tv Bloomberg Markets Bloomberg June 17, 2015 10:00am-11:01am EDT
minutes until janet yellen's conference. erik: been lost key one billions of dollars from the world's biggest firms. hampton home sales are on the rise. some of theabout most expensive properties in one of the most expensive places in the world. good morning. erik: it is time to have a look at what is going on in financial markets. that is where we begin this hour. at 2 p.m. we hear from the fed. at 2:30 p.m. we hear from janet yellen.
investors are positioning themselves ahead of this announcement. the gaming, if you will, goes on always in the hours before the fed announces. we not expect a policy change, but we ge do expect to get the feds read on the economy. tovia: the expecting the fed downgrade its forecast for u.s. growth. and for the dots to move on the chart. we start in greece. prime minister says you can blame him if there is no deal to unlock bailout funds. the government will say the big no if the demands are unacceptable. negotiations are close to breaking down once again. officials have build tomorrow's meeting as a last chance. meanwhile, the former chief economist of goldman sachs still think the deal can be reached, despite the odds. >> it is a game of chicken, it
seems to me. along that in all the last moment there will be some kind of deal. right now, it seems pretty outrageous to say. olivia: greece could miss payments on its debt if there is no deal by the end of this month. you can see all of the interview right here tonight on charlie rose as 7:00 p.m. eastern time on bloomberg tv. , ak: shares of fedex quarterly profit missed estimates, thanks in part to lower fuel surcharges. the board raised the mandatory retirement age to 75. the ceo has been more than four decades. makes botox ist
getting the treatment for double chins. they acquired the company for $2.1 billion. it makes the only approved nonsurgical treatment for double chins. i have no idea how that works. you're fortunate you will are not a candidate for it. sanctions against russia are pressuring russia. if the agreement is finalized, the sanctions could be extended to january. china is drafting a construction plan for its disputed territory on the spratly islands. it says it wants to build lighthouses, telecommunication warningnd tsunami bases. it is sparking fears that it is building a military location.
china and australia have signed a free-trade agreement. tony abbott says that the deal will change both countries for the better. there will be a 5% tariff on chinese goods. boeing has received a much-needed boost for its turbo jet program. of itsunced it sold 20 upgraded 747 jets to a russian cargo airline. declining forn four engine planes. starbucks is shutting down its bakery shops. all 23 locations will be closed by next fall. starbucks bought the chain three years ago for $100 million, but the company says starbucks stores will still sell the bigs goods. we will have more for you in the next few minutes. coming up in the next hour, he was the sheriff of wall street until yesterday.
see my exit interview with the former head of yorks financial n lawsky. been los and we look at what the world would look like after a greece default. and fitbit is the market leader s market -- fitness market. how can they avoid being the next blackberry? olivia: ura holdout. -- ura holdout. blackberrya holdout. erik schatzker is canadian and a blackberry fan. we are standing by for today's big announcement. there is virtually no chance of a rate hike, but a maybe the
last meeting that they can say that. erik: we are looking at some of the risks ahead with mark, a professor at the university who has collaborated for years. an advisor to several banks. obvious question out of the way. policy change today? mark: no way. highly unlikely. erik: so what is going to change? mark: the statement is going to peas ofost interesting news. she has been talking about a rate increase. erik: ricardo? ricardo: the rate increase will come. we try to figure out when. i'm exciting to hear how she will weigh in with the inflation
consideration and employment incineration. -- consideration. erik: what about the market consideration. how much of a factor -- there whicho other issues people think are weighing on the lines of fed policymakers. the impact that a change in fed policy is going to have on the national market and the other is on emerging market. s. mark: i think the fed wants to make is that most protectable -- of rate increases predictable set of rate increases. i think the focus of the fed is going to be on the u.s. economy and pulling the u.s. economy out of the financial crisis. erik: concerns not withstanding? mark: yeah. olivia: the economists we surveyed expect they're going to downcast--
