Transcripts For BLOOMBERG In The Loop With Betty Liu 20150414

We had here. This beats out the money wells fargo and any other bank. 8 million dollars, slightly higher than what analysts were looking for. They were looking for something in a neighborhood of 5. 2 million and certainly from the Fourth Quarter when wells fargo put aside 485 million. The bank indicated it would build some reserves for potentially bad oil as those Companies Facing challenges because of the falling oil prices. Efficiency ratio of 50. 8 . This is an important indicator for their ability to keep their costs under control. Management has been a big theme as they have been waiting for some kind of loan recovery in this not sluggish economy but moderately growing. In terms of what kind of movement it is having in the premarket right now, im looking for the wells fargo share price, and it looks like. 5 higher. A stock is trading higher in the premarket after First Quarter increased 12 . I also have the Net Interest Margin for wells fargo. Wells fargo relies so much more on Consumer Lending out money. The margins, two point 9 to that is down nine basis points from the Fourth Quarter. That Net Interest Margin, which was already so razor thin, so low, goes down a little bit more because Interest Rate have not yet recovered and, so many people expect the Federal Reserve to delay until september or later on. That could be more difficulty for banks going forward. Betty not that great for wells. Thank you so much, scarlet fu. Our chief correspondent. Here is a look at our top stories this morning. Hillary clinton making her president ial Campaign Debuted today in iowa. She will tour a Community College and hold a roundtable discussion. Heading west, she stopped for a bite at a chipotle in ohio and was not recognized. While she is the first democrat in the race, the republican field is getting oh so crowded. Marco rubio became a third major gop candidate yesterday. During a rally, he promised to chart a new course. Marco rubio global leadership. By abandoning this administrations dangerous concessions to iran and its hostility to israel. [applause] betty the 43yearold rubio served just over three years in the senate. Secretary of state john kerry today will try to sell the Iran Nuclear Deal to senators. He made the same pitch to the house. He says he hopes to clear up misconceptions. John kerry it is good to have an opportunity to discuss with people what is really contained within the parameters, and also to lay down some of the work we have left to do. We have two and a half months left to negotiate. Serious business to do. Betty some lawmakers still say Congress Must reveal any plan to stop iran from Building Nuclear weapons. A huge telecom deal is in the works. No kia is in talks to acquire of france. Both Companies Making gears used to drive systems. More than 13 billion. Amazon struck a multiyear deal covering sales of ebooks. A longrunning dispute that got pretty nasty between the two. Amazon angered publishers by insisting on discounts. And talk about a rude awakening, an incredible story. A seattle air ford worker took a nap in a jet cargo hold. He woke up in the air headed for l. A. People on board heard him pounding, get me out of here the man was not hurt. The cargo hold was heated and pressurized, luckily for him. Now you know. Back to a big story in washington this morning, former senator marco rubio is now the third republican to enter the race for 2016 p at a major challenge for rubio is Financial Support for his campaign. Jeb bush is also considering a run of his own and they both are looking to tap the same donors in the coastal state. Julie wrote that story and joins us now with more. How is marco rubio going to differentiate himself from jeb bush when it comes to soliciting money . Julie it is a big challenge for him. The first place a president ial candidate usually starts raising money is on his own turf. It marco rubio has an obstacle right in front of him and it is jeb bush. What senator rubio needs to do is turn to new donors and cultivate new republicans who want to get interested in something he is pitching to them, that he is new and fresh and different. That is the challenge in that is how he is kicking off the campaign. Betty is his pitch going to be, i am younger, i am fresh to politics, i represent the new gop . Julie he is doing it in a significant way. They are friends and they respect one another. Marco rubio needs to be not offensive to his mentor. He is drawing a contract contrast the tween himself and Hillary Clinton calling her yesterdays news. That is a tactic not to the fact that maybe there are other candidates in this race that are old news. Betty also, Hillary Clinton may be yesterdays news as well. Outside of florida, what about california . He is going out all over the country and raising money. He is heading out to california, possibly among Silicon Valley donors. How big of a market is that for him . Julie that is a potentially good place for him to find some money. He has had support in the past from some of the new Economy Companies like google, facebook, and he can really pitch himself as a fresh race of the Republican Party to people like that. He has got a slew of fundraisers coming up all over the country. New york, dallas, and california as well. Betty we will see. Thank you very much, julie bykowicz. Hours before marco rubio announced his 2016 bid, he said Hillary Clinton is old news. Marco rubio just yesterday, a leader from yesterday [applause] began a campaign for president by promising to take us back to yesterday. Yesterday is over. [applause] betty yesterday, today, the future. Hillary clinton is hitting the campaign trail. The former secretary of state will start shaking hands and interacting with voters in iowa today. Linda is a Senior Writer for Bloomberg Politics and joins us now in washington. Just how ready is hillary for this campaign trail and how will she get over what republicans are painting her as, which is yesterdays news . She had better be ready. She made it a little easier for herself because she is giving herself a chance to warm up in small venues greeting people along the way on the ride to iowa and then starting out in living rooms instead of, you know, addressing large rallies in the beginning. I think it is a little dicey for republicans. They want to subtly get that yesterdays news message across, but to seem to be going after her for her age i think could backfire a little. I am not sure how that will play. Betty it could seem quite rude and offend even the older voters. Melinda that is right, who actually show up to vote. Betty this is interesting. You have written this piece which i thought was great, about how women Politicians Face a much different sort of