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tv   Street Smart  Bloomberg  April 10, 2015 3:00pm-5:01pm EDT

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>> welcome to the most important hour of the session. 60 minutes left in the closing bell. stocks rising. the dollar rallying headed towards it biggest weekly advance since 2011. "street smart" starts now. here are the top stories we are watching ahead of the closing bell. general electric planning to
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exit the bulk of its lending business, most of its real estate. the ceo is refocusing the company on its industrial roots. apple's new smart watch now on display in stores while online reorders push delivery dates for some versions into july. apple what officially goes on sale april 20 four. optimism for the new product lineup has pushed the company shares to record highs. hillary clinton officially plans to launch her bid to become the nation's first female president on sunday. according to people familiar with the matter, she will make the initial announcement in a video and head to iowa and later new hampshire. we have got less than an hour to go until the close of trading. scarlet fu is looking at the action on the street. almost a triple digit rally in the dow. almost. getting close.
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over the course of the day, 121 points. that is still more modest of a move been typical over the last three months. scarlet: this is the first three-day gain for u.s. stocks since mid-february and volume in dow jones industrial average is double the 10 day average. you can credit general electric for that movement. if you move on to the dollar you can see how they are performing a move higher for the u.s. dollar, finishing up for the week, giving back some of the selloff for the previous. it was a record-setting day in europe, which to help -- helps to round out equities and government bonds. the stock 600 touching a record high. the backdrop is quantitative easing from europe. the ecb's effort to buy government debt and weaken the currency means other central banks are cutting their euro holdings to 22% of global
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reserves from 28% before the european debt crisis five years ago. you saw the french five-year yield briefly go negative. more than one quarter of the securities and the bloomberg eurozone sovereign debt index had negative yields. alix: unbelievable. this was 10 year yield in negative territory. thank you. deutsche bank is close to 1.5 billion dollars settlement. germany's largest lender will likely finalize the settlement with u.s. and u.k. authorities this month. does this close mean a lengthy legal headache? your to discuss is keri geiger. also, tim, a partner who oversaw one of regulations at the treasury. he joins us now from d.c. kari, we have a potential
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number. do we have a potential verdict? keri: it is a possibility of this settlement. we have started to see banks pleading guilty for what accounts for big financial crime. we did see previous banks that settled also plead guilty. this is pretty significant for deutsche bank. they have not pleaded guilty on previous indiscretions or legal issues before. this is a large number, about the same of what ubs paid for their settlement several years ago. alix: it wipes out the profits deutsche bank made last year. keri: it will definitely hurt. alix: 10, from your expertise, do we end up seeing a guilty verdict for deutsche bank, will there be constituencies to
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soften the blow like we have seen with other eggs? -- other banks? tim: what i'm going to be looking for is the number but in addition, a lot of the brookfield characteristics going to the settlement. deutsche bank will take a charge somewhere and we think that is likely. that is not as unusual as it used to be. the question now is less of do they take the charge but which entity takes the charge? the report and the new york times indicated it looks like they'll be able to avoid taking a banking arm but they will still take a pretty substantial u.k. subsidiary, different from what we have seen the former companies are able to negotiate a less integral entity taking the conviction. this sounds like something fairly material. you will have collateral consequences. alix: what might the consequences be? why might that be significant? tim: i cannot speak to exactly
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what the consequences will be. if it was in the u.s., you saw other institutions that were in similar circumstances trying to make sure they did not have consequence because they would be disqualified from certain types of issues or from providing certain types of services. you would be worried about department of labor consequences so you can not service plans in the same way. you'll be warned about durability to clear dollar transactions if you put her banking license at risk. it is probably the scariest thing when people have to deal with dfs in new york. alix: that is the significance of this claim but what else is on the table for deutsche bank? keri: this is one of their largest issues they have on the table. they have not had the same issues with the big mega-mortgage settlements we have seen over the last few years. this is a major legal headache
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for deutsche bank but typically, we have seen them with less issues to deal with than a lot of the big european and u.s. banks. alix: you are at the cftc when the government was working on dodd-frank. a very specific view of regulation, for example. is this the right deterrent for big thanks playing badly? tim: i cannot do exactly how deutsche bank uses but my guess is they look at the headaches they have dealt with and will not want to go through this situation again. the trick is when you are a big complex institution, you have a lot of individuals to manage and how do you set up appropriate controls to do as much as possible to prevent conduct like this? the trick for deutsche bank pivoting back to what the business model looks like is unlike some of the others who love had died -- tried to
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transition, the ability to continue to operate particularly in these markets -- this is something part of their future. being able to get this behind them is something that is important. alix: other issues, is deutsche bank on the hook for any of those? keri: they have not been fined for anything as x related. we're waiting to see if they will have any major issues on the u.s. side. so far, they have not been one of the main banks that could potentially plead guilty for fx. alix: thank you for joining us. we appreciate it. coming up next, it is the end of
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an era at ge. what the exit from finance means for the company's legacy. plus, sold out. a strong bid for the apple watch even though it won't ship for a couple of weeks. details later when "street smart " returns. ♪
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alix: the end of an era for general electric will stop the company retreating from its finance business, which was an earning power house until it robbed and company during the financial crisis. now, the ceo is looking to grow the industrial business and that could mean more deals. joining me to discuss the new ge is ed hammons and rick plus. what was your biggest take away from this conversation?
