tv Bloomberg Markets Bloomberg May 27, 2015 3:00pm-4:01pm EDT
-- we will hear from bill gross. alix: and the fee for presidential elections are asked to be delayed as officials come under fire. is outand mary meeker with her annual internet trend report. we will interview her on her take of trend technology. scarlet: good afternoon. i'm scarlet fu reunited with alix steel. alix: we are seeing a rally underway with the dow jones up i -- techits and text box stocks leading the rally. greece is also moving the markets according to some traders on the floor, saying the
emergency liquidity was unchanged for greek banks, the assumption being that they did not need that money, that deposit withdrawals stopped. but then they say we are not very close. there is so much rhetoric and talk about whether -- and the europeans don't want to let it go without a lot of conditions. alix: let's get to oil prices. you have a stronger dollar so that is perhaps one reason why oil prices are down by .9%. a bigger reason is iraqi exports could increase, nearing a record of three and three-quarter million barrels a day. that is more oversupply on the market. sounds familiar. alix: sounds like an opec
meeting. we are also watching the 30 year because we see the money flow into the 30 year as the yield falls lower. you have one money manager who says hang onto your 30 year treasuries and maybe you should buy more as a hedge against potential risk in the stock market. scarlet: we will keep you up-to-date on all the market action. let's get you to the top stories crossing the bloomberg terminal at this hour. the european soccer body calling for the post, the fee for presidential election. they made their call in warsaw following the arrest of several officials in zurich. may boycott the congress. corruption investigations into tarnished the image of football as a whole. we will have more on this story later this hour. bailout talks and greece
are said to be going nowhere. greece will probably miss the deadline for a deal. toldnational officials bloomberg that greece is not close to reaching a deal with the imf in european commission. scarlet: banc of america may end up making more cuts in its trading unit. speaking at a conference in a, bank of america ceo brian moynihan says there may be more cuts. if the environment stays flat with less volatility, we will have two keep working. we have worked it down to one level, too decent returns. scarlet: he said resolving all the legal cases was their biggest accomplishment. alix: the federal it may -- federal aviation administration says it's going to examine the emotional health of american pilots.
medicalill undergo screenings and the committee will examine the awareness and reporting of emotional and mental health issues. scarlet: goldman sachs's number one in london when it comes to paying notices. goldman paid london bankers on average of $299,000 in bonuses. seen theirers have bonuses squeezed the last couple of years. tony blair is leaving his post as the international community's mideast envoy. the quartet appointed blair in 2007 what they goal of developing the palestinian economy and institutions. scarlet: the obama administration expanding detection for waterways to keep them free of pollutants. move defies republican members of congress who say it
represents government overreach. this comes as the epa and the army corps of engineers issue final regulations on what rivers, streams and wetlands are waters of the u.s. coming up in the next half hour, hillary clinton is campaigning in south carolina today. what were the issues she's going to focus on? plus what kind of swag she is selling on her website. this and im so into have something picked out for your daughter already. later this hour, larry summers explains why both sides of the greek talks need to move to solve the never-ending financial crisis. alix: and the founder of staples retails before cosco releases its report. scarlet: bill gross admitting he , callinghe german bund it well-timed but not
necessarily well executed. he had shorted the german bond back in april. erik schatzker is live with the bond team right now. erik: as scarlet just said, you short of at this lifetime being well-timed but not well executed. i'd like to know what you mean by that. mean bungled and i know you have to create some excitement on the broadcast but what i'm that was -- what i meant was at the same moment i thought about it, i had not had the time to put the appropriate amount of positions to take advantage of the german bund prices going down in yield. so there will be less spontaneous expression from bill gross in the future? bill: i hope not.
if anything, i want to continue to tell you what i think, to basically open my books, but at the same time, to leave the room and start putting some trades on. more to do with how quickly you are able to put on the trade and less about how you had to structure it? structuring, also. i thought yields would go up more slowly and less quickly. to the extent the structure i produced which in technical terms was an option strangled with selling calls and selling the quickness of the move ,n terms of the price drop which is 50 basis point higher in yield was surprising to me.
it was poorly executed from the standpoint of the structure as of the traitsming themselves. persuasivelyte that it still makes sense to arbitrage the yield differential nds and german bu treasuries. for those who have not read it, explain. and: what needs to be done what needs to be observed is the global monetary policy has proceeded at different paces in different countries with different total amounts. you have a set of different policy rates and a set of different policies with quantitative easing here, no quantitative easing in the the policy rate in the united states in the future
as indicated by the yield curve is 2.5%. the rate in germany is 5%. if the economies normalize, they would have to be the same. between two point 5% and .5% in germany is significant from the standpoint of a historical spread. what other relative value type trades appeal to you right now? observes and one expect in the relevant countries and emerging countries for nominal growth rates to come closer together, several observations come out of this. you can observe some overvalued stock markets and undervalued stock markets.
