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Rpatnsboow0 f ei bancsheetndev uan yocabu uies. Rocegeaseay tol tu, ghetn pe ofnvtmt rk iesrs vero us t tnkinpeenisha th sulexctndou rct omon eal pce fm oc, n gng tohappen becseasal, avbe prid tohe rk. Se a aificiaypred d om tspot,etng chn lere,ouetr ok eewre for yourot. Merngarket lali, vewh war sinplin w,hi iou he image idotxaly tipa wn annouede ulbe u aving pimc eaiela mthdoou in tres any an hmit icarndonr anmah ts conties othi so. Emgi mke is whe haedegan h welus heidoteay ve mh moy ergg rks, upsewe wdippnt wh hle a spred,es i inweeranwetill ar heilbeerilmah. Thghi lfillemy j a denemy succe b visly no whe gngwhe s w sai wldbeheas erere esit will not be t fanalara. Wl veo ess. You know, he mesn d d we o u inth mns shgt, d. C. Clde. mpelang heasnoto abo. Washingn ulbe lic asmpon. N. Isovg weavsidetyeowi yes ara eerncan aultitu omage hof the arwas. Thk we a Better Company now than a month ago and that is a big statement. We are the markets most reliable generator i think that will be the case for years to come. Im looking forward to the next five years. All right. Thank you for your time. Reat to see you thank you for your insights and thoughts and canada commentary about the future of your form firm. Class while mohammed might not be in washington yet, even though some of us are speculating, i will take you there now because we have breaking news. The estimates coming out about the budget deficit. More good news, at least in the short term. Phil mattingly is in the newsroom today. He has got the headlines. That is right. A brightening picture for the u. S. Deficit. The u. S. Fiscal situation. We see the u. S. Deficit in fiscal 2014 will manage about 514 billion. As a share of the economy, the lowest it has been since 2014. Jobless also predicting rate will be at six. 7 at the Fourth Quarter of 2014. The deficit is about three percent. The lowest number since 2014. Longterm. What the ceo is attributing it to right now, aging population and health care costs. On the nearterm, something to keep in mind, fiscal negotiations always continue on capitol hill. The urgency is slipping away. No longer are lawmakers able to point to the deficit has in a constant state of going straight upward. As it starts to narrow a little, lawmakers are no longer grabbing onto that saying. It is something to keep an eye on. Not it urgent situation anymore. I am not sure i believe that. It is a situation that continues to bubble up and they should not take their eye off the ball. Nobodys listening to me. Thank you for giving us the latest on the deficit. We just talked to bill gross, the bond market king. We now have the dean of the columbias business goal talking with us. It seems to be the most sensible place to start is ceo projections. Thennot imagine based on outlook right now, you disagree with the view that budget deficits are going to explode in the next several years. Yes. They are a huge problem there are huge problems remaining. Never a deficit today, but the longterm deficit. Interest rates are negligible. We are not out of the woods. What is your view right now . A key variable. The linchpin, if you will. Bill is among those who does not believe the fed will release Interest Rates until 2016. The fed has intricate indicated it wants to be on hold for a sustained time. We will hear more from chairman yellen on that view. I do not expect aggressive fed action. The question is at one point long Interest Rates start to rise because of market pressures and that is less predictable. It is about the economic recovery and inflation concerns. Should janet yellen be focused on the volatility or should that not be her focused . Emergingmarket volatility . It is import the case the fed has to understand the whole world, but many of these companies are suffering from their own problems. They cannot blame everything on Federal Reserve tapering. The fed can have a 1950s view of focusing on the u. S. It has to look at the whole world. Is there not something irresponsible about the whatever it takes mindset, that we will just create a great safety net here in the u. S. Or in europe, when fundamentally there are massive problems and we maybe should take the safety net away . Taking it away, but really addressing the problems. Gradual and the longterm. We could actually have a strong safety net today. The federal government are focused on the safety net part and not the reform part. Which of the next action be . The stock market is reflecting uncertainty about economic recovery in the future and we will have to see how that sorts out there it there is considerable disagreement between a three percent growth a 2. 5rajectory or trajectory. We will learn that slowly. The fed should focus on the longterm view. Do what to what degree do you believe asset prices will influence policymaking, whether the paper or Something Else . Chairman yellen is an outstanding economist who has been part of the mix for a long time. I do not expect radical changes in that point of view. The fed should always be watching asset mark market to make sure there are no signs of fraud or bubbles. When you look at the smp last year, did you say this is frothy and a bubble . Bubble is a strong word. We see strong Earnings Growth and there is a view they might be upshifting in the Growth Prospects but that is a risky view. That is why we see the volatility. It would be way too soon to use the bubble word. It makes me wonder how long it might take. Lets say we see the dow dropped