Transcripts For BLOOMBERG In The Loop With Betty Liu 20150504

Even with what we heard. I think what the greek government wants and European Partners wants are great Different Things. All sides are so scare of the possibility of a crisis if the greeks were to leave the euro. Theyre willing to do a compromise which is kicking the can farther down the road and not a real compromise, but a short time solution. Betty the greek official says the government should have enough money to get through the week so far. Warren buffett says the new ceo of Berkshire Hathaway must be more than a stock seeker. He spoke in a annual meeting and omaha. He is unlikely to back someone who has expertise only in investing. He also will support someone who has operational experience to succeed him. You might need a scorecard soon to keep track of the falcon president ial candidates. To outsiders are joining the race today. Former hewlettpackard ceo Carly Fiorina is in the running. She made the announcement in an online video that was just released. That she had the morning shows. Yes i am running for president. I understand how the economy works, whos in it, how the world works. I understand the argosys and that is what our federal government has become a giant, bloated unaccountable bureaucracy. Betty retired neurosurgeon dr. Ben carson will also announce. He is backing among grassroots conservatives. He is an outspoken opponent of president obama and health care reform. Former Arkansas Governor Mike Huckabee is expected to jump into the fray to expand the list of declared republican candidates up to five. Some pundits think the gop could have 14 president ial candidates by midsummer. Incredible. Two men are dead after they attacked an event where cartoons of mohammed were displayed. At happen last night in a dallas suburb. Police say they shot back after there were fires shot fired. Two men got out and opened on a garland independent Security Officer. He was dressed like a police officer, however, he was unarmed. They started shooting towards that man and did shoot him. He was taken to the hospital and he was treated and has been released. Garland officers that were close by saw what was going on and gauge the two men, shot and killed them both. Betty the gunmen have not been identified. Officials have not cited a motive for the attack. The event was sponsored by an antiislam organization. Many muslims feel that the painting mohammed is blasphemy. It was americas secondbiggest movie premiere ever. Disneys avengers age of ult ron made 188 million over the weekend. It was only second to its predecessor. They say would have done better if not for the other fight that happen on saturday night. You know the one mayweather impact yell. And Manny Pacquiao. Those took away some have eyeballs. Happening right now, mcdonalds rolling out the details of its turnaround plan and a video message. As statement is going to follow in less than half an hour from now. Theres going to be a Conference Call with management at 11 00 a. M. Eastern. Scarlet fu is monitoring the presentation for us as it is happening online. Are we getting headlines out ge . Scarlet we have not. It is a video message that is coming out at the top of the hour. The statement will follow in 26 minutes. That is where investors are hoping to get some details. We had some indication that management led by Ceo Steve Easterbrook is open and flexible to many options. Santa burstein had met with management and said the management indicated that it is looking at all options. Among those options include unlocking some value by converting real estate assets into a Real Estate Investment trust. That is one possible the. A lot of people looking for a simple solution. There are too many items on the menu and consuming confusing investors. They hope to rebuild their relationships with franchisees. There is a lot of disappointment and confusion and distrust between franchisees and headquarters. These are all things that management should be addressing according to investors. We are looking to get any kind of detail on that. To give you an indication of how highly anticipated this announcement is, when Steve Easterbrook said he would announce a turnaround plan last month, the stock was at 3. 1 . Since then, even as the numbers of mcdonalds where disappointed. A six straight quarter of declining sales plunging sales in asia and weakening and europe as well. Even as that region struggles and mcdonalds would be in a tract of option for consumers there. We will continue to keep an eye on headlines. Nothing has come out yet. In the meantime though, we do have some headlines on dow chemical. The company is cutting jobs. It is going to eliminate 1500 to 1750 positions. That is about 3 of its workforce overall. It looks to post a charge of up to 380 million as a result of these redundancies. Dow says it has added minor adjustments to assets. I dont know what that means. We will look at the release. A main headline here is that it is cutting up to 1750 jobs worldwide as part of an overall effort to reduce costs. Betty asking for that cost cutting out of it. But there we go. They are still on that path. Scarlet, thank you so much. Thats our chief markets correspondent who is going to stay on top of the presentation right now by Steve Easterbrook the ceo. It is when to run 23 minutes long and theyre going to issue a press release at 8 30 a. M. Detailing this turnaround at the restaurant giant. Onto another giant, the giant in the cable industry comcast just reporting firstquarter profit that beat wall street estimates and its shares higher than the premarket as you can see. The cable giant signed up more than 400,000 new internet customers. It also announced it was boosting its stock buyback by 59 . The results come 10 days after the company said, you know what . We are not going to go after time when the cable anymore. Bloombergs report and joins us now on the phone. You look at his comcast results now and you are let down because there isnt that much to talk about other than ok, theyre poking of the internet subscribers. That seems interesting. Alex it is back to normal for comcast. I think investors are not to displease. One of the things about comcast is that their earnings are almost always good. If you look back over the past 3, 4, five years, they are by far best in class in the cable industry. That is one of the reasons why some investors were incited about the excited about the possibility of buying Time Warner Cable. If you add another 7 million cable subscribers and put comcast management on that and that of Time Warner Cable they havent streets of outperforming. You saw at this quarter with adding more than 400,000 broadband subscribers. That is a lot. That is a big number. It topped estimates and reminds people that oh yeah, these Cable Companies are still adding highspeed broadband at a very fast clip. It is quite impressive. Betty it is impressive. I want to let viewers know that the call on comcast has just started. We are listening now for more details about the company. One thing that they are saying and we will get to the headlines here as the call begins, they expect their programming costs to increase by about 8 this year. Just beyond what the industry is seeing . Alex we have seen growth in the low double digits. 