expectations for the u.s. market. ricardo: the gap between the price level and where it should be as large. given that, heightening too soon on the fear of an inflation that is not there could be dangerous, is notlly if the growth robust. mark: if we look at the data today, there are some question marks. those who think there's going to be a rate hike are building in a forecast of what they think is going to happen. of area that you see areas inflation pressures that you see wages starting to increase and prices. t commodity those arguing in favor of rate hikes are doing it based on forecast of where they think the economy is headed. olivia: i believe we have some
sound from the head of the imf who said last week, janet yellen, hang on until 2016. christine: we think there is a case for waiting to raise rates until they are more tangible signs of wage or price inflation that are currently evidence. so, in other words. we believe a rate hike would be better off in early 2016. olivia: what do you think about that? she does not have to listen. it is one opinion. having said that, janet yellen has been an outing that it will come before the end .f 2015 mark: i think that janet yellen is going to stress that she is
going to move cautiously. inthere is a rate hike september as suspected, she is going to stress that subsequent rate hikes are going to depend on what unfolds. seen what we have transpire over the last six weeks in europe make me wonder what the chances the fed looses control. if the market is drawing conclusions about the data that leads traders and investors to inflationere is building in the system and we begin to see rates backup, either on the long and/or short and, what does that mean? mark: the u.s. economy is not doing well. the rate hike will be justified. the euro area is a concern.
it may be the biggest question mark. ricardo: the situation in greece is one that is hard to anticipate. we are on a day-to-day forecast. exit, which isek not at all unlikely, is a moment for europe. we don't know what will happen. maybe very little will happen. erik: i want to thank you both. a pleasure having you here. we know the announcement is coming in. janet yellen is coming in at 230. news just broke on microsoft. julie hyman is in the newsroom. julie: two executive departures -- ention, stephen
and marklopand penn. penn run hillary -- ran hillary clinton's campaign in 2008. mica soft is forming a new team called the windows and devices group. the other restructurings are part of that formation of that team. microsoft is saying it's senior leadership team has 12 executives. we are still going through all the changes here and what the implications of those changes are. the stock is little changed at investors areause
it has been a busy morning for m&a. julie hyman will fill us in. julie: capping off of blockbuster year for pharma already, the maker of hospital supplies for wind care and respiratory health is buying welch allen for 2.1 billion. sharest with allergan trading higher. kythera is buying in order to get the treatment to get rid of double chin. it is a little confusing, allergan is actually ou and bevame
allergan. it is the fifth biggest -- now let's take a look at hill ron. it is trading at a record today after the acquisition of welch allen. also, we have continued speculation about what is going on with t-mobile. the latest is that telecom, the owner of t-mobile, maybe in talks with comcast for a takeover, not dish. we are seeing dish down there he slightly today. olivia: a look at some more top stories this morning. otherthe u.s. and five deal. remain part of a
the deadline is coming up. please in the republic of georgia say that a tiger that broke loose killed one man and wounded another. the zoo said that all lines of tigers had been found -- lions and tigers has been found dead. .t is raining hard in texas flooded and schools closed after the storm made landfall in corpus christi. it is now raining an area still recovering from deadly floods over the memorial day weekend. four years ago, some might say it was a different world for wall street. was appointed.
