Welcome to market makers. And im joe weisenthal. In for joe today. We have a lot to cover. We have to cover greece. The top business stories from around the world. The winner john lohan has joined the board of Lions Gate Entertainment in a stock swap deal. Lions gate is the studio that produced the multibilliondollar hunger games movies. The company is giving malone and his affiliates at 3 stake. In return, lions gate will get 14 of the voting power and malones starz tv network. Time warner has beat profit estimates for the 24th quarter in a row. Fees for its cable channels and hbo help offset a drop in advertising sales. So did job cuts across the company. Time warner is trying to attract new viewers by offering a web only subscription to hbo for hip millennials. A Record Number of americans renounced their citizenship last year. More than 3400 turn in their passports. One likely reason, a law that gives the irs unprecedented access to americans foreign bank accounts. That nbc news investigation of Brian Williams is not over. Williams has now been suspended for six months without pay after he had to apologize for disputed accounts of his reporting in iraq. The network says it is it has concerns about comments williams made. Lester holt will fill in. I have to say, that is a wow. Quite a story. What you think . Im not surprised. I would not have been supplied not have been surprised. Are you not surprised by the suspension or that he lied . Im pretty shocked by that. Its months seems like a nice desk six months seems like a nice way to make it count. I think if you lied, it is hard to get back to it. What you do for a living is stand in front of a camera and hopefully tell people the truth. Germany and greece are playing greece, totally credible. The german finance minister says no way will he renegotiate the terms of the bailout. The greek Prime Minister says no way will he continue the austerity policies. Finance ministers are hoping to find Common Ground at a meeting in brussels later today. The next steps now with david servos. He is in l. A. And our international correspondent, hans nichols. David, what do you make of all this . I will stick to my view the last time i was with you, which was from athens. I think with joe standing on a windy rooftop. This is a tempest in a teapot. It is not the Second Coming of lehman. A greek exit or a greek nonpayment event, if this goes down, is not the morale of Financial Markets and the way it might back in 2012. It will be interesting to watch and we could get a risk off field to the markets for short period of time. Im sad to say i agree with the germans. I think greece can be let go without much fanfare. Hans, what do you think . There are two lines of public posture from germany. It is unimaginable to have anyone leave the euro. It is also that they are not going to budge from their position that greece has to stay in the imf program. Greece has made it clear that they want to leave. They want to do that at the end of the month. Today, we have the reckoning. You want a sense for how little confidence there is on the german side that you will get anything substantial out of this meeting . The german finance minister plans to lead leave the meeting tonight. That is not a finance minister who is per parent for an allnight oldschool european negotiation. Is there anything that we can expect from tonight . Any chance we could get something productive . Or is the expectation that when we wake up tomorrow, everything will be exactly the same except less time on the clock . You will get clarity. Maybe they will have an agreement. Everything i read from the body language, from what all the germans, dutch are saying youre unlikely to have a back down from the european side. We could get clarity on a key point, that is, will the europeans allow greece to increase their tbill limit another 8 billion and that could give greece bridge financing. If they say no to that, it will seem less likely that greece will get bridge financing and you could have some sort of nonpayment, credit event. The markets have a discussion or just decide how big an event that is. If we do have a credit event what is going to happen to european banks . These of the guys with the huge amount of greek debt on their books. They dont have as much as they had before. When the greek bailout took place before the psi, only got the efs at and all the structured loans, the data that was announced french bankshares rally 25 percent. I would imagine bankshares will not be up anything like that if we get an agreement here. A lot of this risk has been moved into the Public Sector whether in the esf f the imf or the Eu Commission loans or all the structures that were put in place this is not a real private sector event. We have psi bonds that were knocked down to virtually a very little portion of the outstanding debt. Were been able to move the exposure out. The problem for the greeks now is that they do not have that lehman bargaining chip. The other thing that is important is we have euro qe. We will have a buying of italian, spanish, government bonds so this contagion effect that worked in the greeks favor to say, you need to bridge us and give us this financing, to effectively pay you. That does not work as well. The luger is the official sector the loser is the official sector. The reverberation to the Financial Markets is going to be minor. That is a problem for the greeks. They will have to have a come to jesus moment about what they want to do. It is going to lie with them and how much they are willing to backtrack on what the greek people voted for. You make a strong case that there is not going to be much financial contagion if greece were to leave the euro. What about the politics . Europe and euro say that it would be unthinkable for anyone to leave. If greece leaves, that story is over. You people start worrying . Not so much about the financial side, but down the road that we could have a similar debate in spain or other countries where the economy is pretty miserable . I dont think is going to shock anybody that a politician in europe might have lied to them. This Brian Williams a in europe is not going to be there at you guys were discussing. Juncker used to argue that when all else fails, just lie. I think that was a quote of his. The idea that we would never haircut bonds that all these bonds will be money good, that did not come out to work very well when the greek psi experience happened. I think you have to go with this notion that the greeks dont want to have money come into their countries only so that it can go back out to pay creditors to save face. I want to share with you headlines crossing. The chairman of the eurogroup is speaking to reporters right now as he arrives at the meeting. He says he is willing to cooperate with the greek government and that greece must become financially instant pendant financially independent soon. What do you think of that . How are they going to do that . I think the finance minister came into all of this saying greece is insolvent. Indy to restructure us. It was the truth in 2011 and it is the truth today. I have been propped up so that they can get money into pay off the creditors. It is about a facesaving exercise for europe. The greeks do not want the money because they do not get the money. Money does not stay in greece. They want to be able to do their