Transcripts For BLOOMBERG Market Makers 20150409

Good morning everybody on this thursday here in new york city. Youre watching Market Makers on bloomberg television. Im Erik Schatzker. Stephanie im stephanie ruhle. I am british sure Monica Lewinsky is not my favorite anything i am sure Monica Lewinsky is not my favorite anything. Not my favorite intern or dress owner or mistress. Maybe my favorite beret wea rer . No. Wholesale inventories for february are out and who better to break down those numbers than scarlet fu . Scarlet we have an increase in wholesale inventories of 3 10 of 1 for the month of february from january. Slightly higher than what economists have been looking for. The previous month number also get revised higher to 4 10 of 1 . Wholesale trade sales and unexpected decline of 2 10 of 1 . Thomas for looking for a gain of 3 10 of 1 in the prior month read were revised by bigger than expect to drop. U. S. Stocks coming up a little bit here. Showing a little bit of a leg up. Looking at marginal gains of 1 10 of one percent. The dollar is climbing to its 9859 and the 10 year yield is at the best levels of the day at 1. 9142 . Monica lewinsky would be my favorite comeback story right now. Stephanie there is no way she would be a favorite comeback story. Scarlet we are only into four months of the year. Stephanie i am sorely but she is not getting the comeback of the year. She has a long road to climb. I appreciate your optimism. I will stick with you as my favorite chief market correspondent. I will call eric my favorite coanchor but he is also my only one. Erik there we go. That is who i am this morning. Let us talk to you about some of the top business stories of the day. The number of americans applying front of limit benefits is at a 15 year low. Claims averaged 282,000 a week over the past month, the fewest since june of 2000. That raises a key question. Was it worse than expected jobs report last week an anomaly . According to the labor department, the u. S. Come a created 126,000 jobs in march. Data earlier this week show jobs opening at a 14 year high. Confusing indeed. Greece did not default. It managed to make one of its debt payments to the imf almost half 1 billion. One says greece needs desperately. The head of the oecd tells bloomberg the forms are not for the benefit of the lenders. The structural changes that have been taken and some that continue to be needed Going Forward are something which is going to be adopted or done eventually for the benefit of the greek people in the Greek Economy. Not necessarily because they are being demanded by summative from outside. Erik the ecb approved a 1. 3 billion increase in Emergency Funds for greek banks ensuring the banks will have enough cash on hand if depositors keep withdrawing funds. Zynga investors do not feel any better about mark pincus now than when he stepped down as ceo two years ago. Pincus announced last night he is returning as ceo. This morning shares of the company are getting walloped. He replaces don metric, a federal of the console Gaming Business who is now leaving the company. Zynga once led the market for games played over social media. Last are, sales dropped 21 and zynga lost more than 200 million. This is where the shares stand right now. Down 13 . Professional networking site linkedin is buying into the Online Learning business. It acquired a cipher 1. 5 billion. Lynda. Com is a subscription site. The classes are offered in five linkages languages. A warning from the president of iran. He says they will not agree to a deal unless economic sections are lifted immediately. That is likely to come look at efforts to reach a final deal with iraq. The u. S. And its allies want to suspend sanctions only after international monitors verify iran is complying. Here in new york, property prices are soaring in brooklyn. The median home price in the First Quarter rose 18 from a year ago to 611,000 setting the sixth record in eight quarters. There is a limited of supply there is a limited supply of homes in brooklyn. You might say how sweet it is unless you are renting are looking for a home. Stephanie luckily eric owns his home in brooklyn. Erik i am a denizen of the borough. Stephanie let us move on to energy. The industrys biggest acquisition since 1998. It could be just the beginning. Oppenheimer Senior Analyst says we could see more huge deals before the end of the year. He is with us now from the new york office. Who do you think is next . As a chevron or exxon mobil . Do they need to do it to stay competitive . They dont need to do anything. I see you as a window of opportunity. Energy shares have come down very sharply. Last time we had a drop in oil prices 15 years ago, we had a big merger between exxon and mobil. Chevrontexaco and bp. We will see something similar to that. The deal that was announced yesterday between shell is a high premium. It is one of the highest i have seen in many years. I am not seeing will not see a good premium, but we are not likely to see premiums in the 52 claims. Come please do not by other companies to get bigger or because the other companies are getting cheaper. They buy each other to get their own assets better. To create value. Not necessarily to create scale. In this business, it happened to be bigger is better and companies with bigger asset bases are able to ration some of these assets. They raise capital cut overhead, and do a lot of things. Chevron and next on will likely make an acquisition but the question is not if. It is when and who might be the Lucky Company that will be taken over. The premiumerik how about we talk about some of the potential targets and you tell me and stephanie whether you think it will be next up . Fadel that is the biggest nono. We cannot do that because a lot of companies will not be happy with that. Let me just put something before you. Exxon has 3. 5 billion shares in treasury stock. The shares have market value of 300 billion theoretically speaking. Exxon can buy chevron or bp or shell or conical phillips. All of these companies are below 300 billion in total market value. Theoretically speaking him exxon 10 by any company the regulators would allow it to buy. Im not saying they will. On the other hand exxon has huge asset base. They want to fortify what they have a balance in operation. They want to create value. The company that will be asked that will have to make them better and a higher quality. That is what we expect. I expect within six months, we see one or both of chevron and exxon following the footsteps of shell. Erik obviously that is super important that what matters potentially even more to investors is what companies will they go after. You do want to talk about potential targets because those companies will not be happy if you do . Fadel absolutely. You guys and your business can do that but in the business i am in, we cannot do that. Erik if we were to look at a number of potential targets, i could throw some names out there. Apache, Devon Commission near whatever the case may be. Why doesnt it make sense to evaluate them on a casebycase basis and say such as such company would be a great fit with exxon . . Or a great fit with chevron . Fadel you started this so i just follow up with that. There is one that has an attractive base with chevron and at another companies because they premiere company. It has a huge footprint. They have enormous amounts of leases and resources on short. They have a. 5 million acres that have they have a. 5 million8. 