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rick: it is clear they are done being a finance company. for them, it came down to two factors. it was something you had wanted to do for a number of years. they feel like the market has come to a point where they feel like they can get for value for their assets. on top of that, they also are a systemically important financial institution, one of the biggest nonbanks of financial companies anymore. alix: they want to remove any regulation issues that come with it. does this solve that problem for them? rick: they think it will. that was a big driver of this decision. alix: in your world, when you look at the landscape, we have seen enormous deals this year. what kind of deals can we expect gigi go into?
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ed: they have the firepower now and clearly with his exit, they have shown their intention to take up industrial space. there wanted the biggest in the world that area. i think we will -- they are one of the biggest in the world in that area. alix: $165 billion worth of deals in just one week. ed: not far off what we saw in january. what does that tell us? the capacity is there and the market is ready for deals across all sectors. this is everything this week. we have seen oil, gas, farmer oil stuff. alix: in terms of what ge might buy, any word on how much they're willing to spend? offers of $13 billion. rick: the ceo is looking at
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willing to spend $3 billion to $5 billion a year. he said that last year. i think it's the right deal comes along, they are willing to go over them. alix: what is interesting and this shift is there had been some pushback. moody's warned there increasing their risk tolerance in favor of equity holders at the expense of creditors by making this shift. ge capital is where they made their money. what kind of risk is therefore ge going forward? rick: there is some concern from moody's that they're putting the risk of creditors. what the most part, this is about reducing risk for them. they see this as an opportunity to get rid of what was a volatile part of their business and really focus on the industrial businesses that will
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be there. alix: oil and gas in the next 15 years. like that is not risky. when you take a look at the stock kimye talk to analysts and they say the reason why ge has under performed other under industrial shares, is because they don't have the same world. what was the same kind of reaction we would see in the hedge fund world? ed: there is a huge increase in the short interest in ge stock over the last month. it has doubled or gone up more than that. the reason that is happening is because so many other stocks in this space have done well. a long short funds, you need to face some exposure. you see the interest go like that over the stocks. today, it was up almost 12%. that is a pretty nasty day if you had short interest in the stock. alix: we go from being just
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finance company to being a water and power company and being an oil and gas company of the next 15 years. is there a shift in the parties of the business or decade based on the folly prices we have seen? rick: he wants to keep it focused on what they have been honing in on in the last couple of years, which is oil and gas, power and water. they have a jet engine unit. those seemed to be the three biggest units on the industrial side and really where they want to keep their focus. he is not interested in buying an entire new business lines at this point. alix: what is the biggest part now 4g? rick: it comes down -- now for ge? rick: it comes down to oil and gas. this is a company that a few years ago getting rid of their
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appliances unit. there undergone a lot of change but they are really trying to focus on a couple of core, industrial areas. alix: imagine what that will grow to. thank you so much. coming up next on "street smart " the former u.s. ambassador to israel weighs in on the around deal. don't miss that -- the air run deal. -- iran deal. don't miss that interview when it we come back. ♪
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alix: welcome back. here is a look at some of the top stories. note yields is exploring the sale of its business to focus on networks. note you has -- nokia has bids
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expected as early as this month. bill ackman paid more than 90 billion -- $91 billion for a new york city penthouse. the purchase one of the city's most expensive ever. the home spans two floors as a luxury skyscraper. iran's supreme leader says all western sanctions against his country must be lifted immediately if a nuclear agreement is finalized. the opposition raises new questions about the prospect given for a deal. peter cook spoke with former u.s. ambassador to israel martin and derek. lin>> it will be very tough.
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even the supreme leader says the devil will be in the details. it will be a lot of tough bargaining. the parameters of the deal have been set. if it continues to be the case the leaderships on both sides want the deals, i think it is more likely than not they will get a deal. i suspect it won't be by the june 30 deadline. eventually, there will be a deal. >> did you take the supreme leader's comments as an indication this will be even harder to get to a final solution? >> i think that it is an indication it will be hard to get there. i am relieved in a bizarre way because i was worried about the way in which there was no real criticism of the deal in a ron -- iran. that led me to suspect there was
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something in this for them that we should have paid attention to. the fact that she is complaining about it reassures me. >> what about the notion that congress could blow this deal? there will be some tough choices for democrats in the u.s. senate as to whether or not to break with their president over the terms of this deal. what do you make of the debate within the democratic ready? >> i think it is difficult for democratic senators who are pro israel. they are being pushed into a corner and having to choose between being pro-democratic president or pro-israel. that is not a fair choice. it shouldn't be the choice they are confronted with what i think the republicans see this as a wedge issue.