8 is a downtick. Cant comcast benefit by being the biggest player in that street meaning their costs are lower than any other Cable Company and pay tv distributor out there because they have bigger scale. That is the big thing among all Cable Companies on why the need to consolidate. It is not and if but a win in the cable industry about when all these Companies Get together. The only question is how they do it. We but they would be able to do it by the biggest plays coming together and creating this big giant Cable Company that would really be able to push programming costs lower, but regulators step to that and now looks like we may see accommodation of charter and Time Warner Cable. Betty alex, thank you so much. You have been writing about that. Talks continuing on charter. Alex sherman of bloomberg news. Not to one of our other top stories on the political front. Former hp ceo Carly Fiorina making a president ial run. She made the announcement on abcs Good Morning America pick. Yes, i am running for president. I understand the argosy. That is what our federal government has become a giant, bloating, unaccountable you are crazy. Betty she is one of three candidates expected to join the gop president ial for. Along with dr. Ben carson, he made his formal announcement today in his hometown of detroit. Former governor of arkansas Mike Huckabee. His speech will include president ial rollout. Three more jumping on. Julie has been following the candidates. She joins us now from washington. Julie, the question is about then. And maybe even might have to be. Mike huckabee. Do these guys think they can win . Why are they jumping in . Julie they feel like they have Something Different to say and something to bring to the full. For a dr. Ben carson, it is a compelling personal story of rising from personal poverty in detroit and becoming a worldfamous and worldrenowned neurosurgeon and baltimore. He is really just embracing a lot of conservative ideals. He will talk about his story throughout the entire campaign. For Carly Fiorina, it is her resume. She brings a detailed business resume that is unmatched. Betty it is unmatched but very mixed good she will be asked about by that time at hp. Are they angling for the Vice President position or a cabinet job . Julie if you have the money or can raise the money to run for president , there is no downside. For someone like harley, she could be considered a Vice President candidate or considered for a number of cabinet post. The same could be true of dr. Carson, but regardless, they will improve the name recognition. They sell books. They make speeches. It is all just upsides for the both of them. Betty julie, thank you so much. A lot happening on the political front over the weekend. Julia bloomberg politics. Make sure to tune in as Mark Hartline Mark Halperin talks about these president ial bids right here on bloomberg television. We are staying on top of the mcdonalds story. Steve easterbrook unveiling the strategy in a video message. There he is online talking about positioning the company for growth. Dont have a lot of news nuggets yet. We want to bring that offer you as soon as they cross. The betty heres a look at our top stories this morning. U. S. Chancellor says the conservative party is the one who can staple and economic recovery. In an interview with guy johnson, George Osborne says that sticking with David Cameron is the way to go for voters hitting the pollls thursday. There are two choices as the general election looms. You can either have a bit cameron back in the job on friday leading a strong and stable government or we can have the political instability or economic chaos as a result of the week ed miliband propped up by a scottish nationalists. Betty the polls continue to suggest a Hung Parliament with cameron and miliband sinking a lastminute swing to form a majority government. The tech word is offering tributes to Dave Goldberg who died friday night. The 47yearold was the husband of facebook chief operating officer Sheryl Sandberg. The couple were vacationing overseas when he passed away. The cost has not yet been disclosed. Those are your top stories this morning. When it comes to mcdonalds, everybody has an opinion on how to shine back the golden arches. This morning, Steve Easterbrook is taking charge. He is right now unveiling details of a plan to turn around the companys fortunes. Happening now, the company just released a video message at the top of the hour outlining action points for growth. Steve easterbrook is talking about that right now online. For more, we are joined by christ. There is the feed we have of Steve Easterbrook. Cried covers Consumer Companies for bloomberg. He wrote a story overnight outlining the five things that mcdonalds needs to address. Headlines coming across. Our viewers arent aware of them yet. Mcdonalds says theyre going to reorganize into four different segments. You have the u. S. , international, something they call high growth, and foundational. What does that mean question . Craig instead of a strict geographical approach, they going to put businesses together with needs. China and italy will be in the highgrowth caligari. Category. They want to put them under leadership to focus what they need to do in those areas. Betty foundational what is that . Craig well have to see what they mean, but we are looking like germany and perhaps france in that area. Companies that are more sound. Betty u. S. Is its own. Craig they have 40 operating income from their alone. It is the market where they struggle the most. Strong short was at home and that is the key market for them. They say they need to get back on track in the u. S. Betty you said that one of the issues they will address as the refranchising. We heard from steve on this moments ago. Craig burger king has done really well. They have gone from 99. 9 franchises. Burger king only owns 50 restaurants less than 1 . Much different from mcdonalds owns 81 of their system franchises. 90 in the u. S. What theyre saying this morning is that by 2018 they want to add 3500 restaurants that theyre going to sell from the company to franchises over the next three years or so. Betty they want to add on more franchises into their system . Craig they want to sell restaurants on the company to unless restaurants. Betty it costs money to run these restaurants . Craig chipotle has fewer restaurants. Starbucks is one that owns all the restaurants. Burger king has done great with a franchise system. There has been a push and investors once mcdonalds to sell these restaurants. Here they are saying theyre going to to get to 90 by 2018. Betty at the top of your list this is something we may not hear from Steve Easterbrook. Real estate is at the top of your list. We know that there is one Hedge Fund Manager who said that they could add 25 to their share price by spinning off the real safe estate. Craig mcdonalds came up in a time where land was much cheaper. It was more abundant and that is not the case this day. It is a good problem that they own all of their real estate. The franchisees is off billions of profit every year. Tremendous cash flow. Ive heard that people say they want restaurants to own real estate if they could. You have people like robinson saying to get rid of the real state and make wifi dollars on the share price. Mcdonalds has shown no signs they want to do it. Betty have they examined it . Craig they have thought about it before, but i come a few years earlier. They showed no interest. Wall street seems to want it. Betty anything that smells like a boost to share price like 25 is not a small thing. Cried, great to see you. Thank you so much. That is cragin bloomberg