5 millio thisn is a company that hasa greatc assetsr, greate peoples, tremendous track record. Stephanie thank you very much this morning. Erik it is back to the future for zynga sort of. The founder of the struggling game maker is retaking the company reins as ceo. People feel about the same way as they did when he left. Stephanie farmville never my jjaam. Want to buy chickens . Know i never have and i never will. A lot more going on when we return. What a breath of fresh air. Candidates for Prime Minister have five weeks to make this case. We will see how the month election is shaping up. Scarlet i am a breaking news at the news desk. After intel ended discussions to buy the company, this is according to people familiar with the matter. Onto research from 34 to 44 on reports of discussions. Spokespeople from both companies did not respond to requests for comment on this. Intel has been bouncing around a little bit here. Last month, the company cut its Sales Forecast because of a slowdown in the pc market so it needs to find some growth. And other programmable chip maker gained on the intel alter entire discussion is rising in early trading as well. The ewh is up for a fifth straight day at a seven year high. The index rose and turnover set a record for a second day. The surge comes as chinese regulators allow domestic Pension Funds to begin buying hong kong shares so this is open to floodgate of buyers from china into hong kong. I how eric and stephanie have been discussing this as really high but there is a new class of buyers here that is putting cash to work and you are seeing that play out. Stephanie thank you scarlet. It is time to bring you uptodate on the top stories of the morning. Shares are falling in early trading. The aluminum producer kickoff earnings season by reporting cells that officially missed estimates. Company is forecasting the rope in oversupply of aluminum this year. Ill collated post profits that were betterthanexpected. A similar story at walgreens. It is forecasting profits of the current fiscal year that missed estimates. Walgreens has been trying to revamp its stores and cut overall costs. Profit was better than expected but sales fell short. Chain announced plans to shed 200 of his 8200 stores in the United States. One of the biggest makers of homeless in the u. S. Of humus it in the us has a major recall because of a possible listeria contamination. It is an illness that can sometimes be fatal. The recall only includes its one flavor. Coming up in 10 minutes, the British Election is just one month away. Prime minister David Cameron had a few missteps as he tries to hold off ed miliband. And who says government only gets bigger . Congress is doing all it can to cut the irs. We are looking at the impact. There is an allnew display in the new play clinton the musical. The want to see that . Do you want to see that . Erik no. Lets talk about zynga. The company is going back to the future. Ceo don mattrick is out immediately and taking his place is the zynga founder and Controlling Shareholder mark pincus. Remember farmville . Zynga once led the market for social gaming but its user base and revenue have shriveled. The company made a slow transition to mobile gaming. What is the committees future . We have mike on the phone with us from chicago. Shares are down 14 , is that all you need to know . Mike zynga has been stuck in neutral for the last couple of years as a goes through a transition to mobile and away from the dependence on facebook games. Don mattrick made some changes but ultimately none of the work over the last couple of years resulted in eddie and he hit titles. Stephanie why is he leaving . Michael don had a hard time Winning Back Investor trust. Want to have lost that trust, it is hard to get it back without results to back it up. At this point, they are there are not a lot of tangible results. Erik it was investors that effectively drove him out as ceo two years ago. Michael i think it is hard to say if mark will be able to right the ship and transition in a favorable way. To investors, the definition of a favorable outcome will be a new slate of games that ranks highly in the charts and is able to offset the decline in older titles. And has no games right in the app store which is hard to believe given the development and Marketing Research they have. It will be hard to say of mark will make those changes to result in a new crop of his or not. Stephanie what is your opinion of him . Michael i think it is a challenging situation as far as coming into a company that is in the midst of transition. I think he had a good vision at the beginning. They went the wrong direction to facebook games. It is probably the right move here given the Investor Community never had held down in high favorability. Erik is going to ask you what they are doing wrong but i wonder at the same time if it is even possible for zynga to do all of the right things. To develop games fast enough for it to have enough of those top 30 titles. The schedule crazy. It is nothing like what we see for the console business. Michael that is right it is a totally different business. It is even more hitsdriven. They have several games in the pipeline and they are launching 710 games this year. I think investors will likely take a waitandsee up roach so to speak to the success of these titles given the recent track record. Erik so the stock is that money until you see some of that and investor share your opinion . Michael i think that is right. From a valuations standpoint, there is a four between 1. 50 and two dollars because of the cash they have in the headquarters they own. The downside has to be in the low to dollar range. Stephanie if the Company Needs to reinvent and get his mojo back what has pincus been doing for the last two years that now that he is back in the driver seat, he should be the one in charge of doing that . Sitting in the chairman seat makes you put your feet up and cap money. Michael i think that is a question that we will find the answer to over the next year. Right now, it is difficult to gauge to see if this has the tools to continue a transition in a favorable way. Time will tell. It will be tied to if they get any games in the pipeline. Erik thanks very much. Michael olson is a Senior Research analyst at piper jaffray. Stephanie a lot more to cover when we return. Republicans in congress are taking on the irs. You can guess who is winning that battle. Erik in britain, they cram the whole runup in a few weeks. Stephanie i will apologize on behalf of michael anchor. He is so funny in the commercials and you dont get those measures. Has it really been 15 years . Dont worry. Now you can relive