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they can drive a wedge between the democrats and the pro-israel community in the u.s. they're in an awkward position. and you do find a way to get out of that corner, to be israel and supporting of the deal the president is making. >> and diplomacy with democrats on capitol hill. what is the solution for a president who wants to give congress some buy into this guilt about the ability to blow it up? >> on the one side, i'm glad to be president is reaching out. if they can find a way that will enable the senate to have a say in this but i think that is one way of dealing with that. the second is there and what the president had to say to john freedom. it was -- john friedman. we need to provide 2-d jake assistance to israel -- we need
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to provide strategic assistance to israel. a defense treaty is something the president has opened the door to. a nuclear guaranteed to israel to provide that kind of assurance to them. i think that the senate would support that any democrats could take the lead on that. an extension of the military assistance agreement that would provide greater support from israel to ensure a full array of defense against assault. other ways of strengthening israel. that would give the democrats a chance to step up and say, we are supporting israel's security but we will also support this deal because it will prevent a ron -- iran from getting nuclear weapons for the next 15 years. alix: coming up next after
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having made history through a phone call, president obama and even president raul castro are set to meet in person. will this lead to cuba's removal of the list of state sponsors of terrorism? i will have the details. ♪
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alix: welcome back. year of the top stories we're watching. goldman sachs awarding ceo a $7 million bonus if the firm meet certain targets. the bonus will pay out in 80 years and will be in addition to the $24 million company station for 2014. ebay's paypal may face a lawsuit over some of the units lending practices. the agency has been looking into paypal's products of what uses by items without immediately paying for them. investigation completed a lawsuit against ebay. ebay says it is cooperating.
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china is using an offensive system used to disrupt websites outside of its borders. the researchers are calling chinese systems a great canon. they said was used on the attacks against get help. -- github. scarlet fu is looking at the movers of the session as we round out this crazy ride. scarlet: a modest move higher. two public is seeing a lot of volume. everyone is trying to figure out why the stock is rising on heavy volume. up 5%. one billion shares traded. that is more than double the three-month average. there is no clear-cut reason. there is speculation of operations but there were no big options locks. we will continue to keep an eye on this one.
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we told you that according to people familiar, intel ended intentions to take over altera. it is old and on to some of the advanced. investors are still betting that intel is not totally dead. it did not really give up that much ground and it still climbed as much as five point 2% yesterday. people still thinking a deal could be attractive at that level. perhaps they could be pressured into reconsidering. netflix shares are moving. the best day since january after an upgrade from citigroup. analysts there see an opportunity. they say the current valuation reflects reasonable multiples and little to nothing for other international markets. they're pretty positive on the
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content lineup for 2015 and recently released content. i am looking forward to orange is the new black. alix: ima house of cards girl. meanwhile, relations between the u.s. and cuba continue to normalize. the state department we did a picture of john kerry shaking hands with cuba's foreign. that meeting came in advance of the summit of the americas in panama with the arrival of the cuban president and obama. joining me to discuss is willem marx. joining us on the phone, augusto maxwell. he co-teaches a seminar at columbia law school entitled " cuba, law policy, and transition." we have castro and obama talking
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on the phone. they'll be posing for ceremonial pictures today. what are they talking about? a gusto: it is interesting their final conversation between embarking on this was hosted by the vatican. you need a lot of blessings to navigate these choppy waters i believe one of the key things is the goal of opening embassies both in the u.s. and cuba. one of the impediments to that was the fact that cuba was on the state sponsor of state terrorism. over the years, this has been a sore point for the cubans. it was one of the things they were asking for prior to more formally opening these diplomatic relations between the two countries. alix: do you expect president
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obama to remove cuba from the list? the state department says cuba continues to harbor fugitives that are wanted in the u.s. augusto: i would be surprised if they did not. it is clear there are broader goals and policy concerns in latin america and with respect to cuba. i think they have thought very hard about the idea of normalizing relations with cuba and i think they have made that decision that they want to go forward. this in context of the broader picture is not as important. alix: in your experience having been there and talk to business owners, is there a sense this is moving quickly or is there still a lot of skepticism? willem: a lot of people i spoke to said this is a great opportunity. one of the things that is encouraging for many cubans is having these two presidents meet and talk does give emphasis and encouragement to the process of negotiating some of these final
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issues. a lot of them to do with business, things like appropriation of land. there needs to be a confidence in contract in the rule of law and cuba. you get this kind of foreign investment. infrastructure needs to be huge. alix: this speaks to your will off as being a partner in national law firms. how does this play out? what can the cuban government due to coppin state american -- to compensate americans and their claims? augusto: i don't think that is high on their agenda. ima cuban -- i am a cuban-american. i think moving forward, they are going -- they're going to be ways were some sort of compensation or ability to invest on a favorable basis
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might go forward. otherwise, u.s. investment in cuba will have to look at that risk and decide whether or not it is worth moving forward. i don't anticipate that the two governments are going to come to a global solution on the settlement. i think he will see a lot of companies move forward notwithstanding that. willem: i imagine you are devising a number of americans in terms of investing in cuba. what remains the big obstacles for them to do that? augusto: it is the cuban embargo. what we have seen since december is what discretion does the u.s. president have in shaping the embargo on cuba? what is very unique about the cuban embargo is the fact that the embargo is in the u.s.
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levels. the president has gone as far as he can with these discretionary things, lifting cuba off the state list of terrorism. to allow u.s. investment on the island where you have cruise ships or development of real estate and other things, you have to have congressional action. alix: what is the response from congress? how on board are they with the moves president obama has made? augusto: you certainly have a unique perspective. you have five cuban-american members of congress, three in the senate. three in the house. our community sees that.