own thing. I think that is right for greece. If that entails greece leaving, i am ok with that. The market will eventually be ok after a hick up. Eat the loss, i think greece stays in and they can move on from here. This is a facesaving exercise for european politicians. Remember as well, this is a radical left party in greece trying taking the helm and you have centerright parties in the north that are watching their prospects if these guys are successful. Youre watching spain the end of next year, same thing. If this radical left Party Looks Like it is gaining traction and doing the right thing and policies are working, that is not going to sit well with Northern European politicians or the right parties in spain. A lot of people rooting for greece to fail. I dont see Angela Merkel sucking it up anytime soon. I think it is a tough trade. I do not think it is the moment everybody wants it to be. Thanks. Do you think anybody want a lehman moment . I remember that moment and i dont want it back again. That was a bad sunday night. I think i was at home on twitter watching what was going on. Bad night in my dojo. Coming up, back together. One investor says that is the way cbs and viacom should be. Can he sell shoes the way he sells music . Adidas finds out when its new kanye west sneakers go on sale. My vote is no. Joe welcome back to market makers. In sydney, australia, police say they broke up a terrorism plot. Two men were arrested. Police say they found a video in which one of the men indicated they were planning an attack for yesterday. More fighting in ukraine hours before peace talks are set to get underway. The kremlin says Vladimir Putin will and this will attend the talks in belarus scheduled to talk start a few minutes from now. Someone block. How much a stumbling block. Chinas president will make his first formal visit to the u. S. In september. She accepted the invitation from the bomb in a phone call yesterday from president obama in a phone call yesterday. Stephanie it has been nine years since by a calm and cbs went their separate ways. The empire controlled split into two. Viacom with its Hollywood Studio and cbs with its broadcast network and radio stations. Redstone still chairs both companies and some investors want him to bring the companys back together. One of them is devalued company. Brett harris is with us to lay out the case. Reunited and you wanted to feel so good. Guest there are big changes going on in the media landscape. It seems the cable bundle is under pressure. The larger Scale Networks are going to benefit at the expense of the smaller networks. Stephanie what do you mean . Guest you have the cable bundle, buying a bundle of programming whether it is cablevision, dish directv, is coming under pressure from over the top alternatives. You dont need to buy cable anymore. You can go to netflix. You can go to who loot to get programming. The cause of that, youre seeing scribers move to the overthetop option. Because of that, the distributors are under pressure. They are paying a lot and programming costs. Costs are rising faster than revenues. Because of that, they are looking to either cut Cable Networks or slow the growth of the programming cost. Which means, in order to do that, they need to take programming dollars from anybody they can. That tends to be smaller networks. If you are disney and you have espn, if your time warner, es time warner tbs. Smaller networks are not in that position. Make sense for cbs and viacom to get together. They would be a Bigger Network with more bargaining power. Joe what can the two networks do together right away that they cannot do right now . Guest they will have more scale. Cbs is on its own. It takes the most highly rated broadcast network. They expect their retransmission dollars to go from roughly 500 million today to the end of by come has a large suite of niche networks. They have mtv which appears to teenagers. Cbs is general in entertainment mess networks. They fit well together and hopefully they have better negotiating power. You have less and philippe. They both very successful executives. We will have to see how who runs the company if they end up putting it together. Stephanie is that why it seems less\ wan les wants and ownership bid . Guest hes putting together a bid to fetch record be part of his that could be part of his game plan, to try to buy out that voting control. Joe the big news of jon stewart. What does that mean for the company . Guest the daily show is a Successful Program for them. It has been around for 16 years. One of the big legs of Comedy Central, which was one of their successful networks. I think the daily show probably survives jon stewarts exit. Jon stewart is not the first person to post it. Craig kilborn hosted it. That being said ratings probably do suffer as you transition from jon stewart to some of the new. Stephanie what an emerging slow down cbss growth . It seems like in the last few years, cbs has been it like a rocket ship. Once you bolt lock boulder via come onto them, i do not know how they can continue this growth. Guest the hope is both of them have better negotiating power. They can go to distributors and say, it cant drop me. I want more on my affiliate sees because of my new scale. Joe you make a good case that they would be better off together. What would be the roadblocks to a deal . Guest they are two completely separate companies at this point. They have a shared founder in redstone. You have some of the management. You have philippe and les who might not want to work together. They both have contracts thats stipulate they are the number one executive behind redstone. . Stephanie what does redstone want . Guest i dont know. Stephanie what do you think . How old is he . Guest early 90s. Stephanie what on thing he wants to relinquish control at this point . Guest he is not mentioned that to me. Stephanie when you think, the guy who actually is pulling the strings is in his 90s, is he making the best decisions . Guest it is tough for me to comment on decisions he has made. We only see the decisions at the operating companies. Stephanie thank you for joining us and giving us your thoughts. Brett harris, giving us the latest on cbs and by. When we returned it is no laughing matter for Comedy Central. Brett is confident the daily show will go on. Without gone without jon stewart . Stay with us. Stephanie when we return he was mustsee tv for those who felt the could not get the real story from network news. How does the daily show replace jon stewart . Joe kanye west wants to make a splash at this weekends nba allstar game with his new adidas sneakers. Live from bloomberg headquarters in new york. This is market makers, with Erik Schatzker and stephanie ruhle. Stephanie welcome back. Im stephanie ruhle. Joe im joe weisenthal, in for eric today. Stephanie president obama has formally asked congress to approve a tax attacks on Islamic State. The u. S. Is already launching air raids on Islamic State. President obama wants authority to use Ground Troops in limited circumstances. Shares of pepsico are rising today. The Company Posted fourthquarter profits that beat analyst estimates. Pepsicos oversee earnings were hurt by the strong dollar. The currency issues reduced Earnings Growth by total of 7 . Merger advisory firm, Evercore Partners says it is busier than ever because of the collapse in oil prices. According to bob walsh, evercore is in the process of completing the largest restructuring in energy today. Among evercores clients, everett Energy Futures holdings which file chapter 11 last year. Jon stewart, everyone is talking about it, is calling it quits. 