challenge than their male counterpart going on the stump. Senator claire, i thought you had a great quote from her. Like it or not there will be more comments about her hair her outfits, or her weight or co i have not seen anyone right on rand pauls hair, even though it is very interesting. What do women say about clintons challenge there . Melinda they haul all have stories themselves being in public life. Criticized by her opponent todd akin, by being lady like. All these women have stories. Carolyn maloney remembered when she was running for the first time in congress in 1992. Someone described her in the newspaper as being energetic like a puppy dog. But there is a different feeling about the degree to which that has changed. Some feel it has and some really have not seen that. So they say, really, all the women i have talked to, say yes, the challenges are still very different. Even though republicans i talked to marsha blackburn, the congresswoman from tennessee, who said, sure, men still call me sweetie. I have had people poke their finger in my chest and it is and say really unfortunate things. She says she just tries to left that off and everyone tries to deal with it mostly by working much harder they field and men have to work. Then people also say, you know it is hard to imagine somebody calling Hillary Clinton sweetie at this point. Even though that is true, i would say there still must be an appetite for the tshirts on sale today that say, you know hillary iron my shirt, as some men have shouted at her during her last run in 2008. Still some challenges. Those again still going after her in that way can so easily backfire too. betty thank you for joining us on Hillary Clinton. Melinda henneberger. A nuclear deal with iran. Senator bob corker joins us in just a moment. Betty here is a look at our other top stories this morning. Police and smalleys eight people are dead after an attack. The violence occurred in the capital city. Attackers and stormed High Education at the gate. Alshabaab is suspected. The miltons have the militants have a series of attacks. Shares in hong kong slipped for the first time in nine days. The index added less than. 1 in london erasing an earlier gain. Equity benchmarks in hong kong dropped at least 1. 6 with the hang seng index following the most this year. More than 10 of the companies in the s p are at least partially exempt from u. S. Taxes. That number has more than doubled in the last four years. The big reason, emerging deals that let the Companies Overseas in order to avoid paying higher taxes. Retail Sales Numbers at 8 30 a. M. Eastern time. The figures are expected to rise for the first time in four months. How much have consumers been held by the gas prices and warmer weather finally . The Senate Foreign Relations Committee may be close to an agreement to assure congress has a say over the Iran Nuclear Deal. The deadline of course is june 30. For more, were joined by peter cook who has been on top of this story. And from the hill senator bob corker. Mr. Chairman, thank you for joining us. Do you have a deal with the democrats on the deal that would give congress some ability to sign off or block a deal with iran . Senator corker we have reached an agreement that absolutely keeps the integrity of the process in place. Today is a vote a vote by members of the Foreign Relations committee as to whether they believe the president should be able to go straight to the United Nations and reach an agreement or, as it relates to the congressional sanctions that we put in place, that congress put in place that everyone a knology is what brought iran to the table, whether we will have the ability to see video in full, including all the classified annexes, let it lay before the United States senate and house and let us make sure we understand and have the ability to vote to approve or disapprove, but also that we will remain involved in the event in the event, so we know iran stays in compliance with whatever deal may be reached. A strong bipartisan way. It appears we have a Committee Vote at 2 00, but it appears on behalf of the American People this process that is full of integrity peter you know the pleas of the white house. They know your intentions, but they say there is a risk this kind of legislation could jeopardize and derail the talks before we even see a finish product. Are you worried bob corker will be blamed for blowing up a historical agreement with iran . Senator corker absolutely not. We know that the fact that most of the negotiators at the table felt that congress ultimately was going to play a role, we know that that strengthened the administrations hand, it strengthened the negotiators from the hand. Absolutely not. As it relates to the sanctions that congress put in place, it has to lay before us peter 60 days . What is the timeframe . Senator corker up to 52 days. Peter can the president waive any of those sanctions in the meantime . Senator corker absolutely not. That is what keeps this process full of integrity. Absolutely not. Those congressional sanctions cannot be waived until congress completes its work. Betty chairman, you keep saying it keeps the integrity. What proposal from the democrats would you accept in order to get this bill through . Senator corker we have already done that. We have strong bipartisan support. We finished up last night at 11 30. Bob menendez was the original sponsor of this legislation and it is the menendez bill, due to circumstances that exist right now ben carson stepped in as ranking member. Senator mccain has played an incredible role in all of this. We know that chris coons supports this. You never know in the senate. I hope we have a very strong partisan support. Peter do you have 67 vote . That is the number that really matters. Senator corker i do not count my chickens before they hatch. I hope those people who believe that something this important should not go directly to the United Nations, but first must come to the American People, i hope people who believe that will stand firm today and call this legislation to pass in a strong way. Betty chairman, thank you so much for joining us. Senator bob corker. Thank you so much for joining a spirit also, peter cook, great to see you here in new york. We will be back in two minutes on in the loop. Betty youbetty are watching in the loop live on bloomberg television. I am betty liu. Today is known as equal pay day. There is still a big gender earnings gap in the u. S. With women making on average . 