Transcripts For BLOOMBERG Market Makers 20150330

Im very excited for this week. We will get to that in a second. Pending home sales in february scarlet fu has all the headlines. Scarlett pending home sales coming in much higher than anticipated, 3. 1 gain in january on the yearoveryear basis of a 12 increase when economists were looking for an increase of 8. 7 . Pending home sales track the number of contracts in a given trade, seen as a forwardlooking indicator. Existing sales another report that we give you at times like this, tallied after forwardlooking indicators that could signal a busy spring selling season for the Housing Market in the u. S. We should mention the january numbers were revised lower even in the face of damaging weather here in the northeast. 3. 1 in february month over month the 12 increase on the yearoveryear. U. S. Stocks are higher and remain higher no Real Movement there, the dollar picking up a little bit for the dx why index. The 10 year yield and two year yield and twoyear yield remain lower, no real change their. Carol matt matt thank you so much, scarlet fu. Thank you so much, scarlet fu. Carol iraq matt iran, easing western sanctions, even if they do announce a deal this week hard liners in iran and the u. S. Are probably going to oppose it. Lets bring in jim walsh from m. I. T. , who has been talking to negotiators on both sides and is one of the worlds foremost experts on nonproliferation issues. Thank you for joining us, jim. Jim happy to be here. Matt what is the chance that we will reach a deal that will appease everyone involved. Jim if we mean the folks at the negotiating table, there is a high chance that we could give them sanctions relief, but assuring us that they will not get a Nuclear Weapon. But if everyone in congress and israel and saudi arabia is included, then no. Carol are we kind of at a breakeven point . Jim i think you put your finger on it. I think that they will have an announcement sometime in the next 48 hours that will outline a Framework Agreement a set of principles, some numbers and then they will still have through july to fill in the details to cross the tease and. The as but if they do not come away with something this week you will see people in congress who oppose diplomacy and want to kill this negotiation introducing bills and legislation to achieve that objective, so it becomes much more difficult unless the negotiators make some successful moves. Matt is pretty clear that the hardliners are people in the u. S. Who want to stop the president from achieving anything at all. In iran are the hardliners people dead set on getting a Nuclear Weapon . Is there still that aspect to iranian leadership . Jim as someone who studies countries interested in Nuclear Weapons, there is always some small route that wants to get the bomb, but i think that more generally it is somewhat similar to the united dates, as you put it. The hardliners want to hand the president their defeat. They do not care so much about the Nuclear Peace as they do that they dont want the centrist pragmatic reformist president to win this political battle because that sets them up pretty well for the rest of his term. If we are able to defeat a deal that could be crippling to him and give him the opportunity to restrict return to the stage. Carol you have spoken to negotiators on both sides. What is it as americans that we do not understand . Jim i think that one of the biggest is numbers here is the idea that they are dragging their feet. That they really do not want to deal. That is in fact the opposite of the truth for the reasons we were just discussing. It is in their political interests to get a deal sooner rather than later. Each day that goes by without a deal is a day that he probably gets weaker. If there is no deal he cannot come back to his constituency and say that you voted for hope and change and i promised i could deliver and i delivered, no more sanctions or international isolation. If he cannot do that, hes in trouble, the iranians want this as much as the p5 plus one. Carol if they are in if these are removed and iran becomes stronger what are the potential implications down the road . Tim part of that is inevitable. You cannot have them agree to a bunch of steps to restrict the Nuclear Program and have them not get sanctions relief. The whole idea of sanctions was that they were going to agree to new restrictions on the program so if they do that they have to get sanctions relief now. That will improve their economy and improve their relationships to other countries which will have some good consequences and some bad consequences. On the plus side it means that iran in the u. S. Can actually talk to each other on these issues where they share common interests. Iraq, we want stability in iraq. Afghanistan, we want stability and so do they but there still will be disagreements. They will disagree over syria and yemen. Matt and probably disagree over israel. Jim, obviously the main thing that you want is for iran not to develop Nuclear Weapons. That should be the main thing that israel wants as well. If the iranians are coming to the negotiating table honestly and if president obama is able to achieve the goal of limiting their ability to create weapons why is then yahoo not happy with these talks . Jim i agree. I think the u. S. And israel have the same shared interest here. I think that for netanyahu in particular remember that he is of a particular political stance in israel the iran issue has been a political one for him. The more that they talk about iran, the less they talk about the palestinian issue, obviously very sensitive in the region and elsewhere. As you can tell from his speech he does not want any deal. There is no deal that he thinks would be sufficient. He houston moving the goalposts but at the end of the day i think we are going to get a deal they will have to except. That was true one year ago when we got this interim deal that he said was like appeasing hitler and the worst thing in history and he accepted it and it actually worked out pretty good and i think the same thing will happen here. Carol what about accounting for the iranian behavior . That should be a part of this resolution . Carol it relates jim it relates to what they were doing when they stop their Nuclear Weapons program. Of course we want to know that but this will also be subject to compromise. They will not tell everything that they know they might have to admit a bunch of violations, but we will learn something about it. International atomic aid Atomic Energy agency is in charge of handling this parallel and they have experience with this they have looked at south africa, a rack egypt and south korea when they had problems in their Nuclear Files they found a way to negotiate so that we got the information we needed without having to embarrass people. The same thing will happen here. Carol matt what will happen to this to the regular bad guys in the middle east . This seems like strange bedfellows but we find ourselves in that with them or more recently. Jim [laughter] it seems to be increasingly more complex every day. In yemen the u. S. Is helping that coalition. In a rack we are on the same side. In syria we are on the opposite side. I think this is going to continue to be complex because every issue will bring a different set of interests at stake and people will not choose sides based on that, but i think that the big picture, and this will not change with the nuclear deal, iran and saudi arabia are trapped in an intense rivalry that has led to proxy wars all over the region. They do not