i think germany and the u.k. are very attractive stock markets relative to those future policy rates. states, the bonds are very attractive and in their foreign-policy rate is 6% or so and that's going to be difficult to achieve. this type of framework can lead you subjectively to an assessment of value not only in bond markets, but stock markets as well. that?how do you express when i came out to see you in newport beach month ago, you talked about taking the global unconstrained bond fund and putting it into equities -- i took it to mean you were thinking perhaps of m&a arbitrage opportunities. not that you are arbitrage and the u.s. stock market.
bill: i think that you can do both. prices are nearing and ending ifterms of the bull market, i told you we were going to have a crash, it does mean to me that we are going to end with a whimper as well as a bang. canhe united states, you sell strangles or sell call against a strong move in the united states. markets that are expected to be stronger, you can follow a different strategy. expect interest rates that go down much further, the same type of strategy i spoke to
a few minutes ago can be employed. newof this depends on the neutral policy rates not only in the united dates but most countries. as i have talked about before and as fed officials have talked about frequently, it's a subjective number that we are just going to have to find as we move along. erik: what about bond market volatility? your view is that it should be fairly contained. over the last month, we've seen quite a bit of price action in the rates markets across the world. bill: i think the objective of policymakers, certainly mario draghi with his cutie program and in the united states with janet yellen and fisher -- two tempora volatility, they don't want a tantrum. they want a measured move. if that's the direction interest
rates are going in terms of the higher level of interest rates, central bankers have been fighting this volatility or six yearsr five with quantitative easing policies and language that speaks to a longer time and slow-moving policy changes. volatility is more noise as opposed to actual volatility, if in fact central bankers can keep a lid on policy rate changes. before we go, is there a play for volatility in greece? bill: there's too much uncertainty there. what politicians decide to do at 50-50ink is perhaps a proposition.
i'm not in the move -- i'm not in the room, so greece could have an effect on financial markets depending on which way it goes. we've seen a little of that today but for bill gross, i'm staying out of that one. would like to you see the odds more asymmetrically tilted in your favor. thank you very much. anus is all gross at j capital. alix: lots more coming up. rick santorum is expected to announce another run for the white house. we discuss whether the republican is a contender or a clinical pretender. -- political pretender. ♪
scarlet: welcome back to the bloomberg market day. let's look at how the markets are trading with about 45 minutes left to go. you have about three stocks higher for everyone that is down forcross the board gains the s&p, dow and nasdaq. only five members in the dow's 30 constituents are declining, so an overwhelming number of gainers there. one more republican has thrown there had into the race for the white house. pennsylvania senator rick santorum sent a letter to supporters today announcing he's going to make another go of it. with more on this, "with all due respect" anger john heilemann joins us. what did he accomplish and what does he hope to accomplish this time? john: he got pretty far last time -- he was the runner-up in
the republican nomination contest in terms of delegates. hadon the iowa caucuses and some trouble in new hampshire and south carolina but then he stuck around and one the trifecta. he kept campaigning all the way till the very end. -- in a thorn in rodney romney's side and demonstrated he could get a lot of votes. he starting right where he started in 2012, which is down in the margin of error in national polling and even in iowa. so he's starting with no boost from his performance in 2012. he's going to have to build from the ground up again. he thinks he's a good retail politician and he can do it again. but the field is a lot more crowded with a lot more contenders who are the same , christianlitician conservative, very conservative candidates on the far right.
he's going to have a tougher field to deal with. hillary clinton kicking campaign in south carolina. she lost big there to barack obama in 2008. who does she need to be talking to? : she's talking to the people she needs to talk to. she has to do some repair work with the african-american community in south carolina. there were a lot of hard feelings where african-american voters felt -- held disrespected by the clintons. mendas tried to go and some fences and talk to women as she is trying to do across the country. by emphasizing that issue, her campaign feels she can talk to women of all ethnic backgrounds,
so it's the first time she's been there since 2008. it is not the most glorious homecoming. she's got some work to do but i think she can get it done. to tune in ate rick santorum mega-donor foster there's -- foster phrase is a guest. campaign open its website and on offer are the usual cups and so on. pantsuitsual is the t-shirt. it can be yours for $30. of love it. remember when i wore those horrible pantsuits. scarlet: she is kind of embracing it. we are looking,
scarlet: today, the u.s. attorney general invited executives from the for, the organization is he -- that oversees soccer worldwide. alix: a major american sportswear company is described as having paid into a's words market -- sports marketing company for rights to the team. bloomberg has just reported that nike is working with authorities and maybe the company described in the indictment. brendan greeley has the details. walk to the's indictment -- nike is interested in getting into soccer right
around that time. deal96, brazil closes the for sponsorship and we know this is something nike did at the time. they pay $160 million to the brazilian football federation for sponsorship. also undisclosed, the company pays $40 million into this bank -- into the bank account. that is the sum of money at issue here and it is the marketing firm named in the indictment also. here is what we know -- there's a major sportswear firm involved in this. if you fit the puzzle pieces together, it is clear it has to be nike. the only statement bloomberg has from nike is that they are working with them. scarlet: is there anyone as involved even in an 10 gentle way as nike?