78 to every dollar earned by men. That difference is seen in the beginning of their careers. A recent survey found almost two thirds of women female millennialist did not know how to ask for more when negotiating their salaries upfront something i even struggled with early in my career. I was so happy she wanted to hire me that i excited the first salary offer. She said will x be good, and without hesitation, i said great, fine. I did not want to jeopardize the author. I was so scared something would happen and i would not get that big break. Betty never going to do that again. That was part of the video serious, ask for more. Caroline joins us now with more on this. It was a pleasure to be part of your campaign and i think you are doing a great job trying to make people more aware of the gender pay gap. Tell me, why is it so prevalent among millenials . Caroline despite all the progress made, there is still a low level of awareness that the gender pay gap is still a challenge for this generation entering the workforce today. The results we began to discuss earlier, we found the majority of our millenial users who are female did not think of the wage gap applied to them to it showed them data that said, already one year out of college, you are already going to make 72 eight cents less than your mail counterpart, this starts early and magnified over time, the perception change and it became a question of not knowing how to ask. We found 66 of our members were not sure exactly how to ask, what is the right way to do this, will i lose the offer in front of me if i do this incorrectly and harkening back to the fears you found. Betty so what about this, ellen of the famous case said i am the interim ceo, i will just completely cancel and eliminate all salary negotiations. Caroline one thing that is interesting is in washington d. C. , the wage gap is smaller than anywhere else in the United States p are the jobs more neil women and men are getting have more transparent salary tables that anybody can reference. It makes the point of departure a lot more clear and transparent from the get go. There is Something Interesting around that transparency to what i do not want to get lost is the need to negotiate from the beginning. It is important for you to understand, if you are already earning the average you deserve for your career track and for your area. Betty there will be several people on the other side who do not believe this gender pay gap exists because there is widespread discrimination. As i got an email, in my box this morning, from a group called the independent womens forum, i do not know much about them, but i will give you a quote from their statement. A rv humanly against equal payday. They call it a fake dishes holiday. They say what do you say to that . Caroline we have to be very careful what conclusions we draw from data appear the research we have is the best available around the difference between men and women in the course of their careers. What we found as a factor we can affect today with this new generation entering the workforce, through the types of resources and connections we offer on levo is enabling people to advocate for themselves to negotiate. There is absolutely a ps of this that is institutional, but what were really focused on is the individual and so that that person can affect their own success and come into a negotiation with the best foot forward. Betty thank you so much for joining us, caroline ghosn, the founder and ceo of levo league. Retail sales out right now come up 9 10 of 1 . 9 . Scarlet fu has a breakdown or break down the numbers for me. Scarlet this is an increase of. 9 , but it represents the first increase since october for retail sales. Excuse me. It ended three straight months of decline spirit im getting my numbers up mixed up. This is a rebound from a steep drop the prior month. The prior months number was revised as well. It is now a decline of 1. 5 . If you back out auto sales the gain was. 4 , slightly smaller than what economists had been looking for. Auto sales helped curb these retail numbers, but auto sales did not rise as much as they had been looking for. On the Producer Price front this is whole sale inflation. Gaining. 2 , in line with what economists had been looking for. Food and energy, core ppi was a gain of. 2 , higher than what economists were looking for. A yearoveryear basis, the drop in Producer Prices was slightly smaller,. 8 versus the expected. 9 . In terms of the markets, u. S. Futures right now taking a little bit lower we are at modest losses of. 1 for the s p, dow, and nasdaq. The dollar also sinking to session lows but not off by a whole lot, only. 25 . I will pull this up right now. Do we have this right now question mark it has not crossed. There is no headline right on that leg. I will get that to you when it crosses. We are looking at the dollar 9920 47. 99247. Betty Hillary Clinton making her president ial Campaign Debut in iowa. It appears mrs. Clinton will focus this time on smaller event spirit while she is the first democrat in the race, the republican field is getting crowded. Former senator marco rubio became the third major gop candidate yesterday. During a rally, he said he would not manage the economy the way the Current Administration is. Marco rubio they are busy looking backwards so they do not see how jobs and prosperity today depend on our ability to compete in a global economy. So our leaders put us in a disadvantaged by taxing, borrowing, and regulating like it was 1999. Betty the 42yearold rubio has served just over three years in the senate. Secretary of state john kerry today will try to sell the Iran Nuclear Deal to senators. He made the same pitch yesterday to the house spirit you just heard from chairman bob corker. Kerry had this to say. John kerry it is good to have the opportunity to really discuss with people what is really contained within the parameters, and also to lay down some of the work we have left to do. We have two and a half months left to negotiate. That is a serious amount of time with Serious Business still to do. Betty some lawmakers still say Congress Must review any plan. Senator bob corker resenting a bill presenting a bill. The bill has strong bipartisan support. Ahead of the worldss largest Asset Management company, sending a controversial message to his fellow ceos is. Telling 500 of the nationss Biggest Companies to stop it stop being so generous to shareholders. In a letter out today, he says evidence to stock buybacks might not be wide in the long run. Those steps could harm the creation of value over time. Spacex launch delay for the second straight day. It is loaded with two tons of food and equipment for the International Space station. And the cargo as well, i love this, an espresso maker. The italian astronaut now in orbit. Maybe some cheese as well. Coming up, how is the strong dollar shunning the u. S. For opportunities abroad. Is brazil the next top market . Stay in the loop here p. Betty scarlet, you hinted at this a few moments ago p or we have the headlines now from metlife about a retiring. Scarlet William Wheeler is retiring. He has 17 years at metlife. As president of the americas, he has been there for 3. 