And more with julie hyman but lets get you to the top story that were following. Billionaire investor bill ackman whose firm is the target of a government investigation into possible manipulation of herbalife stocks that no one from his office has been questioned or subpoenaed as part of that probe. In an interview earlier he said that while a contractor has been questioned by the fbi or the department of justice no one no employee of his was involved. Ackman and his hedge fund have ways to more than twoyear campaign against herbal life saying it is a pyramid scheme. He said his statements have been backed up by research. We have not encouraged anyone to make false statements and it do not need to make a false statement about herbalife to be negative. The truth is what is powerful and the truth is the companys harming people. Mark peaceful protests resumed as the manhunt continues for the people who shot two police officers. They were wounded during a protest outside fergusons police story wednesday night. The fallout of a shooting of a black teenager by a white officer last year. Consumer Sentiment Index fell to a fourmonth low. Americans are optimistic about the economy but that is tempered by weaker income expectations and rebounding gas prices. The gauge of Current Conditions which measures how americans feel about their personal finance also hit a fourmonth low. German Alan Greenspan said there is not right now is a veryproblem caused by the fact that Capital Investment has been falling far short of the requirements necessary to keep the Capital Stock growing and therefore productivity. It is not working. He says congress should address the issue. Both republicans and democrats are reluctant to do it. That is a look at the top stories we are following. President obama is stepping up his criticism of the 47 republican senators who signed an open letter to the iranian leadership. He says he is embarrassed by the effort to undermine Nuclear Talks with iran. Peter cook has more on the story. Good afternoon. Peter the fallout does continue. Coming with an interview that is airing monday. The president was asked about the letter to irans leaders that calls and question whether congress would honor any agreement. He said he is embarrassed for the senators who signed it adding president obama drafting a letter to the ayatollahs of the claim is our mortal enemy and saying do not do with the president because she cannot trust him to follow through, that is close to unprecedented. Mark the letter continues to face criticism here in the u. S. And abroad as well. This is the front page of the new york daily news. The letter fuels mistrust and is not helpful to the talks that is resuming. He says the letters will make an agreement in a more difficult to reach. Mark they are not signing showing any regret . They have been surprised by the backlash. Their larger point, we talked with wisconsin senator ron johnson. There is no good deal under this circumstance. We need to impose greater sanctions. That is what rot iran to the table and we could get a better deal but not with this president , not under the current framework. Peter he says he has no regrets except who it was addressed to. Saying it may be a tactical error to send it to iranian leadership. Mark turning to the ongoing war on terror and isil. Jessica stern is an expert in the author of the new book isis state of terror and thank you for being here. The reports were hearing, are the true that isis was so brutal that even al qaeda did not want to be associated with them . That is true. Al qaeda try to monitor its image and it does not like groups affiliated with it to be too brutal especially to kill too many muslims. Mark isis and al qaeda are in a de facto war at this point . Guest sometimes they cooperate sometimes they compete. They are competing but that does not mean they will be competing forever. Mark competing for what . Gusest attention and the ability to recruit. Mark what is their vision . Guest they really believe that the end times are coming soon and a lot of their actions are dictated by what they believe happens during the end times. It is not that they think they can force the end times to come more quickly but they like carrying out what they believe are the signs that the end times are near. Mark are the signs inclusive murdering those who do not share their vision . Guest they see their battle against what they call room which many people interpret as the west. I believe we should have thought more carefully about how we went in and how we left. We made a mistake in my view. We made a mistake both times. We left far too precipitously especially leaving removing our diplomatic presence, our political presence. Mark is that something as there is a vacuum and there is an individual or group waiting . To fill that vacuum guest this was a democracy that favored shiites and not sunnis. Mark you briefly mentioned a moment ago about financing. I sell is becoming more sophisticated and how does this. One way is i commandeering oil fields. What are the other ways they are raising money . Rex they are selling antiquities that the steel. They are actually apparently selling they are involved in prostitution for money as well as for their fighters. They are have involvement in crime of all kinds, smuggling of all kinds. Mark this seems to be counterintuitive to a religious message which some members have been putting out in social media. Why this disconnect . Guest in some ways their religious message could be seen as a marketing ploy. I certainly think that some of the people involved leaving it but they have more worldly ambitions including maintaining and advancing their territory. Mark it seems that and correct me if i am wrong that social media, their ability to manipulate social media has helped raise the profile. Guest absolutely. We inadvertently fall into the trap. Mark how so . Guest when we spread their videos, that is what they want to happen. Mark we talked about the religious message. Why are youth the young people particularly vulnerable to that message, does it have a seductive influence over the young . Rex it\ guest they are seductive. They claim they have established a caliphate. For some it would seem that the violence itself must be seductive. Mark youre right that you write that they are an Insurgent Army and an idea. What idea is that end is the International Community have the wherewithal to address all of those factors simultaneously . Guest it is going to take an International Effort and there is a military response, there is a diplomatic response, there is a social media response. It will take an enormous effort in the private companies are going to have to be involved especially in regard to social media. When we see the terror and the beheadings, when we see young people, children being used to execute people, this would seem on the surface not a group that you can negotiate with. Guest i understand what you mean. When i say we need to be involved politically, i mean we need to bolster unhealthier Iraqi Government be less sectarian. I am a believer that taught it that does not mean the government should stock to cash talk to them. Mark jessica stern, the author. Thanks for being here. We will check the top stories for this friday. Cuba braces for an influx of tourists as relations between the u. S. And the communist island nation warmup. That when we return. Mark the benchmark japanese stock index closed above 19,000 with the first time in almost 15 years. Since hitting its low. 6 years ago the nikkei is up 172 . Japanese stocks are up more than 10 this year. The Prime Minister of greece says the come three country is fulfilling its commitments on the economy. The Prime Minister spoke to reporters saying he is optimistic a solution found. But i believe that we will solve all these misunderstandings and we will go on with this compromise we did and our intention is to implement the decisions. Mark european leaders say they will not give any more emergency aid until the reform their economy. It was another record year for the organization that supervises college sports. It was up 8 . 3 4 is [inaudible] and the money i getst consumers but perhaps a Silver Lining on inflation. We will have around people discussion when bottom line continues in just a moment. Mark u. S. Consumer confidence fell in march through four month low. The university of michigan said its into index dropped to n. Thank you both. What did we learn . Guest we saw it in the nickel Sales Numbers and in retail sales earlier this week and now we see it in the sentiment figures as well. This is based on the responses from the members of the survey. Participants in the survey. And those complaints were concentrated in the north and midwest and even in the south. It is an anomaly until you ignore it and look at the next round of data. This will be a reoccurring theme as her look through the february data. Next week we have housing. Who builds houses when there is three furyk feet of snow in new england . We will see a lot of this weather impact. It might be better for march because they get the socalled pentup demand that people talk about. We feel better. Guest this is the real question. March should come roaring in. If we do not see that that raises a serious question about the health of the economy. Mark if this is an anomaly do investors see it that way also . Julie this week has been so volatile in terms of what we have seen in guest reaction stock reaction. Theyre looking at Economic Data but that is the bad is good scenario. They are trying to game the fed. It seems another driving force has been the dollar. It has been the health of the consumer but it seems like investors are willing to look past that but they are focusing on what the dollar is doing. Carl asked about u. S. Households and he said they are relatively insensitive to the recent strengthened dollar. What about the goods they are purchasing . There is an outlook that prices should fall further or we have not seen any gain in prices. We have seen declines. We have seen pricing pressure in part because of the u. S. Dollar. I am a u. S. Company buying my goods abroad selling them in the u. S. In theory because the dollar has strengthened. That should be good news. However it does not seem to be effectively working out that way in part because if you look at a n example the big exporter is china. They have fallen 2 so youre not getting the same imbalance like you are with the euro. My contracts are traced in dollars, they are not priced in the local currency. That cost is remaining constant at least for now. Mark the Producer Price index showing the effects of the strong dollar. What do you say see . Guest the next place to look is import prices and we do import prices. Lets look outside of oil. We do see import prices falling so china is the exception because they are pegging their currency to the u. S. Dollar but