scarlet: muted is what i would call it. we are getting a little bit of a lift, but this is within a very modest range for the s&p, dow, nasdaq. a swing of 141 points from peak to trough -- that's smaller than the move yesterday. that gives you a sense of how muted it is when you compare the three-month average. 50 points less swing in today's movement. the big action is overseas. a lot of people talking about how u.s. stocks look expensive compared to stocks in europe. the stoxx 600 closing at a record high with german production rising in february will stop that's the latest report in a string of eurozone reports topping analysts estimates. greece making good on its loan payment, country leading to
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positive sentiment. the big moves were from overnight in asia. the -- let's start with the fx side, the etf that tracks chinese stocks. the hong kong etf is doing well but the hang seng index closed up 2.7%. regulators recently allowed mainland chinese pension funds to buy hong kong shares, so you have a whole new class of investors for hong kong equities. alix: our other top story of the day, greece is repaying its debt, at least for now. the greeks have paid the imf almost half a billion euros which was due today. now attention is turning to april 24, the day where greece hopes to reach a deal. manus cranny spoke to the greek finance minister.
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a very long day for you. what was your biggest take away? manus: i think he chose to send a message to say constructive discretion -- constructive discussions, still more to do. a gala day, k and fragility. -- equality, liberty and fragility. we are getting there, we are trusting one another, we are trying to do a thing and there's a lot to do. it is very specific. >> we need to prioritize the reforms we need to deal with the ill effects of a five-year catastrophic recession that
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includes nonperforming loans it includes a broken down circus of credit, it includes investment, both public and private, so reforms. and evil lucian of a long-term sustainable fiscal plan that involves three elements -- we need the prime minister or we will fall back into deficit again. we need a sensible policy for carving and private investment and that involves public investment, not from the greek state, which cannot afford to affect it, but the european investment bank, from some kind of european authority or institution that will help with the process and we need a discussion on the
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rationalization of the greek debt without any haircuts for anyone but maximizes the value our creditors will get back from the state. manus: the upshot there is they are still dropping over the horses. i love what he said -- we would not the fit for purpose if we were not repaired to take a little political cause stop this is a finance mr. that put himself in further, he's been coming here for years to the institute of new economics thinking and the discussion was very open, very frank. for you, look -- i lit up the eiffel tower for you. can i get it to sparkle, not
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quite, but we are still here. and we're off for a little supper. alix: you are making me blush. i can handle it. thank you for sticking around. manus cranny joining us from paris. for more on the ongoing greek saga, my guest has advised on greece us previous -- greece's previous debt reconstruction and the privacy head of nomura -- he has lived and breathed this debt drama for the last few years. i could not ask for two better people to help me break this down today. what did you hear that was different? hans: i think the biggest thing was they are changing the rhetoric these of the privatization. that has been a hot issue between the greeks and led guys at the other side of the table, the rest of europe will stop it
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has come up and number of times in negotiations and the greeks have talked to it and put some numbers down but there has not been a sense of how they are going to do it. when he touched upon is this is not in the -- we cannot afford to own these assets but we want to have a joint, private sector-public-sector act -- effort on this. he is trying to split the difference to sell it internally but conceding in effect. alix: no haircuts but a deal has to be done. he seemed optimistic about a deal being done by april 24. what do you think? guest: they don't use the debt restructuring haircut anymore. a want to get a deal and i think they are getting close to the point where they don't have any cash left. they need a deal within a few weeks, so i think that is the
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pressure they are under. the big question is whether the legislation they need to get approved in their own parliament, can they get that done in the next week or two? obviously, what we are hearing from the finance minister and prime minister in other interviews might be a little different from the local mps and what they think about doing these steps that smells a little bit like what they previous government was doing. alix: if the deal gets done, do they keep their jobs? hans: if it doesn't, they will certainly lose their jobs. one of the participants is the oecd. the person who runs that is a veteran of some restructuring and went through the whole thing in mexico. you have seen pictures of them and i'm sure they are coaching them how to interact but going
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back to the vote in parliament that will come up, it is only 30% of the mps in the coalition. you can easily make up for that. if it is pushed to a vote, you may have to have an insight, but on balance he will tack to the center and have to cut loose the left wing of his coalition. alix: lots more to come. coming up next, switzerland he comes the first country to issue a 10 year bond with a negative yield, but who is going to buy it? later in the show, i will talk to the creator of "homeland" -- one of my favorite shows. ♪
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alix: a new year afford debt -- the switch's -- this was government became the first country ever to issue a 10 year bond with a negative yield, which means you have to pay them to take your money. but who would buy these bonds? with me to discuss it is the chairman from greylock capital and the head of research capital at nomura. why does this make sense? hans: a lot of institutions can only by certain subset of securities. those are typically the ones that will come to these regardless of what the yield is. if it was only switzerland that had extremely depressed yields look abroad but it's such a global phenomenon that you are going to get 20 basis points in germany or get the slightly
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negative yield, it seems crazy. but that's the decision people have to make. alix: where is the money coming from? we see people go into it and wanted negative yield. hans: there's a slightly different driver in the euro zone. this with it is a fight to -- a flight to quality. they still have an issue of an appreciating currency. the euro on the other hand looks like it is depreciating. you have this weird situation in switzerland where money is coming in but it is a negative yield. people may not have an alternative if they feel this is a safe haven. alix: flashforward 22025 and it comes due at eight negative yield. what are we going to be thinking? what is the obvious thing we are missing when we look back a decade later?