17 years is the longest i have ever in my life held a job by 16 years and five months. [laughter] the upshot there being i am a terrible employee. In my heart, i know it is time for someone else to have that opportunity. Stephanie stewart will leave some time this year. He is not leaving tomorrow. He came to the daily show back in 1999 and turned the program into an influential combination of satire and commentary. We want to bring in paul sweeney of bloomberg intelligence. How bad is this for Comedy Central . Guest it is a big hole in their lineup. They lost colbert earlier in the year. If you are viacom, the owner Comedy Central, u. S. At rating issues the last several years. Comedy central is another network you will have to fill some big holes in primetime. Joe is it realistic to think someone can replace jon stewart and keep the ratings up . Guest that is almost an impossibility. I think it would be difficult to do. If youre Comedy Central, youre looking to either bring in somebody big who could keep the ratings up, or you bring in an unknown much as jon stewart was at the time and try to build it back up again. They have issues in other parts as well. This is probably not welcome news for the folks at viacom. Stephanie hold on. Do we know why he left . Could they not have just paid him more . Guest i cant imagine its about money for him. Although it is always about money. 17 years, it is a grind. Four nights a week. Yet to be topical four nights a week. Best you have to be topical four nights a week. I dont know if Comedy Central has any backup plan. They have a couple fires to put out. Stephanie part of it has to be that it is a grind. From our seat we think, best job ever. The guy to go that i took last summer off to work on his documentary. Getting out there every day and doing a show is hard. He looks to a guy like jerry seinfeld. Jerry seinfeld does comedians with cars. Hes doing it with all his friends. Jon stewart might be like, im a little tired. Guest he is going out on a high note. He probably has lots of opportunities for other things to do. He has the wherewithal that he can do anything he wants now. It is probably good news for him. A challenge for Comedy Central and viacom. Joe speaking of not going out on a high note. Brian williamsnews. Does he have a future in news . Is this suspension going to be the end of his career . Guest i think everybody involved, nbc, Brian Williams is hoping that six months will heal all wounds. I suspects i think it is going to be difficult for him to come back. If you are nbc, youre thinking about a longterm plan b. Stephanie how important is nbc news to comcast . Nbc news was sort of the crown jewel. Im not sure if nightly news matters that much. Joe it does not matter. Guest i think it is immaterial to comcast in general. It does contribute. What is material is the psychic value of owning a brandname news network and the influence it brings comcast and nbc. It is something they want to get right. It is something they want to get on top of area from a financial perspective, not relevant to comcast. Steve burke, who runs the entertainment businesses for comcast, he is the one who delivered the news to Brian Williams. He will have to replace him. Joe you think this suspension maybe we are going to be watching trials or auditions for his fulltime replacement . Guest you might. They might think outside of the box. Im sure they will give lester holt a shot, see other feedback is. I suspect they will bring in other folks, maybe other parts of nbc or outside of the company. Stephanie could we not see a shift . Giving nightly news anchors as much control as they have over the last 30 years, now the nightly news is not as important as it once was, is there a chance they dont put somebody in the position who is massively important or given that much control . If you are comcast, you might say, Brian Williams just made a fool of us, why do we give him that much power . Guest it reflects the fact that the nightly news in the News Division of these big conglomerates are not as material or important as they used to be. I think they still take a lot of pride in them and still want to put their best foot forward. The days of the Peter Jennings dan rather at cbs, i think those terms in control in terms of control are almost on their way out. The News Organization at nbc is huge. Is a big organization. Stephanie whose nude news is more relevant to you . Mark andriys ands tweets . Or nightly news . Guest they were happy with Brian Williams get getting my. 5 Million Viewers a night. It is not as relevant. That being said. All the networks place a lot of value, psychic value, on their News Divisions in general and their nightly newscast. Stephanie maybe this is an opportunity to break that mold. Thank you. Paul sweeney. From Brian Williams, to jon stewart, the comedic news, theyre all making big changes. When we come back, got to be the shoes. Kanye west is making headlines again. When isnt he making headlines . This time, it is his new adidas sneakers in time for nba allstar weekend. Joe welcome back to market makers. More fighting in ukraine today. Leaders from russia, ukraine germany and france are expected. The big issue is likely to be how much autonomy will progress up will the cofounder of ali baba says his company is not too big to fail. Mom jack ma was trying to reassure them he was addressing corruption on the ecommerce site. 10 of the transasia pilots were grounded after a test and will be reach rained on emergency procedures. The other 19 have not been tested. Stephanie we are seeing a big move in oil this morning. Scarlet fu has more from the newsroom. Scarlet the charts tell you everything you need to know. If you look at a two day chart, it is declined yesterday and extended its losses today. This is nymex crude. This is after the latest Inventory Data showed there was another build in u. S. Supply. According to the department of energy food Oil Inventory rose. Analysts were looking for something in the neighborhood of 3. 6 million barrels. U. S. Stockpiles is the highest and best are the highest in at least three decades. Oil prices plummeted almost by half in 2014 and have extended their decline of the early part of 2015 before stabilizing, making higher lows and some would say higher highs within his narrowband. Of late, they have started turning over. How much further do oil prices need default for u. S. Producers start cutting back on production and we start fining a bottom . Stephanie thank you for giving us the latest. We have to move on to sneakers. Nike has been dominating the speaker market for decades. Adidas is hoping to challenge the leader with its neustar, kanye west. Can he say the deiters . Can he save adidas . Jordan keller can tell us. He owns 2504 pairs of nike kicks. He joins us along with kyle stock. You are not just a sneaker head you are nike guy. Youre coming from team nike. Guest i have a huge sneaker head and i love nikes. My expertise is not just nikes i know all the major brands. Stephanie why didnt it work with kanye in nike and why could it work for adidas . Guest it did work for kanye and nike for a while. Kanye was one of the first people to open nikes eyes up to making high quality shoes. The easy line of shoes sold for more than 5,000. Stephanie who the hell is buying yeezy vintage nike kicks for five grand . Guest sneaker heads, athletes, entertainers. The shoes only came out a couple years ago. Just over a year ago the red october came out and sold for 5000 or 6,000. 