everywhere else we are saying the prices falling and that is showing up in the ppi and showing up on consumer shelves in the cpi. The good cpi is sinking into negative territory so we are importing deflation from elsewhere and that means consumer inflation is sluggish. The fed has talked about taking the leap of faith and raising rates are starting their rate hiking cycle even if inflation is below target. They have gone on to express concern that they might not be comfortable making that movie of the latest arrow on inflation is pointing down. Mark what do we do when the fed is having this meeting, the fomc is having this meeting and you have strength in the jobs market and inflation that is still below target. What is the fed to do . Julie i have no idea and it is hard to be part of the fed because you do have the dual mandate. If they are going in opposite directions you have a problem. Guest they take patient out to make the transition to being a datadriven fed. That being said, the data are not justifying the move. Next week they probably remove the patient language. It does not guarantee the start of rate hikes in june and then the fed monitors things and they wait to see what q2 gdp looks like which means they will wait until the midyear mark which puts it temper as they scenario for the fed. Julie to come back to the dollar, the dollar is going to be at least a little bit of a weight on Second Quarter gdp. Guest i agree but we saw a whiff of this when imports surged. We see new orders for domestic industry decelerating and new export orders falling into contraction. The dollar will have significant consequences for the economy and this will lead lead thise thefed [inaudible] mark we will continue to have Team Coverage and Janet Yellens press conferences next week. Main street businesses go global. That is next. Mark welcome back to the second half hour of bottom line on bloomberg television. Thanks for staying with us. Lets get you some of the top stories we are following. Lets check with the price of crude oil. Down 4. 5 at 44. 93. Down 4. 51 . Activist bill ackman said no one from his office has been questioned or subpoenaed as part of the investigation. He said a contractor has been questioned, no employee of his was involved. He and his head Fund Hedge Fund have waged a more than twoyear campaign against herbalife saying the Nutrition Company is a pyramid scheme. It would not surprise me that the fdc does something. They cannot survive unless they change to make their business legal. Herbalife said it is confident in the fundamentals of it is this model. President obama is visiting phoenix ariozzona. Va workers faked waiting list so they could cover of chronic delays in care. The u. S. Unemployment rate is at its lowest level in the most seven years and you have businesses like your local baker to thank for it. For more on how main street drives the u. S. Economy they head of the Small Business administration joins me. Thank you for your time today. Guest nice to see you. Mark talk to us about the community the business community. Has it been the unsung hero and the movement in the economy that we have been seeing thus far . Guest we have had 59 months of consecutive job growth and two thirds has come from Small Business from main street as you say. It is time to celebrate and the sbda is tried to make a big deal out of Small Business. Mark we have had Community Bankers tell us that the dodd frank act creates an uneven playing field. That the Smaller Banks are burdened by some of the same regulations that the larger banks have to follow. Has doddfrank impacted Small Businesses in the area of loan underwriting . Guest what the sba has done is whether you are a small medium, or alternative lending channel we want to be efficient and effective so we put up to technologies that we are hardened by and the results are proving to be very effective. The first is called link. Some people go on the line to find a date in two match. Com or some similar instrument. Now you can go to go online and you can find your lender more quickly. Mark are we talking about hours or days . Guest the system is when you complete the 20 questions than all of the lender community can see what is taking place there, so we make a date within 48 hours is our guidance. We like the lender to respond to the borrower within 48 hours and so they can meet and find out if there is a match there. The point is small banks are not getting the foot traffic. They do not have the large advertising budget. Through link they can go online and see all the traffic coming on to sba. We get 2 million hits a month for people looking for a lender. We can match them up and level the playing field. Mark Small Business owners have cans expressed concern about the obama administrations immigration policy. This is personal for you. You came to the u. S. When you were five years old from mexico. What have Small Business owners been telling you about the policy, can it work, will it work my and what types of changes are needed to make it more effective . Guest Small Businesses have told us a series of stories. What they share with us as they do not they are not in the business and do not have the capacity to worry about who is here and why they are here. They are hiring the best people they can find. That is one thing. They want immigration to pass so they do not have to act like officers or cops. With a can do is they can do the business they were set up to do. What