another thousand points. To undermineh consumer and ceo confidence to the point it begins to affect Economic Growth trajectory . Class it might. Ceos have been for some time anyway. Ceos are worried about future demand and Public Policy uncertainty. In washingtonned is fanning the flames. A clearer path on the budget would really help unleash investment and unemployment. Is one of the reason the markets have done so well because we have had the central hard toso it is evaluate how it is . We have had good corporate performance and ninth nonfinancial corporate america. If you believe the u. S. Economy could grow faster, the valuations might make sense but it is a risky bet. Some people say maybe we have reached a point in washington where the fever has broken and who knows how much can get done in an election year. Thing that you think public and then democrats should Work Together on a combo showing, what would it be . Butany things we should do, emigration, i had hoped the night of the president s speech, histrade was among those. Own party threw cold water on that. Trade immigration and business reform are the big three. What is your confidence level on fixing any of them . It would be tough to disagree with you, but lets get real. Strong elements of both parties want action on each. The big question is will the president lead . He will have to pick one of those and choose his battles and do it. There asking so much of fed, when it is the government that needs to act. Go, we will go back to yellen for one second. Her testimony before the senate and house comes next week. If you were in her shoes, what posture would you strike . They will underscore the continuity of Federal Reserve policy, where we have been and where we are going, perhaps views on financial regulation, but i expect continuity to be the message and not change. Dean of the columbia business school, former chairman of the present council of economic advisers. Were lucky today. Onetwo punch. Up. Ave more stuff coming the jury is going to decide, the big Insider Trading case against the former manager at s. E. C. Capital. Ibm found a way to lower its tax rate. That story is next. Also, the big Insider Trading case is going to the jury today. Defense lawyers say there is a missing man in the courtroom, the Billionaire Hedge Fund manager, steve cohen. More on that next right here. You are watching Bloomberg Television streaming on your phone, tablet, and more on apple. Le,his is mark ke. T croft. Thcoancoird ate told youaswe. In thally the third c companys histy. Sts imporntbi ges will ge up his chamaro te aexnd pdu delopmense. I will bngn n lima live in l. Eric a i love topine on it, b y hpebrk isto la wk. Hyre you making this mie upt llatolng s eeves ainhere soansty ne a fascatg or thlongti insid, the staff treoror tha20ea ansobo lving t area, a brhtpoor microsoft, o epin ts lhtbi gas,ho llow be behind thsces doi me on campus angingmo oa highlevel the t pplbuin ut nplin in the bodrm mh. Heecce mbe theo twn twn shgton and also ju s fainating, the guy who was leinthsechorons and monsalthose caidesand th bom a part of e orhiel its fascatg. Att llous aerhe looked at dozensfcaidates whichncdea tf teal people t bt y g it do w wh seby ono thpotil mehais crosoft. Llat willlaa le bendheces d hn omonilhe tiy y coer walltrt ghha shortrm s a knohabi ges would have to step initand si . Tgho say jt say it. Ato u in wnthinkt ok somebody worki wh llat for a ng timeisoi tha to woralittle bit mo with llat. Ats y e laonship wldav so bn recoliteif somebodyrothouidha co ian sd, whaise in behd e en, i ee to do what i want d and weavsa ts l alon the coliti othsty ste merayg,eris crofgogorrd, and eyea a search for a c tethfact. You arasngueio. Re any of the tential candite tt may have bee peleteallmer was thki wlde ke abo thjowhen hwas putting the blprt tetr, was he asked ou wt eyottily ou tnkbo tt . Iha tsay. Veinheanguage of what s put o today in his commenta, u n e eferens t crof sategy evbame la o d ysls ae te ureranma i mo tn st autor a more than jt about the fa w wi bdog vis d svis. Oeitaynyinto y at ty would chse an teri g aiteems there is me d re pressure to fusn isuses ecoanhaso man diertpoet a gng to make the coluonha, absolutely, that is aloof owth and they veolsts recently, escilyers wt az h bn doing. Th ia eabrht st r them tpot. T crofwould loveo be in a pitn todayo y e deceweutut on th artso y fl terest in stwe, thadinowo as well as is we wanteor ybe it has not. I wl ndouacto the yslba, thta rd because i do n ueranth busine strategy. Oings veman from l. A. H does m i the comnyroedorev straight qrts d e earningspersha jt ep si. Ititve a lot to do al h a gre sry today. Should chkt out. E he tk uabt. U ok at m. I. Legodo. Is ial about engeeng hahoerwi tell you omofhe longusiness and eyav areop a tes sothing that, goes hi t sceshath have looked to crseowucthey are ayg ructhpritro threnue. Have not seen tax refor inmeca cporate tax rates he t neow haotrsomni ve maged to bring the x tedo fth a further. Enrenue is omheide stfr europend aic tou ts ittoraba x teow thanhath he eninhe s. The prit ty d u stayg eras. Abt billion in 2012 ste eras hadipeleay abo the tradef ty made,hede th y, imu btefo shehders ithry becse boosts office and earnings t ey le acce talth money. Ren rtmerica. Shehde a worried abt e aly i eaings. They do not he to gwtin vee d a n gwi thr le wh ty e e tsoo expenses,ts growing, but how good t quitofheoo . Why is the company having so much trouble growing revenue . They have really grown on pcs, which