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jens: i think on some level, there's going to be a real risk on trade. at a certain point, when people feel the world is going to survive, they will be racing for the high yield in play. you will start seeing more issuance come up with high-quality borrowers like mexico, but every other high yield will have considerable compression. i don't know what the obvious thing will be 10 years from now. alix: there's also a fascinating milestone for debt with mexico selling the first 100 your government on in euros. this is in the first time mexico has sold a so-called sentry bond, but it is the first in euros with a 4.2% yield to maturity. that was crazy to me when i read that. what did you make of that? jens: if i scan the global fixed income markets, we have these
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low yields everywhere. even of people have been pessimistic about what is going on in emerging markets now, the local currency yields are rock-bottom in all of these countries. now you can see mexico can issue this very low yield and euros. so there's a disconnect between what can you get from a creditor perspective and what is the sentiment? it just shows you when we have such a liquidity generation from the ecb and bank of japan there is a disconnect between where the yield curves are sitting and where the sentiment is. i think that is going to continue because that's not going to stop anytime soon. alix: it is going to stop at some point. the ecb will eventually follow the fed and raising rates. what kind of pain is that going to cause when investors bet on a lower yield 10 years out? hans: until that happens, you
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would be crazy not to borrow in euros. you don't want to borrow in dollars. this was currency might be appreciating after that big jump up. but why wouldn't you until you start seeing the end of the horizon? i will give you one of the examples that really illustrates this. we have been used to japan as the lowest yielding country in the world. now japanese bond yields are substantially higher than the eurozone on yields. we have started to see money come from abroad into japan. alix: that is an unbelievable statement and it shows the central bank policy and the repercussions we will have. thank you so much. coming up, the framework of iran's nuclear dia -- he'll is less than a week old and may already be falling apart.
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details, next. ♪
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alix: welcome back. here's a look at the top stories we are watching ahead of the closing bell. altera is said to have rejected an offer of $54 a share from intel, breaking off talks to be acquired by the world's largest chipmaker. intel's bid was $29 higher than the closing share price on wednesday. mortgage rates have fallen to their lowest level in two months. last friday pass weaker than expected job report gets some of the blame. the 15 year is just under 3%. muddy waters, the research firm founded by carson block released a report requesting noble
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group's cash flow and investment. they are the largest commodity in revenue trader and fell following the report. a potential road walk to the iran nuclear deal -- breaking his silence, the ayatollah refraining from endorsing the deal says all economic sanctions must be lifted on the day an agreement is signed. that clashes with the u.s.'s statement linking the deal with a final accord. joining me to discuss it is hans hume, from greylock capital. thank you guys for joining me. do you think the deal falls apart based on what the ayatollah says today? guest: the problem is there is so much obtuse station. the real matter is that it has been brought about by prime minister netanyahu and the hardliners the deal is not even
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really given a chance to pick itself well to the negotiation. the iranian regime has come to the table because they feel the problem of internal upheaval against them, because there's an exit stencil threat to them. if the sanctions are not removed, especially financial sanctions that have really brought them to the table, the other problems are not as bad as the financial sanctions. everyone i have talked to in iran feels the pressure of the brain -- of the banking system has brought everyone to their knees and you have other extreme revolutionaries that control the smuggling that would benefit tremendously out of the sanctions that don't want the lifting of the sanctions. alix: the rhetoric continues all across the middle east. iran the plane warships and
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establishing a military presence off the coast of yemen. to your expertise on the geopolitical conflict in the middle east, does it become a full-blown conflict between saudi arabia and iran and what does that do to a deal here? hans: a lot of people in the united states are saying by letting iran have this nuclear deal, it precipitates a new ground race stop i'm not sure i understand the logic. saudi come if they want to bomb them, they just call pakistan and have won the next day. the shiite maneuvering here, the question for us is to stabilize things, negotiating something that stalls something in iran does that make sense for us? i think the business opportunities are obvious. alix: maybe not. what are they? hans: there's a big, well-educated population.
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aside typical low income market a very well-educated population that has been a u.s. ally for the majority of its run. the last few years have been the exception. it has been a potential market for u.s. goods. in terms of what the ayatollah said today, clearly he has to say something to appease the hardliners there. alix: this is rhetoric and not real? would you say this is rhetoric here for the hardliners? guest: iran is a very proud nation and the iranians although they have been sectarian and pro-west they don't want the -- they don't want the continuous outlandish policies of the last 50 years continued upon the region. i think there is a certain amount of validity to the fact that they want sanctions to be
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lifted, especially the financial sanctions by the bank, other than that i agree that there is a lot of rhetoric. alix: we have to leave it there. iran and oil, up next ♪. ♪
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or is it foyer [pronounced foy-yay]? fast in the hallway. i feel like i've been here before. switch now and get the fastest wifi everywhere. comcast business. built for business. alix: here are the top stories we're watching ahead of the closing bell. the goldman sachs ceo did not change course over the past five years, even as revenue and debt from trading commodities fell 50% at the bank. goldman may now report a 7% increase in fixed income revenue thanks to volatility, interest rates and currency markets. amazon has cloud division announcing a cloud service that will help give greater addiction and analytical capability. -- greater prediction and analytical capability. home prices in brooklyn jumping
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to a record -- buyers competed -- competing for a limited supply selling for a median of $610,000 -- of 18% rum a year ago. just under 30 minutes until the close of trading. let's go back to the breaking news desk or scarlet fu is looking at some of the movers of the session. scarlet: we have to start with oil's rebound -- it's giving a lift to a bunch of oil-related companies. it's the only group moving up 1%. it is notable the stocks are gaining even as the dollar appreciates in value and there's a sense that when earnings come out, they will probably be bad. the stocks may actually rise. i also want to talk about herbal life. it is rallying through out the
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day. it got a pop around 11:45 a.m. and then settle down instantly moved higher. the hill reported the ftc commissioner praised the direct selling industry, in particular the efforts to self regulate and that article is starting to make the rounds. herbal life is rallying but other direct sellers are not getting the same kind of boost. that could mean the ftc will clear herbal life in its investigation into the company. l ackman is the reason the ftc has been looking at the stock and has been irish. that might be another catalyst. alix: a possible end to it iranian sanctions create a ripple effect route oil markets and some opec members are scared of more competition and lower prices. officials saying the cartel should reduce production by at
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least 800,000 barrels a day to make room for a run -- to make room for iran. joining us over the phone is the president and founder of pk for ledger -- berliger. what kind of pressure do you think we will see for opec to cut its reduction? guest: we will see pressure from other members of opec, but saudi arabia, kuwait, and the uae have embarked on a course of action to assure themselves a long-term market going out to 2050. they are not going to do anything. it doesn't matter what live via says, it matters what saudi arabia says.