they say is right now, innovation is coming from the small and they want people to create jobs. 40 of the fortune 500 are run by immigrant families. So when you look at your fortune 500, 40 are run by immigrants. We know the kind of country shows that immigrants are making. The fact that i came here and started three different businesses and created jobs for others, that is what immigrants are here to do is to be contributors. Mark is president obamas trade agenda a or hindrance to Small Business . Guest we think it will be an important solution. You are already engaging in international commerce. We are competing with global enterprises. The difference is that for Small Businesses, they do not have a place to go for dispute resolution. They do not have Huge International law firms to navigate and defend against breaches of patents and other problems they may encounter. The president s trade agenda the tpp would provide for a dispute resolution place. Many times they do not know when the big contracts are out. This provides a Marketing Tool for Small Businesses. Many times they say they are undercut in terms of labor. We have a minimum wage in many other countries do not. This levels the playing field. Mark last month you were on capitol hill discussing your agencys budget request for next year. The chairman of the house Small Business Committee Said the sba pursues in his words its own initiatives and priorities and he added that it ignores congressional directives and even some democrats took issue with the way things are run. Is Congress Questioning your agencys relevancy . What we know is what businesses that we think are within our authority to launch. They have been authorized and my job is to execute on the programs that are in my budget. We have so many men and women that are returning from their uniform life to civilian life. Our boots to Business Program prepares them for entrepreneurship. They are coming with a plan in place. Those are the kinds of programs we are launching that are proving to be very successful. Mark joining us from washington. Thank you for your time today. We appreciate it. Up next, the latin america report. Cuba is bracing for a rush of tourists eager to sightsee and soak up the sun and of course spend their money. Mark it is time for todays latin america report. Brazils government is not planning to slow the depreciation of the briel real. Our source says the Brazilian Central Bank will not deploy former reserves to lift the real. The real has tumbled to a 12 year low, plummeting 18 this year. That is the worst performance among 24 emerging market currencies tracked by bloomberg. That is your latin american report for this friday. Your guide to the biggest newsmakers of the week on bottom line. Mark we are doing word that talks undiplomatic times ties will resume undiplomatic ties on diplomatic ties. An expensive new era of enterprise may be donning among the ancient rooftops of old fat old havana. It is another ordinary but entertaining day. You put your letter in their. Go ahead. He has been leading americans around for 15 years. Showing his love for cuban culture and his fascination with the unique architecture. Rococo, neoclassicism. This is inc these are incredibly warm people. We have a lot in common. Many of the 100,000 americans who visited last year required a travel license from the u. S. Government. How tricky in terms of bureaucracy is it to get the license to visit here . It is tricky. It is very come hated. We applied to take people to cuba for educational, humanitarian, cultural, people to people exchange. While these tours constitute tourism in everything but name the recent relaxation of restrictions may mean many more tourists may arrive. The best futures features have long attracted visitors from europe. This could also mean a tourism challenge. More than 10 charter flights leave for cuba each day but major carriers are contemplating routes to the island. How do you think the cuban government will cope with the challenge if there is a huge influx of tourists . I have no idea because they are having a hard time working with the people that are coming now. 3 million global visitors contributed 2 billion to the ache the cuban economy lester. Making it the second source of revenue. It is the private sector that has the most again. That stands in part to a new policy which encourages entrepreneurship and this in this communist country. Mark we bring you encore, look back at the most nobleness makers from this past week on bottom line. Guest we are already at 13 trillion or 14 trillion and add another 50 and that is an enormous amount of borrowing. It does lead you to believe that the federal government is itself the greatest risk to financial stability. We keep focusing on big banks it is the federal government. It is time to get this picture fixed. Guest we subsidize crops that lead to highly processed food and that has is very sick and half the country has either diabetes or prediabetes in the next five years and then we get real sick and we subsidize the health care to take care of the people who get real sick from eating the cheap subsidized food and i wanted to point that out so we can start the conversation about how we change the food system. Guest when an incredible new source makes allegation like this we have to take it seriously. We are not accusing Lumber Liquidators of doing anything wrong but it is our job to investigate. I sent a letter asking questions about their testing methodology and results and we hope to hear from them. Guest as a business person myself, i recognize the importance of giving back to the community, to have a Strong Community and in this case American Eagle stepped up and expired inspired American Express to do the same. Giving back to communities is good for business. Mark Goldman Sachs says Commodity Prices will plunge even more. Forecasting a 20 drop over six months. Alix steel joins me now with more. It was a joke. I called her alex smith last night. Alix this is significant in that it has to give her a much with supply. Not only in the oil market but also in the copper market. That is what goldman is talking about. Commodity investors will see a return of 4. 