like each other and with a rock sort of having gone away leaves the two of them to duke it out. That will continue, nuclear deal or no nuclear deal, but at least the weapons will be involved. Matt jim, thank you very well thank you very much. Talking about u. S. Iranian negotiations with an optimistic been. Carol reports of a shooting in fort meade, maryland, at nsa headquarters. The wonders reports say that they are being treated for injuries and it appears that a car may have tried to ram the gateway and we will bring you more details as they are known. Matt coming up, the greek Prime Minister trying to balance the mans from several sides those who want more Economic Reforms and those who want to end austerity. Scarlet we have a rally on her hands when it comes u. S. Equities. The s p 500 on track for its first backtoback advance since mid february. This would mark their first triple digit point gain in over one week, for stocks higher for everyone its down on the stock exchange. Breaking up the Industry Group all 24 of them are higher. Three transactions in the space for intel in talks to buy altera with suspicion that they will add to the stimulus. Stock prices rising in the u. S. And around the world, the vicks which tracks against the kleins, following its biggest twoday gain in one month. As for treasuries gaining after janet yellen made clear that Monetary Policy would remain loose for some time and crude oil briefly erasing its loss back down again there, 1 at 48. 33. Carol time to bring you uptodate on the top stories of the morning. After the best quarter since 2006 consumer purchases rose less than projected in february the increase just 1 10 of 1 . The weather may be responsible for some of those frigid temperatures, keeping shoppers at home. Strict adjustments of the countrys largest retailer of dietary supplements, planning a settlement between gnc in new york state, they were accused of selling herbal supplements that were fraudulent or contaminated and the new testing procedures would be tougher than those required by federal laws. Good news for dreamworks, its new film, home, was a smash over the weekend. Dreamworks animations in the middle of a big restructuring after four of its last six movies lost money. This was its only scheduled release of the year. Investors are chairman cheering along with audiences, as much as 10 in todays session. Not matt miller but a South African comedian will replace john stewart on the daily show. Daily show. He has only been on the show three times. A surprise pick, they had considered a range of betterknown candidates. John stewart says he is thrilled by the choice. Stepping down after 17 years. Coming up in 10 minutes, stocks are rising right now. Also, good news in the markets . It may not last. We have a forecast for falling profits. As you mentioned, we will look at the man replacing john stewart, all of that to come. Matt i am trying out for top gear top gear. Carol do not go away. We need them all. Matt greece is the clock still ticking . They are submitting a revised list today and the Prime Minister will address and are we finally approaching a resolution . An investor in greek debt, i dont know if you are still holding. Are you . We still have a positioning greece. Matt are you optimistic about the position . Flex sort of, yes. It is a new government, not a lot of experienced technocrats on the bench. But it seems like the rhetoric has definitely dampened. I think that he got what he wanted at the summit with merkel. He has the headlines. Now he needs to manage the leftwing part. Are you disappointed matt are you disappointed with the quality of the work they have done and the speed at which they have done it . I think they would have been better off with a few more numbers guys. It is a traditional problem when you have a left government coming in without much experience, people talking in theory and not in practical terms. A lot of these new ministers are coming from a background that did not involve actual implementation of policy and you can see that. They get there in february and the followthrough is just not there. There is a lot of infighting. You have part of the party pushing back against the more moderate and more experienced side led by the deputy Prime Minister, but ultimately if you look at the Greek Parliament close to 80 is proeurope along with the population. If put to a vote it will pass reforms will pass in parliament. What they have to do is make a decision politically. As you put your finger on, it is one thing to say that we will do enough for the europeans to give us the funding we will need it is another to actually put the details together and present it in a forum where the europeans can look like they are actually matt bring your report to class on time. Hans yes. Carol going back a few years talking about greece, does the situation eventually get better . Hans it is getting better. The primary surplus is dating things are coming out of the banks, but there is a lot of progress internally. I was in greece the week before last and you feel that the country the culture is changing. People know that they have to pay taxes. If you look at the amount of work that people do on an hourly basis, they actually work more. There is a change, it just cannot happen overnight. This transitional time is going to be very difficult. Carol the idea of a greek exit from the eu, is off the table . And does it matter . [laughter] matt if it is a catastrophe that we just accidentally let happen. Hans timing is a real issue at this point. April 9, they need to find money for those payments. Carol matt a serious deadline. Hans not a lot of people will be working through the weekend unless they push it to the 11th and 12th hour. Matt you are saying that chances of a greek exit even if an accident, what percentage of a chance . Hans 10 to 15 on the outside. But if you look at the rhetoric of Angela Merkel today, look at what they are saying on the top level, people want this to work. Its just the followthrough. But if you look underneath her, none of the german ministers have been throwing out the grenades that they were a couple of weeks ago. Carol who is more sick of this point . Hans at this point i would say greece. I think that it still would be very painful for europe just going through the experience of the country exiting would put pressure on them and i think people would call into question the whole idea. Greece needs funding at this point. One of the things that is important if you look at the office pushing the idea of the support, he is selling it to the chinese, probably, which is a really important part of the puzzle. Just the sale of that port is not going to be enough. I dont see a lot of rhetoric against the chinese. Matt what about [indiscernible] is he bringing it the way that you expected . Hans i was optimistic when he came in. I thought that his analysis was on target. The idea of how he was approaching taking things off the table he has obviously been chopped up by the german press. The expose was a little bit much, the middle finger thing probably reduced his listen he was a problem in the first psi, too. Matt thank you so much for coming in hans. Carol Market Makers will be back. You are watching bloomberg. Carol coming up, a warning corporate profits are in for a rough go. Matt there was a story today that said that we only avoided, like, a complete follow from this and one time in 1967. Because of the second Quarterly Earnings decline. It made me think of the 19 67 Lincoln Continental. Ceo mark fields, from ford coming up, betting more than 2 