all the fun of the late 90s. Im not talking about dancing to ace of base, im talking about the new play, clinton the musical. [office phone chatter] [frogs croaking] you know what, let me call you back. What are you doing . [scream] [frogs croaking] [yelling and screaming] its back Xfinity Watchathon week. The biggest week in television history. Its your allaccess bingewatching pass to tvs hottest shows, free with xfinity on demand. Xfinity watchathon week. Now through april 12th. Perfect for people who really love tv. Live from bloomberg headquarters in new york this is Market Makers with Erik Schatzker stephanie ruhle. Erik good morning once again. Good morning once again. Stephanie and him stephanie ruhle. Is get to the top business stories of the morning. Wholesale business rose more than xrated infirmary. The Congress Department a sales remained weak. Wholesalers may not have much reason to spend a lot of money restocking in the next few months. Sling tv is going live with hbos new streaming service. Hbo now will cost 15 a month. You will get to watch hbo shows for the first time without a cable tv subscription. Hbos hit series game of thrones has its season premiere this weekend. The service is already available on apple tv for cable customers that have Internet Service only. Once again, jp morgan shareholders will be asked to decide whether to split the role of ceo and chairman. They will meet next month to consider the proposal. Jp morgan is urging them to reject it. Shareholders give a thumbs down on a Similar Program two years ago. Jamie dimon holes both positions. Many investors are skeptical of royal dutch shells 70 billion deal. The takeover will not boost earnings for two years. It is counting on a quick rebound in oil prices to about 90 a barrel. Investors are concerned the price is just too high and it might lead to show cutting their dividends. The Research Firm founded by Market Makers regular carson block is at it again. This time, muddy waters has targeted noble group. Muddy waters has taken a short position and is questioning its cash flow and company management. The company is rejecting the muddy waters allegations. After nearly half a century at cbs news, Bob Schieffer is calling it quits. The host of face the nation will step down this summer. He is also the networks chief washington correspondent. He is 78 years old and has interviewed every president since richard nixon. Erik imagine how great it would be if election campaigning were just five weeks long. Stephanie not for my calpine and john not for mike halpern and john. Erik Prime Minister David Cameron is trying to fend off the labor party and its leader ed miliband. Here he is arguing about the economy at a debate last week. When you were a position at the time as leader of the opposition, you were saying it was overregulateds i will not take lectures from you about the Global Financial crisis. Didnt spend enough, didnt tax enough. Erik for a look ahead at the big additional, we are lucky enough to have her in new york city our european banker francine. It is about the economy, but is it also something of an early referendum on britains membership in the eu . I think the conservatives would like it to be about the economy because i have a good track record because they have a good track record. The conservatives have a referendum as in world pledge and immigration. Immigration is what is hurting the u. K. This is why David Cameron has put this referendum. Immigration is increasing and people are worried. Stephanie the whole thing takes five weeks. We are talking about campaign finance. How much money . My mind was blown yesterday. Ted cruz his brandnew super pac, raised 31 million in less than a week. To me that is crushing. What does that look like in your neck of the woods . Francine in the u. K. , 31 million i one candidate is crazy because an entire party spent 31 million and one election. 31 million for the parties. You dont really talk about money that much in britain for a campaign. The rules are very specific. You can only have 8000 pounds raised her voter per voter. Stephanie over the next two years, it is going to likely cost over a billion dollars. Erik maybe even to. Stephanie it is crushing and devastating. Erik the debates like we just saw stephanie francine defending our country. We have a bigger country. Erik debates are important. Francine they are important but they are fairly new because up until the last time, it was three parties. They were vying for leadership. Night you have seven parties that no one has heard about for the last six months are suddenly rising to prominence. The charismatic leader would play a big role in this was unthinkable months ago. Despite the fact and her policies, all she wants to do is take care of the scottish people. Yesterday, she came out saying she doesnt want to talk about pensions because the scots died three years younger and any negotiation would go against scotts. She knows who she is talking to stephanie what is voter turnout like . Francine it has been weak, especially for the elementary and local elections. We hope this time it will turn out about 70 or 80 . 62 of women voters were undecided which is a first. Stephanie what have voter turnouts been weak . Francine you dont feel erik let us go back to immigration real quick. Why is it such a hot issue . Francine benefits. Erik britain has a wellearned reputation of being much more welcoming than any other european countries. Francine if you think of the big picture, europe is not doing great. Unemployment is 50 in spain. Italy is no better. To have all this youth coming to the united kingdom. You can apply for benefits right away. This is the basis of the european union, freedom of movement. Have to renegotiate. Erik cameron is in a tough spot. Francine cameron is in a tough spot. Tell me what your drink your coffee and i will tell you who you vote for. Stephanie vodka. Francine i might put you in the green party. Their shopping baskets are a little more eclectic if you vote for the green party. Erik i took a lot of coffee i drink a lot of coffee. Francine for coffee, we have conservatives because they drink a lot more ground filtered coffee and they dont buy brussels sprouts, they bite avocados. Erik i dont for the type because i love brussels sprouts. Stephanie i love that and avocados. I wish i had the time that whoever did this does. Thank you francine for joining us. The one, the only francine the. Erik when we come back not here. What is congress doing to the irs . You think you know. We will tell you. Erik youre watching Market Makers here on liberty television. I will bring you up to speed on the top stories of the morning. We will begin with greece repaying its debts for the time being. The country pay the imf almost half 1 billion that was due today. The Prime Minister elect wants to see european lenders to release more than 7 billion in bailout funds he says greece desperately needs. The problem is Economic Reforms that has european lenders do not want. I am confident the bonds of trust that strengthened sufficiently