brendan: i talked to for a different feature in the world cup, the head of football for nike. brazil is so important to them. it was a $40 million business when they decided to get into it. they made $2 billion last year and they are almost catching up with adidas. i think we have a clip of my conversation where he lays it out. we don't have the clip, but what he says is if nike were a country, nike would be brazil. everyone's second favorite team is brazil. north america is a $12 billion revenue for nike. this quadruple the amount anywhere else in the world. brendan: they don't need to bribe to get there, this is the
culture of fee for. this is what happens when you do business with all the countries that do business with fee for. nike doesn't need to bribe anyone. we have not confirmed it is nike or a bribe, but this is what happens when you do business this way. nike buys teams and adidas works directly with fee for. we don't yet have any information on how a deed is might have been involved. alix: good stuff. i'm say goodbye to you and thank you for joining me. lots more coming up on bloomberg market day. stay with us. ♪
walmart. we want to get to julie hyman at the breaking news desk. julie: apparently walmart and tracy morgan have reported a settlement of the suit involving the crash that resulted when a walmart truck driver crashed into the vehicle tracy morgan was traveling in on the new jersey turnpike. the terms are confidential, but they have some sort of settlement here. this happened nearly one year last year and actually killed a comedian who was in the car with tracy morgan . he was injured severely, so there have been various legal proceedings that have been going on since then. it looks like on the civil side between walmart and tracy morgan himself, there has been a settlement. the terms are confidential. some topwant to get to headlines crossing the bloomberg terminal at this hour. corruption charges are rocking the world of soccer today. in a dramatic rate, swiss police
arrested seven fee for officials. they are probing whether they roque laws. soccer executives were charged in new york along with four marketing officials. the justice department vowed more arrests in a widening investigation of wire fraud and money laundering. the fee for president defended his leadership today. i am the fee for president and i am the fee for president until the 29th of may. by nationalasked associations to be a candidate. they put me as the candidate, but i am still the fee for president. a president.the fif alix: the union of football associations is calling for the
postponement of presidential elections and say they may boycott this week's fifa conference. bailout talks in greece are said to be going nowhere. they will probably miss the deadline for the deal. international officials say greece is not close to reaching a deal with the imf and european commission. some trying moments last week aboard a singapore airlines jet. an airbus a3 30 had to go into a dissent to restore power to its engines after they both malfunctioned in bad weather. the plane was cruising at 39,000 feet. one engine returned almost immediately but the pilot had to descend to restore normal operation to the second. the aircraft with 100 82 passengers lost about 13,000 feet before power return. it did land safely in shanghai. ministers from the group of seven industrial nations are
in dresden, germany to discuss key global issues. talks start today and runs through friday. hans nichols is there and is joined by larry summers to discuss the greek bailout and what is necessary to avoid an economic crisis. this greek situation will be much better if they can work it out in some way. both sides will have to move and greece has got to get more serious, determined and clear on what reforms it is going to take. that's not going to be politically easy, but the europeans need to recognize there are limits to the degree of austerity that can be imposed and ultimately problems get solved through growth, they don't just get solved through austerity. they are going to need to work with the greeks on a strategy for growth. i hope and i expect, but there is far from certainty that something will get worked out. hans: at this summit?