under his reign, the department aggressively's pursue cases of money laundering. it pressed for the firing of dozens of executives. askedday, we sat down and him if he thought that wall street had been punished enough. we want to wall street that is healing and getting its bearings again and is starting to thrive and grow. at the same time, if there continued to be people within the industry who want to flout the rules and cheat and commit fraud, they need to be held accountable. i think you can hold both those ideas it if you are a thoughtful person, in your mind at once. there's a point in prosecuting. what you achieve as a prosecutor is supposed to function as a deterrent so others do not follow in the path of the wrongdoers. had he knows that has happened? ben lawsky: i think it takes
time to judge that. the best way to judge it is overtime. we now have four years at dfs to acts slowed? bad i don't think i can say that today. we have had most recently the libor scandal and fx trading scandal and between those two, that was conduct that took place from 2011, 2012. those were clear cases of some individuals committing very fraudulent conduct. when we think about that, we haven't think and look in the -- we have to look in the mirror and say are we doing enough? to nameu found a way and shame and force people to resign. would you say that is your signature achievement? ben lawsky: that is the best we could do, given that we did not
.ave authority we need more deterrence in the system. that was a very important achievement, an important thing for us to do. i hope it continues. yesterday was his last day on the job. i asked him if he is taking any time off. he said one day. he starts his consulting firm. as of tomorrow. olivia: surely great things to come. erik: he is going to help companies navigate through the regulatory thicket. he knows a lot about bitcoin. olivia: i would like it if you got on the board of going -- i would like it if he got on the
olivia: greece has just two weeks before a 1.6 billion euro payment is due to the imf. deal is still no bailout in sight. the parties seem further apart than ever and the longer they go without an agreement, the more cash investors and ordinary greek citizens are pulling out of the country. tom: greece is on life support and the greek people knew it. they are pulling their cash out of banks and ever increasing amounts. takenlion euros have been out of greek banks since november 2014. the posits currently stand at 133 billion euro. 12 months ago, the figure was nearer 260 billion euro --
hundred 60 billion euro. euro have billion been injected. but these cannot agree over the next course. if it is not agreed, the triage could come to an end. emergencyequire an procedure, capital controls. those controls could restrict the amount of money withdrawn or transferred abroad as happened with cyprus in 2013. thanks there stopped people from spending -- sending more than 20,000 euros to foreign accounts and limited daily cash withdrawals to 300 euros. behout a deal, it could bitter medicine for people to swallow. olivia: it seems increasingly people are talking about the possibility of capital controls.
they do not necessarily mean a default. the default is not necessarily grexit. erik: the chances of something important happening between is probablymorrow exceedingly slim. i want to know, meantime, what dennis yellen has to say. if she makes specific remarks about greece, i will take notice. what does greece has to do with u.s. stock, what is it mean for u.s. investors, still much more to come. erik: i'm going to take this opportunity to say goodbye. olivia: and ciao. ♪
morning's top headlines. investors are waiting to hear what the fed says about raising interest rates. janet yellen and others wrap up their two-day meeting in washington today. etting they b will keep the rates close to zero, but that it will be raised in september. live coverage during bloomberg market day. republicans in congress are considering a new path for the fast-track trade bill. they are now looking at reviving president obama's trade agenda by adding a fast-track basel to an unrelated bill. the plan is designed to bypass house democrats. worker aid to pass a bill. thes a sign of how badly oil prices have hit opec. it is the first time they took less than $1 trillion. who survived a
shark attack is not talking about the terrifying experience. north in the water off of carolina when he was attacked. he lost his left arm and now has two options. myter: i can try to live life the way i was and make an effort to do that, even though i do not have an arm. or i can let this be complete debilitating and bring my life down and ruin it. out of those two, there is only one that i would choose to do and that is to try to fight and lives a normal life. olivia: an hour before the teenage boy was attacked, a shark bit a 12-year-old girl. she also lost her arm and suffered a severe leg injury. those are your top stories at the hour. still to come, much more, including when china's stock market bubble will burst.
just $85 million, you can get a beachfront property in the hamptons. more on the summer sales later on this hour. its ipo.gearing up for we that coming up at 11 a.m. greek prime minister alexis tsipras says he is ready to take the blame for refusing a deal. says thatce minister is good spires out of control. -- spiral out of control. us is antonio garcia pascal. let's start with you. how likely is the greek default?
you want to look at it in a realistic way, by missing the payment on june 5 and bundling payments until the end of the month, it is a form of default. i spent time with mario draghi and he is doing everything possible to keep funding going into the central bank of greece to support the banking system. as i have told you before, the is the banking system. he has a tough board and some of the members think that the ecb has already done too much to keep the banking system afloat there. i think this is all going to hit by the end of the month. we can spend another 10 days or so talking about all of this. i think the crucial point is going to be the end of the month. olivia: could you quote a probability?