billion that he can get the lincoln brand going again with a hot new concept to show and he will be here with us live on set in 30 minutes. Carol the Lincoln Town Car right . Matt no the continental. Carol all right, just checking. Live, from bloomberg headquarters in new york, this is Market Makers. Matt i am matt miller. Carol i am carol massar. Matt we are getting more information about the passer that the german wings copilot, a revelation about him from german prosecutors. At that time he had been in the treatment of a psychotherapist because of what is documented as being suicide thoughts at that time. Prosecutors said that there were no signs of suicidal tendencies. He is blamed for deliberately crashing the airliner into the french alps. In switzerland a sign that any deal with iran may really come in the final hours before tomorrows deadline if it happens at all. The Russian Foreign minister left todays negotiations over the program for another scheduled commitment. One official says that he will return if there is a realistic understanding of and agreement. On this week, a white house spokesman said the next move is up to iran. We have negotiated for over one year. It is up to the iranians about whether or not they are willing to make the serious commitments required and basically live up to the rhetoric that they are not trying to acquire Nuclear Weapons. If they can make those commitments they should be able to do that by the end of march. Matt iran says that it is up to the west to make concessions and that if there is a deal they want sanctions lifted quickly. A Prime Minister agreeing to pressure from both sides today they want the new Prime Minister to come up with a an economic plan. Tsipras needs to come up with a reform plan that will lend them more money or else. Ford is looking to jumpstart its new lincoln line of cars, coming out with a brandnew version of the classic lincoln namesake. For new lincoln models including the continental. We will ask field here on set in just 30 minutes about that and a lot more we will talk to him at 11 00 eastern. Tim cook warns that something very dangerous is happening across the country. The openly gay ceo of apple renounces a bill signed last week saying that the law would allow businesses to discriminate against gays if they say it is for religious reasons. Cook says that there are almost 100 bills being considered across the country that would make discrimination legal. Governor mike pence calls the criticism shameless rhetoric and says that the intent of the law is to protect against government overreach. The purchase purpose the purpose of this legislation is the statute of Court Decisions in other states and it is simply to empower individuals when they believe that actions of government in pain john their constitutional First Amendment freedom of religion. Matt he says that he is opposed to making substantive changes. March madness, down to the final four. Kentucky beating notre dame to against indianapolis. Saturday the wildcats will take on wisconsin and the other game is duke versus michigan state. Michigan state . They made it all the way. Thats pretty awesome. The spartans have had an amazing year. Carol we are more than one hour into the new trading day seeing gains pretty much clear across the board. Check it out, the dow jones is up after the Chinese Central Bank governor indicated another stimulus could be coming. Lets head back to the breaking news desk, where scarlet fu is looking at some of the movers of the day. Seeing a lot of green here. Scarlet plenty of dealmaking is the reason why. Lets recap the big deals this morningmorning, a new offer beginning of 101 per share at a 41 premium. United health is making his biggest purchase premium ever for services at 12. 8 indian dollars. Verizon is buying hyperion horizon is buying hyperion. Hyperion shares are up today because of takeover speculation. Something was bound to happen, given the movement there. Come inside the bloomberg terminal. I want to give you a scorecard of how m a has stacked up so far this year. 8000 to five deals announced globally, a 14 drop from the peak of last year. They say that perhaps that reflects a drop in global sentiment. I want to add here the volume the value of the deals announced. What you will see here is that we are nowhere near the highs of the last cycle. We have less than one dollar trillion in deals announced at that level where we had reached 1. 8 chilean. What they were telling me is that this is one private equity firms were extremely active working at three times their normal rate in terms of deals which was raising a red flag because the deals that they were working on were so large as well. Having said that, the pipeline is busy and they are worried about the health of some of the junior lawyers at the firm. Carol thank you so much scarlet fu. It has been really busy on the m a front. Matt and on the ipo front it has been amazing. Speaking of, lincoln has a new continental that looks fantastic and the ceo of ford is dropping by the video betting that 2. 5 billion can get the brand going again. He is a bit early, we will be bringing him on right away. Up next. Matt ford has a new continental concept a new size sedan coming next year. Here to discuss it is mark fields, the ford ceo and president. Thank you for joining us. Pretty exciting, this continental is a real break from the rest of the design language. I wonder what you are going for. Is this a halo car . Is this a my box type luxury car . Is this something i could afford monday . One day . Mark it has cornered the growth plans that we made out a couple of years ago. For new vehicles in four years. This is the fourth vehicle, a fullsized sedan. When you think about the continental sedan. When you think about the continental concept, it has a meaningful name that symbolizes our past, the best of lincoln sedans. Where we are in the journey over the last number of years, this will be our flagship. Is this a completely new platform, this car . Matt is this a completely new platform, this car . Mark there is a new platform. Matt can we get the side doors . One request. Mark coleman if you look back at the history of the continental the first one was designed by edsel ford and he was all about beautiful design. In the 50s and 60s it was always epitomized the continental epitomizing the beauty of fullsize sedans. We had a time in the early 1960s where we had those suicide doors. I guess lawyers wont let you say that anymore. Matt but you could still use the doors that open backwards. Mark we really wanted to signify what we called quiet luxury, which is all about elegance, effortless power and a serene and relaxing interior. A place to chill, if you will. Carroll how much of this is about china . In some ways your targeting the chinese market. Mark the good news is we have been growing the brand since last year in terms of the luxury industry. We launched the brand in china last fall and it is interesting we did a lot of research and china and the aware awareness there is very high. They remember the lincoln as a president ial car. Mark gabel, elizabeth taylor. Matt president kennedy. Mark he was in the car when he was in dallas that day. When we were researching this car, there are a lot more similarities than differences. One of the big differences, this fullsize luxury sedan in china usually driven by a chauffeur the backseat amenities are really important. That is why you see in this continental concept a lot of time in the rear of the vehicle to make sure its comfortable has privacy, gives you the opportunity to