larry: the greeks are not at this summit. but i think there is some time left and with good spirit on looking into the abyss that it would be for greece if this does not work out and this terribly risky situation that it would be for europe if it doesn't work out, i am hopeful common ground will be found. hans: does that mean there is a risk beyond europe for global growth? it seems like we are talking about contagion differently than the previous ones. larry: i don't think anybody knows. people could not have imagined a $4.5 billion hedge fund could bring the financial system to a halt. ben bernanke, wise as he was, famously said subprime was no big deal on a systemic basis. thee were many who believed world was ready and cushioned
for what happened at lehman brothers and how wrong they were. greek failure and seeing what it's contagion consequences are on -- are an experiment no one should want to run. are they doing too much, too little? will leave the administration to speak for itself. of thee very much aware stake the united states has in europe. has: one thing the u.s. weighed in on is the value of do remember the currency.nese larry: it is up in real terms against china's trading part
owners against the time when they had a 10% trading surplus. it's about a 2% trade surplus right now. that is in the range of what happens to countries, so i don't think there is the systemic undervaluation problem that there was and i don't think it happened automatically. i think that was a tribute to the economic diplomacy of president obama, secretary geithner, and many others. but it's time to recognize there -- hans: can you have an economic summit without china and brazil? larry: sure, you can. there are crucial issues facing the united states, europe and japan. top for me is secular stagnation. the fact the growth recovery for
this recession has been manifestly inadequate and working out what to do with it for the industrial world should -- should be a priority. no other problem are we going to solve unless we are able to accelerate growth. alix: that was former treasury secretary larry summers speaking from the g7 summit in germany. annualup, mary meeker's internet friends report is a favorite of the technology industry. we will look into the crystal ball of the internet, next. ♪
alix: welcome back to the bloomberg market day. i'm alix steel. we are just 15 minutes before the closing bell. i want to bring in julie hyman with more. are seeing stocks rally -- we've had all three major averages rebounding from yesterday's steepest declines we've seen all month and now we see the biggest advance we've seen in two weeks as we bounceback. the nasdaq has been the best performer and is rising to the highs of the session. in particular, some of the stocks doing well include google . google shares rising today and a heavyweight in the nasdaq. there was an interesting note out today from bank of america-merrill lynch, saying that within google, youtube is billion business and
could grow to an $80 billion business. i decided to look into my bloomberg terminal to see what other market caps would be close . it's probably a little hard to read that you are looking at companies like ebay, time warner . battle -- could be valued as highly as any of those other companies. some of the other stats they give is that revenue was up to over eight ilion dollars. then it has one billion monthly active users. an interesting note on google today. i also wanted to take a look at another move we are seeing in technology. that has to do with radcom. broadcom. i have two intraday charts of both stocks. for broadcom.t is both of these stocks spiking and
broadcom is among the best performers. part of the interesting trend we have seen where not only does acquiree rise,-- but the potential acquirers are rising as well. that has become the trend this year. alix: cost cutting versus a growth story. thank you so much. a good outlook into the close. let's take a look at the top stories crossing the bloomberg terminal. the fcc is trying to help consumers hang up on unwanted calls and text messages. they're issuing rules today targeting robo calls and spam text messages, specifically those that target mobile phones. are the topne calls complaint to the fcc with more than 200,000 lodged in 2014.
ebay has a new strategy to protect advertisers. merchants will pay for ads only if they lead to actual sales. sellers will be able to specify pay.ercentage they will the higher the percentage, the more prominent the ad will be. ford's new go drive program offers one-way rides with guaranteed parking. it's an attempt to tap into the growing market of on demand driving. mers 80's are also developing programs that offer rentals by the minute. powerpoint presentations usually get little fanfare, but mary meeker gets the valley talking her 197 slideted presentation today. andy chang has in very busy joins us now with some of the
biggest takeaways. what was the biggest take away for you? emily: we have been very busy poring through this. she has been doing this report since 2001 and it is something a lot of people really wait for. points the trends she out seem obvious but it is the hard data she puts to these trend that make you go wow. so, of course, people are spending more time on their phones but she says adults are spending 2.8 hours a day on their phones. almost threeng hours a day on our phones. isn't that depressing? i believe it. when i am in makeup, i'm scrolling through my phone while they try to put makeup on me. companies points out like facebook and twitter, you see revenue per user stagnating re is no more growth
to be had. spot is video -- a lot more people are consuming video and mobile video with facebook thing 4 billion video views a day, up four times in the last six months. she also highlights twitch, a live the streaming gaming company with 100 million monthly users and that user ship is up 122%. we will be speaking with someone from twitch on our show. something else she is betting big on is a buy button. she thinks companies like twitter, facebook and google tould all have buy buttons allow us to buy things where we are when we see it. you don't have to go to another website to complete the transaction. we will be ripping up this report on "bloomberg west." a lot of interesting trends to monitor. the power ofout
kids? how are they proliferating in the internet world? emily: kids are using their phones even more than you and i do. but when it comes to social networking, the top four social media apps -- facebook, instagram, snap trap -- stat chat and twitter. look at that -- facebook and instagram are by far at the top and of course facebook owns instagram, so facebook is in a good position to on this universe that young adults are looking at online. facebook'sng about $19 billion purchase of we chat -- is it worth $19 billion? i think you are talking about whatsapp. one of the interesting thing about messaging apps is that they will become hogs were content consumption.