to give rise to an agreement that will help stabilize the Greek Economy and move us to the postjune. In such a way that we moved to the time of reconstruction and development. Erik these to be approved ensuring the banks will have enough cash on hand if depositors keep drawing money. In labor market has gotten stronger in the past few weeks. At a stronger than at any time in 15 years. Cuts are on the way a walgreens. The largest drugstore chain will cut 82 of its 8200 stores. Profits have been squeezed by competition and lower insurance reimbursements for drugs. Coming up in 10 minutes, hillary and bill, monica and Newt Gingrich relive the fun of the late 90s with the new play clinton the musical. We will be talking about greece and how much it feels before and how much longer before it feels the crunch. Stephanie here is a headline very few people my cry about. The irs budget has been slashed in recent years. Since the gop one control of the chamber in 2010, the agencys funding has found by nearly 20 . We know. No one likes the irs. The downside is the agency dust the downside to the agency could be bad news for all sorts of reasons. The headline is the irs sucks. Devon is here to explain. Even if we dont like paying taxes, we certainly dont like doing them. Devon we have our sob stories but the irs, but if you was a here sob stories, talk to the people who work there. 87,000 of them have had their budget cut. They have been vilified by ted cruz. We can agree or disagree on the level of taxation but we need a functioning irs for this country to work. Stephanie to work there you have to be smart. Devin and breaks down into two divisions. In Enforcement Division and the Customer Service division. Customer Service Helps you pay your taxes and the enforcement people go after you if you dont. They are sitting in these offices amidst all these empty cubicles. They have no tech support and a lot of cases and have trouble with their computers. Stephanie florescent lights are flashing on and off. Erik people have to buy their own office supplies. Congress has made a mockery of the irs. Devin that is true. Erik it is not greece yet. We mock their collection system. It is why greece has no money and has gone begging the europeans for more. If we cannot collect the money that is owed to the american people, we have our own problems. Devin that is the issue is that the enforcement of Customer Service. If that system breaks down fewer and fewer people will pay taxes. That could be starting to happen now. Stephanie we have to back this up. If i dont pay my taxes this year, what is the likelihood they will come after me . Devin they are doing 46,000 fewer audits this year. I dont know if they have your name. Erik hang on. It is less a matter i would guess that not paying your taxes at all. You will draw attention for not filing. Stephanie i can she on them and no one will catch me. Devin we will all get audited for having this conversation i think. Stephanie probably not because there are no tvs at the irs. If they are paying for their own office supplies, they dont have a tv. You are going to get audited. Devin they want this story other because they are as it set as anybody else. Stephanie did you speak to the commissioner and employees in the Customer Service department . Devin i did. Stephanie why they like . What are they like . Devin they are stressed out in a Customer Service division is abysmal. Is trying to get more funding. Erik it used to be impossible to admit that you work for the irs. Are we at the point now where people might actually pity you if you work for the irs . It is ok to say i work for the irs . Devin they are still scared. That i like to say it but i think it is so bad they are wanting to go public now to get help. Stephanie i know we have to go back how would you compare it to going to the dmv . Devin it is pretty close. Same chairs. Same beige interior. Stephanie everything in the world is automated and online do anytime. The dmv and post office erik we should be hating on a man or woman that shows the color beige. Stephanie congratulations. The story is rad. Erik the cover story. Stephanie it is the cover of this weeks business week. You can get it today on bloomberg. Com. It is really good. Erik maybe the whole thing with ken starr will work out if only this time. We will talk to the producer of clinton the musical. Stephanie i am so excited for this. Welcome back to Market Makers. The clinton come back isnt just on the political stage. It is on the offbroadway stage also and this one has a soundtrack. Clinton the musical opens tonight in new york city and it features a list of supporting characters that transports all of us back to the 1990s. Newt gingrich, ken starr, Monica Lewinsky. We are hoping that is a lot of nudity. We have the lead producer kari lynn hearn. Where does this come from . Kari we have a composer living in london writing about american politics. The humor that he has brought to the peace is Something Different that i think you and i he just brought a different side to it. He started the process seven or eight years ago in australia. I said politicians dont make for great musicals or play satire. He said except for maybe bill clinton. He went to town with it and started writing. Stephanie the clintons try to kill this . Erik they killed Martin Scorseses documentary. Stephanie you have had no interaction . They are not trying to stand in the way of this . Kari no. Would try to attack them in things and we have been respectful. It doesnt matter what side of the table you are sitting on you will be able to laugh at the satire. Erik so much about what we need to know about clintons the stuff we never saw. Three get to see it in the musical . Kari we have two characters playing bill content because a lot of information can from his autobiography and the idea of him being such a convex men a complex man, there are two sides of. Which have the mcdonalds bit. You really good to see how each side plays and reacts. You see hillary trying to deal with both sides of that. It is representative of both all of u. If we decided to make a musical about either of you, perhaps we would find something. Stephanie Monica Lewinsky is making a big comeback. Will should be at the opening . Kari she will not be of the opening but we certainly welcome her coming in. I had an older woman come to me last night after the show and say this is the first time i actually felt sympathy for Monica Lewinsky. I am not saying there is not satire. There is hilarity in her solo songs, but you get to see a softer side. Erik how do you think the show would do if Hillary Clinton was not going to run for president . Kari i still think the clintons are very much like the kennedys. They are interesting. This is about the media as well. The clinton era was the media and press and how they ran with monica through the whitewater scandal. Erik will you embrace the whole political dynasty thing . Kari i dont think so but never say never. Erik i can see why you would want to make the comparison. Stephanie and of sentence. Erik there is