3 years since november of 2011. He is only 53 years old. Bill is stepping down and he will retire from metlife. This is not the kind of news that generally has too Much Movement on the stock price. If anything, there is one trade on the stock but it is hard to make a judgment call from that. Up by. 3 . 75 . The number two railroad in the u. S. Preannounced a 52 profit drop for the First Quarter. Analysts are look were looking at a growth. This is definitely a surprise. Other rails, reporting later today after the market closes. Union pacific down by 2 . Power plays to switch over from coal. Wti oil is below 50 per barrel. Johnson and johnson reported results this morning and cut its fullyear earnings forecast because of the strong u. S. Dollar to the strong dollar eating into its overseas sales. As to the quarter that ended, sales topped estimates. For mystical sales rose 3 in a quarter. Finally, i will cap it off with the big banks and how they began the earnings season p a jpmorgan said the First Quarter profit increased 12 think to an increase in fixed income trading. There was increased volatility in january. Topping the consensus by four cents. Wells fargo dropping and reporting a smaller than expected drop in firstquarter profit. Lower Interest Rates it into the profit. Net interest margin falling below 3 for the First Time Since the 1990s. Betty thank you so much for running through all of that for a spirit i want to stay in the Housing Market and no industry has been able to avoid the effects of a stronger u. S. Dollar. We heard first hand a property player about how the stronger dollar is playing out in a city like miami. Kleist it is an unreported undiscussed reality taking place. Everybodys sales are down from the developer preselling condo 500,000 dollars per unit, to the ones like us at 10 million per unit. They are all slowing down because of the demand from foreign buyers such as brazil has come to almost a halt. Betty i want to bring in tom schapiro, the president and chief Investment Officer from gta partners who also invests in some of these cities like miami but also brazil. Is it that bad in miami . Tom we have had good sales in miami. We have sold 400 units are right now, our projects are sold out. We are not seeing as much. They are 600 type products. That is middle of the road for miami. We are seeing 7 of the buyers to date have been latin american. I think you are seeing the domestic buyer pick up a little bit down there. I sit in the past im very concerned about how much supply we are seeing. Betty domestic buyers are picking up the slack but might they not be doing so enough . Tom if you pick on manhattan, the midtown would be troubling because that is largely a foreign buyer market here 1200 50 new kinds of products going on. Generally, the biggest year ever in new york city was 180 million sales. If you 180 10 million sales. In brazil, japan, europe, china, the middle east with oil prices. Betty outside of miami where are you seeing the strongest dollar have an impact in housing . Tom the markets, San Francisco would be the opposite. The San Francisco market has been tremendous. That is more of an asian buyer than a latin american buyer. I think it depends on where it is. I think we cannot count out the domestic buyer. We just not have not seen these economies recover through the homebuilder market. That market really has not recovered. Everyone likes to talk about powers and that type of stuff but lets her mother majority of people live in singlefamily homes. Betty they do not live in penthouses. Tom that market has gotten better. Housing is up 25 this year. Still down from a normal market. We are still seeing that way down from where it is. We think in general, that is a Single Family member, but we think we need to produce about 1. 4 million. 1. 89 Housing Units per year. Four years ago, we produce 600,000 to even last year, we produce less than a million. In general around this country and i have said this for five years now, we will have a housing shortage and that is a problem. Betty you made that they call a few years ago and you did it on the show, where you said buy singlefamily homes to rent pair that is where you make biggest returns and housing are you are right. Housing. You are right. And you made a lot of money. Another single big call that you have in housing. Tom we have been doing this for a while, backing Single Family and building new homes. An interesting twist to that as well. If you think about the homebuilders, they are manufacturers no different than Apple Computers and general motors. We are providing one of the inputs, one of the parts to their construction. Given their balance sheets, they cannot own that much land. We will buy entitled land and we will produce lots for them. Betty you are now selling lots to homebuilders. Tom 40,000 lots in the downturn. We are continuing to produce those lots and buy new lots. In an area where we can underwrite. A producer for a homebuilder for some time to we call the ceos of these homebuilders, and we will find out how much demand they have and we will buy the land and produce. We are producing the transmissions for general motors. That is what we are doing. That is a tremendous business. We continue also to back the vertical construction, so that has been a big part of our business. Betty great to see you, tom schapiro, gtis partners on Housing Market. Up next plans to revolutionize the industry for shoes. A lot of people we will be back. Betty here is a look at our top stories this morning to what is the biggest risk in the credit market . 1 trillion in student loan debt. There is no way borrowers will pay it all back. Down to about 100 billion in default. Bmw is standing tall. The worldss luxury car market on sales strength. 51,000 vehicles in the First Quarter,. 514 increase from a year ago. Sales of audi and mercedesbenz peerage johnson and mercedesbenz. Johnson johnson reporting earnings that beat analyst estimates. The worldss biggest maker of Health Care Products said earlier this morning that a gain on rising drug sales 27 billion. A gain a dollar 56. Analysts were looking for 1. 