able to read articles within facebook itself without leaving to go to another media site. these messaging apps are going to be more and more a place where people want to consume their content. leave mediahat companies? we see more and more consolidation in the online media space. this leave individual websites and media startups? i will be talking to jonathan abrams who founded a company .hich curates your twitter feed but will people want to use apps like that? these are things we will be discussing coming up on "bloomberg west." gox: still ahead, why costs is the king of the bulk consumer. we will ask a longtime retail executive, next. ♪
watching-stop we are as we head to the closes cosco. the warehouse chain is winning the hearts of old shoppers, surpassing sam's club, which saw its worst first or sales decline in years. joining me now is someone who is known as the pioneer in the big stenberg, whomas serves as a vc investor at places like lululemon. thank you for joining us. tom: thank you for having me. sales willow cosco be up about 4.4%. what is cost go doing right that sam's club is not? tom: cosco has always had a very strong is this focus. they aim at the very serious business customer and try to pick up the serious consumer and
high and consumer user as an ancillary byproduct. sam's has always had more of a consumer focus and ultimately, the cosco strategy will prove more effective. morgan stanley added cost go to its hold and buy list until 2018. would you agree if you look at the retailer that this is one you would want to be betting on for the longer-term? a greathink they are company and they do a good job selling you the fundamentals in bulk and they do a particularly you job bringing in things didn't know you needed, but when you see it, you've got to buy it. i find myself when i go to cosco, buying shirts there and shorts there and all kinds of things that were not on my shopping list. certain categories like wine and beer, there are terrific values, so they are a very tough competitor. the challenge to cosco overtime
comes in the fact that you have online competitors like hawks.com who may do a better job than they do online, which is one of cost go toss weaknesses. alix: taking a broader look at the u.s. consumer, we got a bizarre read on the luxury retail space -- tiffany versus michael kors. what went wrong with michael course? -- michael kors. tom cole and things are never as good or as bad as they seem. great for years and all of a sudden they fell out of favor and no longer are any good. they have a terrific product presentation, but michael cores was perceived as being able to do nothing wrong and low and behold, their stuff is not quite as hot as it once
was and you see the field evening out again. as a retailer, how do you know when your brand has peaked? what is that magical moment? tom: there's nothing that substitutes being close to the customer. young to be close to the customer from the office personnel, sales associates in the store and getting honest and fair feedback. respond to that with inyou are acting days or you are going to lose. tourism, lack of demand for their watches, what sort of demand are you seeing? affected thear has trade. every other market
except new york city where we got hammered. is that a factor for sure? the first quarter was not good, weatherwise, and that hurt. that in general, businesses are soft because businesses are saving money. about your talk other 48 -- the vc world. at 40 billionber -- at what point do you say bubble? tom: you have to be very careful making those conclusions. uber is one of the greatest business models the world has ever seen. there's almost limitless attentional. it is overvalued at $40 billion. examples, insta
card or task rabbit, these are companies that are just not going to make it. the business models are flawed and i hope the public will show them. when you see a company like snapchat wanting to go public, is that a cash out culture causing its own bubble bursting? tom: if you can get away with it, the private markets are great. you cannot deal with all the hassles of dodd-frank and sarbanes-oxley, more power to you. likeof these companies snapchat which have a terrific that form and a strong differentiating model will get away with it. you are the founder and former ceo of staples. staple is in a merger right now.
what's the best practice as staples tries to take over? tom: i very much hopes the government approves this merger. it would allow them to a strong competitor to compete with the behemoth, amazon, he seems intent on taking over the world. that combination would be very powerful stopping amazon and walmart and some of the other big powers, they would become equal power. staples will feel pressure to develop certain aspects and i think the guys are clever and i hope they make a deal. alix: great to see you and thank you for joining us. we will be back with the close. ♪
[applause] bell ringing] the day isame of rally -- the nasdaq closing at a record high while the dow and s&p seeing it just day in two weeks. the nasdaq is really the story, with tech leading the way, seeing its biggest gain in four months and a record high, finally playing catch-up to the s&p and dow. i'm joined by joe weisenthal -- it was kind of a green day across the board. almost 2%. joe: we talked about the selloff and the fed -- alix: you did, i was on vacation. joe: we saw the transportation sector