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earlier this week, there was a very clear talk which said the saudi's would continue pushing toward 10 million barrels a day. they are at 9.8 right now. they would continue unless they got cooperation from a number of countries, not just opec countries, but say canada, mexico and norway, although he did not enumerate them but none of that has been coming. the announcement of the agreement with iran is that iran will put more oil on the market and prices will be even lower. alix: you are speaking of the oil minister from saudi arabia. what is saudi arabia's power to use oil as pressure to iran when they are fighting in yemen? can saudi arabia weaponize oil when it comes to the middle east? guest: in the sense that any commodity can be weaponize to the dollar by producing 10 million barrels a day, saudi
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arabia will put further pressure on the price of oil and it will cut the iranian income. iran has already been heard from the decline of prices and i don't think they can to offset a loss in income from a fall in prices. essentially saudi arabia is weaponize oil. alix: i love to talk about oil. does opec matter from where you sit? hans: absolutely. if you look at the emerging markets and a lot of the countries, they have a link to oil -- venezuela, ecuador, russia. it's part of the analysis we need to do if we need to make an investment in one of those places. on the other hand my trader just follows oil like it's religion. we have seen some volatility it is in a certain price range. i don't want to react to the iran accord because people --
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who knows what's going to happen to the prices. they would probably use anything they can against iran. alix: iranian companies are trying to buy is was petroleum company. this struck me because it seems like iran is preparing to do business outside, acting as if sanctions will be lifted. what do you make of this? guest: my question is why? that refinery in switzerland is a money loser as is almost all the refining capacity in europe given the expansion of the capacity in the middle east. think a much more important move is to look at increasing sales to china. a are competing directly with saudi arabia and if an agreement comes through, even if the u.s.
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maintained sanctions, the chinese will no doubt rush to buy more iranian oil, getting a better deal than they get from saudi arabia. so that the iranians will be selling and monetizing their crude. if they buy the swiss refinery, it will be with borrowed money and it will be an almost meaningless transaction. alix: you made a good case talking about the opportunities and ran. what you want to see put in the country? hans: sanctions lifted would help. i would be interested to meet with some of the people in them sure some of them will be coming to the imf world bank meeting. some preliminary conversations i have had with iranian representatives in this country, it is incredible how they are reaching out to look for investments. they are looking forward to working years already. my sense is will be very
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inviting to american investors and probably looking to open the market. i'm sure there is a level of technocrats under the ayatollah who want to engage with the international community. even with oil, they are going to be able to go into the regular markets and engage in a transparent way. things should be much smoother and just on equities there's going to be a real rush in. alix: thank you so much. i think i am saying goodbye to hans jim. very sad for me. great to have you. thank you for your amazing insight. coming up will it be ready for the premiere of "game of thrones?" and we will tell you who
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linkedin is buying now. ♪
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alix: attention cord cutters -- hbo is now available on sling tv. streaming service announcing it has the premium channel for $15 a month, this is after they suffered a service disruption during the ncaa finals. this warning, the company's ceo explained what went wrong. guest: about half an hour ago we went live with hbo. >> that is new. guest: you can watch all 40 episodes that have been shown of "game of thrones" and watch the premiere on sunday night. alix: will they be ready on sunday night? joining me is paul sweeney and are bloomberg intelligence media
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analyst. who is sweet -- who is sling tv for? guest: it is for people who don't want to buy 500 channels of television but they want to have some of the selected programming that is available out there, including espn. i think they are targeting some of the people out there who don't already subscribed to television. let's see if a smaller, skinny package would be more attractive to that audience. alix: what is the distinction when you get sling available on multiple sources, what is the difference? why would i go to them versus apple tv? guest: i think it is about choice. if you unbundle the bundle and go with different things that the price may be higher. but i think what people want is a choice. some people may just want hbo
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and may not want to watch the cartoon channel because they don't have kids. we will just have to see how it plays out. alix: what has sling tv done in the last war days to prevent other crash when "game of thrones" premieres? guest: i think that's an issue with anything broadcast over the internet. i was watching the duke into aa final on the internet and it was crashing. one of the things of cable versus internet is just the huge bandwidth. i think they have to sort out some of those quality issues online. alix: is that going to prevent or rapid adoption? paul: broadband access and bandwidth is an issue for particularly online video. some of the consumers for over the air television, i think they are more open to some technical difficulties. but as you start paying more and
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more and higher and higher for packages, then the expectation for quality is going to go up. alix: and that may be harder now that we have been neutrality rules in the works. paul: somebody paying for it now $15 a month will expect a near-perfect execution just like they get on their cable system. the pressure is going to be on some of these over-the-top providers to provide a high quality service, which netflix has done, for example. alix: how many users does sling tv haven't what is the growth rate? guest: i think i have heard 100,000 sign-ups. alix: do you think we will see consolidation? there are a lot of players. paul: i think there will be some winners and losers in the shakeout, i think a lot of the over-the-top players like hbo and netflix are trying to figure out what consumers will really pay for.