they sold off. They are getting ready rid of the businesses because the companies store more data in the cloud. Ibm is trying to they have a strategy. They areh, they said building it out and spending on this strategy. You still have competitors like that are getting out there and investors seem to say our ahead. Investors are trying to keep up at this point. Press it sounds like it leaves the company with little choice. Youre forced to try to find ways to squeeze out extra dough on the bottom line. Are we at the point where investors were analysts say ibm has run out of room . We are twoe 20 years out of that. We have shareholders like warren buffett, the biggest holder who growing and i like that. The stock was the only loser in the dow last year. It trailed by 32 Percentage Points last year. That could be an indication as to what investors are thinking right now. Thank you for bringing us that story. The latest on ibm and financial engineering. When we come back, Closing Arguments. The insidertrading case in new york city. Thelawyer who says he is real victim, defendant, that is. Hat is next. Welcome back. The next act of drama playing out in a courtroom right here in new york city. The jury is starting to deliberate the state of the former fund manager for steve s sac capital. Its use of a 270 5 million insidertrading scheme. Covering the case, you are out of the courtroom today. Give us a sense of what it has been like in their. Delivering Closing Argument and the courtroom was packed. Running the prosecution. Several rows of friends and supporters. How do you know they are his friends . I have been asking around. Other employees there, is steve in the room . Who is not seen anyave arrests recognizable figures. Like there was no steve in the room though he has been mentioned a few times. Hislawyer invoked in Closing Argument yesterday, saying it is not fair to convict mark toma. He essentially is just roadkill in the government unrestrained attempt to get . But he did not take the stand. He did not. You think about that . It does not send the best message to the jury. Why did he not take the stand if he did not do anything wrong . The defense followed a very classic insidertrading defense book. They tried to argue the witnesses are dishonest and unreliable year they tried to argue the information he allegedly traded on was already public. The prosecution said i will take this to my kids. When my kids are liars and badly behaved, they say nothing. Innocent, they speak up. Do yours . My kids never lie. Only mine do. To compare aense kindergarten classroom to a courtroom on some level. More than one. Sometimes it seems infantile what is going on. It only takes one juror to have a doubt about that story. People were expressing confidence about the jury and were saying, we feel really good about the jury. If we had michaels jury, this would be bad for us, but we have a sophisticated jury flow and they think that will help them. How is it greeting a jury is part of the art of being a lawyer. Why is it the people in the camp feel this jury is so much more maybe they are just kissing their ass. They are much more alert. One juror after the hours. A couple of hours still in the room last week revealing notes. They seem to be paying close attention. There is no question the defense accusing the prosecution of making a mark toma a fall guy for steve is a persuasive line of argument given everything we have seen given the multiyear effort which no one can deny now. What was the strongest case the prosecution made . The evidence has always been strong. They seem to stick to the basics facts. Y just review the there are two doctors. They gave him information they were not supposed to. There is a lot of evidence he traded on the information. He could slip even after he is convicted. In a sense, saying the prosecution is just trying to make him the fog i. Are they also say he is not to blame either . Class no. Every time steve name has come of a third rail. Steve cohen was never charged with anything. He has been a shadow defendant through the whole thing and has come up again and again. They have tried to blame him and not blame him for what mark toma did. From the prosecution point of us this iswill tell a victory for justice and free markets. A victory for investors and etc. They did not get steinberg to flip. Lets say mark toma is convicted and does not flip and gets sent to prison without saying a word about steve . Does that make the whole effort a failure . Class a cruel question. They would say they still charged steve s firm. The a turnout the attorney running the show would say they achieved a victory with that and essentially put a hedge fund out of business doing things they believe were legal. Steve cohen will continue trading trading his maze of dollars and living a fine life. You watched both of the trials. Has super sophisticated lawyering the truth. Co truth . Everyone deserves a defense. Ou never know for sure evidence is quite powerful against mark toma. There is always the possibility someone made a mistake. Are we allowed to ask sheila what you do if you were in the jury . Do not know if we should call someone and get permission. We will see how it goes. You watched the whole trial and what would you be saying right now . I would say the evidence is very strong but there is always a possibility that is why we get to be judged by a jury of our peers. Anything could happen. That is true. Exciting if nothing else. It has been fun for me. When we come back, a billion