Masters all weekend . Erik i didnt, actually. Stephanie you should have. Erik i watch some. Amazing performance by mr. Spieth. Tying a record set by tiger woods. We are going to start you off with the top business stories of the day. An activist investor is targeting qualcomm. Asking qualcomm to think about spinning off its chipmaking unit. Shares of qualcomm are down 11 over the past year. Here is where they are today. Breathing a little life into qualcomm, but not enough to recoup all of the losses. Meantime, in china, exports unexpectedly fell by the most in more than a year. That adds to concern over chinas growth. Next stop, iowa. That is where Hillary Clinton is headed as she begins her Second Campaign for the white house. She ended the suspense over whether she would try to become the first female president. She used a video to announce her candidacy. I am running for president. Americans have fought their way back from tough economic times. The deck is still stacked in favor of those at the top. Every day americans need a champion and i am going to be the champion. Erik clinton is the first am a credit to announce she is running for the only one clinton is the first democrat to announce she is running for the only for president , will she be the only one . President obama and raul castro will agree to disagree. President obama said the United States and cuba can disagree on issues and still turn the tables. President obama i am cautiously optimistic that over the coming months and years that the process we have initiated and first announced in december, reaffirmed here, will lead to a different future for cuban people and a different relationship between the United States and cuba. Erik obama and castro met for about an hour. The next big step, whether the u. S. Decides to remove cube nation as a state sponsor of terrorism. President obama will make that decision in the near future. Jordan spieth went wire to wire to win the masters. The tide tiger woods record for he tied tiger woods record for lowest score at the masters. He gets 1. 8 million and the green jacket for winning. He will take him another 10 million per year in endorsements. Stephanie blows my mind. He is 21 years old. Closer in age to our children them to wes. Ouch. It is time to have Bruce Richards back with us. He is the head of marathon investments. Managing just under 13 billion dollars. Welcome back. Bruce hi, staff. Hi steph. Stephanie you say europe is a great opportunity. When i look over there bruce what stinks . The glass is halfempty or halffull . Listen. There are three things driving europe. Number one, the ecb the quantitative easing. I think we just ended hours. The number two driver is the currency. The big, huge currency devaluation makes their currencies that much more competitive and will drive earnings for some period of time to come. Number three, the lower price of oil is good for the companys eden europe because they are net importers the companies in europe because they are net importers. We just bought a loan last week and ireland and we will continue to buy loans in ireland. That is one of the countries where we are investing. We have bought nonperforming loans over the last two years. We have been very busy. We think it is one of the great opportunities globally, europe. Erik how long is it going to take for things in europe to improve enough so that the investments you have already made and the ones you are making now, like this irish deal, make money for you . Bruce it is yesterday. It is happening while we are talking. Two years ago when europe came out of recession, their growth rate was 0. 6 percent. Last year, it was 0. 8 . In ireland, we have a 4. 2 growth rate this past quarter the fastestgrowing economy in all of europe and faster than growth rates we see in the u. S. Stephanie what do you think about greece . You are such a tv professional. Bruce greece 1000 things come to mind. The politics going on between tsipras party, which is wanting one thing, and the monetary unit in germany which want something completely different. They will work out a deal. Alexis tsipras will work out a deal with the european, where they both will be able to claim victory. At the end of the day, the greek political parties, the greek population they want to stay in the euro. None of them want to leave. Germany wants them in the euro. Between the ecb and the troika they are owed 400 billion euros by greece. No one wants to see greece leave the euro. Nobody. They are not going to leave. The bigger question is where value is. Greek government bonds trade at 11 yield. Erik 11. 1 3 . Looking at them right now. Bruce you look at laffey and they traded 40 basis points. Cyprus trades on a free handle. Stephanie let the when he a trades at 40 basis points lithuania trades at 40 basis points. Bruce ireland when they took a bailout package, the 10year note was at 11 , right where greases today. You know where ireland trades today . It trades at about 68 basis points and has a 10year note that trades at the dollar price of 1. 