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what is the best package of channels they will pay for? a lot of these companies are experimenting, even viacom with nickelodeon making that available to parents over the internet is an experiment to see what kinds of programs work over-the-top. we know netflix with over 30 million subscribers, that model works. what see how the individual channels work. do people want to go a la carte. that is unproven. alix: i just want to watch "game of thrones." coming up, linkedin announcing it latest acquisition. what will it ring to be professional networking site? -- what will it bring to the national networking site? ♪
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alix: here are the top stories we are watching ahead of the closing bell. ge is close to a deal to sell a
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real estate portfolio worth $30 million to blackstone and wells fargo. the agreement could be reached as early as tomorrow and would further the goal of shrinking ge capital. california regulators finding pg&e corp. $1.6 million for a deadly natural gas pipeline explosion in 2010. the fine is the largest penalty in the agency's history. the explosion destroyed 38 homes and killed eight people. yale university student getting a sit in today outside the office of the university president. they are demanding the school sell its holding of oil, gas and coal stocks which they say contribute to climate change. similar protests are taking place at harvard at swarthmore. linkedin continuing to expand its reach, announcing its biggest deal to date buying online independent business
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site, it's the latest acquisition and it aims to become more than a professional networking site. back with me to discuss are my guests -- why did they do this. what is the strategy here? praveen they are trying to add this education value service. students on the platform -- they are trying to add a better service to that. when you look at their overall strategy, they are trying to have all 3 billion people with the global workforce on there. this becomes important to let people spend more time on the platform. alix: one analyst said the deal should boost linkedin's earnings from 3% to 5%. does that justify a price which is 10 times sales? praveen: i think you saw the
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reaction -- i looked at a comparable deal from a company called renaissance. it's a little higher but we have seen when you get a best in class product in today's private valuation market sometimes it tends to be a bit higher. alix: are we going to see linkedin in schools now? paul: they are all about work environment and getting the 3 billion workers locally into their ecosystem so they can sell advertising and get them to sign up for various services. anything that makes their service stickier they believe will drive subscriber growth. these online companies are still very much in the mode where they have to grow their subscribers. that is with the street is demanding. alix: growth growth, growth.
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the closes coming up -- the dow is picking up a little bit of speed. up 51 points. ♪
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alix: welcome to the viewers round the globe. you're watching bloomberg television. i am alix steel and this is "street smart." start -- stocks looking for direction today. let's get to scarlet fu at the breaking news desk. where was the action today? scarlet: fully them was just slightly below average. only one or 2% below the -- 1% or 2% below the 10 day average, but there is a lack of conviction. the last time the s&p, dow, or
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nasdaq closed up or down by more than 1% was march. the dollar, meantime is at a three-week high, the dollar index gaining for a fourth straight day, approaching 100. the rate diversions story is the full effect here. the fed minutes from yesterday were seen as hawkish compared to what the ecb are doing, easing. not a lot of excitement in bonds as lisa abramowicz will be telling you shortly. alix: joining me here on the set is lisa abramowicz -- and the guggenheim investment senior
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macro strategist. so great to have all of you here. what happened today? the stoxx kind of went nowhere fast, we had the 10 year yield move up significantly, almost of 22%. guest: these are just markets that don't trend. at guggenheim, we're sifting through this data. we were joking before the show started, do economists matter? we do. [laughter] we are trying to figure out the future and i think the markets are trying to figure out the future. some of the data looks great. some of the numbers look fantastic and some of them looked terrible. investors are just trying to figure it out. alix: we did have inventories rising and that could point to more investment. guest: i think we are talking about the notion of final demand for it goods and services and general.
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i think the demographic remains the elephant in the room and we are going to continue slow for the foreseeable future. alix: what did you make of the move in the treasury market? lisa: today there was an auction for the 30 year treasury yield and it did not go well. it looks like yields have been held down by four and others but in the u.s., people are saying with the possibility of inflation picking up, we are not sure. not a lot of conviction. people are saying what is the incentive? alix: is it jobs jobs and jobs? guest: we have retail sales and industrial production. then we get the regional manufacturing survey out of philly and new york and consumer sentiment. we know q1 was a bust at about
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1% or 1.5%. did things pick up in march and do we see a healthy a rebound in q2? alix: let's look at where the markets are settling today. the s&p of about 9 -- we did see stocks claw their way back. the s&p was in negative territory. we did see a little bit of a rally into the closing bell. the nasdaq up by 23 points. or a look at the top movers, we want to get back to scarlet fu at the breaking news desk. what were the highlights? scarlet: we thought earnings would give us some direction. alcoa drop after the earnings, but dealmaking seems to be the theme here. general electric, the biggest gain in one half years because the company is nearing a deal to sell its real estate folio to blackstone and wells fargo $430
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billion. it is all part of the strategy to shrink ge capital and boost the industrial side of ge's business which is safer and fetches a higher multiple. walgreens reported earnings. now at a record high. the acting ceo has signaled more deals are on the way. he outlined what could be a buyout in the drug company's distribution supply chain. express scripts trading at a record high. one analyst saying investors interpreted the comments as interest for express scripts. alix: i am here with a full crew.