dollar makeover, looking for the place that calls itself the worlds most famous arena. You will see that next. Welcome back. Theyre in hosted not just entertain us entertainers, but pose and president s and many others. Worlds most famous arena has lost its luster and is in dire need of a transformation. The ceo gave me an exclusive look at the billiondollar facelift. The rolling stones, elton johns, so not sure, zeppelin, things, they all have one in common. The worlds most famous arena. Madison square garden has been the place for entertainers since 1879. The garden is for the ages. It is forever. A different level of quality. A different level of service. It is unmistakably Madison Square garden. This is new1968, yorks icon with a rich history. With new flashy venues being built around the country, it was in dire need of a renovation or transformation as the ceo describes it. What was your biggest challenge . The biggest challenge was getting it done while we still played. Everywhere else, you move somewhere and close the building down. We had to do both. We did the work and worked until about 3 00 p. M. Every single day during the season when events were taking place. The logistics of making that happen and getting on on time at the start of the season, it was not easy. You notice a difference as soon as you walk in. An open entrance way nearly twice the size. 96 new suites and wifi throughout, two suspended over the course and a map of multimedia scoreboard. It took 2. 6 million hours of labor to complete the transformation and they cost 1 billion. Ratner was in charge of the transformation and is banking on more than just ticket sales. We created a new product and service. It is not just a matter of prices. We had a market partnered that found it desirable. Inventory that do not exist before. More collaboratively with our partners and fans, we help pay the price of transformation. How is it the garden is able in . Ck people that is what amazes me. It is an overall experience as we walk around. You see a billiondollar investment and see what it is like. We could stop here. 366 and food offerings here. You look at the art program throughout. It is an experience and an adventure. Regardless of when or news in that win or lose in that particular night. A legendary icon that, when he will come here, they need to feel they have experienced Madison Square garden. The building completed its transformation in october while the company is still running up the score. Do you not want to make another big investment . We are in a great position right it, to transform the garden, is now time to transform msg as its own company. We have no debt. Two. Re looking at box lyons and we are looking for opportunities to grow the company. We bought it earlier last year and have been renovating it. We are looking for smart and good opportunities to invest and grow our business. It is extraordinary. They really do not have a choice and they have to renovate. We talked about it yesterday. The giant stadium had a transformation because if you want people to go to the games, you have to deliver a great product. At giants stadium, we barely had wifi. That is an issue. It is now just one element. If you ask people to spend thousands of dollars for tickets, you have luxury a display. And wants me to go it wants to make me go to Madison Square garden. Rangers fans. An issue. A hockey guy from canada. Msg is a great venue to watch a lot of sports. The Berkeley Center is trying to become a place to watch hockey and they cannot make it happen yet. Not yet. Right now, almost 56 minutes past the hour, time for us to go on the markets. We will share with you the actionthe volatile on risk assets. What is happening on socks, the dow is up today. The seesaw continues. What is driving the market today, i do not know if there is a whole lot of conviction today. The latest Economic Data out of the economy suggesting maybe things are better than i thought yesterday. In the last hour, i have spoken to a number of investors tried to get an understanding of the Economic Data. Many are ignoring it today and using an opportunity to buy. We found names yesterday like microsoft and amazon take a hit. Maybe that is what we are seeing. About it is not happening in great volume. Maybe not. I have said this before. This market separates the men from the boys and the girls from women, whatever you want to call it. A moment to marker in the market. Market makers is going to be back in just a moment. We will be celebrating happy birthday to facebook. Live, fm ooerwod adarrsn w rk, this ismaetakswi ek hakeansthae hl facebk turns10, weno w rk zkeeroud e campusraze io a global enen. Tthsoal nwo ithne 1ears . S jonasmor adrtin iidt lloriois wringheew anrds. T nt neti of fr le tes philanthrost e w neti that makinghe mk. Lce mark mers. Ernva ew isws a stzla,t h bihd awell as febk. Icso h me fialthcoan iid Saa Dea Wille e w ce a bl gess into step asi achrman. Chnindelie rla sve bamer efctemmedialy tynall wl ple ev bamer effective iedte. Epced byesilbe d e o veonth c src reouar veron in thisen mthowrato ove arhoancout acsso students waaris wppg t competiofoshpe i cada torlaesreil i going to on sernts, addingrod stribuon twks taco aun 4ilon is is doug macmillfit ov,t men s second d asheeweo ou mt keha we he grt es wh us th mni wn vi t magiirtoofndorr o t havintooa ffingtos hs going toe with us for the wl hr,rihiea hadoouakofhithat miost . 