5,000 or 6,000. Stephanie why did nike leave him . Or did he leave nike . Guest there was a difference of opinions with the brand and what nike was hoping to do with their name and brand. Ultimately, mobile nike moved that kind you move to deiters. He may choose with leave a con with louis vuitton. He has been with more brands than anyone i can think of. Stephanie what do you think, kyle . Guest it is a fascinating market. The masterstroke of behavioral economics. Lebron james has a shoe with nike come out with all the time. Guest kanyes are kind of scarce. It is the one part of the market you could justify. Joe what is the ultimate play . This limited edition run is not going to move the deep new moved the needle much. . Guest reportedly theyre paying him about 10 million. Hundred 50 shoes stephanie 10 million is a fraction. If they take even if he is a colossal brat that is nothing compared to what they have to pay athletes. Guest only selling the shoes for 350. Stephanie it is safe is it safe to assume this sneaker is going to be total blowout this weekend . It is going to sell itself because it has his name on it . Guest this shoe is going to sell out and any shoe kind it wears is going to sell out. There were a couple making shoes kanye war with animal print on it war with animal print on it. They sell for thousands of dollars just as he wore them. Just because he wore them. Stephanie what is it about kanye that makes everyone want to wear his shoes . Snoop dogg doesnt have this kind of pull. Guest no. And snoop dogg has a contract with adidas too. Nobody cares. Every think on your touches turns to gold. Connie was seen wearing the red air max nike kanye was seen wearing the red air max nike and they sold for five times as much as the others. Stephanie help me out. Guest i think it is because he is so polarizing. We are all talking about it right now. This is the game. It is all about height. Stephanie beck could come out with sneakers, and no one would care. Kanye steps up to them on stage, and he sells the sneakers. Do you get it . Guest a question about these new shoes are they going to be bought by flippers who will buy them and immediately sell them . Guest they will be bought by sneaker heads who will keep them. If they can get them, they will die to they will buy two keep one cell one. Guest im am not a huge kanye west fan. I think that adidas is using the release of this shoe to tackle a big problem in the sneaker world , how to deal with limited edition releases. The supply and demand is so crazy. People are camping out, breaking into malls. Adidas launched this new confirmed at so that people could rsvp for the shoes they want and pick them up in person. I admire adidas for trying to tackle this. Stephanie you admire adidas for tackling this . You know what that is . A first world problem. Jordan geller and kyle stock. The experts in the behavior of the impact of kanye west and his with adidas. Joe what a world. Stephanie when we return finding that certain someone. Startups can have as many problems with that as the lovelorn do. We will look at a company that wants to solve the problem of corporate matchmaking. Stephanie matchmaking is not reserved for the realm of romance. Holding a startup takes the same kind of chemistry. Founder dating is aiming to make the process an easier one. Here to talk more about the network is jessica alter. She joins us from san francisco. How does this business work . Guest high. Stephanie i think we are having an audio problem. If you think about how a lot of the startups work, they are started by people who at no corporate experience, who do not have Higher Education necessarily. If youre a coder with a great idea, who was going to run your company . You came from Business Insider before you joined bloomberg. There had to be a lot of levels of growing pains. How does a tiny startup developed into a real grownup company with corporate infrastructure . Joe that is a huge problem for startups. Someone who codes and app may not know how to do anything like hr. Stephanie did you experience this . Joe we were spared we experienced the reverse. Stephanie we now have jessica joining us. Help us understand, how does founder dating work . Guest good morning. Thanks for having me. Founder dating is the highest Quality Network for entrepreneurs at all stages to find entrepreneurs, advisers and potential cofounders. Anyone can join and take use of the network. The cofounder piece of the network you were talking about to help find people to Start Companies with, that is highly curated. We keep it 50 engineers hardware, software mechanical etc. People are explaining not only what they used to do. If you think about linkedin this is what i used to do, they are talking about what they want to do next. That intent and piece of it is information that does not exist anywhere and is really important. They are finding each other based on interest areas, skill sets, etc. They will connect. Like any relationship, you dont get married right away. There is a lot of stuff that happens offline, working on side projects together having meetings, talking to each other. There is a process. Finding that initial person is what we help with on the cofounder piece. On the binder on the advisor piece as well. You are a startup ceo and you are having problems with pricing or engineering sometimes it is hiring and sometimes you want an experienced advisor. You are searching on expert areas. Joe blockbuster the mechanics. Someone lost it walk us through the mechanics. Someone describes their project stephanie i am looking to be the next mark zuckerberg. What should i do . Guest you Just Announced it on the air. Used be good. Anyone can join intake use and take use of the network. If you want to look for an advisor you say what expert areas you are looking for. I would say, this is what im doing and im looking for experts in manufacturing retail engineering, depends on what im looking for. You are able to look at advisers. All the advisers are curated. Stephanie we have to leave it there. Just go alter, the ceo of founder dating. Stay with us. Live from bloomberg headquarters in new york, this is market makers. Stephanie dust pepsi have any pop left. What quarter estimates beat estimates. Log jam, there is a huge backup on the west coast. Some shippers are turning to the airlines for relief. We will be speaking to the ceo of the port of long beach. Gathering their own mess, thats what one critic says ceos are doing when they launched multibillion dollars stock buybacks. Stephanie we are right here in new york city, and i am stephanie ruhle. Joe germany has made it clear where it stands. Talks on the great bailout, European Finance ministers are meeting. The german finance minister try to dampen greases expectation of a new deal. We will not negotiate about something new, that is clear. No, there is a lot of rhetoric included, and that is why it is good that we sit down together. Last week i