bill: you could be facing a cyprus type of situation with capital controls. we will see how this plays out. there is a sense of game and ship and everything is being played out in the public, rather room.athering in oua olivia: will talk about the possible fallout. i want to pull out a visual that shows the pressure on the greek banking system, showing there has been an incredible amount of capital coming out of the greek banks. those are private sector deposit accounts from 100 billion euros millioneak 200 and 30 130 million.k and thelikely do think is
default? anthony: it is likely. the final decision is on the head of the state. a few others and then alexis tsipras aired that is what makes it very difficult. we may have this weekend a meeting of the heads of state that could move greek closer to a default that you mentioned for closer to a solution. i think both are so possible. as we mentioned, if you get to the end of the month without a deal, is will be very difficult. is will be impossible to continue funding. olivia: are capital controls the first up to the path of default
and how likely are capital controls. antonio: you can have a missed payment on june 30 and the decision, and as a result of that, the greek authorities have to oppose them -- impose them. if there is no decision, it is very likely that one has to have a baseline scenario of capital controls. outflows,the international transfers, and credit card payments. olivia: what do you think about that? do you think is will go down cyprus style as we are calling it? every three months, the chinese gdp grows by the size of the entire greek economy.
other people say this is a lehman style moment where the whole house of cards could come down. wel: the point here is that are talking about the eurozone, one of the largest economies in the world. the last thing that the heads of the eurozone want is another problem. they are just coming out of a recession. you have a deal with vladimir merkel doesaine and not want another problem on her hands. theuld not underestimate effect of greece on the market. we have got to be prepared. he spoke to mario draghi last week. sense ofve any contingency planning for a greek default? what are european officials doing? bill: he is doing everything possible to keep the flow of money up, but it takes two to
tango and the greeks have to give a little bit. where the greeks have their own problem, their own constituencies. alexis tsipras said that he would not touch pensions and one isthe key demands of the imf to have pension and labor reform. privatization is going to be taken care of. i think that is the big one. there has to be some give their, one way or another. it is one of those things where we are just going to go to the last minute. they may even find some sort of extension. i would say technical default, very possible. the greek people do not want to leave the eurozone. he did not happen in the case of cyprus. i think we will get some sort of agreement, but don't count it.on what people forget is that even
n agreement,a the greeks have to live up to it. out, ini went to pick -- 2010, the greeks agreed there was a primary deficit of more than 10% to a primary balance last year, the largest reversal. they have done a lot of heavy lifting. bill: the whole process started in 2010. olivia: i appreciate your time is always. and my thanks to antonio. don't go away, more ahead. ♪
bloomberg market day. we are one hour into the trading session and it is time to get you caught up on the market action around the world. i want to start with the euro. you can see it slightly down now. we had more comments from alexis tsipras, saying that he will take responsibility to say a big note to u.s. is -- to greece's creditors. we had the eu saying that greece cannot be on the margins like a make-believe economy. ouch. the athens stock exchange dropped over the last two days, down about 3%. i would love to see a day with his equity benchmark is not one of the worst performing in the world. the stoxx 600 down as well.