news. We are monitoring that video message coming up from Steve Easterbrook. Carl icahn calls out larry king. The activist investor says the blackrock ceo is just protecting his friends. His other ceo friends who are underperforming. Is he right . More on that next. T ceo larry fink. He says that last month think told ceos to avoid giving in to pressure from activist investors like carl icahn who wants immediate dividends. Carl icahn says that is a more difficult thing to get rid of underperforming ceos. I dont begrudge them of that money but the stock goes well. If against the stock up, let them have some good money. Look at what you have. You have this clubby system. And you know what . A lot of them feel like they can do what they want because of guys like larry fink. Betty larry fink has not responded to carl icahn. We will see what happens. It is twice six minutes past the hour. Bloomberg television is on the markets. We are staying on the mcdonalds story. Scarlet fu is staying on the markets as well. Scarlet futures and focus. Oil is down after a low survey from china. The game fell below 60 a barrel. The Bigger Picture here is that crude is coming off eight straight weeks of gain of 21 in the month of april alone. What is the likelihood of oil building or is a pullback now on the cards . Joining me now is chris who is the director of strategy at bell curve capital. You call oil and momentum trade. His oil still higher . Chris it is absolutely still higher. We took out over seven loans position. Our algorithms have switched the trade from a hold to abide just based on the level of momentum carrying into last week in the news coming out of the mid east and production continuing to grow here in the next third or fourth quarter. Scarlet you reference iraq. Opec is now seeing production at a three year high. They are likely to increase their production. Chris a lot of this has been priced in what you are seeing right now. It is just the carried through of a stronger dollar. It is fuel to the fire at the end of last week. The fact that we did not have reaction to the downside like i thought we would this morning with the china numbers disappointing that really makes me believe that it will continue to hold throughout the trading session. A lot of traders see this runoff above 60 day nothing more than potentially speculative. A bearish tone has taken over here at the floor of the cme. Scarlet what about the smart money . How are hedge funds positioned when it comes to oil . Chris a lot of the hedge funds, especially the large ones, take note and i think bloomberg broke this that a lot of the hedging had been done by a large Oil Industry Company and they have actually hedged out from 58 to 62 a barrel levels on the futures running out to 2016. What does that mean in laymans terms . That means for the pricing to go higher that sort of Oil Production is not seen as a huge advantage for these oil companies. What you will see is potentially a rage bound of a 50 to 65 range for the next month or so. Scarlet i want to go back to china for a moment. The pmi numbers are disappointed. You had saudi arabia talking about how demand from asia is picking up. Do we have reason to distrust saudi arabia g . Chris i think you do. Asia with a little bit of pull box pullback is not a kick in the pants to opec members. I think they see this runoff as an opportunity to get locked in games above 60. A lot of the tone for hedge funds is that revisiting 50 handle here in the next i would say, a trading sessions eight trading sessions. They have been designated i do say key area. As a key area. We are on a hold level. It is a goal that we are seeking and 5240 seems like the high mark. We are selling after that. Scarlet thank you so much. Betty back to you. Betty betty thank you so much. Deadline on the greek crisis is three days away. The debt ridden country must make a 230 million payment this week to the International Monetary fund. There is still no deal. The greek government wont cut pensions or raise sales taxes. The investment world is watching the crisis closely. We think there is potential for better talks this week. That being said, greece has large payments beginning of june through august. We think there will be a backandforth over risk of capital controls, and theres certainly a risk that they will take a recommend a referendum. I actually dont think ultimately that a greek exit is as devastating as people think but the headlines will create some volatility in the coming weeks and. Betty a greek official says that government should have enough money to get through the week. The overnight curfew in baltimore is over. National guard troops patrolling the streets will leave soon. They were deployed when riot erupted after the funeral of freddie gray, the black man who died in police custody. Maryland government says baltimore is safe. Grexit i think lifting the curfew is a good idea. It has been a really rough week. Lets get back to normal in the city and get people back to work and back to pool and getting people coming in the city to visit the shops. The momandpop stores and restaurants they need your help. We want to encourage anybody to come back to the city. It is safe. Betty Officials Say the latest protest have been useful. Several hundred people demonstrated at city hall. Speakers urged the crowd not to rest just because Six Police Officers are charged with the debt. The death toll from the devastating earthquake in nepal nine days ago is now more than 7200. In thousand were injured will stop more than 180,000 homes were destroyed. Nepal is one of the world poorest countries that depends on tourism and that business is now crippled. And officials in texas are now identifying a man who attacked police say they shot back after they were fired upon. Christ Police Officers nearby saw what was happening and engage the two men, and shot and killed them there i. The Security Officer was taken there at the scene. Security officer was taken to the hospital where he was treated and released. Many muslims believe it is best blasphemous to depict mohammed. You can see on the righthand side of the screen cisco saying that John Chambers, one of the longestserving ceos of a Major Company is stepping down as ceo. Chuck robbins will succeed him as the next head of cisco. I want to get to scarlet fu with more details. Scarlet this move is effective on july 26 and John Chambers becomes the executive chairman of cisco. He remains chairman of the board. Chuck robbins was named to the board of directors, but not taking over as chairman. Just some background on Chuck Robbins. Hes 48 years old and has worked at cisco in his most recent position as senior Vice President of Field Operations for the last 3. 