53. Consumers are feeling pretty good about the economy. That includes splurging for women on a new parachute. They will handcraft handcrafted a time leather heels. You know this as well. Lets not talk about the ones featured here, around 700 to one retail entrepreneur looking to change the way you shop for your shoes. It is all about cutting out the middleman. Handcrafted shoes, all under 300 sourced directly from smalltime factories. They take their Business Model from a place like sarah. Here to discuss his latest business paired youre able to cut the shoe prices in half . Basically, not only cutting the middleman out but reinventing the supply chain and how products are imported from europe to the u. S. And sold, by developing a direct to consumer channel and partnering small factories in italy. We are working to reinvent the whole process. Betty what do you mean reinvent the whole process . Ben four decades, manufactures and highend Luxury Brands have in making shoes in italy wholesaling them to retailers with lots of him between steps in getting them to the floor where a customer can buy the product. Over the last 25 years, most of the manufacturers, the brands who sell shoes, moved from italy to the far east where margins were stronger, where they could make shoes less expensively. With that, you change the quality permit can shoes in china is not the same as artisans making shoes. Betty are my shoes be made in china . Ben i do not know where yours are made but many of the brands are making shoes in china now. Some of the Luxury Brands are still making their shoes in italy but they are charging 500, 800, 1000, 1500 dollars for those shoes. We go into italy, we partner with those factories directly, we celebrate their craft, we celebrate the amazing work they do. These are artisans sitting on stools, carving and cutting and grinding and shaping them. This is art. We are celebrating that are on the site and by working directly with the factory, shipping them to us, directly selling them to the customer very quickly, were able to put the prices on these shoes at 200 to 300. Betty for shoes then, it is kind of like coke. I will explain what i mean. You are buying a brand when you buy cocacola. So like . 90 of that 1. 25 you are paying for coke, 70 of what you are buying with the shoe, is the brand, the markup. Ben maybe 90 . Building a new brand is something consumers when you discover a new brand, that is exciting. In fact, more exciting than buying the existing brand. What we discovered is italy is a brand. If you ask the average female consumer who loves shoes where are the finest shoes in the world made, she will say italy. Most customers do not care about countries of origin. In shoe wear, they do p release celebrate italy. On those coattails, we are building our brand. Betty thank you so much for joining me, ben fischman. We will be back in two minutes on in the loop. Betty betty still to come, bank and earnings for jpmorgan out this morning. We are looking at what is driving revenues to a very strong start. Tiger woods and Jordan Spieth. Were joined by notah begay to talk about what makes jordan a star. Betty in the loop welcome back to in the loop. Futures indicate stocks will open mixed here. Retail sales fell short of forecasts for march. It clinton making her president ial Campaign Debuted today in iowa. She will hold a roundtable discussion. The republican field is getting really crowded now. Marco rubio became the third major gop candidate yesterday during a rally in miami, wasting no time in attacking mrs. Clinton. Marco rubio just yesterday a leader from yesterday began a campaign for president by promising to take us back to yesterday. Yesterday is over. [applause] betty the 43yearold served in the senate. Lawmakers from both parties want to stay the Iran Nuclear Deal. Bob corker told us a bill he is proposing has strong bipartisan support. The final vote john kerry heading back to the hill today. The plan to stop iran from Building Nuclear weapons he said afterwards that they were not sold. Jpmorgan posting firstquarter results that beat wall street estimates. Profit climbed 12 thanks to rising revenue. That income raised to nine point 9 billion. The bank says low Interest Rates helped mortgage lending. Weve got some breaking news from the imf on their forecast for the global economy. Scarlet fu has the full report. Scarlet a lot of forecasters. Let me begin with 2014. The imf has kept its Global Growth forecast unchanged at 4. 5 . For the u. K. Leaving its forecast unchanged at 2. 7 percent. For china come unchanged at 6. 8 . It had raised its forecast for europe and japan. For europe, expect the region to grow 1. 5 from its prior forecast of 1. 2 and japan will log 1 growth come up from the prior. 6 . The imf looking for growth of 3. 1 because of the stronger dollar. Brazil will shrink 1 in 2015. The imf says the u. S. Has little evidence of inflation pressures and oil prices in the stronger dollar is redistributing Global Growth. For japan and europe to grow faster than anticipated and the u. S. To grow a little bit slower. For 2016, the imf is more optimistic looking for global gdp to pick up to 3. 8 . That is still far down the road. Betty thank you so much scarlet fu. We are 30 minutes away from the start of trade. I want to count you down to the open with the top headlines. Michael holland joining me this morning. Olivia sterns as we count down the opening bell. Number 10, building a better battery. Challenging fossil fuels with new ways of sun and wind power in the 50 billion Energy Storage market. Musk betting 5 billion on his own battery plant somewhere in nevada. Libya its about developing the next generation of lithiumion batteries. Olivia its about developing the next generation of lithiumion batteries. Betty the revolution in energy, are you like, ok, where do i buy . Michael i am not so off the optimistic that we will have a huge change in how we power our cars over the next five years. As an industry, for some kid getting out of college today, he or she can be a battery maker this is the new plastic, this is huge. Cory johnson yes they did a wonderful rip on this whole thing. Betty a new movie, a new graduate movie. . 10 holdings the billionaire chairman cut his stake in the operator of asia most popular messaging service. He is the antijack ma. Olivia he is pairing his position. The reason, maybe he wanted to cash out a little bit. The Hong Kong Market has been on fire, the stock is up 43 . Michael he only got 40 million. Pocket change. 