relax. We will be offering the same vehicle in both markets. Carol what is the biggest market in china for this vehicle . Mark the biggest market for that right now is china, stable for the last couple of years that segment alone is up. Matt it has been a booming market for ford in general. I love the blue interior. I am a special kind of consumer, maybe, but everyone i have been talking to today has been praying for one thing, the rear wheel drive or allwheel drive. I think you only have mustang and the 150 on the rear will drive platform. What about this . Mark not at this point with architectures but we do take it from a consumer standpoint. Where we are targeting this vehicle in terms of the right characteristics, this elegance, this effortless power with serene interior we are having the engineers focus on delivering that regardless of what the architecture sits on. As long as you can deliver that true to your brand, customers do not care. They are not saying that they will only look at this vehicle because it is rearwheel, front wheel, allwheel. They wanted to fit their wants and wants and needs. In this case all of those operate in countries where they dont have to use the dollar. Is it a weakness . Mark this is our largest market and most profitable, which is good news but it does erode the Competitive Price position against competitors that are importing vehicles. So, when you stand back it is a net native for us. We will continue to focus on bringing up compelling products to the marketplace working on scale efficiencies and getting the cost down to provide that value to consumers. This is the environment we are in right now. Matt it allows you to really deep up the interior, you can put in better components than your competitors. Mark we do have parts that are domestically produced from the outside but all allegedly run the business is that we look at the Business Environment every week as a team and we deal with it. Right now we have a strong dollar market that is a net negative, there are some positives. Carol is that changing your longerterm thinking in terms of development . Mark no matter the price of gas , fuel economy is one of the most important purchase criteria. They remember four or five years ago when gas was 4. 50 per gallon and they had to park their vehicles. We are not seeing a correlation with low gas prices and the industry going up, weve never seen that in the past but what we have seen are the types of vehicles the consumer wants. We are seeing the consumers favoring more small, medium, and large sized suvs. As a company we have a full family of vehicles that is there for them. Even within them they want the best fuel economy. Carol does it change the longerterm thinking of how you might do development . Mark coleman it is a nonrenewable resource, our view is that the price of one gallon of gas or barrel of oil will go up over time which is why we are spending so much time delivering customers the best fuel economy that we can. Matt 2. 5 billion putting 12 billion into developing that brand. Obviously that is on a forward basis. What do you think as far as throwing numbers at this . Mark when you look at where we are in the journey, keep in mind that that is just, our capital expenditures. Matt on a hay Matthew Mcconaugheys a check. [laughter] mark what is a good thing, a new marketing metric, how often your ads get spoofed. Pretty successful. We think that that is an appropriate amount. This in mind, matt, we are not the biggest, we are one of the smallest. How are we using that to our advantage, giving customers Personalized Service . When you walk into a dealership in china its like walking into someones highend living room. That is the kind of service you want to differentiate. Matt when can i walk into a dealership and be treated the way that you want me to be treated and buy the car that you want me to buy . Mark our top dealers today are delivering that experience. Matt but the endgame, when is that . Mark when you look at technology and the Technology Enablers that are enabling great retail experiences, that is never going to stop. For us at lincoln we want to keep pushing the envelope in a way that makes customers lives easier. We are focusing on experiences first and how Technology Enables the experience. Carol like watching an episode of top gear. This is fun. [laughter] mark this will be in the marketplace next year. Matt sweet. Appreciate your time. Carol we are taking a break. Coming up kentucky, wisconsin, duke, michigan state, who will win. Matt we will talk about it. Matt the final four is set. Our Charity Challenge is a threeman race, Gerry Connolly didnt the pack. Gary cohn leading the pack. If he wins all the people in the poll will donate 10,000 each to his chosen charity. Do not count out the quicken loans chairman, dan gilbert. Three of his final four are accurate and he has kentucky over in the finals he should know a thing or two about the finals after ringing king james back cleveland. John chambers is down in 12th place, but if you these kentucky in the finals, he will wind up the winner. John donahoe had been the leader going over the weekend, mathematically eliminated from the tournament. Carol you had your own bracket right . Matt we all put our own bracket and included ourselves in this celebrity bracket challenge we work your and i was in first place. Do you remember that . Carol for like a few hours. Matt on the first day. Carol i think it is great that the money will go to the charities. Lots of fun, we have been having fun tracking these guys, a lot of money to a good cause. Matt i think it is great that these guys stepped up. Stephanie ruhle and michael ball oil Michael Boyle was trying hard, they all pitched in to get these guys to give up their money and they did it willingly. Carol i would like to see dan gilbert win. I like what hes doing, it would be interesting. He paid to bring back lebron, even after he wrote that letter. I saw him play here in brooklyn. I am from the great state of ohio, which is why. Carol we will take a break but be back in just a moment. Matt who is tsipras who is trevor noah . We will have more when we come back. Live from bloomberg headquarters in new york, this is Market Makers. With Erik Schatzker and stephanie ruhle. Carol can Airlines Avoid future tragedies with better pilot screening . Psychology and the cockpit. Matt be British Election campaign underway. David cameron says challenger ed miliband does not have what it takes. Carol filling the shoes of a comedy icon. How would you like to be the one replacing john stuart . The guy who is doing that. Matt i matt miller. Carol im carol massar. Matt the campaign for the Prime Minister is underway. Parliament was dissolved and David Cameron says britons face a choice may 7. The later of the cameron says the leader of the labour party is not if not fit to lead the country. Prime minister cameron when it comes to Prime Minister, the personal is national. Matt ed miliband told bloomberg businesses are concerned came right will take the country out of the eu and the labour party is committed to staying in it. United health is buying catamarand. Bulking up its drug business so they can have better negotiating with pharmaceuticals. A stricter testing of pills at the countrys largest retailer of dietary supplements. Gnc and three others were accused of selling herbal supplements that were fraudulent or contaminated. New procedures will be tougher than those required by federal law. Tim cook warns that there is something dangerous happening across the country. In an opinion article for the washington post, the openly day ceo of apple denounces a law in indiana. Critics say the law will allow businesses to discriminate against gays. On abcs this week governor mike pence said the laws intent is to protect against government overreach. Governor pence it is the law by either statute or Court Decisions in 30 other states. The purpose is to empower individuals when they believe that actions of government Hennepin John Doerr constitutional First Amendment freedom of religion. Matt impinge on their constitutional First Amendment. Freedom of religion matt pence says he will clarify the law but as opposed to changes. Dreamworks homes taking and 54 million. In its Opening Weekend dreamworks is in the middle of restructuring after four of its last six movies lost money. Home is the only release from dreamworks this year. Investors are cheering. Shares are up were up as much as 10 in our day and now up 7. 