had, like some of my colleagues, long and intense talks with greek colleagues and i believe that the rules are clear to some degree. Joe greeces new Prime Minister wants a deal that will end the destruction of the Greek Economy he would shares of aol are down more than 10 this morning. The operator of the Huffington Post posted fourthquarter profits that beat estimates, but Ceo Tim Armstrong said that 2015 will be an investment year. They will invest in cover these that will make the company more competitive. Armstrong addressed speculation that aol may be a takeover target. Aol has been an acquirer and i think that is our stance. We internally talk about the fact that what we are building is a Media Technology company that can shoot the gap directly between Offline Companies and the Big Internet Companies that are probably try to get into media, but we are the only Large Company that is about culture and code, content. Joe aols digital ad unit has been the grass that growing business. Samsung will unveil two new visions versions of his galaxy smartphone next month. One will have a three sided screen according to people familiar with the matter. They used to be leader in the global market, but apple has pulled into a tie. The jackpot in Powerball Lottery is now close to 500 million. The drawing is tomorrow night powerball is played and 44 states. Your odds of winning by one tight relation about 175 million to one. Stephanie deal by powerball tickets . Joe sometimes it is fun. Stephanie i never do. The company top estimates generated organic sales growth of 5 . Our next guest does not care. He says there is not much room for pepsi to grow. He is david sherman, founder and managing principal and he is shorting pepsi bonds. I want to start with the fact that youre shorting bonds and not the stock. You normally short the stock. Bonds seem to be money good. Daveid bonds, not for to us. People think pepsi, they think nothing will go wrong, everything is fine. Those bonds will pay off in maturity. They are not getting very much premiums for the fact that activists they just reach an agreement it is like letting the fox into the house. The fact that they Just Announced a 12 billion share buyback. That is not good for bondholders. They will take cash that will be used for leveraging. They are going to peter toward jump to buy back stock to help shareholders. Joe you think do you predict the future it will be downgraded to junk . I am not a fortune teller probably not anytime soon. I do think they are strongly incentivized to borrow money at these low interestrate to buy back stock. Lets take pepsi not the ball out of the window. They had much better volume growth and coke. They are reaching maturation and they should obviously be split up he would lets say they trade at 20, 25 times earnings, that is for or 5 earnings yield on stock. When you can borrow at 3, 3. 5 you should be buying back your stock with bonds youre barring. Stephanie this is not about whether people are drink in gatorade or eating lays potato chips, this is about Corporate Structure . It is also about the fact that the organic growth will run out. Stephanie is that ok . It is a massive copy, why does it have to keep growing . People eat three does, drink gatorade eat doritos . I believe management, you have a segment coming on in the future about how ceos will line their pockets with Stock Options by boosting their stock price for the short term. A quickest way to do that is a creature dividends and buybacks or stocks and split your company up. You have a guy who is in your board of directors seat saying you should merge with another company we have interest in, or you should buy back stock. This is the error of the activist. It is not good for bondholders. Joe do you have an opinion on the stock if you think the company is going to get stretch, if you think the core business will fade . Anytime a company is priced at a high multiple it is a problem for a stock. We were long against our short bonds. We sold it. Always the we sold too soon because the stock keeps moving up. At the end of the day, i am concerned about this companys organic growth, but here is something people are not thinking about. Zero calorie soda. Your metabolism they sure taking in sugar. Did he Soda Companies know is this a tobacco lawsuit waiting to happen . Maybe, maybe not. It could be on the horizon. Stephanie how real is that . Are people really going to be suing pepsi because their pepsi one was more fattening than they thought . I think lots of classaction lawyers on looking for litigation and if they can make that argument, they will. Stephanie you think that is a legitimate thorn in pepsis side . You tell me what the documents are going to show up and i will tell you. Did they know that the fines they were tricking your body into drinking. It is something, as a bondholder, i have to worry about. Stephanie to an issue is a strong dollar . If you look at the strong dollar in the highyield market. We have a strong dollar that is gone with economic growth. The point of this is you have to look at what is the strong dollar mean, relative to the economy and future Earnings Growth. And also, it does not affect all companies equally. I am sure people eating at checkers drivein or shake shack will not be nearly as affected by the strong dollar as an International Company like Emerson Electric which we are also shorting. Stephanie what is the answer . If i sure the bar, they should be proactive for shareholder benefit. Stephanie from a corporate perspective, the smart thing for pepsi to do is the smart thing to spin off their Snack Division . The smart thing for them to do is to listen to their shareholders and make a decision whether we want to be longterm focused or shortterm focused. Shortterm focus, spinning off the business is smart and when there they are as big as pepsi. Stephanie what does that mean . Im not sure his interest is a longterm holder. He is into doing direct results today. He has a large instant monoliths. Stephanie do you think it but nelson tells on the board to quite him . Of course. Joe four people watching at home and people thinking by shorting, is there a risk in the fact that we are still in this bull market for bonds. Is this something one would pair with shorting it is very frustrating in our strategy to be short bonds and have treasury rates keep going down an investment rates continuing to compress. If you are a typical investor you have a fixed income portfolio. You have a some bonds. It is a natural hedge. Stephanie what is your time horizon on the straight . We started in the Fourth Quarter of 2013. We have a longterm perspective. Stephanie what have the bonds done in the last year . We are about even. We lost a lot of money in the interim. Stephanie that is a barb wire bontrager if i have ever heard one. Thank you for joining us. David sherman. This guy is shorting pepsi bonds. Joe apple now value at over 700 billion. Stephanie crazy, 700 billion. Joe how much more can the worlds most able come to grow. Stephanie we was big to one investor who says that stock buybacks are bad, bad business. Stay with us, you are watching market makers. For some of the top headlines from around the world this hour. More fighting in ukraine today, just as peace talks were set to get underway in belarus. Leaders from russia, ukraine germany, and france are expected. The big issue is likely to be how much autonomy will prorussian rebels get over areas they control in eastern ukraine. President obama has formally asked congress to approve a tax on Islamic State. The president says the Islamic State has committed despicable acts and would threaten the u. S. If not confronted. The u. S. Is launching air raids on the terrorist group. President obama wants authorities to use Ground Troops in limited circumstances. President obama is preparing to withdraw most of the u. S. Troops sent to west africa to fight ebola. 