tv Market Makers Bloomberg March 17, 2015 10:00am-12:01pm EDT
>> live from bloomberg headquarters in new york, this is "market makers," with erik schatzker and stephanie ruhle. stephanie: israel decides whether to reelect benjamin netanyahu, no party is expected to win a majority. so someone will end up forming a coalition government. breaking up is so hard to do. consumer conglomerates are slimming down by getting rid of businesses. and i guess this deal was not a slamdunk. a slamdunk. adidas says adios to the nba.
they want to place bets on individual players and instead. welcome to "market makers," i am stephanie ruhle. joe: and i am joe, in for erik schatzker. stephanie: let's take you to the top business stories of the morning. we will take you to israel where voters continue to count ballots today in an election that is too close to call. one of the first to vote was prime minister benjamin netanyahu. he is trailing the zionist union, but both are well short of a majority.
whoever wins will have to form a coalition government. he told voters yesterday that if he is real elected will not allow the establishment of a palestinian nation. housing starts plunged last week for the first time in over four years. blame the colder than usual weather in parts of the united states. there was a rise in the number of building permits, which means it may be a temporary slump. and they have projected an unsolicited $22 million takeover. they say this substantially undervalues the company.
and japan's central bank has a warning, as it could set record stimulus in place. cheaper prices may call inflation to fall below 0%. and it looks like super mario will be coming to your smart phone. i cannot believe that mario and luigi still exist. nintendo dropped its opposition to using the characters on mobile devices. nintendo has stuck to a strategy of selling its games only on its own devices. a first-year nfl player is calling it quits because of concerns about the long-term effects of had tribal -- head
trauma. he was the team's leading tackler. according to espn, he says espn is for balance not -- football is not worth the health risk. here is another head injury. washington republicans are availing their -- unveiling their budget blueprint. let's bring in our chief washington correspondent peter cook, with the early details. let's the honest, how are they going to do this? peter: they're not going to do it in 10 years, they're going to do it in nine years according to the budget plan unveiled today. this is not going to be law but
it is setting out the republican priorities at least on the house side for spending going forward. in contrast with what the president has forward rate they're going to cut spending over the next 10 years by $5.5 trillion to achieve that balance by 2024. major changes repeal of obamacare is baked in, that would save $2 trillion on its own. major changes to medicare medicaid, and the food stamp programs. medicare would be partially privatized, the savings there would be about $458 billion. defense spending would be maintained. tom price is trying to appease everyone, sue he is adding a wartime spending budget.
that will be the source of new funds for the military to go above and beyond the sequester cap. already being accused of using gimmicks to get to his numbers. stephanie: what do you think? peter: like most budget resolutions, it is not worth the paper it is written on at this moment. it does matter this year. if the republicans can pass a budget resolution, and merge their differences, it means that tax reform could potentially get done with republicans in control in congress. a lot of this is more symbolism than anything else, but it sets out priorities and the table for the rest of this year. stephanie: not worth the paper it's printed on? that is symbolic. joe: is there anything new and
the -- in the budget? it sounds a lot like the ones i've seen before. peter: the biggest twist is this fight over defense spending. there are those in the republican ranks who want to stay at the caps or go below. one other thing that i would mention particularly important to wall street, that this legend anticipates that fannie mae and freddie mac are privatized, and that on the too big to fail front this budget anticipates removing the ability for the fdic to bail out and failed financial institution. stephanie: peter cook, thank you. joe: back to the israeli election, voters are choosing
between incumbent brian minister benjamin netanyahu, and a coalition led by herzog. our bloomberg middle east editor is in tel aviv. elliott? elliott: thank you very much. we have the polls closing in just under six hours. great to have you with me. you are quite close to benjamin netanyahu. is he on his way out? >> we think he is on the ropes. the optimal -- outcome will be very tight. the segment of the electorate of that is right of center is larger than the electorate that is left of center. so just and broad numbers of the aggregate vote share that is sympathetic to him and his point of view is greater than the
opposition. but it is a fragmented white -- right wing. he has been in power for a long time. he is focused on security issues. those issues have made it a challenging environment. elliott: and if he ends up losing the election, he ruled out the possibility of a government of national unity. do you believe that? >> there is precedent for the first part of your question when he got elected for his second run of prime minister, he lost, but was the only one who could form a government. and if he once the negotiating begins. if there is a national unity
government, who was her first as prime minister? i do not rule out him participating in a national unity government but it is highly likely that he would join in one with a rotating prime minister and him having a second shot at it. it would only work for him if he were the first in the rotation. elliott: one of the -- what will the results do for the u.s. israeli relations? president obama and benjamin yahoo! are not the best of friends -- netanyahu are not the best of friends. what will this do to the relationship? dan: at the end of the day, i do not think much. if you look in the substance of where herzog is on the issues that have been so divisive between netanyahu and the white
house at the end of the day, herzog is not going to be that far off from where netanyahu is. he's going to be just as credible -- critical as netanyahu. the only challenge is that it will be much harder for the white house to dismiss his criticism. they have said that netanyahu is a knee-jerk hawk, what will they say about herzog? elliott: the other issue, the palestinian issue, he said if i'm prime minister, no palestinians they. -- palestinian state "herzog has vowed to reignite talks with the palestinians. >> i do not think it will produce anything, because there is no hand on the palestinian
side that they can negotiate with twoo initiate a peace deal. i am highly skeptical that it will produce anything. it is true that personality matters and that the chemistry between herzog and obama will be better than between benjamin and obama, but at the end of the day it is policy disputes between the two countries, and policy will trump personality. elliott: thank you. we will be here throughout the rest of the afternoon, and evening, covering those election resultds. joe: thank you. stephanie: coming up, the housing market hits ace be fun.