7 . Carol an update to breaking news. One person is dead in a gatecrashing incident at nsa headquarters in maryland. Reports say a Security Guard exchanged gunfire with two incident at nsa headquarters in men who tried to enter the facility dressed as women. The two were driving a stolen ford escape. We do not have all the details but will be finding your headlines and bringing you update as they are known. One Day Oil Prices are up, the next day they are down. Our next guest says they are ultimately on track to bounce back. Tom is back with us, chairman of petri partners a Boutique Firm offering Financial Advisory services to the oil and gas industry former vice chairman of bank of americamerrill lynch. Great to be talking with you. Where do oil prices go from former vice chairman of here . Tom the balance is probably keep the price under pressure as we go into the spring. Weve got the building of inventory. The demand pickup, and i think the lower price, the cumulative effect of the lower price will show up by this summer. Thats why the self correcting forces will be there. Weve got a bunch of geopolitical things going on with unintended consequences. A number of those could contribute to supply constraints down the road later this year and next year. So all of that points towards a recovery either in the second half of this year are sometime early to mid next year. Carol i want numbers. In january you are talking about 30 a barrel for oil. Are you still thinking of that number . What is a love for you at this point . Tom the way i recall it, i was asked is that possible. I said it could be. I think we could test lower on that basis. When we get to the point that cushing is full, i use that as a metaphor or a placeholder for storage in the u. S. Then the pressure will be there in a significant way. Sometime in the next 68 weeks that cushing looks to be full and most other u. S. Storage looks to be full. It is a tugofwar between filling those tanks and seasonal recovery in demand that we normally get an spring. Matt i wonder, is the problem as far as demand is concerned global . Or are you focused in the u. S. . Tom no the global issue is certainly but we have to think about. And what we have is a fairly important decision to be made by the congress and possibly the president on oil exports. Connecting the u. S. Market for crude oil to the International Market should give us a recovery because of the right now it is about a seven dollar differential and it has been as high as 10 or 11 for brent oil versus u. S. Oil. The overall global surplus is probably somewhere between 1. 5 Million Barrels and 2 Million Barrels a day. When you start to see Global Growth kick in, especially in asia, then you know we are on the supply surplus we are talking about. The surplus was created by Domestic Production growing much faster and sooner than was generally expected. But it is a global picture. Carol we caught up with blackstones Steve Schwarzman in asia and asked about the decline in Energy Prices and what that means in terms of investment opportunities. Mr. Schwartzzman when you go into a period of distress everybody starts freezing. Because we have, in the scale of it all, relatively little exposure to problems, weve very actively evaluating a low situations and our people are not troubled working out problems where other people are. The scale of the Energy Opportunities is huge. Absolutely huge. Matt Carol Blackstone ceo Steve Schwarzman. The declining Energy Markets and the volatility in prices what implications does the halfway investment arena . Have for the investment arena . Tom nearterm volatility has been a challenge. What steve is talking about, i suspect is the longerterm growth rates in asia for oil consumption. Still very favorable. Even in the Slower Growth environment china, and december of last year was up by. 7 5 Million Barrels a day versus the prior year. I would not be surprised to see that girl that grow to possibly one Million Barrels a day six months to nine months from now. Thats the kind of recovery hes alluding to as creating great opportunity in this period of depressed prices. Matt what is this doing to new exploration and new production . I remember when the shale guys came along back in the day and the vertical well guys got basically laid off four years. Is this doing that to the entire industry . Tom very good question. Theres no question but the reaction on Capital Spending has been very early, very rapid very almost draconian in some cases. That is going to show up probably next year and the year after. But it does not show up this year. This year, u. S. Production probably grows even with these low prices and even if prices go lower than they are now. But that is because of some residual momentum, if you will in the deepwater offshore where there are projects coming on and there are large sunk costs. I think if we get back to Something Like a 60 or 65 oil price then we start to get a modest recovery in Capital Spending as well. But people have definitely decided to go to the sidelines on Capital Spending. Not just in north america but elsewhere in the world. And that will have to reverse itself or else we will get back into a situation where the price will rise by virtue of supply shortfalls fairly significantly looking out 18 months to 24 months from now. Carol do you consult with a lot of players in the oil and gas sector . What happens to the smaller players and what happens to the large players . Do they get bigger and eat up all the small players . Tom where probably in 48 period were probably in for a period of consolidation. We have not had corporate consolidation in a number of years, the last significant wind was between 2001 and 2006. We have had consolidation on the asset side. Now i think were in for some additional corporate consolidation. Probably in the context of confidence rising, we put in the bottom. Maybe not this month or next month, this year or early next year. Carol thank you for your time, tom petri of petrie partners. Matt inside a pilots mind. Can better screening prevent future tragedies . We ask. Carol who is trevor noah and why did Comedy Central take him to replace jon stewart. When we come back on Market Makers. Carol time to bring you up to date. The market, stocks rallying on the second to last day of the First Quarter. S p 500 up 1 . A gain of 21 points. Dow jones industrial average of 260 points. Nasdaq better by. 9 . Speculation china may take more steps to stimulate the economy. A survey expects china will cut both the benchmark lending rate and tank reserve ratio. A signed Housing Market may be picking up before the spring selling season. Pending home sales rose much more than forecast the highest level in 1. 