3000 americans were sent there, it 100 will remain in the region after the end of april. Moving onto our next guest, it has been a traffic jam at ports on the west coast. At times, a Record Number of ships are waiting. A labor dispute is one of the many problems. It has gotten so bad that some shippers have turned to airlines. With us is the ceo of the port of long beach, one of the busiest ports in america. What has created this perfect storm . The big ships that have begun to transform the industry has had an enormous impact. Every week these massive ships come and is like a peek all by itself. The congestion, the container of lines that have built up have increased and coupled with that are two other issues, one has been the availability of trucking to pull the containers off the dock. That has been fixed. Now we are stuck with this labor problem. Stephanie what needs to get done . We have to get our workers back to work. It is a union, contract issue. Joe is this a sign of a recovering economy . The workers feel strongly about holding out for higher pay . The contract itself all the interest around pay and benefits have been solved. There are minor issues they are in the final throes of solving. We expect it to be fixed in the next week. Stephanie if the issues are minor, why does this seem like a colossal problem . Without having a full staff on the docks to get those containers moved, we are in a gridlock situation. Stephanie if you are in a gridlock situation what makes you think it will get solved in a week . It will be solved was we have labor fully back to work. Without a contract, they are limiting the number of workers we have available. This cost us the entire industry close to 1 billion a day. Joe how much is it costing the u. S. Economy . How important are these ports to the u. S. Economy, and are we seeing it show up elsewhere . In the last six months, the impact has been over a trillion dollars. Stephanie and if there wasnt this union dispute, we would not be in this position . There are systemic issues right now it is the big issue. Even if we would have had a Union Contract months ago, he still wouldve had congestion because of systemic issues. Stephanie you have been in this job less than a year, what have you faced that you were not expecting . A complete rebuilding of the supply chain. It is a supply chains that is highly fragmented, very silo driven and needs to be integrated with a systems approach. If you look at the supply chain from the manufacturing origins of asia to the Distribution Centers, that supply chain is very inefficient. From the Distribution Center to the end consumer, it is incredibly efficient. We had to the way we do things on the front and. Stephanie if it is all about improving the supply chain and revamping how it works, why not just combine efforts with the port of los angeles . We have to integrate our efforts, but we are fierce competitors. That will not change. Joe lets say you get the union deal done, what is the timeline for getting all these other structural issues done . We are moving ahead aggressively, whether or not we have a contract the contract, assuming it is signed today, we will dig out over the next six weeks and he back to normal operations in advance of the next peak. We have about six months to solve the structural issues and begin to introduce the systems improvement. Stephanie we will make you come back and sit in that seat and give you a report card. Good luck. If this union deal settle. The ceo of the port of long beach. He may have a tough time at work, but he gets to live in california and it is dam cold in new york. Market makers will be back in just a moment. Joe European Finance ministers are about to start their emergency meeting. Talking about how to handle greek demands that their bailout package be renegotiated. Hans nichols is there. What is the latest . Hans the head of the imf just walked in and downplayed expectations. She says that she would not expect anything to come out of this meeting. In her words, it is the beginning of a conversation. Anyone looking for Firm Resolution that will have anything other than clarity, and i mean clarity about the enormity of the task ahead to bring these two sides together. They may be too optimistic. The french finance minister is walking in. I earlier spoke with the someone with the european commission, the message seems to be not to expect too much and they really want to hear what this formal proposal. The finance joe people talking about how there is a meeting next week and that could be where the big event happens. Is that where the new thinking is, next week is the new today and that is the new drop day . Stephanie we lost times, you answer we lost hans you answer. Joe i have seen headlines talking about a meeting less week next week where greece presented case. We might be going into this in a few days stephanie . Stephanie after you spent a week on the ground in athens, was it better or worse than you expected . Joe i would be lying if i say i got a great sense in the five days i was there really what it is like for great people. Especially where we work near the parliament in athens. Where the parliament is is not the worst part of athens. One thing i felt afterwards, i did not get that they really believe what they say and they were not going to be that eager to copper mize and quickly sell out within a few days of taking power. Stephanie i want to bring in scarlet fu. Markets in europe are getting ready to close. What does it look like . Scarlet the finance minister of france coming out with headlines. Saying the eu must respect the greek vote outcome and greece has to respect eu rules and commitments. A lot of talking, a of political posturing. Hans had mentioned germans finance ministers has made clear to not expect any deal today or this week. That is the theme in the markets. A lot of waiting, that a lot of acceptance that you will not get a resolution in the meantime. European stocks are drifting lower. The stock 600 index is trading near a sevenyear high. No Major Economic data, so plenty of opportunity to focus on the noise coming out of brussels. Oil and Gas Companies and basic Resource Companies are leading the way. Technology shares are rising. The dax, little changed at the moment. Within 1. 