boston. a chinese property broker may try to buy cushman and wakefield. they are looking to sell for about $2 billion. they are the biggest privately held provider of commercial property services. the firm is controlled by a holding company. in crimea, a celebration marking the one-year anniversary of the day the region voted to break away from ukraine and join russia. the u.s. state department called it a fake referendum. president vladimir putin said he sent russian troops to neutralize ukrainian forces. joe: back to that surprisingly
bad housing start. what do you make of this? ? stephanie: is it really a surprise? who wanted to track out of their house and looked at a bunch of apartments and homes? carl: letter alone that the ground was frozen at it was hard to continue on projects that were under way. the impact was a lot more than we initially thought. but this continues a string of economic data reports that was affected by the february weather. it was much more severe this year even relative to last year which was significantly impacted the receipt with snowfall totals, temperatures, and an easy way to look at this is heating degree days in the
country. if people are cranking their furnace more than they normally do, it is a good sign that the economy is being disrupted by this bad weather. we saw this in vehicle sales retail sales housing starts production data, we are seeing a whole swath of economic data impacted. we may be tired of hearing economists lame the weather, but it can be a disruptive factor in the economy. if we get too large and we do not see a room aren't rebound, -- get to march and do not see a rebound, we may have more problems. stephanie: the fact that permits is a positive number -- carl: this is a way that economists look at data in the winter months when you see starts down but permits up the first thing you ask yourself is was there some disruption such as unusually bad weather, and
that is exactly -- a textbook example of february. permits actually increasing, this tells us that the spring building season could very well be decent. february is not the spring building season. joe: we get a no announcement from the fomc. are there going to look straight through this? carl: one month of bad weather does not going to deter them from removing the patient language from the statement. that does not mean that this is not a patient fed, they're still going to wait around to see if this is a waobble.
they keep june on the table for central rate increases, i do not think they won't follow through with that. and they are waiting to see what the implications of the decline in oil. my guess would be september. stephanie: what is not be a bigger issue if we actually saw them reacting too bad housing data? they need to have a long-term view. she suddenly acting like a day trader. joe: she has done a good job over the years of seeing through a temporary transient bump. stephanie: thank you. "market makers" will be back. ♪
stephanie: welcome back. stocks are making another triple digit move. this time, lower. scarlet fu is in the newsroom to take us through the numbers. today is st. patrick's day historically traditionally this is a day for stocks end up in the green, which is fitting given the holiday. what is the problem? scarlet: how many st. patrick's day's have preceded a big fed meeting? it is a waiting game before the fomc statement tomorrow.
an activist investor making a proposal to the biggest casino operator to the strip. mgm is soaring after land and buildings, a hedge fund urged the company to get in on the week conversion trend, convert it real estate into equity. he says it could be worth $55 a share. keep in mind how many shares they own of the company. they took down their stake of 200 69,000 shares at the end of leicester, leaving it with nothing. that may have changed this quarter and they just have not disclosed yet. stephanie: we will be back with
>> live from bloomberg headquarters in new york, this is "market makers," with erik schatzker and stephanie ruhle. stephanie: welcome to "market makers." commercial breaks are the favorite times during market makers, is we're pretty focused on our brackets.having given yourself a team name yet ? joe: not yet. stephanie: the top business
stories of the morning. a surprise drop in housing starts. construction fell 17% in february, that is the most in four years. bad weather is getting some of the blame, and the drop may be temporary, the worse an increase in -- there was an increase in building permits obtained. sales were up 7% led by volkswagen and bmw. all five of your biggest honor markets posted gains, but strongest was in spain. they offered incentives to trade in old vehicles for scrap metal. in person familiar with the matter says apple plans to start accepting android and blackberry phones as trade-ins. the iphone is now reading
android devices in the united states. a new round of financing values the online scrapbooking start of interest -- pinterest. more than twice the value that interest based on itself last may. -- pionnterest placed on itself last may. nothing succeeds like success. glu mobile turned its prospects around with the ultra-popular kim kardashian hollywood game . they now have one with carly and kylie.