8 years. He began that position in july, 2011 also he joined cisco in 1997, according to a statement put out by the company. And he has led the global drive for about 47 billion for the business. They also credit him as the key architect for one of the faster growing parts of the business that now represents one quarter of ciscos overall business. He is being pulled in from one of the faster growing segments of cisco to be named the said the head of cisco overall. Chuck robbins is starting on july 26 stop on july 26. Warren buffett making some comments. Im not sure if this is from the videoConference Call or not but lets get you the headlines. There is some general statement from the exalted about how they want to reorganized into different reorganize into different segments. It sees meeting the top and of a threeyear 20 billion cash return by the end of 2016 and is targeting 20 billion in net savings by 2018. These plans go out three to five years. Mcdonalds is looking for a cost structure to be a lot leaner than it currently is. These Warren Buffett comments at this point only relate to being franchise owned. Betty scarlet, thank you. The cisco news, in many ways it is surprising, because John Chambers has said over and over again, do not ask you. Do not ask me and i have asked him over and over again about stepping down as the companys limits of trouble. And here he is nothing down. Stepping down. Coming up, a massive opportunity for insurance companies. Betty watch out, last year half of all Small Businesses feel that into Cyber Attacks. In a new survey by jerome international, theyre coming at a much higher cost will stop in 23rd income it cost Small Businesses nearly 8,700 for ciber said cyberattacks. That has now increased to nearly 21,000 last year. We are joined by the ceo of an International Group that helps Small Businesses, line and build out their tech platform. He is joining us now with the result of this survey. Harvey, its great to see you. Its also Small Business week. You surprised by these findings by how much, first off, the cost of these are jumping every year . Guest thanks for having me. We were not that surprised by because every year, it gets more and more sophisticated. A lot of criminals have evolved more into social engineering trying to get at data, trying to get at transactional information. The cost to thwart these are more than just putting here at the appropriate network, or trying to keep their network secure. Its much more an allencompassing exercise now so the cost of managing these has gotten quite a bit more. Betty what is also interesting and we got this from your survey as well, is that just 5 of Small Businesses are prepared for this by buying Cyber Security insurance. We talked to the ceo of xl, a big insurance company, where they mentioned last week that Cyber Security insurance is a huge opportunity. I want to play for you what he said about that. Collect the earliest phase of how cyber will be addressed to make the fastestgrowing part of insurance as well. But it needs to be built out and become more robust before you see it take off. Betty only 5 have insurance. What is the potential here . Hari the difference is, is such a new trend. I dont think companies are really thinking about how they can use insurance or other vehicles as something against the risk of Cyber Attacks theres still some education any to happen. Education that needs to happen. First, you have to get them to understand there are more tools available to them as they understand there are other ways to prevent risk and create outside for themselves. Create outside for themselves. Upside for themselves. We need to do a better job showing them what is available to them. Betty thank you very much for joining us. Much more ahead from the Kentucky Derby to the mayweatherpacquiao five. The first week of may was overflowing with sporting events. We will discuss all the winners and losers. Betty just moments ago we heard this big news coming out from cisco. John chambers is stepping down as ceo taking on the executive chairman role. Chuck robbins, who has been at the Company Since 1997 will take over as chief executive. The stock is up slightly on this news in the premarket. Cory johnson, our bloomberg west editor at large who knows the company well, is joining us. John chambers has been at the helm of this company for decades. Actually the stock is now down 0. 3 . How big is this that he is stepping down . Cory for a long time he has led the investors know there is a process underway. He has been telling everyone about this for many years. That has been very clear. I think the choice of Chuck Robbins is a little bit of surprise. There was a widespread belief throughout the ranks that had misread warrior, a woman who was a thing of officer was named the cto and Strategy Officer for cisco. It was seen as a tapping of the sword of John Chambers because she was going to be the next leader. Betty if John Chambers had been telegraphing for quite a few years that he was looking to a successor and looking to step down, that is news to me. Because he has been very adamant, and so has he said that the board was adamant that there was no talk for years that he was stepping down or that he would be resigning, even when the company was reporting quarter after quarter of bad numbers. Cory i will say that he wasnt going to be there forever. I dont think its a huge surprise that he will step down this year. If you look at 17 years there lets just go back 10 years. If you look at what is going on with John Chambers and what has gone on with that company and who their competitors are. We used to talk about during the. Com bubble there were there was cisco and sun microsystems. Keeping this Company Alive has been impressive. And a lot of the focus has been a change in terms of the product lineup even their core router business but moving into other areas, not least of which is security. And that is the thing that Chuck Robbins is best known for being the champion and mixture that Cyber Security was a big focus in terms of the software and hardware of the company. That has allowed cisco to remain central in the business when all of their other competitors look at juniper, look across the world, look at alcatel lucent, all struggling to stop all struggling. Cisco is still dominant. Betty and the and switching topics, the sad news that we heard over the weekend, David Goldberg dying suddenly passing away on friday. You can imagine Silicon Valley is shocked by his passing. Cory gave the guy that was really well a dave is a guy that was really well known in Silicon Valley. A lot of people had a chance to work with him directly. He had a really wide network of people in Silicon Valley. It is often said of the dead that they are well remembered but i have to say that he was a friend of mine as well. Im kind of struck by how many people i was looking at facebook last night. Everyone from bill gurley to bob iger. He was a Corporate Executive that was really beloved for his brilliance and his humor and hes such a young guy. It was just a shock to the entire valley. He was so wellliked, and a big warriors fan, should mention. It was shocking. Betty they so much, cory johnson, bloomberg editor at large. 