5 of making a new high. The greek afc index hitting back some of yesterdays gains. If you look at how the greek bonds are performing they are down, which means yields are higher, but the feeling across markets is that a greek exit what hurt, but not necessarily be devastating the way it would have been in 2012. You are not seeing that contagious spanish or italian bond yields. They are very low. Joe thank you, scarlet fu. Stephanie when we come back what is not to love about stock buybacks . According to one investor plenty. Live from bloomberg headquarters in new york, this is market makers. Stephanie welcome back to market makers. There are a lot of theories out on how to help the middle class and improve the economy. My next guest is calling out corporations and specifically ceos for using stock buybacks to boost share prices instead of creating jobs and increasing wages. Nick hanauer is the cofounder of 2nd avenue partners, one of the very First Investors in amazon and he joins us now from seattle. Explain the case you are making. Nick as a founder and director of a bunch of Public Companies, i have personally participated in doing stock buybacks for a long time. Of course, stock buybacks are win a company a public him but he own shares in the market. The reason you do it is because your investors will call you up and Say Something like, the stock is down a little bit if you own if you will not support the stock, why should we . In order to support the stock price, you use the covenant cash to reduce the number of shares and put the price. The companys cash to reduce the number of shares. That left me feeling a little bit dirty and uncomfortable, but it was not until i understood the dimensions of how big this thing is that it really becomes clear what a terrible force it is in the economy. Public companies in the United States over the last 10 years have devoted 54 of their profits to buying stock back. That is an astounding number. Up to 700 billion per year. That is 4 of gdp, the nation dedicates to an activity which is simply to artificially inflate stock prices. In the intervening time, the rate of investment, Corporate Investment has fallen 40 . There is simply no doubt that this 700 billion that we spent every year on this could be used in better ways for the economy. Either investments in plant equipment, rmb, or as wages to generate growth and demand. Joe one of the arguments you hear encounter, in counter something you hear a lot is there is a dearth in good investment opportunities. Globally Interest Rates are low because there is this perception that there are not many good Real Investment opportunity in the world. What is the alternative . Nick that is comically circular reasoning. Why are there a dearth of investment opportunities. . Because the man is not high enough. What creates opportunity customers. How, by having disposable income. Where does the disposable income come from wages. If you impoverish your Customer Base opportunities for investment will decline. We are in this ridiculous da ebt spiral, where profits are increasing, wages are decreasing and we are using the excess to inflate the stock price to the benefit of a tiny minority of people who complain that there is no place to put the capital. Stephanie normal people own stock in their pensions, their 401 k , and they do benefit. Nick there is no doubt that normal people do own stock. There is also no doubt that the vast majority of stock is owned by a very small proportion of people in our country. Most people do not benefit massively from a higher stock price but they do as a league benefit from higher wages. The top 1 of americans controls close to 40 of the nations wealth. That means that at least 40 of the stock. Joe it seems that there is a game theory problem, where one ceo to do decides to spend more money on investment, he might be punished, but if they all did it at the same time, it would benefit everyone. How do you solve that coronation problem coordination problem . Nick it is a collective action problem. In 1982, Ronald Reagan put a wall street ceo in charge of the sec and that person changed the rules. That our connected with the companys ability to buy stock back. Before that, it was looked at as stock minute duration which is what it is. Once that took place and it coincided with stockbased compensation, now everybody is singleminded goal becomes pumping the stock price. The only way to solve this problem is to regulate it in a different way. And to make sure every company has a bigger incentive to invest in its employees and rand d and less incentive to enrich its biggest shareholders. Stephanie maybe not expanding in some cases, is projecting protecting its management, employees, investors. Maybe expanding isnt always the answer. Nick you are absolutely right. But, there is a reason that societies grant People Limited liability to go out and Start Companies. The reason you would do that is because you believe that companies will generate broadbased benefits for society. If the only point of the company is to enrich a few, what you will find, and you are finding and increasing suspicion that corporate ceos and companies in general do not benefit the public broadly. We all have a stake if we want the public to support capitalism and businesses to have regulatory environments that ensure that Business People do the right thing for the country and for people broadly. Investing in them and not just personal enrichment. Joe on the regulatory front, what would you like to see happen from regulation and laws to get to a state you would like . Nick from my point of view, unless there are extraordinary circumstances, and a huge legal threshold is met, i do not think it should be permissible for Public Companies to buy their own stock back. It is plain and simple am a stock manipulation. It is plain and simple stock manipulation. When you look at how ceos are compensated, giving ourselves big stock grants and come in behind it and repurchase the shares to minimize the dilution. It is this pernicious game of generating increasing for the people at the top, 30 years ago, corporate ceos earn 30 times the medaian wage, now it is 300 times, 500 times. This practice is at the heart of it. Stockbased compensation and stock minute duration. Stephanie the only way to close the segment, is amen, sister. Thank you for joining us. Special guest, truly. The cofounder of 2nd avenue partners. When we return, apple hits another milestone setting a record for the highest u. S. Market cap in history. We will talk about how big apple will grow. Joe welcome back to market makers. Apples market cap is at a record 710 billion. Not just a record for apple, the first time any u. S. Company has closed above the 700 billion mark. How long can the growth spurt last . Here is bloomberg west editor at large cory johnson. You heard tim cook speak, what stuck out to you . The moving target of that market cap. I think enterprise value is more important than market cap. It is an alltime record. One of the first thing put to him was when due the large numbers take effect on this company. He took on bridge on bridge umbridge to that. One of the things steve jobs taught is not set limits on expectations and not to focus on what we are, we focus on what we are trying to do and how we got this big. He talked about how the products work and how they work in an individual market. Stephanie what was your take away . Coreyy the news of the solar thing. Apple will spend 850 billion 850 million on a 27 acre spot in Monterey County in Northern California which will allow them to build a solar court large enough to power all of their operations, including these power consuming data centers that they have in Northern California. He said it will be profitable. Cheaper for them to do that than it will be to buy power off the grid. Talked about it from a moral standpoint, apple has to lead the world leave the