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we have to take a look at treasuries. there's a lot of interesting stuff and we did see the yields spike up that the jpmorgan ceo jamie dimon, and -- giving investors a lot to talk about. he said last year possible till to is a warning shot to investors. the fluctuation in yields last year was an event that is supposed to only happen once every three years. the next financial crisis could be exacerbated by a shortage of securities. treasuries are supposed to be among the most able securities. is this real or are the banks trying to scare the fed? the new regulatory climate has really constrained banks.
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they get charged and it hurts them. that is the truth. central banks and foreign investors are large purchasers of securities. we were talking about the auctions and the -- you are seeing a bigger pool of treasuries. i don't think we're headed for a liquidity crunch or drought of liquidity like jamie dimon is talking about. lisa: if you look at the market the volume of overall market of treasuries has almost tripled while trading volume has dropped substantially. there are a lot of questions run whether one trader could move this mammoth market, this most -- this most liquid market in the world and what are the potential implications of people cannot rely on this market for a benchmark or a protectable way
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of measuring be fixed income market. this is a huge concern. they could be talking their book as well. i don't think it is because of the full parole, but -- because of the full rule. -- volcker rule. alix: the dollar rising for a first session for a fourth day against the euro. look at that chart. what do you think? guest: i'm still getting around the 3 billion years think. i want to go back to the point about the volcker provision under dodd-frank. what you are saying is the bank puts on the treasury trade, they levered up to the moon and it's wonderful. i'm not sure about the ultimate
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liquidity, but what it means for investors -- and we traffic and credit -- we are getting a substantial liquidity rhenium to provide capital to the marketplace. as many things as it screws up, it creates opportunities as well. >> you buy things that are not traded as frequently and you get a better deal. guest: that's exactly right. given the credit cycle, we're not going to have much of a default cycle for the next couple of years therefore it's an opportunity to capture bigger liquidity. alix: walk me through the dollar strength we saw today. guest: i will argue the fed minutes were somewhat stale in light of new information, but it did show policymakers were seriously considering moving in june, so this puts us back into the scenario where maybe the fed is going to turn a blind eye to the dynamics from the dollar and charging higher interest-rate. that appears to be how
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foreign-exchange markets are looking at this, so we are real approaching the lows we saw when janet yellen started expressing a greater degree of concern about the macroeconomic implications. alix: we do have some breaking news. let's go back to scarlet fu, looking at. scarlet: gap reporting comparable sales for the month of march. the headline number is encouraging -- the consensus was for a gain of .5%, but if you dig into the numbers, it's all driven by old navy, which saw its sales increase by 14%. their flagship cap brand showing a drop of 7%. banana republic was down 3% when analysts were looking for a gain. old navy, the lower-priced part of the gap portfolio doing well. it does not necessarily mean gap is firing on all cylinders and his son encouraging for anyone looking for a refresh of the gap
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brand over all. alix: we were talking about the dollar seeing its biggest gain since 2011 at it has an effect across the currencies market. we have to look at the euro because mexico is selling the first 100 years government note in euros. i saw this headline in my brain exploded. what is the strategy here? are they on the wrong side of the straight -- on the wrong side of the trade? guest: we have seen plenty of episodes in the past where latin american economies issue debt in a currency that strengthened and it was very difficult to repay the debt. we saw a repeat in mexico in 1994. the outlook for europe is not so great this year and maybe still weak cheer but over a 100 year horizon, certainly they are going to get back on track and
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this means a stronger euro relative to the dollar, relative to the peso. the timing is interesting. alix: what do you think when you look at a long-term strategy like this? guest: it's interesting because there have been u.s. corporate issuers who issued in euros. if someone sell they 100 year bond, they are not thinking about 100 year currency exposure. at guggenheim, we have been euro bears for quite a while. we think the euro is likely to go to parity and likely under just as a process of the economic, you have to get it down. over the last few months, you've seen manufacturing activity pick up -- it is a powerful economic stimulant in addition to the qe program. alix: the imf coming out saying bond funds may be exposing customers to more risk than
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investors actually realize. the imap chief -- the imf spoke in washington. listen to this. >> they have i graded from banks which are supervised and heavily tested nonbanks. they have migrated from advanced economies toward emerging markets. alix: what do you think? do you agree that the risk has shifted completely? guest: i run a bond fund. all of this ties in -- who in the heck is on the high side of a 100 year piece of paper? one of the things we are seeing in a change in corporate now when i started 3 billion years ago, the average maturity was a tenure maturity. high yield has migrated back to 10 year maturities again. what all of this is saying is
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that there's a hunt for duration. this comes from liability driven investing and i don't know if this and badly or is ok, but there is a hunt for duration that ties into our conversation earlier about the lack of liquidity in the treasury market and the consistent demand for this. somebody is looking to put in a duration match here in terms of the piece of paper. you have to pick your poison and that the end of the day, these guys have said we're going to take commercial banks and make them riskless. you then force it to become what is called shadow banking to be nice. that's what you have done. unfortunately, we have to leave it there. alix: thank you so much. great to have y'all here. after the break, why chinese
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investors are hunting for places to put their money, coming up next. ♪
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alix: here are the top stories we are watching after the closing bell. president obama is in jamaica today for less than 24 hours to discuss energy and security. he will head to panasonic where he will attend the summit of the americas. diplomats and dissidents will be watching his interactions with cuban president, while castro. french economist and best selling author thomas v.a. says he sees the risk of politicians and their european union forcing greece out of the euro area. >> the eurozone as a rule is not doing well.