joe: procter & gamble is the latest consumer conglomerate to downsize. they are explaining a sale or ipo of some of its beauty brands. is bigger no longer batter? -- better? let's ask julie hyman. julie: procter & gamble signposted this already. there is this selloff of the beauty brands, but he was looking at a hundred bands -- brands to spin off. stephanie: what are their beauty brands? julie: aussie, several
large names. it is not a hugely performing area, that is why they are looking at this sale. joe: they put pressure on them to spin off, and then that becomes the trend. julie: it is definitely part of a cycle. i talked to a management professor at the nyu school of business, and he said we are in a shrinking cycle but the next growing cycle could be a smaller growing cycle. thepart of that could be that you do not have to have as much under the same room, you can outsource more of what you used
to do your self. part of it is also the activists we have seen coming in and pushing changes. stephanie: what about different kinds of businesses? the financial crisis wanted to be all things to all people. they wanted the best services and they did not care where they got it from, and now when nbc and abc say you are going to watch everything here, not really. we're going to find where the new content is. this is what we're seeing across industry. julie: it is not just consumer companies, but general electric would be the big example. speaking of media, they used to own a big media business for a while. the latest is that it sold off one of its financial units to refocus on its one-time
date on the top stories of the morning. it may take weeks before we know the real winner of today's election. holes show that him and yet who is trailing, but neither party is likely to win an outright majority. nintendo is finally going to go with the flow. he will now get to play super mario under smartphone. they are teaming up with another japanese company to develop new mobile games for devices that previously did not have their games on them. nintendo has only allowed its games to be played on its devices like the wii console. consumers have shifted to smartphones and tablets. a first-year nfl player is calling it quits because of the concern of long-term effects of head trauma.
he was the team's leading tackler. according to espn, he says that ball is not worth the risk. with more than 5000 nfl players suing the league, seeking damages for head injuries. stephanie: adidas has decided not to renew its contract as the nba's official outfitter after it expires in 2017. they will place more emphasis on sponsoring individual athletes. what is more important, the player, the team, or the league. pat, let's start with you, one would think you would want to be the outfitter. they want to go up and down the field with niners -- nike,
adidas or under armour gear on. pat: i wonder how much of this was adidas path decision. this might have been the nba saying you are not going to win this and when it comes available in two years. and in the nba, the players are the stars. so this might be positive, because you can focus on branding individual players, where in football or baseball you have to brands the team or the league. >> years ago they took lots of money from the apparel companies and would not let them put their logo on the uniforms. let's not forget, adam silver
has said what is coming in uniforms. do you cheapen the brand if you are sharing the space with something else? we know that is an round to the nba. we have to be thinking about that. stephanie: i do not actually think nike, under armour, adidas i think personal brands. how many personal brands have become the most important? i know dwyane wade, and his glasses, i don't really know his team. pat: it is a unique sport because of the players. if you look at the teams who have been champions over the last 30 years, you usually have one or two stars on this championship teams. they can really push their brand , and we see it in commercials. one thing that is interesting is
the point guard for the chicago bulls is an adidas guy. these can sometimes backfire because they're not getting a read of return with them. stephanie: saying he has bad knees, bad ankles, and he is bench, all of that money i've spent on these shoes, and he's not on the court. scott: it is a great marketing strategy to get the star but you cannot have the one who gets hurt. there is a fantastic player for the portland trail blazers who is an adidas rep but he does not have the resonance with fans.
if nike wants it, nike will get it. i bet you know every single individual player nike represents because they are the biggest stars in the industry. stephanie: for a long time, nike was the biggest game in town and now that is not the case anymore. scott: they knew the guys they wanted to keep. they are putting in the five years that james harden will be the next andmvp. alan iversen never won a championship amount but kids love our iversen. they love his style, and they loved him in asia. it is about individualism, cutting through the clutter, making ourselves and out. making the kids want to wear your gear. standing for something.