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Wl sina agntioofheocl rds,neli fmsvio becoming really poan faceokilbeifre fm but wi pbay seo e chlee. Ctrutedorerat kkokioins us aryoa ceokse o. I utt wn aun2. Yes ag m o paentoea wi i doousefabo . Ots chs ustwte what does thame tn . Tunrstand thepa, a tonnus ent meto ina er idinosoehe pblem for me, it created problems. I am much more active as a tutor user twitter user. I use it on a daily basis. That it wassnt necessary today judge, it was just my daily uses to stay in touch, it was just my daily usage. For any platforms like facebook going forward, they want to be all things to all people. With all of these services, the market kind of finds things that wants to do, and maybe twitter or facebook will buy them and maybe not. The market by the sunway degrading services that it uses. That is going to perpetually that threat for this big monolithic service like facebook. Stephanie uses it a lot, paul does not use it anymore, he i do not use it all, you using it less and less. Maybe footer is the social networking website, maybe it is snap shut, i do not know. Networker is the social of the moment, maybe it is snap chat, i do not know. Facebook away from the idea that it has to all happen on one network, diversifying. , ive downloaded these apps and youd can deemphasize if you deemphasize your friends, and empathize news. Think of facebook as a realtime anything . It can be, and of able see it that way. It new apps have been announced to come down the road. They need to unbundle facebook to some degree. Facebook home, they tried this once already with creating a new interface and a new way of using it, and it was a complete face plant. These are stabs at figuring out how to get the right tool in front of people, so they will use facebook the way they want to. The real threat are these people that are creating new apps like instagram and on and on. You cannot have this be all things to be all people to all people platform. Is paper getting a great review from you . I cannot use it, because you cannot use unless you plug into facebook. You cannot use it for anything productive unless you want to plug it into your facebook account. I do not even know what to call it. The identity crisis for facebook, the reason that snap chat and some other companies do not want to be owned by facebook . They own instagram, which is part of that new platforms for social. Others have said it is a young company, i think mark is a malicious its ambitious is ambitious. These guys do not want to be litter on the side of the road. But what would they need that is amazing, that we are talking about the possibility of the facebook being a litter on the side of the road . That is the history, i long history people love loan out a long history of people who have blown out. Reallycome in and get excited and then decide that im not that interested them and they move on. Thatcide that i am not interested, and they move on. Goldenerberg was the boy, i could do no wrong, did we overstate his embedded of and could do no wrong, did we overstate his competitive advantage . No. It is an event by itself. I think it is going to continue to do well, it will not be later by the side of the road. Does facebook need to change the way we think about what we use it for . You would not put realtime news on there, neither would i. You saw them fumble around a with this last week in the super bowl. I do not think it will ever take. They are almost exclusively mobile, there is no investment in the desktop roddick, and it is more internet and sharing. Product, and it is more on the internet with sherry. Aring. Use a mobile device, you use it in a very different fashion than use the desktop you use the desk top. Mobile is over half their revenues, they have a huge building to grow. Advertising is an indicator. People are just starting to understand how they use their platforms. I hate facebook advertising. Theyll tell me to white my n my teeth, and go on a diet. Is sticking with us here on market makers. Were going to talk about incoming quality income inequality. Journalism goes native, is the future really going to be Constant Contact . We will be answering that question in just a few, so stay with us here on Bloomberg Television, live on bbg television and streaming on your phone, tablet, and at bloomberg. Com. Welcome back to market makers. The hippeau is with us for hour. Hes the former ceo of pop in to post of the huffington post. We want to talk about the income inequality debate, it is really on fire in silicon valley. I do not know it people in new york have their head around to the protests, and what is going on. Year medivation of technology. The urbanization of technology. They are all moving to San Francisco, because they want to be in a norman area urban area. Big them a diverse fight centers of eggs and these is where technology is getting developed. Now you have all of these tech workers moving up to the city, and they have a little bit more money than some people in the city, so they jack up the rents. That nobody houses all caps for dramatic pushes out the people who have been nobodyresidents can afford, and pushes out the people who have been longterm residents. Can you give us a sense of what it is like . In new york city is is always how we have operated this is always how we have operated, it is just how we roll. What he mentioned was important, that it is only recently that these tech workers have wanted to live in San Francisco. It is a lot more desirable for the younger people. Googlere not just blessed with a are the buses to