46,608, that is how much it would have cost for a dedicated fan to attend all of the events over the weekend including Airline Ticket and hotel accommodations. It kicked off thursday with the first round of the nfl draft in chicago. Friday at fenway park the red sox at the yankees. On saturday, 12,000 dollars for the Kentucky Derby. And it was also finite in a get fight night in vegas. And then the Golf Championship in san francisco. According to a harris poll commissioned by nielsen, 52 of adults said they plan to watch or attend at least one of those sporting events. Mayweatherpacquiao, that is what i want to talk about. Overwhelmingly, people were texting me sunday morning and saying, this is kind of a disappointing fight. Collects in the weeks leading up to this fight, we heard every superlative, biggest of the century, and while the money would be over 100 million for each fighter, it would not be the fight that would save boxing by any means. It was kind of boring. Its not the brawling fight that you saw from mike tyson, or even lighter guys like hagler. Betty they will each go away with 100 billion or more, but it it break Television Records . Eben we will not know that until later this week, but its pretty much guaranteed. These guys have been talking about fighting for six years. Im sure a lot of you tuned in. Betty and the photos in the philippines, it was crazy. Gathering all over the country. Is it unusual to see a favorite actually win . Eben and he was supposed to win by a lot more than he did. David papadopoulos, who covers horseracing, mentioned that he was with 32 times during the race, which is rare for that horse. American pharaoh worked harder than a lot of people thought to win this race. Betty does that goes well you go eben does that bode well . Eben i dont know. Im not horseracing expert. The horseracing world has been waiting for this for a very long time, as you know. Betty since 1970. Before you were born eben. [laughter] and one of baseballs biggest rivalries, the yankees versus red sox. A rotted this homer what was it, his 650th . He made arod hit a homer what was it, his 650th . Eben when jeter retired, you could buy his dirt that he stood on atbat. But it sounds like they did not market it and they will not pay him a 600 million bonus. Its a weird situation and the Baseball Association will have something to say about him not getting the money. Betty thank you very much. Mayweather may have taken the title in the ring, but was periscope the big Victor Bianco the Live Streaming app the big victor, the Live Streaming app that left many people watch the fight for free. Betty flying high, amorous emirates reveals first class details coming up. Betty welcome back. We are 30 minutes away from the opening bell. Heres a top a look at top stories. Wall street is expected to hear an upbeat report an hour from now on orders in march. The next debt crisis in greece is three days away. The debt ridden country must make a 233 million payment to the imf this week. There is still no deal and the greek government wont cut pensions or rate sales taxes. One economist tells bloomberg that what each side wants create a huge gap. It is very hard to be optimistic, given what we have heard. What the greek government wants and the European Partners want are two Different Things and the only possibility of agreement at this point is if both sides get so scared of a crisis that they are willing to do a compromise which in many ways would be to kick the can further down the road. Betty a greek official says the government should have enough money to get through the week. You might need a scorecard to keep track of the republican president ial candidates. To outsiders are joining the race today. Currently fear any major announcement and then hit the morning show. Collect she wasnt transparent about benghazi she wasnt transparent about her server and her emails or about benghazi. And we see donations that she said she would disclose while she was secretary of state. All of those things get to trustworthiness. Betty ben carson is being backed among grassroots conservatives. He is an opponent of obamacare and health care reform. And Mike Huckabee is also expected to jump into the fray this week. Rtwo men are killed as they attack an event where cartoons of mohammed were displaced. Were displayed. The government has not given details yet. David goldberg, 47 years old ceo of surveymonkey and husband of cheryl says Sheryl Sandberg passed away while on vacation over the weekend. Disney has changed released of secondquarter earnings so that employees can attend the funeral. They will now report tomorrow morning. Bo peabody of great Craft Partners is joining me. And bob emery is joining as well. We have a lot going happening. Who watch the mayweatherpacquiao fight . Uhhh this is where my life is. I was in bed at the time. Betty oh, my gosh, we are also exhausted and aged here. Bob it was not on my popculture radar. Betty it sounded like you did not miss much anyway. Everyone seemed disappointed. Unisys was going to happen twitters new video platform come a periscope, apparently that was a winner in saturdays boxing match. People were periscopeing the fight and it allowed people not to pay the 100 that you needed to watch the game the fight. Bo this is a big deal, hbo, twitter, google hbo, and showtime. Betty whos got bigger muscles right . Though controlling the eyeballs bo controlling the eyeballs a lot of people wins in the end. Bob this was kind of hilarious because it reminded me of those people who recorded off the television and its so bad because you cannot tell whos talking and somebody will pay the five bucks to buy it. Betty the cable giant signed up more than 400,000 new internet customers during the quarter. The result come just 10 days after it abandon it 40 billion bid to buy time warner. Everyone is saying that comcast is just going back to being this cable giant. Bob if it were not for 50 shades of grey grade, they would be in the red. Am i on the wrong story echoed you guys on the wrong story . You guys are looking at me. Bo this has nothing to do with the economy. Good management teams make the numbers and bad management teams dont. And you know where they will end up making their money. The one thing i did not like out of the story that i read 4. 7 raised in the subscriber fees last year. Bob thats almost 5 . Janet yellen loves it but as a customer, i hate it. Thats where they will make their money. Betty it also shows why their deal got a little bit of a monopoly there. Number eight, sprint versus tmobile. Investors are looking to sprint earning report. To see how many subscribers it added in the past quarter. In the last of, tmobile increased it monfils of trevor bayne by 36 , while sprint fell 2. 5 at the end increased its Subscriber Base by 36 , while sprint fell 2 at the end of last year. Bo its such a tough market now. We have a couple of Small Companies dealing with sprint. They are difficult to deal with and have not been that innovative from our perspective. Im not surprised by this. Betty how have they been difficult . Bo when Big Companies are really adept at working with small, innovative companies, thats a really good sign. Sprint has not been. Bob any experience with tmobile . They bill themselves as kind of the little guy. And thats another welterweight fight right there, right . For third place. We love competition, dont we . Betty and competition for the International Business travel, our number seven story to my guys. If you want more privacy on your first class flight, emirates maybe your future carrier. They are changing things for passengers who want more private space for either work or relaxation. Bo i find this so interesting. You have some airlines pulling all of their first class seat out and then others doing this. Who is right . Bob i would think, maybe with the doors that close, its almost like the old orient express. Bo i was on a flight to allay and was in business class, but there were only 10 rows of economy. They had literally half the plane that was premium seating. Bob they have to pull feeds out for the showers and sauna. [laughter] betty if they can find a demand, why not . Bo a focus on a focus on the 1 is what you see here. Betty speaking of the 1 , how many private jet work crowded were crowded on that one way . They look like roaches on the tarmac. Number eight, out of the Berkshire Hathaway annual meeting, Warren Buffett addressing the buyout of 3g practices. He