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overall you see more mainstream republican interest in revisiting this with the agricultural states. the chamber of commerce is very strongly urging the lifting of the embargo. it will be interesting to see how that plays out. within the context of the u.s. domestic politics. alix: thank you so much. a fa fascinating conversation. why oaks straight capitals preparing for the worse. the apple watch finally available for preorder but you might still not be able to get one. ♪
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alix: stocks are rising. the s and p is heading for a weekly gain. where looking at nine of the s&p sectors looking to finish higher. industrials leading the way rallying near 2%. ge has a significant rally
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gaining 10% on the day. the s and p is at a fresh, all-time high. the nasdaq only 1% away from it 2000 record high. we see a rally underway. wall street capitals preparing for the worst full topic company gathering $7 billion for distress fund. joining me now to discuss is devin banerjee. why now? devin: investors have moved way too far out on the risk curve. they are taking too much risk for to incrementally return. they are investing in credits that are deteriorating in quality to try to get some incremental returns from yield an environment where interest rates are near zero. scarlet: what is this going to be focused on?
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devin: what they are hoping is for what they could do in two dozen eight. -- end 2008. they invested $6 million from that september bankruptcy. they have returned multiples of capital on those investments. there are hoping for cheap assets. they're hoping to get into the stress situations, hoping for a default or reorganization of some kind where they can transfer to an equity position. alix: they're not the only ones. if you take a look at the u.s. corporate high-yield index, it is 18% since december. why is this unique? devin: people are definitely taking notice. oak tree is sort of the biggest. it has been very successful in
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distress. this $7 billion we wrote about a day they have been able to raise and about seven months. that is $1 billion every month. the way they have structured it is $3 billion to invest initially end a $7 billion reserve they can turn on when things are really bad. if we have a market come a big correction, if this oil distress continues and the effects ripple out they will have another $7 billion reserve to turn on. alix: is there a country they are more focused on? devin: they have historically focused on the u.s. they have started to use this fund for energy opportunities. it employed about $400 million from their funds and energy opportunities in the fourth quarter. we find out in a few weeks how much they invested in the first
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quarter. they start investing in these distress energy producers and the u.s. they are buying the debt and hoping for the debt to recover or for these companies to become even more distressed and go into a restructuring were oak tree can come up with an equity business. alix: they want oil at $10. thank you for joining me. coming up, the release of a new apple product but the company still has plenty to celebrate as its new watch goes on sale. details next. ♪
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alix: breaking news regarding symantec. there's a to be considering a major sale and scarlet fu has more. scarlet: symantec is looking doing -- looking into a sale. the company has contacted pe
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firms and possible industry bidders about buying the business. there is no guarantee a deal with the done but the journal is reporting that this particular business could produce with an $8 billion in a sale. pretty sizable. and has a market cap of $17 billion. the $17 billion firm looking to perhaps shed into data storage business for $8 billion. symantec shares up about 4.5 percent today. it has given back a little bit of that with some late reporting on them considering a sale giving it a boost. alix: we want to stay in tech for you. apple saw a strong debut for its watch on sale today. the $17,000 gold version is on back order.
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possibly until july. has apple managed to succeed where others have failed? merging technology and fashion. the news today was the watch is sold out, that is crazy. was that demand or supply? alex: it could be a little bit of the supply. it is estimated 30,000 watches were sold on preorder in the first 24 hours. one million in the first weekend. this will be an interesting thing for apple because it is tim cook's first product of his own. it will be interesting to hear what they have to say in this first week of demand. alix: i am used to seeing the lines around the block. alex: tim cook is pushing it online. he wants people to browse and
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look around or set up appointments. you see in the new york store not much of a line. london china stop the optics look different. the metal barricades are not in use this time of around. it does seem he is trying to get people online to deal with some of this demand differently. alix: apple is asking artists like it was left for exclusive deals. will that work? alex: taylor swift has pulled her music off of spotify. these artists are looking for ways to make money outside of these free options like andorra, spotify. you see apple, jay-z's tidal. it will look differently in a couple of years. alix: artists have the power this time a run.
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the close is coming up on "street smart." we will be right back. ♪
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alix: welcome to our viewers around the globe. this is "street smart." stocks rising ahead of the closing bell. profits ahead of a big earnings week next week. scarlet fu at the breaking news desk. give us some context for today. scarlet: a pretty broad gain in terms of the advances to decline his ratio. three stocks for every two falling on the new york stock exchange. this is the first three-day events and smith february.
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financials are the only sector to decline in the s&p 500. jpmorgan and wells fargo will report their earnings and take things out for the earnings season on tuesday. some softer than expected economic data means that could have reason to put on the interest-rate increase from june. you see less anxiety as a result. but at the lowest level of the year and the dollar has resumed its strength, rebounding from last week. alix: i am here with lisa abramowicz carl riccadonna and chad morganlander. today, the data points that caught my eye was the import prices and they were week.
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if you take out oil, they were week. what is that end up doing? chad: i think the fed will move in september, october. that is on the back -- we have inflation at 1.5%, well below their target rate. the underemployment rate is still at 10.9%. nonetheless, they will go one-time 42015 and a systematic increase is completely off the table for 2016 as well as 2017. alix: when you take a look at the appropriations, you take a look at the markets and you see what chad's saying? you still get about that? karl: we have some very divergent forces beneath the surface on inflation. we get more information next
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week. you have inflation pushing higher. goods prices are falling. the rate of change on imports price growth is accelerating downward. that tells us the goods portion of the cpi will be very low. alix: industrial size down 6/10 of a percent. one of the largest in food and beverages. carl: you look through the details of the report and see broad-based weakness. lisa: the two-year is creeping higher. people see the potential for a rate hike. there is a complacency that not much can check this environment. you see the fed not hiking that quickly. the dollar keeping down the potential for that. people are moving away from the
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surprise to the upside with respect to economic data. alix: we do have the closing bell. the s&p up by 10 points. the nasdaq of 20. if you dig deeper you are looking at most of these sectors in the green. industrial's leading the way at almost 2%. it is financials that were flat due to a plat for the day. the dow finishing up 99 points. scarlett, give us the highlights. scarlet fu: volume is monstrous. 345 million shares. 1000% of the three-month average. this as they company plans to exit most of its finance business.