5 . Part of that issue is speculators. They see a huge amount of etf inflow coming into products. Mark you can look at the drop for that one year chart. Alix as you see speculators come into the market you get that flood come out. And the oil in etf alone inf lows of 5 billion. Mark we half a have a report from the iea. What does that tell us . Where reaching storage capacity. It is fascinating that we see Storage Space be shrunk and inventories rise and production rising as well. It is a strange, crazy world we are living in. That orange line is where storage is right now. All the other lines are at the five year low, the five year high, and the fiveyear average. Where above that now. Iea is saying that when storch asked that he is fold that is when we will see the production cuts because prices will come down that much. Mark tell us about the other commodities. Alix the big one was copper. What has been helping copper is china has been stockpiling it and there is speculation they will not do that this year. Were looking at a miniboom in the copper market. Freeport will start up two new projects, that is part of the deal. It is all about supply and less about demand. Do you watch dancing with the stars . Mark i do not. Alix everyone else in the world and we will have three of the judges. Julianne hough will be joining us from the New York Stock Exchange talking about the new season. It has been on 20 seasons, 10 years, really excited. Mark i feel like i should put a loser sign on my head. Alix awkward. Mark scarlet fu joins us after the break. Mark when it comes to inflation the better question might be what inflation . The february jobs report showed average Hourly Earnings remained flat. As scarlet fu shows us in the off the chart segment there are several ways of measuring Wage Inflation and they are scarlet i have a series of charts. Our first chart shows how employer costs for employee pay. How much a walmart orhas been paying. The main thing is the far right side of the chart. The last high mark we saw employer costs rise this much was in 2006. Is this a good thing because what we have talked about on this network for the last several years has been wage stagnation. That people are not getting paid even know the economy seems to be doing better. Scarlet based charts are designed to show that perhaps they are creeping up in different parts. On bonuses, and these are not wall street bonuses per se, and they have increased 3 . This shoulws a creep up. 45 yearoveryear. Surpassing what we saw in 2006. That is a sizable increase. He said that could be the result of Companies Shifting their pay structure from compensation to more variable structures. That might be one explanation. It could be better corporate earnings and being generous with their employees. Mark we are talking about a services dominated economy. How do the wages breakdown . Scarlet it is only not a huge surprise in the hot industry technology. It is the outlier. Trade, transport, and utilities. Tom keene would have a heart attack if he saw this chart. There are too many lines. What you want to focus on is all six sectors show a move higher over the past year. The big picture for this chart and the two previous charge is that one your ago there was no obvious sign of wages going up area now we are starting to see a sustained increase and that shows the trend is changing. I have gotten an Old School Way of slicing and dicing. Union versus nonunion. The wages for union workers, the white line rising faster than those of nonmembers. Membership has been falling rapidly so this could be misleading. But they appeared to be better paid. Mark overall inflation when is inflation is still threere. Janet yellen is not going to hang her hat on those. The market has been reluctant to embrace this because they have been wrong on Interest Rates and when the fed will raise. Theyre comfortable with that idea that the fed will stay on hold for as long as possible. Mark scarlet fu with our off the chart segment. You can get the latest headlines at the top of the hour and streaming on your tablet and on bloomberg. Com. That does it for this latest edition. I am Mark Crumpton reporting from new york. Have a great weekend. Street smart is next. I will see you on monday. Alix welcome to the most important hour of the session. I am alix steel in this is street smart. The s p poised for its third weekly drop. Investors concerned about oil prices. And that surging dollar. Warning investors about more headwinds for athens. Street smart starts now. Here are the top stories we are watching ahead of the closing bell. The European Central bank is facing a shrieking universe of government wants
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