also resisted calls by activists to break up berkshire. It wont be broken apart, even after hes no longer at the helm of the company. Bob we love to mythologize Warren Buffett. And hes done a great job of being the folksy grandpa. We had him on bloomberg on friday with the ukulele whatever that was, singing the cocacola team. T heme. This is a brilliant move by him because hes seen as a grandpa and then goes into negotiating room and hes a coldblooded killer. That gives him an edge. How many people have gotten the best of Goldman Sachs . In 2008, Warren Buffett horns for them. Bo but thats what i dont understand. He should have kept to the folksiness. I think he got a little lazy here with really tough vocabulary. We all know costs need to be cut sometimes. But i wish he would have kept the folksiness. Save the coldblooded for the negotiating table when its private, instead of revealing bob toto got a hold of the curtain, and there is Warren Buffett. Betty maybe he is more like mafia like the godfather. Bob he might just be getting old. Betty after the break, diving into the details of mcdonalds and their turnaround strategy. We have some details. It may be time to ditch the create your taste you know the old customize your order. One guy took the builder build your own burger trained at mcdonalds and he built that order. Betty hes got to try to get that all in. Bob hes got to try to get that all in. Blo what is that . Betty that if they can. Betty we continue to count down to the opening bell and we are now halfway. Number five, if mcdonalds. Last hour, eeoc for detailing how he plans to turn around the fast food giant. He posted this video message. Steve im changing the structure. Our new structure will be simpler and more concentrated around a reality of where our operating income comes from. This is the first time betty this is the first time we really heard from him as ceo. I want to get to susan. A couple of changes here. For new segments four new segments, International Lead market, highgrowth markets, and foundational, like the rest of the hunters. [laughter] is this transformational . Susan cole and night yet. These changes seem important if you work in the mcdonalds headquarters, but not if you are a customer, at least not yet. How will we know . How much of a difference will it make, and how quickly . Can they really change anything just by reorganizing . Betty right, i get it, they want to work look at the world a little bit differently. What surprised you that they have not mentioned yet . Susan i wanted to hear a big strategy about how they would deal with their food. That is their product. Steve easterbrook has made a lot of announcements since he started in march. Taking the acrobatics out of the chicken, trying in our teeth and all chicken, a sirloin burger an artisinal chicken, a sirloin burger, that the overall view. He wants mcdonalds to be called a progressive burger company. Betty right, he wants a better burger. So wheres the beef . [laughter] susan lets the see what that really means. We dont know. Betty the stock is down in the premarket. Investors are not selling you down tremendously, but not all that impressed with what they hear. Susan i think when you make a big deal about may 4, we will unveil how we will transform the company, i think people want to hear betty they want to hear big things. Susan yeah we want to see, or we want to know what to look for. Betty there was a q a with press, but no answer russians. No answer to questions. Susan a big thing they have not really touched on is how they want to change the perception of the company. Certainly, changing the food might help, but people need to be persuaded that the changes are real, that they are offering something other than a kind of industrialized burger. What is a modern progressive hamburger when you have 14,000 restaurants in the u. S. . Betty exactly, how do you change that image . Susan i see a big disconnect and i havent seen anybody from the company talking about how they will bridge that. Betty susan, they do so much. Susan brooks field of bloomberg news. Susan berfield from bloomberg news. Betty lets get back to bring you the most important stories before the bell. Ok, guys, number four. Lets talk politics. Another slate of candidates. World famous surgeon, ben carson, seeking the nomination for president. He will make the announcement in detroit, his hometown. And on top of that, former hp ceo, carly p arena, announcing she will Carly Fiorini announcing she will take on Hillary Clinton to be the first female president. Three weeks ago, this was looking boring. Now its looking interesting. We have neurosurgeons, ceos. Its interesting now. Betty it is. Bob is an interesting, a black woman a black man and a woman on the same day. And one thing you can say about ben carson that you cannot say about Carly Fiorini, is that ben carson is successful in his field. Betty im so glad you mentioned that. I talked to carly last week. Ok, that the bell, but basically she said she came at the peak of the dot com boom and she was not alone in seeing that company sink. Number three, Chuck Robbins is replacing John Chambers as ceo of cisco. He most recently served as the cto of operations. The commercial business segment now represents one quarter of their business. It is the fastestgrowing segment. And hes the new ceo. Bo i like change in general. I just hope they keep buying companies. Bob i think they will. That is what has been identified. In the new guys involved in acquisitions, that will be good, too. Bo they really wrote the playbook for how to acquire companies fast. Bob hats off to John Chambers. Bo a great run. Betty number two, the incredible rise in u. S. Oil production is over according to one crude traitor. Andy hall, remember him . Hes known for making aggressive bets and has said that we have three citrate point and called for a rebound in crude prices from here on out. Said that we have reached a turning point and he called for a rebound in crude prices from here on out. Bob he was a 100 million for one year by citigroup. Remember that . Are you going to listen to him or to me . That is a make any sense. I want low oil prices because i buy gasoline for my gas guzzling minivan. Betty is it a subaru . Bob no, it is a minivan, japanese made. Every guess that comes on your show that im on with, i say, what is going on with oil prices . And none of them seem to know. If they dont know, how are we supposed to know . Listen to andy hall, i suppose, and make lots of money. Bo it make sense to me. Betty a quick check of where futures has settled and they are slightly higher on this monday morning. The opening bell is next. Just because im away from my desk doesnt mean im not working. Comcast business understands that. Their wifi isnt just fast near the router. Its fast in the break room. Fast in the conference room. Fast in toms office. Fast in other toms office. Fast in the foyer [pronounced foyyer] or is it foyer [pronounced foyyay] . Fast in the hallway. I feel like ive been here before. Switch now and get the fastest wifi everywhere. Comcast business. Built for business. Betty welcome back. Lets get back to bring you the most important stories you need to know before the bell. The number one story the fight, mayweathertakeo mayweathertpacquiao. And now we have carl icahn. Betty i would put my money bob i would put my money onicahn. By his here off. Betty carl icahn is accusing him of making it harder to protect ceos and doing things