joe: how much of this individual ability as a function of them, and how much of it is the marketing of the company? scott: they used to joke that they do not have to push lebron or market michael because nike did that for them. the nba can say, go on the court and play, they will do the rest. stephanie: if i am adam silver i do not want nike to be the only game in town because they have so much money, i want to petition -- competition. pat: they have considerable old. they have nike and under armour who are going to begin push i suspect they will ultimately go with nike. it is so difficult, going back to the choices that adidas has made. they are strong internationally so they need to look at the
international players in the nba, and target them. i think it eat us will have a really hard time competing even for individual players because nike and under armour are ahead of them in that game. stephanie: five years from now, do you think they will still have 96% of the shoe market? historically they have been the only game in town that is not the case anymore. pat: i do not know if it is going to be that high, but i find it very difficult. nike has the advantage, and i do not see it slipping. they may go as low as 85%, but they are a strong position. stephanie: are you doing or brackets -- your brackets? pat: yes, and i do not think it
there is no one better to talk about this then paddy cosgrove. he is host to some og -f the biggest tech conferences. what is happening in ireland? five or six years ago they never would've thought it would be a hub for tech companies. paddy: scores of people showed up, and we attracted a few speakers and there were not many startups. and in five years it cannot be
more different. the number of new startups has come every week and teamwork is incredible to see. stephanie: what do you attribute it to? paddy: a combination of many factors. an incredibly deep recession from 2008-2013. you see a huge amount of activity government policy over number of decades that has been very positive and has attracted large and successful global companies in the zone. some of that magic has rubbed off on the domestic scene. stephanie: do you have the right workforce for these tech companies? paddy: that is a challenge. a good way to answer that question is i do not believe the education system of california has provided silicon valley is
workforce. i think the silicon valley attracts the best and brightest from all of the world. i think those people have gone to work for those companies. i think you're are seeing the same thing happen in dublin were many of these companies are located in dublin, and after look further field for some of their workforce. many of those employees are beginning to pop up inside of startups. joe: we want to follow up on that. the startups in ireland, do they look at the arrival of these big companies is a threat, as competition for artylready scarce talent, or do they see it as bringing in new
opportunities? paddy: they are front enemies. it is a threat because they do not pay the same salary but it swings and roundabouts. they provide a fantastic opportunity for people to get really great training about linkedin and twitter, and then after two or three years they want a different challenge and they bring all of their experience and apply it to an early stage company. that makes it happen enormously positive impact. it is not all good, it is not all bad. you can see the same thing about silicon valley. stephanie: what is the biggest challenge you are facing right now? paddy: for our company, this is
simply hiring people. until the last three years ago it was just three of us on a couch in the living room. hiring is incredibly different in its environment. hiring in dublin is a huge challenge. they have rebounded incredibly fast, and that is a factor of the technology companies that have moved here. that is putting the squeeze on everybody. you're seeing that in silicon valley as well, what we're seeing in dublin is a very low base from three years ago and in a very short space of time it has increased dramatically. stephanie: we have to leave it there. celebrate st. patrick's day.
>> live from bloomberg headquarters in new york, this is market makers with erik schatzker and stephanie ruhle. stephanie: how to win while losing. benjamin netanyahu may keep his job even if his party does not come out on top. the battle of greece's new government is just one of the regions big problems. the automated onslaught. the social media site that helps financial advisors standout in a world of robo advice websites.
welcome to the second hour of market makers. i am stephanie ruhle. joe: i am joe weisenthal. there's certainly a possibility for an accident. maybe they have capital controls -- stephanie: what do you mean by an accident? joe: they intend to keep up with their deal, but they cannot get one in time, so something happens. i think that it is impossible that it has big global ramifications for now. stephanie: for now. certainly not an easy region. these are the top business stories of the morning. a surprise drop in housing starts new home construction 17% in february. the most in four years. the cause? bad weather is getting most of the blame. it may be a temporary drop.
there was an increase in building permits last month. may search has turned down a $22 billion takeover offer for simon property. they say a bid from the largest mall owner in the u.s. does not reflect the company's true value. may search is also adopting a bill that would raise the price. it may take a while before we know the winner in today's elections. in israel regimen netanyahu and his party may be trailing the zionist union, but neither is likely to win an outright majority. the country's president will decide which party is best able to form a coalition government. that task will not automatically go to the party that wins the most seats. the process may take several weeks.