44. The greek government bonds im not saying go out and buy them, but we are at a fork in the road. I say they are not going to leave the euro and then you project forward a couple of years from now and when the ecb is coming in to buy quantitative easing, they are buying 60 billion euros per month in that is what is driving all the crazy yield levels, those start at some point they will start buying greek government bonds again. They will start buying them again sometime later this year or into next year. Erik what you are saying is that there is going to be a convergence. Greece is going to come in from the periphery. Trading at 10 plus now and going to end up roughly where you think cyprus is. Bruce that is a good place to start as a starting point, provided they do not leave the euro. Lets walk through the scenario if they leave the euro. It is selfdestruction by greece. You wake up tomorrow morning if you are greek you wake up in the morning and it is a bank holiday. A week later when they open up the banks, you realize that your 100,000 euro is now 100,000 rock my. What do you 100,000 drachma. What do you think that buys . You will see a 20 contraction in gdp because all liabilities denominated in euro will not be able to pay debt and assets will be denominated in drachma. It is a nightmare. Stephanie we are running out of time. I want to hit puerto rico. Erik no we have lots more time. We are going to take a commercial break. Stephanie thank god. Erik is it fair to compare greece with ireland . The Greek Economy i guess you could say there are lots of things that were wrong that are not quite what they seemed about the irish economy. Bruce no, it is not fair. I am just trying to give you a little direction as to where ireland was during the crisis when their Banking System went bust and they took a bailout package. Erik i was wondering whether the ecb, whether quantitative easing would make the most sense . Bruce it is not a fair comparison. Their tax rate is 15 . They have great formation going on in their country pharmaceutical companies microsoft, google. It is one of the lowest unemployment rates in all of europe, next to germany. Erik how sure a thing would you say lets talk about odds you dont think greece is going to leave the euro because you said it was selfdestruction what odds would you put on it you bought greek bonds you are betting that it stays. Bruce i think it is a 10 to 15 probability. Maybe 20 on the highend. The base case is that they stay in the euro. Politicians, i know it is election season coming up, but politicians will say what they need to say on the stump to get elected and then they will do what they need to do to run a country to be practical. I think there is going to be a shift of the way that the politicians think about it to keep it all together because the risk loss scenario for europe and for greece to leave is too dire for greece and not particularly good for europe, when they lose 400 billion euro. The only ones that would like to leave them see the euro is mr. Putin in russia. Everyone wants them in. Stephanie politicians saying one thing to get elected and doing Something Else . Im not familiar with that practice. Bruce house of cards. Stephanie i want to talk about house of cards during the commercial break. Erik we will talk about puerto rico when we come back. Stick around. Stephanie welcome back to Market Makers. Shares of under armour are up in early trading a day after that recordtying victory in the masters by a golfer it sponsors. Jordan spieth that little cutie, was a walking billboard for under armour at the masters supporting navy and white. He recently signed a 10 year deal supporting the company, while tiger is still a nike man. Spotify is raising new financing and around that would value the streaming music site at about 8 billion. That valuation is double what the company was valued at in november 2013. Coke is going all in for american soccer. The Worlds LargestBeverage Company has signed a fouryear sponsorship deal with Major League Soccer and the u. S. National soccer team. The deal also covers the Mexican National teams games in the u. S. Major League Soccer had been sponsored by pepsi for almost 20 years. Those are your top stories of the hour. Coming up on Market Makers the s p 500 is coming off a second weekly gain in a row. We will see what is moving the markets today. Plus, will this be the water crisis that finally scares california into fixing their problems . We will look at how the state is fighting the drought. Bob marleys son is marching to the beat of a different drummer. He is making his fortune in coffee. Erik lets return to our conversation with Bruce Richards of marathon asset management. Lets turn our focus across the atlantic. Stephanie wanted to talk about puerto rico. Before we get there lets talk about energy. Oil prices are still way down from their peak. There is a lot of money chasing opportunities. What does it look like to you . Bruce a lot of money. Companies are able to term out what they term out and are able to raise the dollars to continue operations without eating into cash too much to keep the coffers and the wells pumping. Stephanie it seems that every highyield or distressed year you are so excited about the Energy Sector are the really enough opportunities . Bruce one traditional money manager called us the other day asking our advice how to play energy bonds. What is the best way to do it . Stephanie your answer was, give it to marathon. Bruce what i am suggesting is that the money flow is coming from not only distressed investors, but also traditional investors and they are coming to the bond market. Erik that is why these companies can borrow. Does that mean that there was nothing for guys like you to do . Bruce it is stabilized. That is the real reason why the Capital Markets are reopened. Oil is stabilized. We are seeing tremendous value. Stephanie is there tremendous value or are traditional Money Managers getting into a risky space, is this reminiscent of 2006, 2000 seven, when players who should not be in highyield distress got in . Bruce it is a combination. You have companies at the top of the capital structure bonds. You take a company like samsung, where does the trade of that security interest . Is it . 