5 years. Buyers taking advantage of Mortgage Rates near record lows. In sports, how the mighty have fallen. For the first time in almost 20 years tiger woods has fallen off the list of the worlds top 100 golfers. The games biggest moneymaker ever has not played in a tournament since dropping out of one last month. Tiger says he will not play again until his game is entered in the shape. Coming up and 15 minutes, the British Election campaign begins. David cameron and ed miliband have just five weeks to make their case. Pilots and psychological testing, can airlines do a better job and a and avoid future tragedies . Matt you probably cannot take him out of a lineup but hes about to be one of the biggest names in latenight tv. Trevor noah will replace jon stewart on Comedy Central. A 31yearold standup comic from south africa a correspondent on the show who has made three appearances so far. Trevor its a pleasure to be here to talk about chess. The game of kings, smart checkers. Black and white squares. The history of chess stretches back oh, come on. Matt a risky move for Comedy Central, after losing Stephen Colbert last year. Lets bring in paul sweeney. Carol i like chess, by the way. Matt smart checkers. Carol who is this guy . Matt hes very funny. Paul hes 31 years old, from south africa. He speaks six languages. Matt his father is swiss and his mother is soweto. Paul his parents marriage was illegal in south africa. A lot of his humor is racially based. Its ethnically based. They call him a polyglot, he speaks a lot of different languages. You look at late night and so much as the ability to attract audiences online and around the world. Carol is that what this is about . Yes. Nbc said 70 of Jimmy Fallons views as online. You were talking about james corden and a lot of that was streaming. Hes taking it up after craig ferguson. Matt i saw james cordon with mariah carey. Carol it was impressive, all the stars in the video. What you make of the posts we are seeing . Paul even though for jimmy fallon the statistic about 70 of viewing online, the vast majority of the revenue comes over the air. Carol it is big bucks. Paul Comedy Central is taking a risk bringing an unknown talent to u. S. Audiences to a chair that has been a huge moneymaker for Comedy Central and viacom over the years. They are making a bet on fresh talent. As opposed to going a safe route and getting a household name. Matt jon stewart was a no name. Carol how long did it take for him to get a following . What really put jon stewart over the top was the study in 2005 from pew research said young adults are getting their political news from jon stewart. They are not getting it from newscasts or cable or radio. Once you saw that number his numbers really started to grow. Matt i thought it was interesting they did not take a woman. You would have thought there was a push for that. They had a huge talent pool. There is olivia munn, even tina fey was mentioned. Paul weve had a lot of turnover over the last couple years and there has been opportunities for a woman but they have not. Some of the networks have been on the defensive about this. Another opportunity to fill that and they chose not to. Matt do they not think women are funny . One comedian has gone to tbs. Chelsea handler has left e and she has a show on netflix. Latenight does not mean much on netflix but she is going there. Jessica williams said on twitter shes 25 years old and very funny. She said i do not think im ready. Carol thinking that trevor noah is a more global person and there might be a global audience . Some of the Digital Rights maybe taking the show to a more global audience through some digital platforms. That might resonate. Most of the economics are from the traditional ever the air broadcast, at least for the next several years. That represents risk for Comedy Central. We might look back in a year or two and say this was a bold move. Matt how important is this in terms of revenue . This is no top gear. They are not pulling in . 5 billion a year. Carol is big for Comedy Central. An average year is 30,000 for a 32nd ad 32nd ad 30second ad. The audience is younger and male. Youre reaching an audience that advertisers want to reach because they are later viewers of tv. You cannot really make money off streaming yet that hes 31 years old. By the time he reaches 52, jon stewarts age, they will find a money to make off of streaming. Carol when you look at late night, whos doing the best . Jimmy fallon. Close to 4 Million Viewers each night. Jimmy kimmel and David Letterman are tied. The David Letterman finale in may is going to do a huge number. That is not getting a lot of press. Hes stepping down may 20 and he has been behind the desk for 33 years. I think that will do about 20 Million Viewers. It has gotten very competitive. Everybody on the networks they all have a latenight franchise. Some of the other for the top networks are thinking about it as well. There are ad dollars there and it has gotten competitive. Matt i miss Johnny Carson. Carol girls can be funny. Matt paul of bloomberg intelligence, brad of horizon media. I miss johnny. Mark crumpton often is watching Johnny Carson on his computer. Carol he set the standard for short. Market makers is taking a break. Back in two minutes. Matt David Cameron comes out swinging. He says ed miliband is not fit for the job. Carol could better pilot screening have prevented the germanwings disaster . We talked to an expert who studies psychology in the cockpit. All of that to come. Just because im away from my desk doesnt mean im not working. Comcast business understands that. Their wifi isnt just fast near the router. Its fast in the break room. Fast in the conference room. Fast in toms office. Fast in other toms office. Fast in the foyer [pronounced foyyer] or is it foyer [pronounced foyyay] . Fast in the hallway. I feel like ive been here before. Switch now and get the fastest wifi everywhere. Comcast business. Built for business. Live from bloomberg headquarters in new york, this is Market Makers. With Erik Schatzker and stephanie ruhle. Matt into Market Makers, i matt miller. Carol im carol massar. Markets across the pond are closing. Lets head to the breaking news desk. Scarlet fu looking at action out of europe. Scarlet a rally, global in scale. All is right in the world when the european clocks are aligned with u. S. Clocks and european markets are closing at 11 30 a. M. Eastern. The stoxx 600 rising, led by automakers and autoparts makers. The biggest advance in 2. 5 weeks. The dax in germany about to close the First Quarter with a 23 jump. That doesnt shrink to about 10 when you convert it to u. S. Dollars. Weak euro a reason the dax has rallied. Greek stocks have finished higher. Alexis tsipras will be addressing lawmakers in two hours on the progress of talks with creditors. That should be interesting. The backdrop is liquidity and accommodate a Central Banks, whether you are discussing the fed or the peoples bank of china or the European Central bank. Helping to support a Global Equity rally. The Exchange Traded fund that tracks chinese stocks, its at its highest in almost four years following dovish comments from chinas central bankers. The pace of Economic Growth has fallen too much and the government can do more to support growth. He says china has rented act with Interest Rates and quantitative measures. The dollar has stabilized with the euro under pressure as the greek debt talks continue. The dollar index higher dollardenominated commodities are moving south. Crude oil down to 48 three six cents as Iran Nuclear Talks continue in switzerland and gold down 1. 