that will be confusing. just what israel needs. house republicans have come up with a budget that is likely to be opposed by not just democrats but likely many senate republicans. the plan calls for balancing the budget in nine years by cutting medicaid and food stamps, and partially privatizing medicare. the two dozen senate republicans are up for election next year. who wants to run on a budget that would cut benefits to senior citizens. citizens -- senior citizens love to vote. the u.s. state department calls a vote a fake referendum. russia denies its occupying the region. president vladimir putin says he sent in russian troops to neutralize the ukrainian forces. in baseball, the former player known as charlie hustle once back into the game. pete gross -- pete rose has
asked the commissioner to lift his lifetime ban. he is baseball's all-time leader in hits. he was suspended in 1989 for bedding and baseball games. that ruling made pete rose ineligible for the hall of fame. his request will be considered. joe: even bronner is with us now. ethan explain how this process works. even if the prime minister benjamin netanyahu's party wins the least amount of seats he could still emerge the winner? ethan: the process is messy and could take a long time. neither party has huge block of votes. there are 120 seats. it is likely in each make it
into the 20's. if one is 25 and one is 21 you could argue the 20 five winners should give the chance -- begin in the chance to form the next government and that may happen. if you do the math on the smaller parties, the zionist union under herzog could have trouble being a 61 c government. stephanie: there are not enough people to fill the seats? ethan: the other parties that he would seek to form a coalition with are not national allies. they are to the right. maybe ultraorthodox. parties that will not sit with other parties with which he may want to form a coalition. stephanie: how many fragmented parties are out there? ethan: about a dozen. and the king making parties, one of the king making parties, is under a communication minister. he is famous in israel because
when he was the communications minister he open the cell phone market in a way that everyone could afford a cell phone. cell phones are cheaper in israel than the united states. stephanie: did he profit massively? ethan: no. but he did this, and everyone loved him. he will win eight or 12 seats for his party. he will go either with herzog or with netanyahu. joe: it is always about the security questions, but that is not the only issue. what other factors are there? ethan: then yahoo! -- benjamin netanyahu has 13 previous elections on security. stephanie: security meaning what? ethan: worries about iran having a nuclear weapon. hamas, hezbollah various threats to israel's internal safety.
he repeats over and over that if the left gets in power they will pull out of the palestinian state to be formed and that will be a threat. this time that message is not working so well. assuming that the polls are correct and he does not do as well as he thought. that is probably because housing has been expensive. social economic issues are big. the other irony is that israel has been safe for five years. his focus on security has worked and he is now a victim of his own success. joe: let's say benjamin netanyahu does not return to power? what about the israeli-united states relations? ethan: they would improve. on the other hand there are 3 billion dollars a year that come to israel. it is not like the countries are not friends.
they are strained over. and palestine. herzog, if he became prime minister, would make it easier with the white house in terms of both of those issues. ultimately, i don't think he disagrees with benjamin netanyahu about iran and therefore the problem could continue after that. stephanie: there you go. joe: bloomberg news managing editor, even bronner. -- ethan bronner. stephanie: greece. can a fix the problem before there is another crisis? ♪
we are blaming bad weather for housing starts. new home construction fell 70% last month, the biggest drop in four years. parts of the united states were hit by colder than normal temperatures -- 17% last month, the biggest drop in four years. parts of the united states were hit by colder than normal temperatures. the slot may be temporary. if you want to switch from android to iphone apple will make it easy. apple plans to start accepting android and blackberry phones as trade-ins. they are trying to boost phone sales. the iphone is now officially beating android devices in the u.s.. another sign the labor market is heating up. payrolls rose and 39 states in january. the jobless rate fell in 24 states. california is the leader which added more than 67,000 jobs.
ohio is next with 25,000. payroll fell in virginia louisiana, and minnesota. joe: mario draghi stimulus and cash crunch. two huge issues facing the eurozone. we brought in the ecb former director general of market operations. he is now chairman of prime securities and joins us from frankfurt. francesco, is going to produce a meaningful acceleration in the economy? francesco: everything says it should work. in a way it is working more than expected. many people thought that most of the effect with the at the announcement. that since it came into the market the prices have moved a
lot. i mean bond yields. and the stock exchange, and the rate. the first step in the program, the per famous -- the famous portfolio, would be people would be moved from government bonds into riskier assets. it is working. of course it remains to be seen how this would translate into the real economy and inflation, which is a big worry of the ecb. so far the signs are good. they are favorable. stephanie: do you believe the greek finance minister and government officials are realistic, or have their head around how dire the situation in greece is? francesco: i think the greek situation is paradoxical in a way. the essence of the problem is