18 or . 20 on the dollar . That is a 7. 8 billion buyout. There is a whole gap between the companies and energy that have already filed for bankruptcy the ones that will be filing next, and those that will be able to raise capital and have Sustainable Business operations and continue on. I think the traditional Money Managers are looking at the Sustainable Business operations that are going to continue on and are looking to sit choir acquire senior bonds and equity and we are looking at the more distressed place. Stephanie puerto rico. They have had a rough road. Bruce we like puerto rico. What is not to like . Have you been there . The people are beautiful. It is great. Here is why we like puerto rico from an investment perspective. They have a little bit too much debt relative to the gdp. The amount of debt outstanding across all of puerto rico entities is around 77 billion. It is a little bit more than 100 of gdp and the economy is not growing like much of the United States, but here is what we like. Prepa, the puerto rico power authority, is an entity that is very valuable and important for puerto rico. It provides the power for the whole island. You know what they have been doing . They have been importing oil from the United States across the atlantic into puerto rico to supply power. We have a plan, we eating marathon, dealing we being marathon, dealing with puerto rico and there and visors that works beautifully theyre an advisors that works beautifully for puerto rico. Here is the plan. Here is the plan. It was all public. Ge is our partner. They are going to build in puerto rico, if the plan is accepted which we think it should be. Stephanie what is the likelihood it does become excepted . Puerto ricans do not feel great about American Hedge Fund managers making all of this money. Bruce this is us putting in new money. Erik timeout. Does it all work without a restructuring . Bruce absolutely. 2 billion or 3 billion will allow plants and equipment to allow power plants to be built in puerto rico, so that they will not be held hostage to exporters from other regions. Stephanie you think they will sign off on this . Bruce they will lower the cost of the island. Absolutely, it is the best plan. It will lower the power crisis for the consumers of puerto rico. Stephanie bruce, thank you so much for joining us. Bruce richards is the ceo and cofounder of marathon asset management. Erik Market Makers will be back. Erik coming up, it is not just the drought that is the problem. Why is california so bad at managing the water that it does have . Stephanie plus, he is not following in his fathers footsteps. Live from bloomberg headquarters in new york, this is Market Makers. Erik welcome back. Im Erik Schatzker. Stephanie and im stephanie ruhle. Erik now for some top stories. Stephanie how about it. [laughter] erik more than a dozen big retailers are being questioned over the way they make employee schedules. Requiring hourly workers to make themselves available on short notice made break laws. The talks on the Iranian Nuclear deal may have to be extended past june 30. U. S. And iranian officials have been sparring over the details. The window to wrap up the deal is not an unchangeable matter says the iranian supreme leader. Anytime the Obama Administration the Obama Administration will try to sell a Skeptical Congress on the deal. I think we have earned the right, through what we have achieved in the interim agreement and what we have laid out in this parameter that has been set forth, we have earned the right to be able to try to complete this without interference and without partisan politics. Erik john kerry and other cabinet members will brief the house today and will be speaking with the senate tomorrow. A new report says groupons market value may be as high as 16 billion. 6 billion. Groupons market value is about 5 billion right now. Sprint is going to start making house calls. They are rolling out a Personalized Service in kansas city, miami, and chicago. Who leaked four episodes of the new season of game of thrones . That is what hbo wants to know. The episodes appeared online before the season premiere. The link may have come from copies the network sent in advance to media outlets. Game of thrones is a most pirated show. Stephanie isaiah and as an game of thrones enthusiast does it borrow you bother you . Who cares . We are 60 minutes into the trading day. Lets take you to scarlet fu. Scar are you a game of thrones fan . Scarlet im a big fan. The First Episode was a big set up piece. Erik too many plot lines. Scarlet i did not read the book after season four, so i am looking forward to the show. Anyway. Stephanie there you go. Not my show, but i do like the markets. Scarlet it is quiet before the earnings storm hits tomorrow. Netflix gaining this morning after ubs upgraded it to a buy from neutral. Last week you will recall that citigroup upgraded the stock as well. There has been a little bit of an investor regrading of netflix over the past few months. You can see that 46 percent jump over the past six months after a dismal 2014. Lets move onto qualcomm. Activist investors activist activist investor jana is getting involved. They want qualcomm to spin off the chipmaking business and made other suggestions for improving the stock. Finally, jetblue shares are trading at an 11 year high or almost an 11 year high after march capacity rose 6. 