that are bad for business. What you think . Bo carl icahns point of you is that they should be operating the companies and not making acquisitions and landing for the longterm. And larry fink just has a different viewpoint, right . If you have the right guy or gal in the post they should be able to do that stuff. There is good data on both sides. I actually think when ceos, when allowed to than cash, they make a lot of mistakes. They make they do a lot of m a that in the end doesnt work. I think im on carls side here, believe it or not. Betty what about you . Ball what hes doing is accusing larry of voting consistently against the activist investors. [opening bell] i agree with bo, he ought to loosen up a little bit. Lets open it up a little bit. Betty he is accusing think of fink accusing fink of protecting his bid. Lets bring in mark. Lets get your take on this carl icahn versus larry fink. Who do you side with . Mark that is the beauty of an indexed world. With the etf and larry finks prominence in that part of the business, we dont care what management does, so long as it is part of the index. Im guessing has to buy shares accordingly. If you go into the holdings on the hts page in bloomberg right now, you know, blackrock is one of the bigger holders because of the proliferation excuse me, its early in the morning of etfs. Why bother . Just see what it looks like an index and go play golf. Betty like you, mark . Mark im a terrible golfer, betty liu. Betty i want to bring in mike regan. I forgot to mention you were joining us as well. Questions for mark . Mike so many people have loaded into highyield debt and the really if theres any set of weakness in that space, think his quote was a run for the exits. And i know intrepid has a pretty good state in highyield capital. Im curious what you think of that. Willie potential rate increase caused will a potential rate increase cause a run for the exits . Mark we are not quite to away were in june of 2007 where things went up in the night with a bear stearns mortgagebacked runs that set all the fun off mortgagebacked fund that set all the fun off. But i am kind of a believer that we have boxed ourselves in, or the fed has, in that they have allowed the congressional leaders to get by because of cheap rates. And now we have borrowed so much money we cannot afford to pay it back and not only that, we cannot afford the higher rate on it. I think it will be a Long Time Coming but as i mentioned with the bear stearns mortgagebacked fund in july of 2007, things can happen that we cannot perceive of right here. But i think oaktree will be ready and able to take advantage of the dislocations, as we will hope to do at intrepid capital. Betty mark, did you read bill grosss letter . It came out today. He sounds depressed. Bob he does. Mark what part of depressed with your own fund of 700 million do you have . Betty [laughter] good point. He says the super cycle and bull market is over. What else did he say . Mark mike if you like he thinks he is over. Reflect on your own death is pretty shocking commentary. Bob it sounds like hes resting well at night. Betty good for him. Mark, what do you think of that . Mark i pity bill, with as much money as he has that he is depressed. I guess you can get a bear market in time, and i guess thats what hes inferring. We certainly had a bull market for the past 36 months. Look at 2013 and 2014, we took the s p up 50 . I dont think prices are compellingly cheap, and they could stay somewhat elevated and not drop precipitously, but not make any forward progress. Who knows what bill is thinking but hes going to be ok. Betty oh, he will be fine. I dont know about his fund. Boggle and he cannot take it with income i think is what hes trying to say bob he cannot take everything, which is what i think is right to say. Betty this bull market is coming to an end itself, right, like its getting long in the tooth. My dividends with a whimper instead of a bang, i think mike if it ends with a whimper instead of a bang, i think we will be ok. We have already had two of those bangs in the past couple of years. It was awful. Mark think about the things he could not have foreseen. The guy with the flash crash, the guy with a finger on a button and suddenly vaporized a couple trillion dollars. Or who would have thought that a couple of nobel Prize Winners would have blown up a hedge fund in september of 1998 or that the United Airlines merger would not have happened and the market cracked . When you have cheap money like you have, you have people live for leopard significantly levered significantly. Betty mark, it does like you are worried about something. Bo hes worried that a bang and not a whimper. Mark i am prepared for prices to go downtown any given day. I like to have cash to take advantage of those dislocations. To be fully invested today means is no better opportunity tomorrow and that is not an assumption we make at intrepid capital. Betty thank you so much, mark trapp the mark travis of intrepid capital. Bob and go, they give for staying with me, and also thanks to mark read mike regan. Still ahead, matt miller is out there in kansas city. He will sit down with gms north american president. Plus, how much did you pay to watch saturday nights fight between Floyd Mayweather and Manny Pacquiao . Some people paid nothing. Betty another factor were watching this morning is General Motors celebrating a massive milestone, the manufacturing of over 500 million vehicles in the long history of the company. Matt miller is live in kansas city at the event with alan beaty, gm north american president. It is his First Television interview. Matt, i will send it over to you. Matt thank you very much betty. Allen, congratulations on the milestone. Are we looking at record sales for gmalan if we are coming off for gm . Alan if we are coming off of a quarter of very strong sales. A very good march and a really strong april and now we go into may with a lot of a lot of optimism. Matt we have seen a concentration in compact cars. Obviously, you are selling small and large in the suv market which you dominate, and small and large trucks. You are the only one who really makes them. What does this mean for the margins at gm . Alan what you said about the margins is absolutely right. It is the fastest turning vehicle in the industry. We are really doing well. And what is really cool is that we are attracting new people to chevrolet and to General Motors. We will we look forward with a lot of optimism. Matt do you expect that to continue, the low fuel prices . Do you plan for that . Alan if someone had told me that this would happen over the next 18 months or so, i would not have affected that. Matt you have come out with a ton of new trucks and more coming out this year. The chevy malibu is bigger, more luxurious. Why are you trying to step up with these models into a bracket higher . Alan malibu competes in the biggest car segment in the market. And our performance has not been up to par. With the introduction of this new beagle, we have put our best foot forward of this new vehicle, we have put our best foot forward. It is bigger and lighter. We have gotten great reaction to the vehicle. We are excited to be here today to celebrate an incredible milestone, but also to launch. Matt would you overtake the sonata, the ford fusion . Alan it has done quite well and i expect we will do that. Matt and i expect to see the camaro coming out. Mustang got the jump as far as releasing earlier, but the camaro at this point, will you retake the crown . Alan i will put my neck out and say, yes, we will do that. It is stunning and beautiful. And i think what research is showing now is that we have reinvented General Motors where we are looking for leadership in everything we do. We have more to come. Matt you are putting a lot of money where your mouth is. 17 billion that you have invested in u. S. Factories alone since the you the new gm was formed. Are you worried you are over investing . 