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the ceo has been fixated for a wildhile. the white line tracks the ford multiple. the orange line is the industrial peers. what you will see is that the industrial peers traded at ernest, and because of the spike in the share price it has moved up to 16 times. there is the gap. ge has continued to trail over the last couple of years. jeff wants to close that gap. with this deal perhaps this gap gets closed a little bit. alix: i love that chart. it tells an amazing story. i'm here with lisa carl, and chad.
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the news today, investors facing the prospect of declining corporate earnings, higher interest rates and you can't think of a worse time be buying the blue-chip companies. she says in my 30 year career it is one of the most unattractive propositions i have seen. rick reader is saying the same thing. there isn't a lot of value in investment grade. people have to be sensitive to it. lisa: this is my wheelhouse. honestly, i think people are looking at investment grade bonds, you're getting 3% on a company incurring more and more leverage, borrowing at a faster pace. this is not a time you want to be jumping in. the same time where else do you go? do you go to negative yields?
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do you look at the gap? it is not crazy low on a historical basis. this is the conundrum people are facing. it looks terrible, but what else? alix: rick was on the show on tuesday. he said we are going down the risk her because we have to find some kind of return. chad: that is dangerous. you have to move up the quality spectrum. moving your durations. if you think you're going to have a correction within the bond market, high yield is not going to give you a total return if you start to have volatility within a fixed income system. alix: then where? treasuries? chad: why would you go to treasuries? with global liquidity programs, it was quite effective, thank you very much.
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very high. lofty valuations. anyone that reads a history book can tell that. you have negative yields. i would be very cautious at this inflection point. i would be moving up the quality spectrum, text income, as well as taking risk off on the equality -- quality side. alix: he just said moving a little bit. i'm going to get to you. let me point out what is coloring this conversation, the fed. markets have been rallying around the idea of the fed may be pushing the timeline. he continues to favor an increase in june. speaking in florida today he says the recent readings on the economy will probably prove temporary. what was the standout from what you heard? carl: he is the most hawkish
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member. he continually wants to raise rates. he wants to liquidate the balance sheet. if he had his way we would have significant market disruptions that would impact the macroeconomy. going back to the broader debate , reaching for yield, this is what the original design of quantitative easing was supposed to achieve. it has happened in the u.s., it is now happening in europe. investors are forced to extend credit elsewhere. now that they get credit they can grow. we have been stuck in this sluggish economy. if we can extend them into the riskier corners that can be what leads us to shake off this sluggish pace of overall growth. i agree there is real interest rate risk.
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lisa: what is going to change? this has been an argument for a long time. if the fed hike could be up and it, even if the fed hike is a little bit, is that going to cause the next in this? people have been talking about this for a long time and it has not happened. chad: our outcome, you could drive a truck through that. i understand that. our inflation expectations are low. you have a 25, 15 basis points on the german tenure. we are not going to be going up a great deal. you want to be somewhat pragmatic with your allocation fixed income. alix: what about the central bank allocation? it is tarnishing the caloric as a global reserve currency.
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this struck my idea. they act the allocation and the u.s. dollar. explain this to me. carl: banks to want to hold a losing bet. they got out of that currency. the moving is surprising because they are doing the same thing the europeans are doing but they are moving to dollar. that is a great trade that was highly profitable for them. alix: why does european qe mean more for a declining euro? had is that make sense? guest: our forecast is going to continue to strengthen over the next 12-18 months. what we are telling investors to do at this point is to overweight dollar donated assets.
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we believe that is going to reverse as they pick up steam. even with picking up steam overall for 2015. lisa: i would argue not to sound catastrophic if greece were to exit the euro, and realistically that could threaten the existence of the euro. there are some questions that go pretty profound right now. it is not that people are expecting it to dissolve. but you want to go with the hardest reserve currency you can. that is more the dollar. carl: when mario draghi said we will do what ever it takes investors believe 10. the bank of japan has always been taking half measures. alix: the fed did. carl: when the fed move the currency fell.
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bank of japan, people just have a lack of conviction they will stick to the course of action. alix: it is a big week. we have a summit of the americas. we are going to hear from angela merkel. congress returns to washington tuesday. wednesday super busy. we have the ecb rate decision. ipo pricing for nc and virtue. we have inflation on friday and earnings kicking off. we have jpmorgan, bank of america, goldman sachs. carl: retail sales on tuesday. consumers have slumped in q1. it is all about how much the economy can bounce back. alix: talking about earnings outlook and where you are betting into earnings season. chad: flat for this year. when we look forward we are overweight on consumer staples
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and make a cap technology stocks. when you ask out -- x out, you will have ratings growth. this is not great. the deceleration of growth. i believe the imf will start to lower their forecast for global gdp for 2000. credit dynamics within the eurozone are lackluster. i believe mario draghi is hopeful with that growth rate for 2015. that is a dream. alix: not optimistic. [laughter] thank you for joining me. coming up next, china facing a catch 22. the central bank is trying to counter a slow down. more on this struggle after the break. ♪
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alix: here are the top stories we are watching. chinese smartphone maker breaking a world record selling 2 million devices in 24 hours. it happened during one of their flash sales. the sale was held during the fifth birthday celebration. vladimir putin is facing a problem no one anticipated. the ruvell is becoming too strong. it has become this year's best. that is hurting russia's export revenue. hong kong defectors central bank stepping in for a second day to prevent the currency from rising against the u.s. dollar. hong kong's 32-year-old peggy is under pressure.