the finance minister for germany is putting contingency plans in place in case there is not a deal by june 30, the deadline greece's bailout end. go up, it isprices good for this company. oil prices are gaining. and telecom italia, it may increase its stake to as much as 15%. you are looking at green there. do not be full. we have not see much green in euro. we are seeing losses pretty much across the board. julie? julie: we got the oil inventories, a few minutes ago. barrels, a bigger
drop in estimated. oil had been rising going into this report on expectations that we would see a drawdown. still at relatively high levels. because the price has rebounded, there's attempt nation for the oil providers to just keep right on pumping a lot of oil. energy is one of the best-performing groups and the snp. we are seeing companies like valero on the rise. one of the implications of the drawdown in oil is that there is relatively high demand and refineries are pumping like provide summer feel. changes, not unusual on a fed day. i thought for fun, we could look of the past couple of days when
we had a fed meeting. take a look at my bloomberg wasinal there and this april 29, the fed. 18 point swing before we closed lower by about 4/10 of 1%. revised numbers for first-quarter gdp which showed not a very half picture for the economy in the first quarter. that also weighed on stocks. olivia: so many people holding their firepower, i would be interested in seeing what volume is. it is the q and a. julie: 2:30 p.m. olivia: now i want to turn to asia. the nikkei -- one big story as of the region, japan reporting this writing --de data across asia disappointing trade data across asia. , singapore, both
reporting figures, both missing estimates. singapore reported a drop in shipment. japan is out of the bright spot. if you get china, india, taiwan, all these places reporting their own drops in exports. the external demand is not yet ideal at this point. one of the stories the finance pros are interested in thatmorning, here is one caught our eye. speculation that a chinese stock market bubble is finally ready to burst. a bust could comes in. self.story repeats it it is possible that we will have a notable crash in the next few months.
the turnover ratio over the average holding. a week.s about there is even a shorter holding. period. the odds of a crash is increasing. olivia: joining me is pimm fox. is upanghai composite hundred 30% over the past 12 years. why would anybody think that is not sustainable? pimm: just a few figures for you. about a hundred 70,000 new created everyeing day by retail investors in china. it is see here -- going all the way back to june of 2006. so far up this year more than 60%.
index is up more than 120%. talk about the absolute numbers. the value, the market cap of all the stocks being traded, it is over $10 trillion. there you go. take a look at the u.s., 20 telling dollars, aspect has seven chilean, and the shenzhen, -- 10 chilean trillion. mutual funds listed in hong kong are now able to go into china and into the mainland and get investors there. you have more money flooding into those kinds of investments. have a combination, big retail
investors. something like 81% of the market trading turns over once a month. they trade at least once a month. olivia: huge amounts of retail investors. change in regulations. the central bank greasing the wheels of stimulants. pimm: it was from real estate. olivia: we are saying that, watch out now. pimm: you have to keep having new money come in in order to keep the stocks going up. if that does not happen, there's nothing underneath it. olivia: thank you. with us for the next hour. much more, including, do you have $85 million to spare? details, next. ♪
olivia: welcome back. sales of homes in the hamptons, the posh long island enclave, are on the rise again. it was by two and a half percent $920,000. $20,000 -- great to have you here, dottie. fullye market flee bounced back? dottie: absolutely. back.re the problems with the hamptons is that there are not a lot of
transactions because it is a small amount of property. you have a quarter where you sell a house that was $20 theion, it will throw numbers off. you have to look at the whole year. where are the strongest pockets of the market? we heard the market has collapsed. $1.5 million. not the ultra high-end, it is high anyplace else. in the summer it takes a hiatus. those take a little longer. it is pretty brisk. the rental market is probably the best year ever. the average price is $1.7
million. it is the highest it has been in seven years. olivia: wow. i want to talk about the super former, including the each property of andy warhol. it is stunning. how much are you asking and who is going to buy this thing? actually it is a bargain. $85 million because it is on 30 acres of oceanfront. there are 300 acres of canerve, meaning nobody build on it. it is all new ocean. arns built by b carl fisher. there are six homes. it is not like one big mcmansion. olivia: it is like ira veterans
place.r's m, you: there is a gy can ride horses, it was a fishing village. i do not think there's anything you can compare it to. the ocean spot is like no other. ofvia: i have never heard 300 acres in the hamptons on sale. million, you could get waterfront. . just did it oceanfront olivia: how about this house. this is the $40 million south hampton cam compound. it is in the heart of
the most exquisite part of southhampton. you can get something for $20 ition on the ocean -- depends on what part of the hamptons you are in. it is like boardwalk and park place in monopoly. , it iss only so much limited. second homes or on the rise and i think we're going to see more foreigners in the hamptons. olivia: we will leave it there. thank you so much. i appreciate your time. still to come in the next hour of bloomberg market day, much more. ♪