very simple. conceptually everything is clear. greece and the creditors should reach an agreement. where you would have three components. first, the greeks with a strong structural adjustment programs that would bring fairness and economic performance. the creditors should reduce the burden of debt. not the debt itself, but the burden, on greece which is excessive. third, and least importantly, greece should not be obliged to pursue as much a stare as was written in the old program. -- austerity as written in the old program. then you have the difficulty of reaching that. every day something comes that makes the process more difficult. mostly from the greek side. also, sometimes, from the side of the creditors when they seem
for the habituation of greece. the timing is getting shorter and shorter. cash problem of greece is getting more serious. what seems to be an economic recovery seems to have been broken. the improvement in the primary surplus is jeopardized. we have a tension between the obvious thing to be done and the difficulty of doing it and time running shorter and shorter. it is difficult to balance these two. eventually, i think it will be reached, an agreement, but each day it is difficult. joe: where do you come down on the case of contagion if greece leaves the market everything
would go back. with the market be ok or worse that people are expecting? francesco: i am pretty confident on one statement. the statement is that the problem for europe, now, would be less than two years ago from frankfurt. in relative terms, it would not be as bad as it would have been. i am much less certain about the absolute damage it could do to europe. normally, a nats is a bad thing. -- ignorance is a bad thing. i would say it is a good thing. i don't want to know how bad it would be for your. i would prefer to be ignorant and not do the experiment that would come from the exit. i worry first about your. stephanie: isn't ignorance the
problem? since europe got into the pattern of kicking the can down the road and mario draghi saying we will do whatever it takes, isn't that a celebration of ignorance? ignoring the fundamental problems in europe, glazing over them, and making it ok for the market? francesco: in europe you need something like the three arrows in japan. you need a monetary policy dealing with insufficient demand maybe some help on the fiscal side. some room to maneuver there, it is very limited. the countries would need more help on demand, those with a high deficit or debt there's limited room. and a very strong structural measure. i think the last one, the structural measures, it is
proving to be the most difficult . now the ecb is taking care of monetary policy and fiscal policies saying not much can be done on the structural side. doing something but not quite enough and not quickly enough. i think, again, we need something like the three arrows and it remains to be seen if it would add enough, especially on the structural measures. joe: how concerned are you about the greece political scenario playing out in other countries? the rise of radical parties in spain and france? do you think this could be a long-term problem for the eurozone? francesco: there's an emulation. because this is ridiculous felt in spain, because of a similar movement of two cities.
i would not exaggerate the problem. it is not there that greece is having a lot of advantages from the new policy of the new government. it is not clear that if another country would go the same way they would get a lot of benefits. this would be a hindrance to a similar approach being taken in other peripheral countries. joe: thank you, francensco papadia the former director of monetary operations at the ecb. stephanie: let's give you a quick look at the markets. here is scarlet fu in the newsroom. scarlet: only one member of the doubt, coca-cola is up. it is a broad retreat. the dollar is also weaker a
rare down day for the u.s. dollar and oil dropping 242.63. today is a day of positive, and the markets are taking a breather before the fed statement tomorrow at 2:00 and yellen's news conference at 2:30. we also had economic data on housing starts showing an unexpected drop that continues a trend of economic data in the u.s., disappointing compared to what they were looking for. this measures the actual figures relative to consensus not the degree of weakness in each of the reports. you can see a steady decline over the past month. going to a longer 15 years back here is a surprise index for that. you can see the drop lower in the last couple of months that has taken us to the lowest level since march of 2009, the bottom of the last bear market.
>> market -- live from bloomberg headquarters in new york, this is market makers with erik schatzker and stephanie ruhle. stephanie: i'm stephanie ruhle. joe: another triple digit move. let's go back to scarlet fu. scarlet: i wanted tell you about arcadia national. this is not a great sign from the parent company of jeopardy's -- of jefferies.
trading revenue tumbled by 56 percent because of a slowdown in trading and fewer high-yield options. it could be an indicator of how the trading results fixed income to. jpmorgan will report its first quarter results on april 14. if the investment bank chief, as he said in late february, the year was off to a start -- strong start but we will see how that plays through march. goldman sachs and morgan stanley those lost 1%. this is an update from mgm, it is staging the biggest rally in two years. volume in the stock is three times the daily average after a land in buildings. a hedge fund urge the company to get into the reconversion trend. and to spin off hotels. there is a note out of deutsche bank that says mgm completing this transaction is likely -- is
not likely if there is a low probability. he doesn't seem meaningful value from that transaction according to carlo at deutsche bank. he said he was open to the idea of a reconversion, so this is not exactly a conflict between mgm and land and buildings. we will keep you posted. as we enter the final hour of trading in europe, look at how european stocks are declining. the decks losing 1.5% as german investor confidence miss forecasted. it does not rise as expected. this beat of economic surprises coming out of the eurozone, 80 euro is a bit stronger in the second day of meetings. stephanie: i want to go back to the plunge and fixed income trading. down 56%. it is not jefferies alone.