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that is a big advance since 2011. china is facing a catch 22. the country is doing everything it can to counter an economic slowdown by giving banks a cash injection of $60 billion. at the same time the central bank is cutting rates to prevent markets from overheating. can these goals work hand-in-hand? my next guest does not think so. he saw everything from policymakers to industrial guys what was your biggest take away? kent: you have to believe the chinese government. they said they were going to completely transform the economy . they weren't going to be the last two governments which always overspent on building an infrastructure. they are changing to a higher value. that is going to mean the low value economy, basic steel, that
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is ending. alix: not to mention iron ore. china is intervening into the iron ore market cutting taxes to keep a smaller player a float. what is the long-term risk for china? ken: china imports 70% of the iron ore. for every dollar move it benefits china's economy by $1 billion. for them giving money to their local miners to stay in business and keep the price of iron ore low benefits china as a whole. alix: you said you were terrified. ken: we have seen the data, and the data is getting worse. you can see on paper how bad things are. when you see complex after complex, nothing being done people complaining i've lost my money in this deal they are
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putting all their money in the stock market. it shows you the way the economy is changing. alix: thank you. for more on the country made economy, will is joining me. and lonnie chen former mitt romney policy advisor. what did you make of the observance that it is it look good on paper that they are going to keep going to do what they will do? will: well below even what were diminished expectations. even based on numbers i think that is what his report is not surprising to us. there is softness out there. alix: how does it make since then? how can you have weekend gdp?
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>> he used the phrase catch 22. that is where the government is. if the goal is to drive down interest rates what is the next thing? it has to be the stock market. it makes perfect sense that the market is rallying. expect more fun to go back into the stock market. it may have some more legs than many expect. alix: from a policy standpoint how many more tools are left in the box? cutting the reserve ratio requirements what else can they do? lonnie: maybe not much. this is the concern. if china continues to slow down the u.s. economy is part of a global economy. what happens in china affects our ability to grow here. the other challenge we have is an unclear policy towards china.
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we have had engagement. we have been unwilling to challenge them on human rights to challenge them on these currency issues that have affected our relationship. the outlook is very cloudy. alix: i want to get your take on this. president obama highlighting his concern and that china is a bully. he said this yesterday. president obama: where we get concerned is where it is not necessarily abiding buying international norms and rules and is using its sheer size and muscle to force countries into subordinate positions. alix: you are laughing and shaking your head. lonnie: i'm thinking ahead. i'm wondering what the real agenda is going to be. this is really a time in global
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economic history where there is a leadership needed. the u.s. is falling short. not just having a strategy with respect to china but to provide a set of principles to guide things forward. when talking with china and just saying we think you are bowling your neighbors maybe that is the case, but realistically it is politics. there is more of a strategic framework necessarily to provide some certainty or guidance for what you are to expect for the relationship. lisa: i think you are right -- lonnie: i think you're right. these are real problems. the fact that you have china engaging in activity in the south china sea, let's not forget the east china sea, where they have been active. these are significant geopolitical issues. how do we handle this? alix: that is a good question.
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thank you. you are sticking with me. it was great to have you. coming up, when will washington have a house story can check with havana? ♪
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alix: welcome back. history is expected to be made when president obama meets face-to-face with rival castro -- president castro. hypothetically if a republican was commander in chief, with such a meeting be happening? would there have been any
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changes to the u.s. embargo on cuba? joining me is lonnie chen. you served at ms mitt romney's advisor. what happened if he was president? lonnie: no. this is a total change in u.s. policy. unfortunately a change in the wrong direction. but you have is essentially what you have seen across many of the different foreign-policy challenges america's has face. we gave and the other side gets. i think you have a valid -- very similar theme here. alix: with your insight into the republican party, two other candidates senators mahout leaders agree? lonnie: most republicans are on the same page. there are some that have expressed an openness to dealing with cuba. i don't think the issue is whether we deal with cuba. it is the prerequisite. that is where the debate comes. president obama has says we're
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willing to drop our pressure points for a dialogue. a lot of republicans would say we have to keep pressure on in the hopes we can have a more rational discussion. alix: which is what we're seeing with the iran negotiations within congress. does this change if we get a republican president? lonnie: it could depending on which one. with rand paul the approach is similar to the kinds of approaches you are seeing now. if it is someone like job -- jeb bush or scott walker we're going to see a more muscular foreign-policy. alix: do we walk back what is happening with cuba? lonnie: it is entirely possible. congress is the one that has to lift the embargo. the president can say we have an embassy, things like that. the actual meat of the cuba relationship lies with congress. alix: you are sticking with me for a few more minutes. coming up, hillary clinton gets in on the the island
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thrown action. -- the iron thrown action. ♪
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alix: welcome back. here are the top stories. billionaire investor who worked for george soros says trouble is looming. our monetary policy is so much more reckless so much more aggressively pushing people in this room come and everybody else on the risk curve that we are doubling down on the same policy that put us there. blackstone is going on a real estate spending spree. it is the biggest such transactions since the financial crisis. blackstone agreed to buy a
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shopping center owner for $2 billion. he will spend the $5 billion to expand to manufacturing units. stocks finishing in the green. their first three-day rally in a month. back to breaking news with scarlet fu. a look at the action that happened before the close. what do you have for us? scarlet fu: we are fixated on individual names. the theme was lackluster. everyone waits for dollars. one name is semantic. it got a late boost in trading on a report that it could get a billion dollars for data store -- data storage. they had purchased barra taws in 2005. they would spin off to focus on the anti-hacking business. according to the report, $8
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billion of valuation. the data storage business and its revenue growth over the past couple of years, formally they call it the -- i can't get my words out. information management business. they are a drop from the previous year. we have been around this to an order billion dollar revenue level for the last couple of years. this is an $11 billion market. it is a 22% market share. once again they are looking to spend this off -- spin this off. it is looking to separate that to get a higher valuation for its core business of anti-hacking. alix: thank you. moving on to politics.