4 . Carol thank you. Scarlet fu, chief market correspondent. Matt the u. K. Election has begun. They are shorter than ours. Instead of two years, 48 days. Anna edwards is the anchor of countdown. How did things kick off . Anna good to see you. I dont think i could take two years of this, it has been feisty. Some fairly combative language from David Cameron saying he thought ed miliband would not be up to the job. Today we saw the dissolution of parliament. The Prime Minister went to the queen to dissolve parliament. He does not need to do that anymore but we like a little bit of pop and ceremony in this country. So far, weve seen both of the parties, labour and conservative sticking really to their comfort zone. Labour talks about money for National Health Service Spending and conservatives on the right have talked about the economy. Their record on the economy. Labour stepped away and started to talk about business. Theyve got a lot of damage between the labour party and the Business Community. David cameron was on home turf talking up his record on the economy. This is what he said. Mr. Cameron you face a stark choice. The next Prime Minister walking through that door will be me or ed miliband. You can choose an economy that grows, that creates jobs, that e generates the money to ensure a National Health service, a government that will cut taxes for 30 Million People and a country that is safe and secure. Or you can choose the economic chaos of ed miliband. Matt economic chaos . That is rough. If talking to businesses is not comfortable for the labour party, why are they starting to campaign in that way . Anna tough talk from the Prime Minister. The labour party does have a reputation to restore between business and the labour party. Ed miliband has been dubbed by the press red ed because of some of the leftleaning policies regulating Certain Industries are taxing Certain Industries. He talked about predatory capitalism. We try to get to him what he meant by the concept of predatory capitalism. One of the strong hands they have in terms of their relationship with the Business Community revolves around europe. This is the big party in the u. K. That is not planning to take the u. K. Out of the european union. It is not planning to hold a referendum on whether we should leave the european union. The party in charge at the moment, the conservatives, they have pledged they will hold a referendum within two years if David Cameron is still Prime Minister after may 7. That is making some of the Business Community nervous. They are worried about what will happen to their axis of the european market. This is what ed miliband said earlier, exclusively at bloomberg telling us why he thinks it is important the u. K. Should stay. Mr. Miliband Business People will get to make their own judgments. Lots of Business Leaders will want to stay out of the campaign. One massive issue is our place in the eu. Labour is the only one of the two major parties setting out a commitment to remaining inside not outside the eu. A reformed eu, but inside and not outside. Anna that is the strong hand the labour party thinks they have to play when it comes to restoring relations between the labour party on the left and the Business Community. Carol anna, that is the labour and conservative. Im fascinated by smaller parties. Are they taking a chunk out of traditional parties . Anna that is one of the key features of pulling into this election. It has been the rise of the smaller parties. Process parties are nationalistic parties in some cases. One feature has been a declining level of support for conservatives and labour. When you combine them it is 65 or 70 of the vote. In previous decades that would be higher. Some protest parties might get a serious crack at getting some seats this time around or getting many more seats. A lot of attention is focused on ukip, the u. K. Independence party. Data suggests they might get 10, 12 or 13 of the popular vote. Because of the lady system works they are unlikely to get more than a few seats in a 660seat parliament. On the other hand, the key story to watch if you are zoning in and focusing in on this for the first time, the Key Development is what is happening in scotland. The Scottish National party may have lost the independence referendum midseptember. They have seen their member ship skyrocket. They look at it, they could go from six seats in westminster to 40 or 50 in parliament. That is shaping up to be the big story of the referendum so far. When you are talking about no majority, the potential for a hung parliament, a party like the snp could wield more power than they had previously. This is a party that wants to break up the united kingdom. Carol what do investors want to see . Anna investors do not like uncertainty. That is investing 101. Weve spoken to a number investors who have talked about concern for u. K. Assets. Not necessarily the ftse 100 but maybe if you look into some of the smaller or midcap there is concerned there. Focus on the pound, how that is going to respond. In september in the weeks running up to the Scottish Referendum it was as if the Community Well got to the threat that could be posed by part of the u. K. Voting to leave the united kingdom. There are some investors saying the same thing that happened, 48 days away from the election, may 7 is the date. In the runup there are people nervous about the pound and u. K. Assets. Matt countdown anger anna edwards. Now we know what is going on in the u. K. Elections. Carol i like 48 days of campaigning. Matt i love it. You can follow that really easily. It is more like a sporting event. Carol coming up matt we are talking about airlines. Carol how can Airlines Make sure pilots are mentally stable . We talked to an expert in psychology. Coming up on Market Makers. Matt there are plenty of Unanswered Questions about the mental state of andres lubitz, the copilot blamed for crushing the airliner into the french mountain. Prosecutors said lubitz was treated for suicidal tendencies years ago. We do not have any documentation that says regarding his sight any problems that he might have had or might have assumed to have. There is not any documentation that says this is caused by an organic illness. Matt we are left wondering if better pilot screening needs to be in place . Here to help us understand is the chair of the robertson safety institute, she studies pilot psychology and safety. Joining us from arizona. What can be done to prevent this kind of tragedy . I am guessing there is not very much. Erin unfortunately the answer is not very much that we can do. These types of events are so rare and practically unprecedented. Theres really no way to make the system pull for system pull first there is really no way to make the system foolproof. Carol how does it compare to sergeant psychology or air Traffic Control . Erin there are some similarities but pilots exist in the environment where they are taking responsibility not only for a life , like a surgeon, but for a large number of lives and a multimillion dollar pieces of equipment going at several hundred miles an hour. Matt is there any screening that could be done let me ask in a different way, are we doing screening now that is helpful or are we doing screening that is not helping the process . A lot of pilots are taking antidepressants, they have to do it secretly because of concerns from previous decades. Erin there is no regulatory requirement for Psychological Assessment or psychological screening. It is really left up to the