fixed income used to be the most beautiful place. that is where i came from at the big banks. three years ago morgan stanley's ceo said he doesn't want to spend as much money there. today the story was broken that goldman sachs is out of fixed income into asset management where they put in 100 billion dollars last year. it is up 11%. when you get this news out of jefferies, we saw a rich handler's letter two weeks ago. the start of the new your letter where he was not talking about fixed income or equity trading, he said let's search for rescue deals. the rescue for fxcm they made a ton of dough. they orchestrated the rescue of knight capital. the old school high-yield corporate bond business that made banks so much money feels like it is over. joe: every once in a while you hear of one quarter were someone
did well on trading revenue. this seems to be a story that comes up quarter after quarter since the financial crisis. a trading slowdown. it seems like this is going away. stephanie: we are pointing to the fact that so much of the top talent at the bank in top income have left banks in part because they cannot take risks, and because the guys want to get paid. though: left to say this is the golden air of thinking and argue with him. he says it is the golden air of banking if you are an investor not an employee. six years ago you wanted to be an employee at a bank now the tables have turned. that talent has left the building. you can see it in how the banks are performing. joe: speaking of volatility this is the seven out of the eight last days have been triple movements on the dow.
every time we are sitting here i'm looking at that and it is 150 up or 200 down. stephanie: people are starting to believe we could see a pullback in the equity markets. if we do, if you believe in the long-term horizon that the u.s. economy isn't doing so well. if you believe warren buffett to says the united states is filled with boatloads of opportunity, this may be a chance to buy. the one reason you're not his valuations. when i look at shake shack, no matter how much i love the burgers, it is hard to justify their valuation. how much could a burger place with six items grow that much? it is delicious, though. we will take a quick break. we will return helping man against machine. i liked as a woman against machine. how social media can make financial advisors stand from anonymous websites. ♪
stephanie: welcome back to market makers. i'm stephanie ruhle. financial advisors are under siege from the rubble advice websites offering strategies. to combat the automated onslaught they conjure into hearsay social. the media management company providing financial advisors with tools to highlight their value. clara shih is the founder. she joins us from san francisco. what is the value proposition of hearsay? clara: here's a social offers predictive analytics to advisors so they know when to reach out, where to reach out, and what to say. stephanie: why just the financial industry? clara: right now we want it to be laser focused. we want to provide predictive
insights on social media and across platforms including the web, mobile, and beyond social. stephanie: if i posted on facebook that i'm so proud of my daughter is going to college would you take that data and to say to my jp morgan financial advisor, are you helping this woman big you're out how to pay for school? clara: that's right. assuming you are connected to your advisor and we cochair advisor on how to do this, we use a combination of natural language processing and machine learning to pick out social signals from what these clients are sharing. based on the signals we pick up on, we predict to the advisor when they should reach out and what they should say. in example you gave, that is the content of the conversation. how do you start planning for college and paying for it? stephanie: if i argue that that creeps me out a little. if i post on facebook my daughter is going to college, do
i want someone to take that data and sell me a product? clara: billions of consumers are on social media and mobile devices. they have voted and said that people actually want to trade information if they are getting something of value in return. joe: how our financial advisors connected to their clients? people in finance are restricted in what they can do and how they can market themselves. how are they making those connections happen? clara: that is a great question. there is an art to it. there was an art to getting someone's phone number or contact information after meeting them at an arts gala, it is the same of social media. there is etiquette. a big part of the we do is coach financial advisors on when the right time is to connect and the value they can provide so they can be compelling for the clients. stephanie: do social media users
realize -- when i go on my facebook page and there is an advertisement for me to lose my belly fat and whiten my teeth it hurts my feelings thinking, what can i be putting in the universe that big data folks thinks this is what i need? clara: in your case the target is off, but it's different in an ad as to one-on-one sharing between clients and advisors. that is is what makes a powerful. financial services have always been personal, about relationships, social. when we look at the battleground of automation, we see what is happening with self driving cars watson, and when it comes to financial services it is personal. joe: how many advisers are using your platform? clara: we have over 100,000 advisors on seven of the top 10 global financial services.
they get it is not either or. it is not just high-tech and automated, or about providing traditional advice. it needs to be a combination. the best of both worlds. your arming eric visors with the latest technologies and tools so they can prepare -- you are arming your advisors with the latest technologies and tools so they can prepare for the onslaught of automation. stephanie: if i'm scared of social media i would say help me, but what are the results you are getting? clara: for financial advisers we look at new client acquisitions and specifically at new high net worth client acquisition. then growth and a u.n. -- aum asset under management, and what information is the client getting to the firm?
joe: i'm curious about the competition between the human advisors and the robot advisers. i take the human advisors can make the case that their client should be staying with humans. clara: it is fascinating. if you look at travel agents a year -- a decade ago, the websites replaced travel agents that we used to go to. at hearsay we believe financial services are different. unlike a commoditized flight over tell room each person's financial needs are different unique and emotional. it is someone's dreams. sending your child to college saving for retirement, getting your first home. that is where we see human advisors stepping up having the skills, using technology to
achieve those productivity and efficiency gains, and freeing time to what they can uniquely delivered -- the human touch. stephanie: when are you taking the business public? clara: good question. we're building the business at this point. the long-term plan is to transform the industry and save advisors from the fate of travel agents. stephanie: thank you so much for joining us. claire side --clara shih the founder of hearsay social. joe: four hours from now we will get the first idea of how the election in israel went. exit polls will come out in a race that has been too close to call. prime minister benjamin netanyahu, the polls indicate his party is trading -- is trailing the zionist majority.