something there. I would go only so far in liking the clintons to the kennedys but that is how i would put it diplomatically. Stephanie good luck. Kari let us know if you want to come and check it out. Stephanie definitely. You can see it right here in new york city. Shes the producer for clinton the musical. Market makers will return to you in just a minute. Erik want to watch Youtube Videos without commercials . You will but theres a catch. Live from bloomberg headquarters in new york, this is Market Makers with Erik Schatzker and stephanie ruhle. Stephanie i am stephanie ruhle. Erik lets get right into it. Stephanie here is the bulletin, with all the news you need to know. Consumer confidence has climbed to the highest level in almost eight years. According to the Bloomberg Consumer index, americans view the economy is more favorable today. And said it was a better time to spend. That pick up could signal a rebound in demand. The number of of americans applying for unemployment has hit a 15 year low. Claims averaged 282,000 a week over the past months the fewest of june of 2000. Was last week worse than expected jobs report and anomaly . The u. S. Economy created just 100 for a 6000 new jobs in march 126,000 new jobs in march. Leaving the professional networking site linkedin is buying into the Online Learning business acquiring for 1. 5 billion. Linda is a subscription site selling access to online process taught by industry experts. Offered in five languages. Sling tv is going lave live with a new streaming service. For 15 a month, you can watch hbo shows without a cable tv subjection. That is in addition to the 20 a month you pay for school for slang. There is sling cbl ceos we will skip that. This weekend, game of thrones has their season premiere sunday night. Hbo is now available on apple tv for cablevision customers. Erik, i know you will be watching. Greece may be running out of money but they are still paying their bills. They repaid half 1 billion to the imf today, part of the bailout agreement. The ecb increasing Emergency Fund for greece thanks for more than 1 billion. The Prime Minister is under pressure to come up with Economic Reforms. European lenders will not unlock another 7 billion in bailout funds until they approve his plan. French economist tom petty says wakeup degrees, the countries have done a bad job of handling the crisis. I think they are mistreating the eurozone. The eurozone is not doing well. Stephanie he is the author of that bestselling book on wealth and inequality, capital in the 20th century desperate for century lots of people bought it, but did you read it . Erik no. Stephanie me either. Erik and i am willing to admit it. Just with his greece default, it does not mean it does not face a cash crunch. You saw him moments ago talking to thomas. He spoke with the greece finance minister this morning. Lets begin with you. Tell me, what do you make of that conversation you had with the greek finance minister. . What it what an incredibly cool customer. Joseph stiglitz is here. He has been coming here for years. He had a really strong message. He wants the reform deep reform, a european solution. I am in amazing gardens in the heart of paris. Do you feel, do you trust your partners and how are you getting on with them . The bonds have strengthened. To give rise to the agreement that will help stabilize the Greek Economy. The postjune time in such a way to the short that we moved to reconstruction and redevelopment. Manus it is all about making up the numbers. How to get this to work. They have to deliver on the numbers. He is confident greece can return to gross. Erik marcus, just like manus i have spoken to the finance minister. He strikes a tone when he is out the country outside the country, in the presence of his european lenders, that is dramatically different from what he says when he is back in athens. Is this nonsense going to stop . Marcus more generally, you get a lot of different voices in the government. From the day this government was elected, ever since then, as soon as they came in, they have had a lot of difficulties speaking with one voice. Erik in many cases, the voices are their own. They could be talking about how relations are so great and the europeans understand me and understand the indignity the greeks have suffered. And then they come back and have to adopt a different political posture for the benefit of athenians and greeks. Marcus it is very clear, you have different statements and a lot of positivity and optimism that they can reach a deal by april 24. They are also saying we have had we have a dozen red lines. Unlike previous governments, we will not cross these redlines. You then get signals coming from the other side of the negotiations saying, unless you we come together, unless you come together, unless you make progress, we will not give any more bailout. Manus i just want to jump in. Inside the country, it speaks to the different voice, charming lighting candles. When i asked are you prepared for the political backlash we strike a deal with your creditors and compromise, are you ready or the political backlash . He batted it away and said it wasnt really about being prepared to get a backlash. What he wanted to do was give me a message. He avoided me all day. I have been here ands since 6 00 in the morning. When it became to an issue of how will you can confirm your creditors, how will you pay your money back he said no haircuts. I am not looking into the longdistance, nirvana, in 100 years. It is not about haircuts, that is a critical message he wanted to deliver before the end of the discussion. We do not want to elongate maturity into the future. That would mean a haircut. It is not something we are seeking. It is something we hear being suggested. We want to repay as much as quickly back, but we can only do this if our payments are linked to our growth. Manus i will leave you with this your buddy your boss what do you want to do . He said let me be clear, this is the european problem, we want a european solution. And the euro has got to work. There is two sides to this. It was clear that he wanted to make the point that we are not looking, but we are not in the business of looking for a lifeline from russia. He was very clear, things are going along. Things are not too bad. The boys and girls will get their money back. Erik marcus, didnt deprive mr. Promise didnt the Prime Minister promise that he would demand a haircut . Now the finance minister is saying they are not demanding a haircut. Marcus there is a lot and this is something it infuriates some of the creditors. On the one hand, days after the election, he came out and said we will not ask for a haircut. Then he came out and tweeted hours later, saying, use whatever euphemism you want, about the different signals and the problems with these negotiations. Coming back to your question i was a most greeks whether a gdp swap or an extension of majorities or interest rates, i think what the government realized, what they are saying now, the cuts in pigeon would be the cuts in pensions would be politically toxic. Erik thank you. Manus and paris, i know you want us to feel pity that you had to to chase him around. You will not get it here. Stephanie doesnt marcus look like Joe Weisenthal with a beard . I saw his face and i said, joe, with a beard. I think joe is really good looking. Gentleman, thank you so much. Manus my name is manus. Stephanie i think marcus looks like joe wiesenthal here it you are an original. Though shirts and ties, no one could propagate. Dont you agree with me . Erik on both cases. The separated at birth Joe Weisenthal. Stephanie coming up, haiti commercials on youtube hate the commercials on youtube there will be awake to avoid them. Erik if google is your job the guy in charge of hiring has tips for you. Erik lets bring you uptodate on the top stories. The struggling game maker is struggling and new, shares are down 13. 