2 . March traffic rose at 9. 2 . When it comes down to revenue for per passenger, it will show a bigger upside than previously anticipated. Stephanie thank you for the update. Erik how california can solve its water problem. The first step is to become water literate. Stephanie i could not even tell you what that means. Erik it is time to talk about californias drought, everybody. Blame californians. They are a wasteful lot. Unless they change some of their habits, jerry browns mandatory useful dass usage cut may not make a difference. With us this morning, Charles Fishman the author of the big thirst. Charles california has one heck of a problem and californians are only beginning to wake up to that reality now. How should they be thinking . Charles good morning. They are waking up slowly. That is part of the mistake. How should they be thinking . We are in year four of the drought. The drought might last two more years or six more years. It could last a decade. We could have six and seventh graders with no memory of real rainstorms. Part one is you need to figure out how to make it through the next few years, the shortterm. How to keep business growing and thriving, how to keep the farms working. Half the produce in the United States comes from california. Much more important california needs to reinvent its water system which is incredibly elaborate and complex, to account for this kind of dryness. The system that exists does not work very well and they need a longterm reimagination and then they need to teach the rest of us what they learned about how to manage scarce water. Stephanie where are they going to get the money to do this . If californians are only waking up now, clearly budgets and laws have not been passed to afford some sort of revamp. Charles i am not sure money is the most important thing. It does not cost any money to take a shorter shower. A third of the Water Utility supply in california that is different from agricultural water, a third of the Water Utility ply supply goes to lawn water. It does not cost any money to stop watering your lawn. It does cost money to substitute better landscaping, but the truth is, it costs a lot of money to find new water for california. What you need to do is say, how do we make the water weve got economically productive and as economically productive as possible . Erik why not just put a price on it . Why not just allocate a minimum amount of water that every californian needs to survive and take the odd shower but not car washing, for example, and not necessarily watering your lawn and just charge californians for everything they consume above that minimum . Charles that system kind of exists for the utility water people. The issue is that 60 or 70 of the water in california goes to farms and there is a very complicated 100yearold system for who gets that water whether they pay, how much they pay. When i talk about reinventing the system, that is what i talk about. Erik i meant charge everybody. Not just in santa cruz or palm springs. Of course, most of the water gets consumed by agriculture but i see many arguments and you would know better than me that the agricultural consumers are not paying a fair market price or what should be a fair market price. Charles they are not. If they start paying more, we will start paying more for fruits and vegetables. What happens if you charge for water is people find ways of saving it. It is largely free. I am a big fan of bringing some economics to water. The problem is that the road laws that entitle people to water and so when i talk about reinventing the system, you have to start with a clean sheet of paper and figure out who is going to be hurt and how you transition. You cannot just wave a magic wand. What i think is interesting is the jerry brown at the height of his popularity as governor and then you talk about the ceo of disney, the ceo of google, the ceo of apple, Facebook Twitter some of the most Prominent Companies and prominent Communications Companies in the world all headquartered in california there is no conversation or attention to the problem from those people. Stephanie im guessing they all have swimming pools that their houses. Charles it is even more than that. When you press enter on a Google Search, two tablespoons of water is used. Stephanie two tablespoons of water is used every time i hit a Google Search . Charles even on your iphone, just yes. Stephanie that is pretty cool. Charles google uses in normans quantities of water to run its server centers, apple does disney does. Intel reports all of its water use around the world. Those people could step up and say to the governor as could the large farm communities and irrigators we need a conversation about how to fix the system. They seem oblivious. Erik before we run out of time, where would you have them