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it is less than it is outside the eurozone. alix: hsbc must pay a billion euro bail after being charged in tax evasion. the move comes after the banks swiss unit was charged to post a 50 million euro bail. go by hong kong stocks. as with the state run china securities journal has as a headline this morning. a buying frenzy in china stocks is spilling over into hong kong. the hang seng index hitting a seven-year high on thursday prostrating day. and unbelievable rally. joining us over the phone is the raymond james chief investment strategist and here in the studio is remy and since io. -- guest: i think china is trying to recycle some of the excess cash a half.
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hong kong is a unique property. there is an investment firm that is very high on hong kong and the currency translation will be favorable as well. alix: what is the risk? when you have chinese individuals having no way to make money except in the stock market, where is the risk? guest: the risk is that it drives it into bubble valuations like the tech stocks got bubble eluate in syria in 1999, but we don't think they are there yet. alix: what would signal that we are there? >> we had a better than 40 price-earnings multiple on the as the 500 the first quarter of 2000. hong kong is not there yet. alix: what we are looking at now is the china composite with the hang seng index and the shanghai composite.
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do we see that kind of rotation? guest: i think you have seen a rotation. we were with you a year ago and i have been of the believe that china is not going to implode. they were employing the same kind of switch from a manufacturing, as -- export -driven economy, just like brazil debt. the economy slowed a little bit and i think china has employed the same business model. alix: how many billionaires have been made by this push of the government into stocks? guest: we are seeing a couple of billionaires who have just gotten even more rich. a couple of people we're looking at the chairman who added one point $2 billion to his coffers. another chairman of a property giant bank the same $1.2
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billion. all told, about $50 billion is what they bank just in the first part of this year and we are only into april. alix: when you have these kind of billionaires cropping up in china, is this helping the middle class or is this creating an income disparity when you have this huge surge in the stock market? guest: there's obviously an income disparity between the super rich in china and the lowly farmers over there. milton friedman said the only way you pull the poor into the middle class is by a free operating economy. i think there are more billionaires in the u.s. than in china, but they are coming into their own, obviously. alix: what areas are you worried about? there has to be some area that is rocky right now.
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guest: i think the fixed income markets in this country and in europe are frothy areas. alix: what have you found? guest: the tech sector is something people are saying is overvalued. at the height of the tech double in the united states it was only about 150, so people are saying the tech industry might the ready for a false. -- for a fall. mark mobius says her could be a decline in chinese stocks and you better look out, because something is coming. alix: has beijing commented on this? guest: not yet. if something bad comes out, you might see some easing coming over the next few months or so. alix: how much of this rally is fundamentally driven or driven by easing policy? guest: i think it is driven by both of them.
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it's driven by china coming into its own as the second-largest or may even cross to the largest economy this year. alix: thank you so much. you are very levelheaded. appreciate your insight. coming up, more from the greek finance minister on whether greece is prepared for no deal. you don't want to miss this. it is exclusive. ♪
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alix: welcome back. he read the top stories we are watching after the closing bell. blackstone and wells fargo are close to a deal to buy a real estate or folio from general electric worth as much as $30 billion. an agreement may be reached as
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soon as tomorrow. ge, wells fargo and blackstone representatives declined to comment. the incoming jcpenney ceo is telling floor managers he will give them more leeway to select merchandise and make other crucial decisions. he will be replacing the current ceo in august. the stock is down 70% in the past three years. the university of kentucky's basketball team top seven scores say they are leaving the school early to enter the nba draft. the wildcats finished the regular season undefeated and lost in the semi finals in the final four. greece wins more ecb emergency cash and while a deal is said to be just within arms reach, bloomberg caught up with the greek find -- greek finance minister today and spoke about getting along with non-eurozone
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countries. >> our financial road needs to be dealt with within the european primary. this government is not seeking extra european solutions to what is a european problem. it is a greek problem, a european problem and despite some disagreements, we have to resolve it within the boundaries of europe. greece needs, like every country, to maintain good working relations both at the financial level and economic level and in terms of broader common interest that fall outside the eurozone. that includes countries in africa, africa -- africa asia and so forth. but the two are quite separate issues. greece is not seeking solutions for its problems outside the
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borders of europe. manus: one final question and thank you for taking the time to come and talk to us. you have cleared a number of answers up for us. as you as a party prepared to accept a bit of backlash from the people of greece if you have to compromise? does doing a deal involve compromise? the risk is you take a bit of a smack from the people of greece if you do. are you prepared for that? >> we would not be pit -- we would not be fit for the purpose if we were not bear to take the steps to stabilize greece. we are prepared to make all sorts of compromises. we are not prepared to be compromised. alix: you can catch that full interview with the greek prime minister on coming up next, details continue to emerge in the shooting death of walter scott in south carolina.
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renewed calls for police to wear body cameras, coming up next. ♪
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alix: welcome back. stocks finishing in the green of the fourth time in the past five sections. s&p closing at the highest level in the past four weeks. i want to go back to the breaking news desk. what is going on? >> this is a desktop virtualization company. i use it when i need to log into bloomberg at home on my pc. in any case, the company says that first revenue will trail analysts. we have a function that allows you to track the share price versus analyst estimates for the first quarter of 2015.