400 million. Betty incredible. Fueled by foreign sentiment . Michael foreign sentiment. It is underreported, the Hong Kong Shanghai link has been huge in the last few weeks. Betty next story. Do they know the difference between allie bubba andibaba and tencent. U. S. Investors are missing out the climb. Traders in the u. S. Pulled 100 million. Climbing to a sevenyear high. As the government eases Monetary Policy to counter a slowdown in the worlds secondlargest economy. Michael chinese investors are really smart, really fast. Property stopped going up so they say we confront run mutual funds can front run mutual funds. The Retail Investors are very smart. Olivia bloombergs has a written plenty of stories about how the Retail Investor in china is someone who does not have a college education, getting their stock tips on the street. Betty is that wrong . Michael its whats going on. Betty telecom tuesday, huge deal in the works. Alcatel could be valued at 13 billion. Note here wants to be the roads, instead of the cars on the roads. They already sold their handset business to microsoft and are now doing this big deal. They have been back and forth in the past. They will bolster their china business. That is huge. Mergers are alive and well here. For a lot of friends who are bearish and short the market this is not a good thing. Though stocks are up. Betty number six, greece returns to work after the easter holiday. The most indebted state is negotiating 7 billion euros. The greek government spent some of its Holiday Weekend combating reports that the nation is prepared to default. Who is who has cap track of all this kept track of all this . We try. April 24 is the next meeting. They have to pay 1. 5 billion euros of bills every month. Its like life support. They are gone. I think so. Betty what do you mean . I i think greece is out. It would cost germany more to let them go. Thats exactly right. Austerity is not going to help them increase. In greece. Betty are you buying in europe . Germany will be fine. Up 20 . Exactly. I have been on vacation. Jpmorgan reporting the First Quarter profit that climbed 12 . Michael holland staying with me to give his take on one of his holdings in jpm. Betty we continue to count down to the opening bell. We are halfway through, its time for rd dive. Number five is jpmorgan, the biggest u. S. Bank saying First Quarter profit climbed 12 on rising revenue from fixed income trade. Joining us now for more is Michael Holland. The chairman of holland and company. He owns jpmorgan. What did you think of the results . Michael excellent number. Not a particularly enthusiastic market today. It will be one of the highest traders. The backdrop for producing this kind of result, throughout the business all the businesses got rid of their fixed commodity trading. These are great numbers. Jamie dimon and his team continued to produce the great numbers. Huge expenses making this a stock so cheap. It is trading at a discount to the big banks. Betty the other banks have the same legal problems. They have the same regulatory problems. Why is jpmorgan traded at such a discount visavis its peers . Michael it doesnt make any sense, you should buy this stock. Which is why i own the stock. It is ridiculously cheap, less than 12 times earnings. It has nearly a 3 , paying a 44 dividend now, a 3 yield. Everything is up since 2008, the Central Banks have pushed the asset prices up, look at jpmorgan. Its where apple was five or six years ago. This is what the stock is worth, you look at the business and it doesnt make any sense. The Intrinsic Value of the business is much more than where it is today. Betty what if jamie dimon gave a bit of a hint as to why they are trading at this discount . He spoke last week when he released that report about the liquidity. The liquidity crisis that is in the markets right now. This bubbling crisis that few people are paying attention to in the treasury markets. Michael beware what you wished for. When the regulators around the world have tried to make the roads safer since 2008, 1 of the outcomes has been liquidity in the markets. That is a major problem. Once again, i would go back to come aware do you want to be when we get a crisis like that . 2008, we had a precursor of how people do and jamie dimon and his people were in the best position of all picking up the pieces looking for opportunities being asked by the u. S. Government to take over bear stearns. Betty they are suffering from liquidity even more. Michael the next crisis jpmorgan will be in a great position to take advantage. Betty michael, stay with me. Much more ahead. Speaking of crisis, bill ackman has a warning on the markets. This time, it is not about herbalife. His concerns about your Student Loans. Investors need more tough love. Stay in the loop. Betty Michael Hollands thing with me and Olivia Sterns joining us again. Holland staying with me. Bill ackman talking credit markets. The biggest risk to the markets is to do loans. He told a group at a conference that a trillion dollars in Student Loans that is outstanding and there is no way that borrowers will pay it back. Olivia its a scary amount of money. Michael he said one of the problems here is because these people when rates go up, are people who protest things. The conference he gave that comment add, they were there were protesters. We have a situation here where the next president is going to forgive the debt. Betty there will be a bailout summer. Michael absolutely. Betty who is on the hook . Olivia my taxes will go up . Betty members of the s p looking to avoid scams. 10 of the companies are partially exempt from u. S. Taxes. What is the reason . Texan versions. Deals that let their headquarters move overseas. I thought we put that issue to rest in 2014. Tax inversions. Michael we are not supposed to pay more taxes than the loss tell us we have to pay. You have lobbyists up there fronting for these companies were the special deals. This is one more example of how our tax mess continues to plague us. Someday, there will be a politician with the courage to tackle list. Betty is it surprising that there are those Many Companies . Michael no. Do you know how much lobbyists make . Olivia they have an obligation to shareholders. The companies registered over seas, they also transfer tax liabilities. Betty number two, someone standing up for ceos. Larry fink sending a message to ceos telling 500 of the nations Biggest Companies, stopping so nice to shareholders dividends and stock buybacks might not be wise in the long run. They can harm the creation of value over time. You are a big value investor. Do you say yay to larry fink . Michael in part. Ceos can learn from some things. Overall, when you do get the shortterm people wanting to get in and get out betty has it gotten worse . Michael i dont think so. You have more headlines about it. Olivia its 1 trillion in buybacks. I think it has gotten worse. Is this incentivized by ultralow rates . Michael im not against buybacks or dividends. The idea about buybacks being bad per se, no. Olivia do you think hes auditioning to be treasury secretary . Michael again . Betty we want to get a quick check on where futures have settled. Futures are slightly lower. Our top story is next. Betty welcome back to in the loop. Michael holland staying with me and also, Olivia Sterns. Number one is our big story of the day, retail Sales Numbers march retail sales of 0. 