look . Where in the world gets water right . What jurisdiction, municipality, country . Charles the quickest place to look as australia. Australia looks very much like california, economically and climate wise. Australia had a tenyear drought across the entire country and they had to reinvent their water system. They cut the amount of water people at home used in half and they reimagined just what you were talking about the economics of how water is supplied to big users. Much closer to home, the city of las vegas has a lot to teach sec, los angeles, san diego because las vegas lives with the amount of water that was allocated in 1935 and they are a little bigger than they were. There are lots of lessons, even close to home. Erik i have spoken to some farmers in the Central Valley and they constantly pointed finger at the environmentalists and the smelt in the sack around joe in the Sacramento River drainage. What do you say to those folks . Charles what i say is that if you set up a water system, the system is not right. In the shortterm, they may have a reasonable argument, but in the long term, all that tells you is that the system is broken you are facing farmers off against the smelt. The farmers are pumping so hard out of the ground that in many places in california, the ground is falling an inch a month. The system needs reinvention and hoping for rain is not a plan. [laughter] erik no number of rain dances that stephanie or i will do is going to solve the problem. Stephanie lets just see eric do one. I want to point that out. Erik Charles Fishman is author of the big thirst. Thank you. Stephanie i think it should be called the big fishman. Wouldnt that be good . Erik that is clever. Stephanie clever. Thank you very much. A surprising stumble from one of the drivers of chinas economy. Exports unexpectedly fell by the most in more than a year. Overseas shipments dropped 14 . China is already dealing with overcapacity and a property slump. In the u. K. It is now less than four weeks before the election. Labor Party Candidate ed miliband says that if he is elected, the government will run a Budget Surplus by the year 2020. His manifesto rate petes repeats key labor points, such as reversing cuts and Prime MinisterDavid Cameron and the labour party are neck and a can the race. Another republican has officially entered the president ial race. Just moments ago, senator marco rubio confirmed he will announce his candidacy later today in miami. The 43yearold rubio is the son of cuban immigrants. Like rand paul and ted cruz, he won his seat with grassroots support and the backing of the tea party. Those are your top stories of the hour. Coming up in 10 minutes his family name is synonymous with music. Now he wants it to become famous for coffee. Call him the father of modern republican economic theory, we will talk president ial politics with art laffer and why the future of transportation is looking a lot greener these days i hope so we will be speaking with a venture capitalist about those opportunities. Erik that is all coming up on Market Makers. Stephanie welcome back to Market Makers. Bob marleys son is hoping to brew and empire. Rohan marley launched a Marley Coffee 15 years ago. These days, the coffee industry is under a lot of pressure especially smaller growers like his. He joins us now. Rtohan, what started this dream . Rohan marley the james started when i took a trip to jamaica and i found a paste of land the dream started when i took a trip to jamaica and i found a piece of land. I love to the property because of the river. There is a beautiful river, a spanish river. By impulse i told the person, i want this land. Stephanie you did not know what you are going to do with it. Rohan marley no. I did not know the situation between the community and the previous owner, that he was not only offloading the land and the situation on me because he was trying to do a Coffee Business and it took him several years to get done, but he kind of failed. It had been a year since people were working. My only thing to the community i said to the community, what are they known for . They told me, coffee. The told me coffee was on the land. I said, do you know anything about coffee . They said yes, mr. Marley and i said, all right, we are in the Coffee Business. Stephanie it is a really competitive business. Rohan marley if you are really passionate about what you are doing and you have the time to put into what you are doing it is research. I think knowledge is what is going to really separate yourself and being an innovator that separates the competitiveness. It is more than trying to make a dollar, it is doing something that represents my family, my fathers legacy, and the movement of sustainability what the environment needs. If you are going to go through something, youve got to do it with your heart. Then your heart becomes a business. [laughter] erik what is it that you are doing that you think makes people want to drink your coffee more than someone else . Rohan marley obviously, i started my own vision of the business when i went to ethiopia in 2007. I started to understand that coffee is more than a beverage it is a culture. How you can impact peoples lives. I think that the way i source my beans is ecofriendly and the organic certification. Fair trade. Rainforest alliance. Being that you drive yourself to do things that can be beneficial to the community i think the people, the consumers gravitate toward that. What i am most proud about is what i am doing with the brand and the movement. 