google, facebook google, they are the buses to facebook and apple. It is not just the people who are poor who were getting out of neighborhood, it is the middle class people who were upset about the traffic. To agreement that they came the city to pay one dollar to at thesee last ups bus stops, regular people and to paytwo dollars have to two dollars. What about all of these urban planners that want to be the next silicon valley, with the city. W york . Washington wants to do this, and london, england wants to do this, dallas wants to do this, austin wants to do this. It is a transition that has to be planned for. , the companies that have those buses need to pay more to use the infrastructure that has been paid by the taxpayers. I do not understand. A dollar a day to stop any busstop does not seem like it will make a crack in the problem. They need to pay more just to utilize the infrastructure that was developed by the taxpayers of the city. On the other side, cities have to plan ahead, and earmark new elements for Affordable Housing new development for Affordable Housing. There is a lot of this in new york city, and you see that brooklyn is brewing, hopefully the queens and bronx areas will follow suit. Brooklyn is booming. Google anda that others should actually pay more money to the city of San Francisco for the luxury of being able to use Public Infrastructure for this kind of thing . Or to the state, because theyre going all the way down . Theyre using bustout, bustling, maybe to pay their using b e maybebus lanes, they should pay their fair share. Withu not seeing this connectivity to the city . A 111 rule. Pretty robustve a employee matching program, but you have these buses that have become a symbol of why there is this income disparity. Ber one commit is the rod number one, it is the broad ecosystem. Rich,et lucky, and get and then youre still making the same amount of money. Technology is the changing so quickly, that people who develop the skills over their lives, these skills are not relevant. People love to realize that have to realize that it is not just about the buses, it is oftesters around the houses google engineers. Theyre not just singling out the buses, they are singling out the people of and particular employees. When he gets to that point, it is pretty dangerous. Theould not one make argument that these people in San Francisco are the current model for the American Dream . While there are a few millionaires among these tech number ofa great them are middle class. Everybody should aspire to be that kind of middleclass. We need to start educating technology in middle school, and high school. Most schools do not do that, new york city we do not do that. This next generation has to be able to be technosavvy. Should we not say that the people in these buses are taxpayers . Right, they are taxpayers, but at the same time, they are not spending their money in the city of San Francisco, but they are living your. Here. Terribleisco has a Public School system relative to the amount of technology and education in the area. Was recently given a recently gave a 2. 7 million public grant for technology to the schools. This problem is only getting edgar, great to have you on the beat bigger, great to have you on the beat. bankers are trying to do still doing well. That story, coming up. Is 26 minutes past the hour, and time for on the markets. We are talking luxury go ods. Has beat analyst estimates, and raised its estimates. Michael kors having a big day. Names are having a better day after yesterday. I am just a realist. Is aen we come back, journalism, marketing, or both . We will be making with the lounger behind the Company Founder behind the company. They want to change the world, and they are preaching the power of capitalism to do it. A new generation of philanthropists on wall street. Live, from bloomberg headquarters in new york, this is market makers, with Erik Schatzker and stephanie ruhle. This is indeed market makers. I am air cam Erik Schatzker were talking about a startup that connects freelance journalists with our brick sponsors that corporate sponsors with corporate sponsors. Shame, why dont we start with this, is journalism advertising . Am aat is the thing that i point wet, and at a realized that what we were facilitating was not journalism of and that was a relief because what brands want to do a sponsor content, but tell stories that are informative and entertainment. So we are in the education doesnt business, but not in the journalism sense that you are exposing corruption, and the like that. It has less to do the content, and more with the way it is presented . I think it has more to do with the intention. The same reason that advertisers use to want to advertise against the sports section and the finance attention and the section and the fashion section. In tellingterested the stories about those areas, instead of the war in iraq. Eed lives and breathes on sponsored content. Is a new segment. Sponsored advertisement has existed in print, and tv to some degree. In his storytelling, that is the important part. It is very hard to tell a story in a little rectangle display ad. Advertisers want to tell stories about their marketplaces, about what goes on in the world that is relevant to them, and did some cases element to their product. Relevant to their product. Is storytelling, but i do not realize who is telling me that story. That do it need to post it correctly, buzz feed has used this, and makes it very clear. Should journalism feel