9 slightly less than forecast. Harsh Winter Weather the reason. Americans using the savings at the gas pump the gain was a rebound from what weve seen the last few months. Thats good news, right . Olivia its good news. It has been very curious. Michael the model is not positive. People dont feel that good. Olivia it doesnt match up with 5. 5 unemployment to dollar gas. Betty what do you think is going on . Michael people are generally blase there is a bit of a funk. Its around the world, not just here. Betty very true to we have seen that with stocks as well. I want to bring in pat dorsey. I want to get back to the banking sector. As we mentioned earlier, Michael Holland is a big fan of jamie dimon. When it comes to banks, you want to keep it simple, you would rather by wells fargo. Pat right now wells fargo is an easier business to understand. I would not be buying it right now. Jpmorgan is certainly the cheaper stop by a long shot. The bulk of the mess is behind jamie. Its an open question up to big to manage. Too big to manage. Betty you would by jpm then . Pat i think so. The shares are cheap. Jamie dimon is an excellent manager. As long as you set your expectations right none of these banks are getting back to the multiples they had precrisis. That is simply not happening. Through the cycle of returns on equity will be three or four points lower. Michael what is your overall take on earnings this season . Pat 15 of gdp is exports and 40 of earnings come from outside the u. S. Where it will hurt most is the companies that have relatively low topline growth. Large industrials especially consumer goods companies. Colgate were a food company where at best they will do 6 topline growth. Suddenly you are looking at a couple points of topline growth, which is really painful. When you dont have robust organic growth thats where you will see the biggest effects. Betty i want to get back to what patches to set about banks. Jpmorgan will not get back to the multiples we saw before the crisis. Do you agree with that . Michael yeah. But were talking about pat was just saying that wells fargo was at 1. 7 times jpmorgan is onetimes book. Less than 12 times earnings. A company who has been north of 30 times earnings in the past. They dont have to go back to 30 , just go to a modest 18 and i will take the 15 increase in value. At the end of the day, his comments are spot on but the only thing is the valuation does not make any sense. The are we at it is 9 . It will not stay down there. When Interest Rates go up a little bit and they expand the credit book a little bit in addition to the multiple the roe will go up toto 12 . There is a Cash Explosion when this occurs. Betty very true. Speaking of Cash Explosion, we have seen cash infusion in chinese shares. Pat, i know you have talked about in china that there is a frothy nest there. Frothiness there. Pat more than frothy. Its foamy. The most fascinating thing about it is when they opened up the Hong Kongchina link, what i expected and a lot of people expected is the link would be used by nonchinese investors to access chinese shares. Have seen the reverse, chinese Retail Investors piling into every hong kong stock possible. It is a true bubble over there when you look at the number of accounts been opened. You are seeing headlines in state owned newspapers saying go and buy hong kong stocks now. That is not a healthy sign. Michael i sit on the board of one of the asian companies, in each case, you have a situation where the people are telling us that the institutions have not yet begun to access because they had to go through the regulatory moves, they have not begun. The Retail Investors have front run the institutions. That is supposedly whats going on. Olivia the bull run not slowing down anytime soon . Michael as the numbers come out tonight in china, they will be slower, disappointing. To export numbers were down. You will end up with the central bank and the government doing a few more fiscal things. That bubble or whatever it is, you still have the banks of their trading at less than six times earnings. Pat they should. They cannot make loans to save their lives. They have not moved up. All the retail frothy you are seeing youve had lots of traders, investors buying stuff without any financial knowledge whatsoever. Folks who are College Dropouts trading based on momentum and lucky number share symbols, a recipe for some unpleasantness down the road. Michael i could not agree with you more. Betty as olivia was pointing out, some of the retail olivia isnt that why baba sounds like the number eight . Michael that is not priced to the moon. Betty lets get back to the u. S. What about the stronger dollar and the effect on earnings this season . Cap the biggest effect you will see is on businesses that dont have robust topline growth to offset weaker currency. The thing to bear in mind, for most u. S. Multinationals, the costs are matched. If they are selling stuff in euros, they are producing stuff in euros. There is no economic effect here. Its a translation effect of bringing weaker euros into stronger dollars. Its not harming the cash flow per se but you were expecting 7 topline and you get 2 because the euro move has been dramatic on the downside. It will affect the way people write these stocks. Betty how about you, michael . On the stronger dollar. Michael i think it will continue. These things always overshoot. Managements are paid to do this. Im ok with the dollar getting stronger. Betty pat, great to see you. Also great to see Michael Holland. Thank you to Olivia Sterns through the opening bell. We will speak with Jordan Spieth notah begay about golf plus new era. The 26yearold who won the masters. Stay with the spirit you us. You are in the loop. Betty treating just underway. I want to get back to scarlet fu with some of the early movers. Trading just underway. Scarlet rails dont begin reporting results until after markets closed today. Sentiments nor folk preannounced a 15 drop. Analysts were looking for growth. Falling Energy Prices hurting the sector. Coal shipments dropping because lower Natural Gas Prices have led power plants to switch to natural gas some of these rails cannot collect on a fuel surcharge. The dow jones transportation average, 17 of its members caugh declining. At a threemonth low. Banks went big gaining after j. P. Morgan reported fixed income trading was 4. 