airline to determine what assessment procedures, if any, they choose to use on their pilot. By and large matt maois the first generation of antidepressantmad e people tired and a little out of it. They were banned. Thats probably not the case with the current generation of antidepressants, which maybe more people should be taking. Erin correct. Current generations of antianxiety and antidepressant medications have far fewer side effects than the original ones. Carol i feel like we are going through an educational process. One tragedy is one too many in our view. Is the pilot screening process to some extent working . Because we do not have these kinds of situations, thankfully, happening often. Erin the problem really is the notion that pilot screening would somehow weed out those with depressive for suicidal or homicidal tendencies. That is really not what those types of assessments are designed to do. Carol what are they designed to do . Erin most pilot assessment tools that are used by the airlines are primarily personality inventories. Inventories of leadership ability, competence in interacting with coworkers. In response to stress. Matt what you think the response of the airlines will be . Regardless of whether or not it is good, how do you see this playing out . Carol what should they be . Erin ideally this is part of a growing conversation about Mental Illness particularly as it applies to professionals and their mental status at work. And so ideally we do what we have done with other safety issues that have been identified in aviation and for the last 30 years that is attempt to change the culture of the airline. Carol one last quick question in terms of selfmonitoring by carriers, does that make sense . Does there need to be a more objective body . A government body . Erin i dont know that a government body would be the right answer. I think that would be a really reactive approach based on the situation. I think leaving it up to the airlines allows the airlines to tailor their assessments and their treatments of a pilots wellbeing to their individual culture and that is important. Matt im sure that we also a tragedy like this does not ever happen again. Everyone will do the best to try to prevent it. Erin bowen, we appreciate your help, pilot psychologist, to us from arizona. Carol time to bring you uptodate on the top stories of the morning. The u. S. Economy might find it hard to sustain the momentum it gathered in the Fourth Quarter consumer purchases rose less than forecast last month. The weather may be a part of the reason. Consumer spending grew at the fastest rate in the Fourth Quarter in eight years. The biggest retailer of herbal supplements has agreed to conduct tougher tests as part of a settlement between gnc and new york. The state attorney general accused gnc and others of selling supplements that were fraudulent or contaminated. Dreamworks has something no one counted on, a hit. Home smashed expectations by taking in 54 million over the weekend. Home has Jennifer Lopez and rihanna voicing characters. The studio has cut jobs and reduced the number of movies it is producing. I that you will see it to cj to see j. Lo. Matt i completely forgot about this post that i was looking for a film. I would have gone to see it. I did see big hero 6. Carol did you see insurgent, divergent . Matt no, i did not really like the first one. Are you into that . Carol my daughter is full stop is interesting for dreamworks, they need a break. Matt a frozenstyle break. Thats one in a million. Debating the merits of animated films. We will be back in two minutes time. Matt i cannot believe that is at. What a pleasure, it has been a lot of fun. Thats it for the program. Tomorrow, one of the classic british car brands. When you hear the name you almost always think of james bond. Aston martin they are doing something new. Bringing over a new car, a trackonly car. Making a car for james bond. Carol that is cool. Matt theyre doing a lot of stuff. Which one . The bond car . This must be some other prototype we are looking at. In any case, we are going to talk to the ceo of aston martin of the americas. It is going to be awesome. We are going to start ramping up car coverage because wednesday is the new york auto show. I will drive the vanquished. I will see how it is. It is going to be amazing. Carol not quite the same as james bond, but close. Matt im a little balder. Carol had a great day, stay with bloomberg. Scarlet 56 past the hour. Bloomberg is on the markets, midway through the u. S. Trading day we have a global stock rally. Corporate dealmaking and optimism that Central Banks will boost stimulus, getting the dow its best twoday advance since early february. The s p 500 on track for its first backtoback gain in more than a month, gaining 1 . Joining me for todays options insight is derivatives strategist at mtm holdings. Lets start with the fact that it is monday, theres a lot of deals but it is the beginning of a holidayshortened week. How much faith can we take that these gains will hold . Maybe a lot of people are absent . It is the end of the quarter as well. We talked about choppiness. Everyone has experienced that and it continues. The s p was down 2. 5 last week. A big bounce today. Something i continue to watch is where the the 13. 5 level is elevated. We are not near that now. If we come through that over the next few weeks that will be an inflection in the volatility cycle. Same with vvix which measures the volatility of the vix. As long as the volatility measures remain elevated you expect choppiness. Scarlet the choppiness continues. U. S. Markets are pretty much finishing with little change. If the dow is lucky it will hold onto gains of. 9 . A lot of movement and we kind of end of nowhere in contrast to europe. Jim you start earnings next week. We have been sort of without a catalyst the last couple weeks except the fed we will pick up with news, also the employment report later. The lull will turn around. Scarlet lets get to your trade, on twitter. The stock has surged more than 35 this year. What is your strategy . Jim we want to go all the way to june and buy call spreads. We have a group in our firm called the intelligence community. They go out and survey users indicates a twitter, more than 2000. The issue with twitter has been User Engagement and growth. A crew just 4 million users last quarter. About 280,000. Some new features are beginning to work, specifically the instant timeline that brought out less than two months ago. Twitter looks at your contacts and flushes out where your interest may lie. It begins to show you tweets from the universe as opposed to just showing you tweets from who you sign up for. That should help User Engagement. Our analyst is encouraged by these developments. They will not report until the end of april but we want Long Exposure here. Scarlet tell us your trade. Jim go out to june, by a 52. 5 strike call sell at 65 strike call. It is a call spread, you pay 2. 30 and you create a 4. 5one payoff with twitter above 65. 5. We are very bulled up. A lot of headroom. Scarlet we will see if dick costolo can put onto his job. Money clip is next on bloomberg. Pimm welcome to money clip, we bring together the best stories come interview and video in business news. I am pimm fox. A business backlash in indiana. Angies list joins tim cook in protesting the law Business Leaders say discriminate against gay people. In motors ford resurrects the Lincoln Continental with a touchscreen tablet and a champagne bottle holder. No suicide doors. Let the games began in the u. K. David cameron and labour