5 . The maker of farm bill turning to its founder for help. Mark pincus is returning to the role of ceo. Immediately. He has been chairman. They want to lead the market for socalled social games like this, farmville. Last years sales fell 21 and the top of the lost 200 and the knowledge. 200 million. Mortgage rates have dropped some are blaming last weeks weaker than expected jobs report. The average rate for a 30 year six margaret mortgage was just under 3. 7 . One of the biggest makers of hamas in the United States is recalling 30,000 cases. Hummus. Sabra initiated the recall because of a possible listeria contamination. It is a foodborne illness that can sometimes be fatal, you do not want to contract it. There have not been reports of listeria. The recall includes only classic flavor. Those were your top stories, coming up, liquid gold, farms in california down the drought by going underground for water. Plus, the secret to getting a job at google. We have their head of people operations. Microsoft wants to protect your privacy. To do that, it is going up against the federal government. Stephanie leave it to a tech company to call hr people operations. There will soon be a way to watch Youtube Videos without commercials. You will have to pay. Google plans to offer a subscriber version of youtube as soon as this year. As it moves closer to charging users. Lets bring in brian wheeze eezer. Does it go against Youtube Content to charge for it . I have watched a Youtube Video of the guy playing clarinet on the stripper pole 20,000 times. I do not know if i would pay for it. Brian that may not be part of it. We will see. Whether or not it is going to be a higher end content. Does it go against things, they are trying to run a business. There is some sense of commercialism inside of google, ultimately. It may not always be evident. They want to have a problem profitable business in youtube. Erik what do you figure will be considered premium content, things users will have to pay for and what will continue to be free. Brian i suspect that the vast majority of content that people use will continue to be free and ad supported. You will mostly be able to skip through the ads when you are given the choice. It is a pretty good product and gives consumers control. I do not know if the content will get restricted. That is where the limitations of this offering are. If you do not have content behind a wall, a pay wall, and it is not toptier content. I am skeptical many people will sign up. Stephanie youtube has more than one billion users. How many do they need to get for this to make sense . For it to be a success . Brian it can be a small number, but it will will it be perceptible to any investor unlikely. Nobody will notice. They could have a lot of people paying and who cares . Erik if they really wanted to make anything of the subscription service, it would do with the hulus and the amazons have done which is pay for content. Pay for premium stuff. Brian google has the resources to invest in truly premium content. Say the nfl or original programming or anything netflix is doing or amazon. That is the thing. If they wanted to build a successful scalable business that was based around consumers paying for content, they will need that. It may be that they run the numbers and they do not look very good. Stephanie doesnt it feel like everyone is getting into the original content business . It is a limited number of outlets that are making it a huge success. Brian it may not be a Good Business for the 45th player. Erik google has the market power and money to leapfrog some of those other players if it wanted to spend the money. Brian go big or go home, and you could contrast what they are doing with yahoo, taking baby steps, having a couple programs is not much. If you committed 1 billion, you could have a real business and google has the resources. Stephanie do you think they would do it organically . Why wouldnt you just buy a platform if you are google . Brian that is one approach they could take. It is perplexing to me, given their position, the resources they have had, they have not done something, so it there must be a reason. I do not know why. Erik what should google be doing . If they were going to spend 1 billion, what should their next project be . Brian it is hard to say. What can they officially invest 1 billion in . They can probably build a better video ad business. Right now, they are getting not much anyway real tv dollars. If they invested more in tv like content, they could get more tv dollars. Stephanie he is a Senior Research analyst. Erik Market Makers will be back in a couple of short minutes. Stephanie would you pay for Youtube Videos . Erik no. Stephanie but your kids would. Erik im not sure. Farm bill was big and now it is nothing. Farmville. Why would you want to sign up for something that is not going to be worth your time in a couple of weeks . Stephanie we will be back. Stephanie you better stick around, when we return, how to land that dream job . We was we will be speaking to the jet got who does the hiring for google. Erik a fight between microsoft and the federal government. Stephanie you better hope the New York Post doesnt own it. Live from bloomberg headquarters in new york, this is Market Makers. Stephanie welcome back. I am stephanie ruhle. Erik i am Erik Schatzker. We are two hours into the official trading day in america. That means that markets overseas are closing for the day. Scarlet fu, u. S. Stocks turned negative at about 10 30 and have stayed there. Couldnt be more different different than what is happening overseas. Scarlet they have moved higher as u. S. Stocks turned negative. A by 1 , surpassing its intraday record high from 2000 and recovering from a bout of late selling that paired its advance. German Industrial Production rose in february, the latest report to top. In contrast to what we have been seeing in the United States. The market index getting a lift. There was a report from Credit Suisse that firstquarter organic sales at european luxury goods rose 3 . Athens Stock Exchange rose as well. Lets take a look at the euro. Rate divergent story between the ecb and the federal is back in focus. The euro taking a dive. One of 6. 