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you can see the share price closed at 66-66, while the redline track estimates. it has not really shifted since then. right now, the company sees estimates 65 - 3-65 cents. it would have to go all the way to around here from where it is now. previously it was 70-72 cents. you can see how this redline meet come back down to the share price. tricks suspended from trading because of this announcement. we are still waiting for you to resume trading. we'll keep you posted when it does, likely it will be a decline. another likely to claim is gap. overall the number was fairly decent. up 2%, when you're considering
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that analysts were hoping again by one half percent. but breaking it down by brand, old navy did the best. gap, the actual gap stores down 7% versus the consensus of 3.5%. alix: scarlet, thank you so much on this after our report. on this day 150 years ago, the american the war officially ended. yet racism still divides america. from trayvon martin, eric brown to walter scott in south carolina, the deaths of unarmed african americans at the hands of police continues to highlight racial issues facing this nation. the recent death of walter scott was caught on camera and the police officer has been fired and charged with murder. for more on the future of law enforcement, i'm joined by daniel, a northeastern
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university law professor specializes in criminal law. he is also the author of the book "prosecution complex." if you take a look at population for example, charleston is 45% black. please force is 18% black. -- police force is 18% black an enormous divide on how african-americans are represented in the community. how can we change that? daniel: the problem is that the police are often majority white, and the community they serve is principally african-american. in the case of michael brown, in ferguson. how do we change it? part of it is encouraging those from communities of color to become members of law enforcement, to be recruited into law enforcement, to be mentors, and to be integrated so that they can enhance
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communication between the two communities. alix: something we saw some try to do is elect two african-american numbers to their local. -- local government. what is the responsibility of local election? daniel: it is important. so much of criminal justice is on the front lines at the city and county level. we can talk about prosecutors -- most crimes in the united states are state crimes, prosecuted at the state level. in turn, they are prosecuted by county prosecutors who are elected by the county. if we can get to some extent, greater representation in the prosecutorial ranks by getting people to go out and vote, doing voter drives and other things to get people to vote electing people from your own communities, that could greatly increase the dialogue and justice. alix: a lot of things you could point to are to blame --
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education, income inequality -- social inequality. is it state, county, federal levels? daniel: i think all levels. the absence indication between all groups is going. -- is startling. we no longer live in an era of segregation or formal legal segregation, but we do not have as much integration at the society at every level that we should or want to have. alix: another solution that has been floated strapping cameras to cops. what potential do you think that has to solve the issue? daniel: i think you could help. -- it could help. it can give us a sense about how these incidents occurring in south carolina actually take place. justice should not depend on the fourth two would eat whether or not a bystander is available to capture the incident on video. if the police have body cameras, it could protect citizens, but
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it could also protect the police in other instances from potential more dubious charges. alix: what do you think could be the strongest deterrent? daniel: to this type of activity? i think it is happening now on awareness on db half of the public. we are learning about these incidents, we are seeing them. what could be more shocking than the video that has come out with respect to mr. scott? just by talking about it learning about it, by educating citizens and the police, i think that could have the greatest impact. but we could also add to it through body cameras and other specific evidence-based reforms. alix: thank you so much order passionate discussion. daniel medwed is a professor with the northeast university. we're talking to the creator of "homeland" in just a few
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minutes. stick with us.
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alix: my next testguest knows a thing or two about must-see tv. the executive producer of the hit tv series "homeland." he joins me from l.a. gideon, full disclosure, i love "homeland." i want you to tell me the secrets of the new season. you have a new show, is called "dig"." gideon: "dig" is an archaeological thriller set jerusalem. set -- set in jerusalem. the main character is trying to investigate the murder of an american. alix: "homeland" is all over the
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middle east as well as the u.s.. why is that area so popular for you in a show that you produce? gideon: i was born and raised in jerusalem. i am a citizen of israel. i'm fascinated by the region. i thoughtshot "homeland" in israel, but this time we are shooting "dig" in israel, which is important for me. alix: what is the response to filling in israel? -- filming? gideon: they couldn't care less. no, they care a lot, and it is fun to see the reaction. alix:i created the show with tim. we wrote the script without getting paid. we saw the reaction of the
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networks and found an amazing partner with usa. they immediately understood division of the show and what we wanted to create. they let us have a lot of freedom in terms of where to shoot the show. they have been amazing partners. alix: the show focuses on religious fanatics. can you like that what we are seeing in syria right now? gideon: absolutely. i think we're living in a dangerous times. i think it is amazing that in 2015, religious fanatics are massacring and killing us. just last week, 147 students in kenya or killed because they were just not muslim. it speaks a lot about fanaticism and it plays in the world. -- and its place in the world. i think it will be interesting to discuss. alix: do you think these kinds of shows would have the same kind of reception 15 years ago? my question is -- what about the environment now accident so popular?
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-- makes them so popular? gideon: two things, it seems like it is ripped from the headlines, it sounds so real and also tv has made strides in the past years. it allows adults to indulge in amazing and sophisticated shows. alix: are you trying to find a new kind of audience, trying to tackle these topics? gideon: absolutely. i think the viewership is becoming more and more sophisticated, even in the way they watch shows. i am not sure many of the audience watches once a week. i think the engine watching is something that everybody now does. -- binge watching. we are trying to reach a sophisticated, yet large audience. alix: what is your next project? we have seen "homeland." what is your next middle eastern project? gideon: it might be mars, who
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said middle east? we will see. i'm developing a few things. but now, i am totally focused on 'dig"dig." a very twisty turny episodes coming up tonight, so i'm still focused on this show. alix: "homeland," what is the theme of the next season? gideon: i would love to tell you, but i can't. i'm so involved with "dig" that i can't tell you any more. alix: he didn't even let me go a little bit there with that. gideon, thank you so much. "dig" airs at 10:00 and 9:00 central on usa. good luck. coming up, at 75 years young, jack nicholas still has game. at the masters, the golf legend nailed a hole in one on par
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three. more links fromt he the masters tee off today.