threatened by it . Journalism since the end as an opportunity. In colombia, i taught a few e studentsnd tho thought i was a dying business, but i told them that news is a growing business. The thing that encourages me is that there are more opportunities. They do not want to hire the people writing the same copywriting as advertisements. Lots ofopening opportunities, publishing is coming from a different source. Sameifferent the heights and skills are being needed. We work mostly with orton 500 companies and Media Companies that are doing sponsored content for their fortune hundred 500 sponsors. One of my favorite examples is American Express. They want people to know how much they care about Small Business. So they created a website which is exceptionally a magazine about Small Business owners and the challenges that they face. They hire journalists to interview Small Business owners, to provide tips and reactions to the news, and commentary for Small Business owners, so that American Express can build relationships with these people that they wanted up want to know. If you write for another magazine, they are paying more for those stories. Lets just use the mx example the American Express example, what do they accomplish by telling stories about Small Business . In his ace ball business brand it is a Small Business brand. Lots of people take a very cynical viewpoint and say that American Express wants to affiliate itself with Small Business because Small Business looks at the monthly fees and says to rich for my blood. They have choices, the American Express services that are to expensive, that will make people go with mastercard. Where do you think it goes next . There are four things that we predicted the next thing that is coming this year. Transparency is a big one, counterproductive for a brand to tell stories that you do not know is behind the story. Beingl see more brands proud to fly their banner above the stories they tell. Brands will start to tell bigger and better stores, trying to outdo each other, and that is positive for the consumer. Think aretwo that i important our distribution, so we will start paying money to get it out there, but the measurement, how do you tie the publishing results to Business Results . How fast are you growing . Last year we grow about 400 . Grew about 400 . And you turned him down . Misses,imes you have and he was one. We were very tiny, three guys in a coffee shop when we pitched. We were amazed at how much omentum theres been in the space momentum there has been in the space. How big are you now . Journals, 30000 people in the office, a nd many clients. Doesnt feel like the realtor a arm is about to smack you guys down the regulatory arm is about to smack you guys down . In the same way that journalism is one of the one of the core tenants as to not betray the reader, minimizing harm, those are the things that advertisers need to do when theyre telling stories. The ftc is trying to step in, because people are being tricked. The brands that are going to be successful need to go above and beyond those standards anyway. Is looming regulation why you chose this path . Knowthink the good brands full well that there has to be longterm plans. I took this pass because i made a bad judgment. One of the things that people want for themselves when they read a piece of sponsored what kind of handcuffs do have to work with . Upother words, lets make it , if intel came to you and said do a piece about thisbut not to mention company, what would you do . We created a code of ethics for our customers that they have to agree to the comes down to the sum of those things that comes to some of those things. Put our bank is awesome in there byline, in their byline, that would be unethical. Of course he picks a bank. Thank you, it will only get more interesting. Indeed. We have a lot more to cover with eric hippeau, and we will actually be covering young bankers on wall street. That is next on market makers. It is not all about the benjamin. It is aboutkers nonprofits to help immigrants, veterans, and students. Congratulations, give us the story. You said it is not all about the benjamin couple which is a good puff daddy reference. Benjamin, which is a good puff daddy reference. We are talking about people of multithat are creating their of wall street that are creating their own nonprofits. They want to take the lessons i m has to teach that capitalism has to teach, and applied to the real world world. T to the real one thing i did was talk to a lot of people who know about the nonprofit world when they said that the passion is great, but sometimes it takes more to run a successful nonprofit and passion thean passion. Our country would not exist with capitalism, but not every thing about it is terrific. It can be a little bit harsh, but this is the generation of finance. People want to be entrepreneurs, they want to be able to build something into it that builds gives back. Parker,d about warby which gives one away for everyone but every one bought. Moste millennials are the impressive generation he has ever worked with, and he has been hiring people for 30 years. Would you agree with that . These are the people that i see everyday that, to me with new ideas come to me with new ideas. They work hard, they want to is the big hope in our country, this generation. You cover wall street, you have been covering it for years. When you look at the ceos of the titans that you cover, versus the new generation in the story, do you see the difference . One