80, we euro, strong dollar. Express scripts is trading at a record high. On general expectations of more m a in the managed care phase. Analysts say the recent deal involving catamaran is a catalyst and driver of future activity. It says it sees no m a on the immediate horizon. You can parse those words and they can come up with something. Erik to justify the speculation. Thank you, very much. Stephanie free food, pet friendly policies and topnotch benefits, i am not talking about bloomberg, though it is pretty sweet to work here. I am talking google even take it over 2 million resumes a year. Attracting top talent laszlo bock runs people operations and he is out with a new book called work rules, about how companies can recruit the best and the brightest. I asked him what insights he wanted to share. Laszlo we are in the inwardly focused and making Google Google work better. I realized one day that for too many people, we spend more time working than we do anything else. More time then we do with our friends, and our hobbies, that with our loved ones. For most people work is a means to an end. It does not have to be. It can have meaning. Where you feel like youre doing something for the world. At google we have done research and work trying to make it that way. I discovered that there are a lot of organizations large, small, that do the same kinds of things. The idea behind the book, how you make work sucked last. Stephanie college kids would love to work at google. If for the internship, if not anything else. What does it take to get a job at google . Laszlo it does not matter where you went to school. It does not matter the status the head agree, we do not care. We used to care. We there are four things, the two most important are how bright you are, cognitive ability. Give me an example of a tough problem you solve. Get ready with those kinds of examples. The second is, we care about not your formal titles, a vp of something or the president of the student body. We care about how you lead. The notion that when there is a problem, you set step in to help solve it and step out and let some nails they charge. Stephanie im sure you look at the data, you look at all your google recruits down the line. Five years, 10 years in the company are the top performers those who went to Ivy League Schools and those who studied Computer Science . Laszlo we have not talked about this publicly, but we have had a lot of leadership changes. If you look at our top 50 people, 20 people. A lot of them never finished college. There is a handful. Less than 10. More than 2. There are people that lead product for the person who leads product for all of google, he has an mba. The odds were against them. Against tim against him. We were wrong. We are trying to get a broader set of people in the company. The best people are not always at these fancy schools. Stephanie do you people not to make the argument that young, smart kids are shutting wall street and rushing to silicon valley. Is that true . When i walk by goldman sachs, there are a lot of who want to have jobs there. Laszlo people want to work everywhere. In the last 10 years, as a result of the two booms we had intact, it has become a legit to do that. I remember, when i was thinking about what to do after my nba, there were three people from my class who decided to do tech and it was a weird thing. It wasnt normal. Now it is viewed as a safe remove. A safe remove. We do not want just safety, we want people who will change the world. Stephanie one of the things he would say, the secret to googles success is big data. They call it people operations he has an mba from yale. He does not have a profile for the person who runs hr. When he first went in to google he was embarrassed to tell people. When you look at how effective he has been and he says it is about recruiting. If you find the best people, overpay them. I like that model. Erik if you do not have the people to put a good idea into practice all it is is something for some meals to buy. You need people. All businesses need people. If you do not have people who can execute good ideas, and create products that the likes of you and me may want to use or by. You do not have anything. Stephanie i wonder, all of these amazing perks, anybody who saw the movie the internship the free snacks, does it affect people want to stay at that place . Erik it is part of the culture, sure it is. Stephanie if somebody offers you more money, are you going to go . Very few people at exit interviews say they leave for the money. You can guess that whole interview on bloomberg. Com or read his book. When we return, the federal government may want your email. Microsoft says no we will be speaking about this fight with microsofts head lawyer. Erik microsoft is fighting the feds over your email. The tech giant arguing that the government cannot force it to turn over emails that are stored overseas. With us the meant waging war for marker site microsoft, brad smith. With us from headquarters in redmond, washington. What is at issue here . Brad this is about the protection of peoples privacy. We believe that when people when the u. S. Government wants to get your email, they need to get a search warrant approved by a magistrate and needs to be governed by the rule of law. When it sits overseas and belongs to a resident of another country, those residents deserve to be protected by their own law. If that is not the case, other governments will be able to reach into u. S. Data centers and get your email without respecting our laws. This is fundamental to the protection of everyones privacy. Erik the emails you are talking about, if they are stored on a foreign server, are the emails between nonu. S. Persons or are they or could they be emails that a u. S. Person initiated or received that microsoft has chosen to store overseas . Brad we store peoples emails in a datacenter that is close to where they live. If americans have emails, we store them in the United States. The u. S. Government has a jurisdictional basis to get them. When we store them up people from france or germany, we store them in europe. That is a logical principle to follow and it basically ensures that, if governments look at this properly, is that people are protected either own laws. Stephanie how willing how far are you willing to go to push back against the government . Brad we are saying 2 things, we believe it is important to stand up for peoples privacy rights. We are litigating this case and we will take it to the Supreme Court if needed. We want solutions, not just a lawsuit. We think solutions are closer at hand than people might think. There is legislation in congress, bipartisan, it would ensure two things that the u. S. Government can get email, even overseas when it belonged to americans, and what it is email that belongs to other peoples citizens, they work with other governments under new rules that should work well. Stephanie you are talking about, located staff. You believe the government understand it . Brad it may be collocated cop located when you create an email, it is yours. You