world better than they found it. From an environmental standard saying that they believe in Climate Change and it is time to stop talking about it and act on it and that is what they are doing. I thought that was an interesting move to show what kinds of things they can do because of all the cash. Joe tim cook says the market cap is not an impediment to growing, what will drive it significantly higher . More iphone sales, or will they need other, big rocks to drive growth big products to drive growth . He talked a lot about both of those. The phone business and the conversation about china was interesting. He said that it took time, they spend a lot of time in china, going to china, understanding and respecting the chinese market. The iphone 6 and the larger screen size may have been tailormade to china but so was the iphone 5 and how it worked on the emerging 4g standard that is growing in china. What he said is, we have not done the same thing in india. We do not understand that market and have not put any time there. In a matter of time he would not describe how long, one might expect just as big a market could be for apple. Stephanie what did you learn about the what did you learn about the iwatch . You know i dont want one. He divert he compared it to the tablet world before the ipad. We werent first, we were very late. The way that they did it made it a lot Better Process and more useful. The use cases from people would be very different in the applications. I think elected as an openended question, but an intriguing approach to their business. What i didnt hear from them, is that they are not all about one product for the phone, one product for the computer, one product for the tablet. The watch business will have. Should a product with different kinds of uses for different kinds of people. Stephanie do you want one . I do not know. I did not think i wanted a tablet. I was not quick to jump on the iphone and wagon. Bandwagon. I am a gadget geek, so maybe i should get one. Stephanie you are a geek in general. We will be back in just a moment joe will be here, stay with us. Stephanie we will be back in just a moment, but before we go i have to know what is on your mind. You are one of the most prolific tweeters. You wake up in the morning, say what did you miss, you have not missed anything, what are you focused on . Joe this emergency meeting in brussels, there are progovernment rallies in greece. An extraordinary phenomenon because normally when you think of protest, the rest of europe is being seen as antagonistic and the protesters are very excited that the government is holding a hardline, not caving. To my mind, it makes it harder to get a deal. Stephanie think about greece four years ago, think about spain the youth unemployment issue, people taking to the streets desperate. The fact that, as a country they are unified, a positive for greece. Joe there is something to that. Longterm, they needed a change of course. Whether is it a positive for getting a deal right now, when you have a government with a wind at their back, go fight, it makes it tougher. Stephanie does this mean the greek people that are progovernment will start paying their taxes . Joe the biggest problem is not max mass tax evasion, the problem is the super rich and that is the area the government could probably get taxes from. The perception is that in greece there are a lot of super wealthy people who have their money and Shell Companies and overseas. The argument that this government is making is that because they are not beholden to the special interest connected to the last government they think they can stick it to these oligarchs . Joe they feel like they are not copper might in any way. Stephanie it is a great argument to be made, whether they can do it is a whole another story. That is why joe is here to come what am i not thinking about Brian Williams, john stuart. We will be back with more market makers. 19 a 19 billion business. We will find out why. I am on the internet of things. Joe i do not know what it is. Stephanie sometimes i feeling big brother is watching me. I do not like that. It will the nba allstar weekend, right here in new york city. We will speak to the ceo of the philadelphia 76ers, a man who made the city of brotherly love his home. Scott oneil, he came from Madison Square garden, we will get his take on what this weekend will be all about. For now it is 56 past the hour which means we are taking you on the markets. Scarlet fu has more. Scarlet u. S. Stocks in search of direction. The meandering that we are seeing in brussels is taking things lower. After the dow jones lost a triple digit point gain yesterday. No triple digit point moves today. Oil the loser today after the latest government Inventory Data showed. Energy stocks were underperforming as a result, off by a tense of 1 . For todays options inside we bring in Investment Adviser representative at equity armor investments. Give us your read on the meandering that we are seeing inequities . We are seeing a very quiet day. The nasdaq is higher. A mix market. However, the volatility are higher today, given that uncertainty out of greece. Expecting news, have not got any yet. What have seen this whole year is the market trading at a very wide range, from the 1970 area up to where we are now. The s p 500. A wide range for the start of the year. Within that range, individually we saw large moves. Given the fact that we are subdued today, that potentially could be good news for the market. You mentioned effects, it is currently flat at 1717, if i look at volume, it is up by about 20 from the 10 day average. People are playing that wait and see game. We potentially have a big news defining event on the horizon. People will take their chips off the table and wait for an event to come out before they put their money at risk. Yesterday we had a guest who made a trade involving the euro, calling you are looking to do a similar move by using the financials. What is your thinking . Yesterday, we had a large trade in the financial sector. Where i saw market producer come in and buy the june 23 straddle. They bought the put and call. Saying that they were expecting volatility to behind around the summer months. One possible outcome out of the trade is that the European Finance ministers will kick the can down the road. That perhaps what this trade is signaling. What i am thinking is what will be a shortterm positive for the market could lead to a higher equity prices in the u. S. Certainly, it would be beneficially for financial stocks, immediate risk from greece. Quickly, your trade does it encompass the fed moving in june . Absolutely. One of the laggards in the stock market has been financials. They have not caught up to the creek precrisis levels in 20 in 2008. A lot of that is due to the housing market. One of the headwinds to the financials has been low Interest Rates and as big economy improves as there is less worries from greece, the execution for rates to rise will continue. Equity armor investment, thank you so much. Money clip is up next. Welcome to money clip. I am pimm fox. Around the world, germany takes a hard line on greece. The problem is greece is doing the same thing. Intech, the magic word is growth. In nation alabamas chief justice goes rogue in a fight over samesex marriage. In motors, georgia marconi opens up on the upcoming for ari ipo