difference that i see is that this group of people consider themselves revolutionaries, or could, but they do not, they say we are adding on to the model. We are inspired by what came before. It is interesting to hear them give lip service. What do you mean . That they brought their names and the compliments and accomplishments and eight positive way in a positive way. What what young people say, 34, are about 30 to these are bankers we are talking about, private equity people, hedge fund people, bankers, who say they are just living in a postcrisis world where they are yearning for her spiked ability respectability, i was there before 2008. We had a quote that we did not put in that was about family reunions. Workould say i used to at Goldman Sachs to edit had a great connotation. Now it can be a way to signal to other people what you used to be able to pa. Dozen nonprofit signal does aability nonprofit signal respectability . It will be the model going forward. As opposed to waiting 100 make 100 million dollars, why not just give a little bit away, and signal to the market . This to the streets, and the street takes into account of and does not punish you for doing good things. Youre a journalist, and a millennial, what would you take away from meeting all of these bankers . I think it will take a little bit of time to show. There are three women who met each other at Goldman Sachs, and fund laststarted a year, to give scarlet ships give scholarships regardless of immigration status. That theoretically could be a remarkable thing for american education, but they are just starting, and i think a lot of it we can question motives, but if the results are good, that is only good. Congratulations, great story. What is the title . Bankers climbing wall street. Back, finalome hippeau. With eric this has been a great hour with eric hippeau, the former ceo of the huffington post. Leftve a minute and a half , you are a venture capitalist but what excites you the most these days . What excites me the most is that all the technology, barring some like banking back to banking again. They will be moving forward with the same tools, and same platforms that we used today for personal use in our pockets. All applications will be built using the same technology. Why is that exciting . It will cement the phase of rapid development, rapid innovation. We are on down with all text, old tech, old i. Dt, systems. What does that say for the future of Companies Like ibm, oracle . Moving reallyl rapidly and aggressively into this area. Cloud computing, all of that. This is what the new microsoft ceo is from. Thank you for joining us. It has been a great day on market makers. That is going to do it for market makers, tomorrow another great show. Blackrocks ceo will be here, and it will be a big day. Bloomberg is about to take you on the markets, because it is 56 minutes past the hour. Thank you, it is time for todays options insight. Net five networks was part of yesterdays massive sw elloffs. But now we have an investor was bullish on the strategy. Great, it islooks hitting a 52week high. A pullback yesterday when the s p 500 futures went down 40 points. I think this is an opportunity. Institutional order, a traitor lot 1000 of the 800 call trader bought 1000 of the hundred call. In that ugly day and that selloff, i bought some of the april 1 15 calls, it cost me 2. 15 for that was my biggest. And a microphone that was my biggest position in my portfolio. The stock chart looks great pride the good is headed higher. Is their fundamental reason that you like it . The earnings were great for the stock was trading 94, we saw this institutional order, and i took it off before earnings, and unfortunately they had a great quarter and fortunately they had a great quarter. Takes out 110, it can go up to 120. It will get hit, but there is an opportunity. Just because the market gets hit so much, does not mean that there is opportunities as a trade out there. How risky is this . How much do you risk . I bought 100 of them, so i have one in 5,000 of risk in my own account 25,000 of risk in my own account. Every time we rally, we get sold off, and get sold off hard. Im not going to go by brazilian stocks, or arginine are argentinian stocks, it moves me higher, it gets me all the way to april. I have about 2. 5 months on this trade. After yesterdays big selloff, how does that action look . Ive been long on the market for the last couple of years, and delectable of days have been rough. Im stock pacific specific, buywe saw a trader september calls. I do not want to go long on any week stocks, and i do a lot of weak stocks, and i do not want to go on any of markets. Emerging you do look at the tech sector a lot. Any big movements before or after the announcement . The order for microsoft is so big. Y, and it popped toda thought there was a possibility that bill gates would come back bad that did not happen back, and thats did not happen. We are going to take a quick look at what the markets are doing, because we did see a massive drop yesterday with the s p down more than two percent, and the dow off 326 points. We covered some of that, but not very much. The nasdaq is also a gain a right now. Welcome to lunch money. I am adam johnson. In media, happy birthday. Facebook. Where it is going. The worlds biggest maker of Wind Turbines lance a first quarterly profit in three years. Data breaches on capitol hill. We will take you there. How green addiction drove this man to lead a payroll. Alyssa milano goes into sports