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hillary clinton will officially kick off her second run for the white house sunday. this morning she posted a fresh epilogue to her 2014 memoir. she wrote i'm more convinced than ever our future in the 21st century depends on our ability to ensure that a child born in the hills of appellation or the mississippi delta, or the rio grande grows up with the same shot at success charlotte will. charlotte is her granddaughter. could this be her campaign message? with me now, lonnie chen, former romney adviser. did we hear the campaign pieces today? lonnie: maybe we did. that has been the problem all along. that is why they are eager to get underway. people don't know what the rationale for the clinton candidacy is. is it a competency rationale? is it just a mike turner in line rationale? she has to figure that out if
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she is going to be effective. can it be all of those things? the challenges issue trying to be all things to all people? that got her in trouble when she ran for president. we will have to see. she has to be more specific and focused and figure out where issue going to draw distance from president obama? there are elements that are going to be on popular. is it going to be obamacare? open questions here. alix: you see her referencing charlotte, is that a different hillary clinton now been in 2008 who seem to not really reference the fact that she was a woman running for president? lonnie: they are trying to give her rounder edges, trying to soften her. we understand why. the perception that she can't connect with people. at the end of the day what she is saying isn't that different than what democrats say. not that different than what republicans would say about the economic imperative over the next four or eight years. what is going to get going with
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campaign everyone else's effort? she has to figure that out. alix: when is the right time to launch? people can get dirt against you. what is the benefit for her? lonnie: the clintons are the most well studied family in history. i think people in her camp democratic donors are eager to have heard get started because they feel like she has been taking a lot of punching and not doling a lockout. it is a difficult question to answer. her moving sooner rather than later makes sense for a lot of different reasons. i guess she is going to get started. she has her headquarters established in brooklyn, that starts the timeline that she is required by law to start her campaign. alix: great to have you. coming up, one of the newest
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members of the billion-dollar valuation club is spending money. we look at the latest acquisition. ♪
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lonnie: alix: -- alix: with clients ranging from the gap to citibank sprinkler helped hundreds of companies manage their online presence like twitter. it completed a $46 million funding round this month and just acquired get satisfaction. the president and ceo joins me now. welcome back. carlos: it is great to be here with you. alix: why does this make sense for you? carlos: the battle for the future with the large brands is really how do you deliver great
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call it quality experiences for customers? we need to enter into a couple of other areas. one is in the website that is all around doing ratings and reviews. when was the last time you bought something that you didn't check a rating or a review? alix: i have a kid. i checked them all the time. carlos: ratings and reviews really is driving behaviors of what we buy and where we go. we did that and then game of fight it to encourage -- gameified it. people tend to contribute more. the next phase that we were really wondering about was how you do in customer care? building a community that delivers great customer care. it really flips the model around if you think of how important customer care is. alix: what does it mean? carlos: you have a problem and
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you may dilate one 800 number. -- dial a one 800 number. you want to tweet or go on a site. what it does is it delivers committed to based support. people who don't work for the company are answering questions. that is added to a database. companies really benefit from it because they don't have to spend money on providing customer service. alix: let's talk about your acquisitions spree. three already this quarter. that is pretty huge. talking about pricing. how much are you paying for these? carlos: if you would have seen me 18 months ago i was much better looking and taller. pricey. it is a wonderful time in the business for us. the social media space and the environment wherein has reached a seven-year maturity. those companies that have been in the marketplace, if they haven't obtained huge success
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basically the funding is drying up. it is creating an incredible opportunity to pick up assets that are critical in our experience delivery journey in the cloud. we are buying them at decent pricing. alix: that means i'm not going to tell you the pricing. have you seen pricing continue to rise? or are you seeing a decline? all we hear is the vc money slowing. carlos: in the space we are and it is an interesting opportunity. we are one of the companies that have evolved as one of the emerging companies that is going to survive and continue the journey. we are trying to consolidate all these pieces. what customers want is an integrated solution. they don't want to go from one system to see what is in social and go to another to respond. alix: that means valuations are going up? carlos: valuations in our space
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is going up. absolutely. alix: coming up next, exports of kentucky with you -- kentucky with you increased. what is behind the great american brown liquor boom? i got the answers. ♪
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alix: this is street smart. here are the top stories we are watching. the president of the first lady reporting an income of four and $77,000. that is down less than one person from a year ago according to tax returns. the obama's paid $93,000 in federal taxes 19.6%. news corp. are thinking to move
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to the world trade center. they are considering a joint headquarters in the skyscraper in lower manhattan. 21-year-old jordan space is -- jordan speight. his second round score broke a record set in 1976. incredible. call it the great american brown liquor boom. the british government says global exports fell 7% in 2014. america's native spirit is literally flying off the shelves. 18 million cases of u.s. bourbon and tennessee whiskey sold in 2013, a 35% increase since 2003.