own it, you should control it. If the government wants it, they should have to follow the law just as companies have control need to respect your rights. Erik you have any general counsel at microsoft for 13 years . Brad that is right. Erik what do you say to people who ask, how is it that the guy who is arguing in favor of privacy rights now is the same guy who was general counsel at microsoft when it allowed programs like prism to operate and allowed the nsa to take information that was private and that issue has upset a lot of people since Edward Snowden brought it to light . Brad that is a great question. I have been public in saying that, when the government came to microsoft, 12 years ago, and asked us to turn over peoples private correspondence, we said we would only do it if the law required us to do so. When we were served with the lawful order, we complied. When we were asked to go beyond the law, we said no. We said, it if you want to reach into peoples private information and the law does not give you the ability, do not ask us to go beyond the law, go to congress and change the law. That is the same principle approach we are sticking with today. Erik the difference is that 12 years ago, nobody knew about it. You think it is a good thing that snowden did what he did and brought these practices to light . In part, because, as a result, we are having this conversation. Brad i do not think is my role to opinion to opine whether it was good or bad. This as is an important debate. It is good it is out in the open. We need to respect peoples privacy rights and keep people safe. The only way to do that is to have the kind of broad public conversation that is a requirement in any democratic society. Erik it is in fact a requirement or democracy. We enjoyed the conversation and look forward to the next one. Rad smith, fighting the u. S. Government effort to reach into foreign servers to obtain private emails. Stephanie time to bring you up to date on the top stories. Talks between chipmakers intel and all terra have come to an end. According to persons on the your with the matter. Shares had risen 20 on word that it was in discussions with intel. A warning on the president of iran. He says iran will not agree to a nuclear deal unless economic sanctions are lifted immediately. That is likely to couple gate copmplicate efforts. The u. S. Want to lift sagging its sanctions after it is confirmed that they are in compliance. Bob schieffer is calling it quits. The host of face the nation will step down this summer. He is the networks chief washington correspondent. He was a newspaper reporter in texas before moving into tv. No word on the sunday morning replacement. Erik we will return after a short commercial break. Stephanie that is it we have something cool. Erik every day somebody earns the right to be called the most bad ass dude on the internet. Stephanie i try to get it every day on tv. Erik yesterday, this is who he was. Have a look. Stephanie look at this picture. Erik a bobcat in florida dragging a shark out of the ocean. He is one bad ass dude. Bureau beach vero beach. Stephanie does a bobcat live at the beach . Erik it is a state park, so there is an area that is unpopulated. Large enough to support a bobcat. Stephanie you think that was the most bad ass thing on the internet yesterday . Stephanie i will win it for the month. I was on a conservation trip 300 miles west, the middle of the pacific ocean, and there you have it, yours truly underwater with about eight species of sharks, a few dolphins tunas. I have the bad a shot on the internet for the month. Erik am i supposed to respond for the bobcat . Stephanie was today a good show . Erik i had fun. Stephanie we have a live audience, my nieces here. Erik get ready for the sunday season premiere of game of thrones. An interview with the author of the cookbook. Scarlet it is 56 past the hour and we are on the markets. The start of the First Quarter earnings season has not done much to provide direction for u. S. Stocks. Indexes opened higher, erasing their gains about 70 minutes into the session and have come off their lows come a trading within a very narrow band. The Energy Sector outperforming as oil recoups losses from that big selloff yesterday on the back of a massive build in the mastech stockpiles. Joining the is kevin kelly. Joining me is kevin kelly. Lackluster, quiet, i thought the start of earnings season will give us catalyst. Kevin if you look at the fed fund futures for the end of year is forecasting about 34 basis points. Relatively muted. Go back to december and january, we were seeing a 60 basis point move. Everyone thinks the fed will keep the policy. That is why it is quiet. You are seeing that in correlations. When youre looking at the sectors, 80 correlation, the only exception is energy. John bonds junk bonds have decreased their correlations by 57 . It is muted right now and we will need earnings to give us guidance. Scarlet and of course one thing everyone is fixated on is what kind of devastating effect the strong u. S. Dollar might have had on results, especially companies dependent on overseas sales, like Consumer Staples. Kevin that is a great sector to look at. They are giving a lot of yield. In Consumer Staples sector, you have 23 times forward earnings with a percent growth. Very rich. They are giving a 2 dividend yield. It is great but if you have Procter Gamble that is going to be competing against bear in europe and bears product are cheaper to png, there could be difficulty. We will look at the guidance coming out. One of the ways to protect yourself is go to the xlp, the consumer staple etf and by protection for about . 73, you can buy out to june protection on the 48 strike rice. It is relatively cheap. You can protect yourself when i guidance and strong dollar. Scarlet you are not looking to make much money, it is a purely defensive play. Kevin given that evaluations are elevated and they have smaller growth, it is a great way to have a cheaper insurance policy. Only costing you . 73 and the etf as at 49 and is protected through earnings. Scarlet there have been headlines are you seeing pickup in options activity on individual stocks or sectors . Kevin options activities are picking up in the consumer space. If you look at the casinos, it has never been a better time to be a consumer. The have extra discretionary income, and your sink two times the amount of calls. If you start looking at casinos people are making sector bets. Scarlet the slowdown in gaming is set to slow down or reverse here it is still going down, just not as much. Thank you so much. Money clip is up next. Pimm welcome to money clip, where we bring together the best stories and interviews and video in business news. I am pimm fox and heres the rundown. Greece pays the bill and gets more eight. The finance minister sees more deals to come in a bloomberg exclusive interview. Investors sell in shanghai and buy in hong kong. The frost and correction in chinese stocks. In politics building a Coalition British parliament brick by brick. And passover profits