5 and equity trading climbed to 22 . Goldman sachs trading at the highest since may of 2008. Bank of america at a onemonth high. These banks will be reporting results in the coming days, led by bank of america tomorrow. Adr getting a lot of attention. Nokia in advanced talks to buy alcatel. Alcatel getting a big pop while nokia is declining in early trading. From company news to sports its golf. They may have finally found their next big star. Notah begay with a recordbreaking Jordan Spieth with a recordbreaking masters when. Wi. N he could add a 10 million a year and endorsements to his golf winnings. Hisa recordbreaking masters win. Joining us now is notah begay. He is tigers former college roommate. When you hear people say, can Jordan Spieth be the next tiger woods, what do you say . Notah he made a bullish run up the leaderboard and through the record books and was able to set some amazing precedents with regard to his future in the game. Nearly trampled tiger in the process. He would have set the alltime scoring record for the masters tournament, which is a record that tiger woods set back in 1997. He also set a couple of the records. 54 hole scoring record and 36 hole scoring record and tying the 72. He has what it takes. Superstardom is an elusive job in professional golf. You never know whether a player has what it takes to carry the game forward. As evidenced through the ratings , which you discussed earlier the game is in great hands with players like him and rory mcilroy putting up a great showing this weekend. Betty is that bittersweet for you . You have been rooting for your friend, tiger, his comeback. Notah you always root for your friend. Lets not close the book on tiger woods yet. He made one of the most remarkable comebacks that i have ever seen him make, going from an abysmal and difficult showing at the Waste Management open and the Farmers Insurance open in san diego to putting up an extremely respectable scored this weekend. He shot two consecutive rounds in the 60s betty he made the top 20. Notah he did. Usually if you wanted to see tiger in the top 20, you had to turn the newspaper upside down as of late. The game is in great hands. Bittersweet, but everything changes hands. Tiger woods understands he is closer to the end of his career than to the beginning. He is working hard on his game looking forward to that x challenge. Betty he is a legend. He wants to finish strong. What is his next big test . Will he play in the players championship . Notah im not 100 sure. He tweaked his wrist second shot on the ninth hole on sunday. I talked to him yesterday. A bone popped out of place and he popped it back in on the 10th and finished out around. Its going to be how it heals. His back is great. His swing is coming around. His short game is back on point. Betty great to see you again. Thank you for joining us. Notah begay fourtime pga tour winner. The winner himself speaking on Market Makers later this morning. Stay in the loop. Betty if you missed it, and well announced new adept technology today. The program will simplify Online Marketing by showing where an advertisement is driving sales. Aol announced new Ad Technology today. Corey we are all trying to find ways to be smarter in online advertising. Give the context for us. Cory johnson a well has spent hundreds of millions of dollars tried to figure out this problem. Aol has spent hundreds of millions of dollars trying to figure out this problem. They acquire things like the Huffington Post. They thought that was the place users would go and they would see ads. Now, they had figured out a bigger deal. They are stitching together all the acquisitions. The main goal of this is to take all of the advertising platforms , Huffington Post or some random website or tv or wherever the advertising put stuff and figure out what is working and what is working at that moment. Imagine you have an ad for the avengers on facebook. You find out that ad is doing well or maybe not doing so well. You want to also try television. You run this promo on tv and start to get some results on tv. With this new platform, you will be able to measure in realtime what is happening with you arer ads and ship the dollars to the places where it works. That is a dramatic example of programmatic advertising. This new platform is meant to do just that. Let advertisers find out what is working and when. Betty hallelujah right . Isnt that the holy grail the echo cory . Cory johnson even facebook is your meeting with taking the advertising outside of facebook this is a big step for aol to use the tools and the cash from the old style of business and turn it into an advertising platform. Betty be sure to tune in for his full interview with Tim Armstrong, coming up on Market Makers in 15 minutes. Surprising entry among the highestpaid executives. The Pay Practices at the top. Betty new figures show one of the highestpaid executives in america is Martin Franklin coming cigna chairman of Consumer Brand Company Jargon which owns you candle yankee candle. He was paid 22 million last year. His total award page 296 million pay to 96 billion. Tell us about this discrepancy for a guy who is now considered one of the top paid executives in the country. We found the discrepancy stems from there is in the cunning role that this and set up goals. Said these goals are so audacious that franklin will never get there. Betty why is this . We were interested with that. We called up a couple of analysts. Franklin was given the same title award a large number of shares that depended on performance criteria. Two years later, he hit the targets. We called up analysts and asked how audacious these new targets are. They said they are not at all based on his successful streak in the past. They might even get there earlier. Betty he is likely to be one of the highestpaid executives in the country. How does he compared to his peers and consumer space . It doesnt resemble a traditional Consumer Brand company. His portfolio of brands is so diverse. It sells yankee candles and ski gear. His top executives are all dealmakers. Have gone out and bought all these wellknown but undervalued brands, turned them around quickly in terms of revenue and made big bucks. In that sense is a company structured more like a private equity firm or investment firm. That also blends in somewhat into the exact of conversation executive compensation practices. Betty that does it for today on in the loop. Tomorrow, Jonathan Tisch joins me to reveal exclusively some new details on his luxury hotel. That is tomorrow at 8 00 eastern time right here on bloomberg television. Live from bloomberg headquarters in new york, this is Market Makers with Erik Schatzker and stephanie ruhle. Erik aol makes a play to groep ad dollars. Will a new platform be enough. You will hear from Tim Armstrong in a bloomberg exclusive. Stephanie the imf revises the forecast. The u. S. Economy will not grow as fast. A stronger dollar will help europe and japan. We will speak with an imf economists. Erik strictly a list. The man who plans parties for everyone from beyonce to bill clinton. Good morning. It is Market Makers on bloomberg television. Im Erik Schatzker