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at the forefront, roots that date back to valley forge, the distillery operates out of louisville. they show just how strikingly american whiskey can compete with the finest scotches and cognac's. for more, i'm joined by andrea wilson and the first woman to chair the kentucky distillers association. welcome. great to have you. what is the deal? why is american whiskey so popular? guest: you have a couple of trends happening. there is the mixologist culture pop culture that has driven shows like madmen and boardwalk empire. all of these things have driven this enthusiasm.
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it is pretty cool what is happening. a lot of people are coming to the category. i think the one thing that we can't discount is the advent of social media and how that in it of itself really drove a lot of people. people had a way to talk about the whiskeys they like. it really was what made whiskey so hot so fast. american whiskeys. alix: carlos: and the advent -- alix: and the app the advent of home burying. -- andrea: there is a heritage with making whiskey that makes it very appealing to people. they want to learn more about
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it. that is the injury. alix: your whiskeys have a huge price range. $48 to $4000. what do i get for $4000? does it dance? [laughter] guest: you can't get it now even if you want it. that was a special release in 2013. we did not know whether the market would be welcoming. we figured we would release a small number of bottles and we were stunned. every bottle was accounted for even before we released it. they are special bottles. he chose them, with some whiskeys in barrel is old as 30 years. he just created a remarkable flavor profile. alix: is there a price point
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that seems to be really killing it now? andrea: superpremium, that is the hottest category. in the timeline you spoke about my 2009-2013, superpremium in group was at 104%. alix: what is that? connie: it depends on who you are talking to. it is probably in the 35-40 dollar range. it is based on the price of the whiskey. alix: where do you export to? are you have a lot of local reach? [indiscernible] alix: what is the most popular? connie: probably for us it would be the u.k., germany, and france. hong kong. we are going so strong in hong
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kong. and we are mainland china now. alix: what is the plan for the next the years? where do you want to grow to? give us the dirty secrets. [laughter] connie: we are focused on growing the brand. we are focused on growing a tourism element. bourbon tourism is exciting. last year we saw 725,000 visitors to kentucky just to come see the kentucky bourbon trail. it is an exciting time. those visitors were from all 50 u.s. states. people are coming. they want to learn about american whiskey. alix: very cool. you are sticking with me. next, because brown liquor is becoming a go to beverage for females we will discuss how women are making a name for themselves when it comes to
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whiskey, bourbon, and ride. -- rye. ♪
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alix: you can forget about those iconic images of don draper. my guests enjoying brown liquors is not a boys only club. the executive vice president and andrea wilson has over a decade of experience in the whiskey industry, the first woman to chair the kentucky distillers association. you have an impressive resume. you oversold johnny walker brands. what has been the shift?
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how has that shifted over the years? andrea: what men -- women have always drank whiskey. it wasn't hot, it was about vodka and vodka has been on a huge run for a long time. now people want something different. whiskey offers a complexity. it is not gender specific. it is something that if you produce a great quality whiskey people are going to love it and drink it. alix: you were a former wall street attorney. how did you wind up here? connie: it was buying accident. -- by accident. i had done legal work for the company. i joined them as director of marketing. after that i was also named evp of ministers -- michter's.
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i join a lot of senior women enjoying whiskey. he had a skill set that was transferable. what we don't see in the whiskey industry, we haven't really seen women on the protection and. distillers and blenders, and tasters. with more women drinking whiskey, that may well change in the future. alix: was there any stereotype when you got into the market? in the whiskey world of women versus men? andrea: from a production side there were women there. i just think they were being recognized as much for their contributions as men were. what's great about american whiskey in the phenomenon we're experiencing now it is allowing the visibility to those individuals, female distillers and leaders in the industry to come forward. but we hope is more young women
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will want to come to the industry. alix: when you are marketing, do you change the way to your marketing? do you want to market war -- more to women? andrea: we do not market specifically to women. both men and women drink mic hter's. there was no need to target a particular gender. [laughter] one of the interesting things i found is they have -- they don't know what the fuss is with women drinking whiskey because they grow up drinking whiskey. they have never lived in a time when women didn't drink whiskey. i think it is very meaningful because it suggests there is now a long-term shift in consumer tastes. alix: equal opportunity drinking. great to have you here.
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thank you. thank you for joining us today. thanks for bringing this alcohol . everyone is excited. that's it for street smart. have a lovely weekend. i will see you back here monday. ♪
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john: i'm john heilemann. mark: with all due respect to cher the on say, it is time to make way for hillary. ♪ john: on the show tonight, ready for hillary. rubio is ready to go. first the great clinton campaign announcement is coming on saturday or maybe sunday. definitely sometime this weekend. it'll be on twitter or maybe facebook. then she will go on to why what or maybe new hampshire -- iowa or new hampshire. or maybe it will be new mexico.


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