12 billion in cadillac, 15 billion in china, a lot of money in mexico, its a lot of money. Alan it shows the confidence we have. We are putting our money where our mouth is. We are investing with the right products for the market and we are investing with the customer in mind with everything we do. To your point, we are making those investments. This is a time when we can show we are here to win and were here to be a leader. Matt allen, thank you so much. We appreciate your time. Back to you. Betty thank you so much for bringing us that interview. Trading now underway. Lets get to scarlet fu. Cisco is up marginally on this news about Chuck Robbins becoming the new cbo ceo. Scarlet that is right, and John Chambers will keep his role as chairman of the board. Even of the stock price is not reacting much, take it to her a look at the total take a look at the total return. Look at the chart. These are the gogo days leading up to thedot com bubble. Cisco was forced to split its stock for different times between 199699. And there was the crash and the high. And in 2011, cisco began paying dividends, reflecting how it changed from this highflying growth stock to a more mature tech company and it has consistently been paying dividends since then. We have seen microsoft did this and apple as well, but for far Different Reasons because it has a surplus of cash. On a civil price change bases, 100 14. 2 on an annual basis. If you reinvest dividends, 1955 almost a 50 return for cisco shareholders. That is something to keep in mind as John Chambers passes the baton to chuck roberts. And comcast has been in the news because it was not forced necessarily, but removed it bid to take over time warner. No word on what it will do next. First quarter profits beat analyst estimates . 79 on an adjusted basis versus a consensus of . 74 after comcast signed up more internet customers. Other highlights from the Conference Call, although it did not touch on what it would do with its many and what it might buy next, programming costs will increase a percent this year. I dont know if that means higher cable bills for you and me, but if the Cable Network continues to but the Cable Network continues to operate the majority of the cash flow for the service. Betty i am on verizon files, so i guess i wont be part of that. Still to come, Stephanie Ruhle will be headed to a conference will hear from bill ackman and much more. Betty many of wall streets biggest names, including bill ackman, are taking part in the stone conference, where they will be doling out their best ideas to eager investors and listeners. Stephanie ruhle and Erik Schatzker wishes. Will be there. Stephanie Erik Schatzker witches. Hes not coming today. But we are both headed to vegas tomorrow. But for today, the sohn conference. It happens every year, the biggest in the industry come and present their best ideas to eager investors and its all for charity, for cancer research. At 12 00 we will stream David Einhorns presentation live. And you know that as soon as David Einhorn get on the stage and get behind the podium and utters a civil a syllable the stock moves. Its all very entertaining. We will have barry rosenstein, a very wellknown activist investor. And think about it just a day after carl icahn talking about the value of activism kind of taking a jab at larry fink, it will be interesting to get very resins point of view. Barry rosenstein;ss point of view. Betty herbalife earnings are out. Will he talk about that at all . Stephanie bill ackman will never miss an opportunity to beat that drum, and so he will definitely cover herbalife, but what else he will present, we dont know. Betty what else could he say about herbalife that he has not already dead . Already said . Thank you, stephanie. Its all starting at 1 p. M. Eastern time right here. Still to come from a very an end to a very long road for ciscos John Chambers. After 20 years hes stepping down as ceo. Betty back to some news that broke earlier this morning, the ceo of cisco, John Chambers, is stepping down. Jack robbins will take over on july 26. Chuck robbins will take over on july 26. I want to get more this morning from cory johnson our bloomberg west editor at large, who i didnt know is actually here in new york. Cory i didnt know either. But here i am. Betty cisco announces, and you show up. Cory yes. John chambers said in 2012, im going to retire sometime soon and then nothing. It has been a couple of years since that announcement. Indeed, its been 20 years and a quarter since being named ceo in january of 1995. Since announcing his pending retirement, he listed a few people to replace him. In some senses, it has been in the cards for a long time, but it has been a very slow bakeoff. Betty theres slow. It seems like the market the stock hardly moved on this news. It seems like it will be a smooth transition. Cory i think his longterm record is overlooked, because the stock hasnt done great over a long time, but two survive and be a dominant company during this time when all of their competitors are following falling away. And i mean all of them. Back when the dot com was soaring, who would have thought that any of these competitors would fall away . Of patel lucid, very strong in telecom, but alcatel lucent, very strong in telecom still, but others are gone. 3com, long gone. Juniper, an interesting and Important Companies though, but cisco really dominates the business they are in, not least of which is because of the focus on security that has been very important to the company in the last few years. Betty is robbins going to keep the ship steady . Will he do . Cory who knows . It is such a behemoth of a company. It has done a lot of acquisitions and issued a lot of Stock Options to do it and use the Free Cash Flow to buy back stock. The game has been to try to acquire the best. Acquiring the best engineers what they call the manquisition. Its a timehonored tradition and cisco is loving it. Betty i like what you are doing with the phone. Cory it is a huge deal and because of the foot of twitter, the footprint of twitter, a lot of people have access to this. You saw a lot of piracy this weekend with people using periscope to watch the mayweatherpaquiao fight. The fight was subpar anyway. Betty exactly. If it is free, somebody will take it. Cory why not . Betty great to see you, cory johnson. Tomorrow, moving and shaking on the vegas strip. Then national finally gets what it wants. It is buying tropicana. Its a bloomberg exclusive. Live from louvered headquarters in new york, this is a Market Makers with Erik Schatzker and Stephanie Ruhle. Erik mcdonalds promises to stop the bleeding, its new ceo promises to strip away layers listen to the customer, and change what people think of the food. Stephanie billionaire blackrock calls out mr. Fink. He says his argument is making harder against investors. Erik and Carly Fiorini is joining the race for the president ial nomination as well as ben carson. They wont be the last. Stephanie