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alix: here of the top sports stories we are watching at this hour. visible owner of the -- princ ipal owner of snap advances was promoted to top official. also joining him on the field will be sarah thomas, who became the first woman selected as an nfl official on a full-time basis. in the first round of the masters is underway. that is why my dad is not watching the show. tiger woods returns to the course after multiple injury related hiatus.
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the action continues through sunday. for more on the golf world, and joined by "taking stock" anchor pimm fox. here is the preview. >> the connection between the golf in the management business and eagle capital, is that they are both start of the american dream. there is a correlation between how you play golf and the same thing in the asset management business. everybody in the world knows what kind of your double eagle capital had last year were once we have done since inception in 2005. it is the american dream, and if you do well, you will shoot good scores and golf, and also put good returns for your investors in the money management is business. alix: tell us who he is. pim: he is one of the best golfers around.
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he may be one of the best golfers to be managing money. he played as an amateur for his entire career. he decided at an early age that he did not want to turn pro. the decision was really clinched on the 18th of 1994 tournament the amateur open, where he played against tiger woods. he was six above tiger woods, he had six shots under par. he was set to win. last hole, tiger woods ahead and he wins. alix: amazing. pim: he realizes in his conversations with coaches, he recognizes that he does not have what it takes to be a pro gold fer. and he always wanted to manage money. so he goes to arizona state university. and continues to play golf -- he is an excellent over. you can hit the ball 325-400 yards. he goes and gets his degree and
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starts working at legg mason. he works with kyle bass. alix: hmm. pimm: and when kyle bass pays attention to you and says "you might have what it takes to manage money," it puts him on that career path. now he has double eagle capital, three funds. he goes out and finds the best fund managers, he has been adv an advising council. he is still playing golf obviously not professional, but in a competitive world, that is where he is making a difference. alix: what are the similarities in terms of finance on the corporate world and the field? pim: he says you look on the leaderboard and you know who is losing and was winning. you know who is making money and wis losing it. alix: darknesson't miss "taking
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stock" for the full interview. scarlet has some breaking news. scarlet: this is about paypal and ebay, making sure that the split is not disruptive their businesses finances. the companies are drawing up a five-year operating agreement in which he felt will be guaranteed a reliable source of revenue after a split. they also announced the initial board members after the separation as well. you have the ceo of ebay involved. they are working this group. -- this rthrough. i do not see much response to these agreements. they should not have too much effect on the stock prices anyway. alix: thank you so much scarlet. coming up next, we have a hot se t. i will be trying on over $100 million worth of jewelry from christie's. i will tell you how you can own
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these rare jewels.
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alix: this is my lucky day, because i have on a $2 million pair of harry winston earrings. $2 million. i think my husband to take a look at for a little christmas present, because i am loving them. here to tell me more about these american earrings is tim bernstein, tom, i'm sorry, the senior international jewelry specialist with christie's, will be selling this item on the 14th. i'm so overwhelmed by these i can't even get your name right. tom: a classic harry winston pair of earrings. what we are called flustered tops with diamond pendants. alix: they are shiny.
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tom: we'll send you a picture. alix: tell me about the auction your hosting next week april 14. not just this, a lot of amazing pieces. tom: there are ranging from beautiful rings, necklaces and bracelets a few thousand dollars up to several million dollars. alix: what are the bigger ticket items? tom: we have several. the biggest would be the diamond here, which is over 80 carats. that is in the neighborhood of $5 million. we have a 25 caret hundred in the neighborhood of $3 million, with a matching white and diamond necklace worth 500 thousand $500,000. these are probably some of the most important of the 20th and 21st centuries. alix: this ring looks huge.
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after telling me about the diamond, it is enormous. tom: it has a very, beautiful warm tone to it. people like this in the older style of cutting. it will get a lot of attention. alix: you can wear this? tom: you can wear it as a ring or a pendant. alix: what kind of sales are you expecting number wise? these are huge ices with big price tags. -- huge pieces. tom: we are expecting between 40 million and 50 million, maybe more. the upside is hard to predict. collectors really fight for these kinds of pieces. alix: how does that compare to what you might tell him at 2014 -- sell in 2014? tom: it is similar. we had a big market for diamonds. it remains quite strong.
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the collectors are still seeking the same type of jewelry. we are expecting similar results . alix: you mentioned collectors. that means it is not for the everyday person. i don't have too many dollars sitting around. who attends these auctions? tom: we have all kinds of buyers. we have people looking for the first engagement ring, people looking for the one real highlight of their collection and we have people that just love you for jewelry and art jewelry wearers. it offers a great variety under one roof. alix: globally it is interesting too. you had sales of over $750 million. is there a country that has had more demand for these? -- these jewels? tom: it is mostly universal. we have different sectors with different types of demands, but universally it demand is strong. alix: i can't walk out with
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these, which is upsetting. you can see these jewels on the 10th in new york and item on the 14th. husbands,m l listen up. that is it for "street smarts." have a great night everybody. " with all due respect" is up next.
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>> no matter how hard you try there will only be one president lincoln. mark: happy chinese cookie almon d day. chris christie's comeback tort. and elizabeth warren's don't forget about me toward. but first, rand paul's tour. today, after a super shaky or state of the tort


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