house republicans are they can balance the budget in less than 10 years without raising taxes. they revealed a budget repealing obamacare, cutting medicare cutting food stamps. few republicans up for reelection next you want to run on a budget that cuts funding for the elderly. $11 billion more than twice the value that pinterest placed on itself last may. stephanie: when we return, the fastest-growing gambling spot in the world macau, is going in reverse. we'll see what happened. ♪
stephanie: welcome back to market makers i am stephanie ruhle. joe: i'm joe weisenthal. i have fascinated by the collapse in the count. the rate at which the estimates are being cut. the never-ending boom. stephanie: it was just maybe a year or a year and a half ago, that was the place to be. casinos are opening in every other state not that exciting but the cow was the destination. joe: we have a chart.
our top economist made it. it shows the sales of hong kong jewelry and clocks, high-end versus the macau gaming revenue. there are a couple of things i'm fascinated by. one is looking at the yellow line how dramatically the macau gaming revenues are collapsing. also you have a correlation of high-end jewelry sales in hong kong. it is like there is a slowdown among the elite rich buyers in china. going to macau or hong kong to buy assets. it is indicative of what is happening in china. the slowdown, anticorruption drives preventing the elite from getting money out of the country. stephanie: with regard to corruption there are so many of these that are fearful over the last six months. saying if there is a crackdown and officials are using macau as the center to look for these
people, why would you go spending all of this money? on the cash, luxury items, and in casinos when you know you are becoming a target? that is the last thing they want. joe: and the results speak for themselves. stephanie: you can even see in the images, in addition to the hotels, there were 8 cranes. there is a huge amount of real estate development. many of those who go to the cow want new and exciting -- go to macau want to new and exciting. they want new restaurants. i the developers going to stop what they are doing and rethink it? it makes me think the cosmopolitan resort in las vegas, deutsche bank, is underwater with that. what will happen in macau? joe: it seems fitting that these
hour. bloomberg television is on the markets. midway through the u.s. trading day on wall street, the question is is volatility back. we have seen swings in the dow with it swinging or falling by at least 100 points for the fourth straight a. currently off by 170 one points. oil dipping below $43 a barrel. $43.45 right now. taking a low anyway you look at it. this is the derivative strategist at in km holdings. earlier it was written that today's a day of pause because we are on hold until the fed comes out with the announcement tomorrow. we are seeing moves if you want to measure by the doubt. jim: trading values have been off considering the s&p is at the same level that it was at the end of november last year. arguably the direction of the
market, albeit with higher volatility, has been in place or a while. scarlet: we have got a lot of places but ultimately got nowhere? jim: that's right. and there is the potential for it to be higher, showing that we have shifted from the past couple of years. from 10 to 12, meaning that the environment of sharper and longer duration pullbacks, we still think of those in the context of a bull market for stocks. it is been like that for a couple of years starting in the late 1990's. scarlet: should the fed decided to drop the patients and move ahead with a rate increase in june or september what does that mean for equities? is the great bull market over? jim: if you look at the relationship between monetary policy in the u.s. and six, it argues for a relatively low
volatility. we have to economic cycles. the 1990's and the 2000s. in each case the fed began to start --. the entire time of the fed tightening occurred within the context of structural low implied volatility. the point is that the monetary policy tightening is not inherently destabilizing for the u.s. equities. scarlet: people are saying this time is different because we are in unprecedented territory. on alibaba, and in the news, the shares were upgraded to a by. tomorrow many of the inside early investors will be able to share cells. jim: 100 million of the shares are employee shares and they will continue to be locked up past the first quarter earnings
in mid-may. 137 million shares that come up. 15% of outstanding shares. consider that the colony became public at $68 in september increased 75%, came in 30%. we have an almost price target of 100 20 five dollars. we think the expectation is priced in. we go out and sell at 75 by at 92.5, and do that for $.80. scarlet: you are looking to take advantage of the next earnings? thank you so much. ♪
♪ pimm: welcome to "money clip" where we bring you the best news. i am pimm fox fit around the world, israeli citizens vote. concerns about prime minister benjamin netanyahu and one of his challengers who might threaten his reelection. adidas chops the nba and chooses a player over a team to support his logo. and politics, republicans put together a budget cut $5.5 trillion in government spending. some in the gop are on board.