1 of each of the real cups each of our capsules we help to support the community in ethiopia where we help to replenish the community. Stephanie how do you get it sold in a world of starbucks . Rohan marley being bob marleys son, i get to enter a door. The grade of our beans are from 99 through 100. We source ethical beans. I am from jamaica where the number one beans are produced. I can play ball. We have the best coffee in the world. Erik what do you think about what starbucks is doing . Are they doing some good things . Rohan marley you have that much money, you must be doing some good things. I think they do good things, too. They open up the gateway for people like us. I have never tried it. I only drink Marley Coffee. Stephanie jamaica, ethiopia, but you are headquartered in colorado. Why . Rohan marley denver. It is a growing market for new business like myself. It is an organic, friendly market. We love denver for many reasons. [laughter] stephanie there you go. Rohan marley wait. I have to tell you about our ecocups. Let me tell you. Stephanie we cant. We have to pay our bills. Rohan marley is the founder of Marley Coffee. Live from bloomberg headquarters in new york, this is Market Makers. Stephanie this 21yearold is now a marketers drain after winning and setting the record after tiger woods. Eric we will talk to him and venture capitalist about what it means for investors. Stephanie and made his name in the reagan administration, more than three decades later, we will speak to economist art laffer. Welcome to the second hour paradigm stephanie ruhle. Eric im Erik Schatzker. Stephanie shares of qualcomm are up today after an investor urged the company to consider been a off its chip unit. They say splitting off could make it a takeover target. They have invested more than 2 billion in qualcomm. More than 11 in the last year. Here in new york city, the state attorney general is questioning more than a dozen big retailers about the way they make schedules. They may in fact break the law. Plenty of demand over the weekend for the new apple smart watch. They pushed the delivery day into july. Almost three months. The one and only Hillary Clinton has hit the road for iowa. She is driving there, kibbe kicking off her campaign tomorrow and wednesday. It is the site of the first new york mayor, bill de blasio, who says he is waiting to hear more present. Mayor de blasio it is time to see a clear vision. He are technically not yet endorsing her. Mayor de blasio not until i see in actual division of where i want to go. Stephanie de blasio was clintons can made Campaign Manager in 2000. Official enter the president ial race later today. He said he is uniquely qualified to be the republican nominee. The 43yearold rubio was first elected in 2010, the son of cuban immigrants and in a swipe at Hillary Clinton, he called her a leader from yesterday. Senator marco rubio of florida will hold a rally later this afternoon in miami. Erik marco rubio enters a crowded republican field, the perfect opportunity to bring in john the coanchor of with all due respect to come in nashville, the man who practically invented economic theory, art laffer. Good morning to you. You have met with just about every serious contender for the republican nomination. Who get economics art laffer sees it . Art they are all very good and all qualified to be president and that really is the truth. What you see right now is a process going on. As you see it right now, all these candidates are trying to figure out what sells and what does not sell and what will and will not work. I think each one of them is capable. Erik they are all very good . How can you say that today and at the same time be quoted not long ago in the Washington Post what i tell candidates today, and there are not many who are very economically literate . Art i mean phds. They cannot get down to the weeds. Capital gains and whether it should be treated as a separate tax fair that is not where they are. They are literate in the broadbased sense of lowering the tax base and broadening the tax base will lead to economic disparity. Each one of them is fully wired for that and that is what they should be discussing. They should not be talking about the fourth footnote of a bill. They should be talking in broad terms. Stephanie you have got a bit of a smirk on. John art laffer likes tax cuts. The Republican Party is for tax cuts. I am not surprised he thinks they are all for good candidates. Relative to today because marco rubios about to announce his president ial candidate campaign, marco rubio has a tax reform plan, some people on the supplied side think it is not really what the Republican Party should be doing. Marco rubios tax plan is focused on business and investment but does not do acrosstheboard rate cuts and the top tax rate on personal income, where it is right now, i know a lot of people do not like that plan very much. What say you . Art i think they are basically correct. Im criticizing the plan as it stands. You talk about child tax credits, that makes no sense. If you want to reward people who have children, write them a check and do not use tax credits. And people who do not file tax returns do not get the benefits and it makes no sense. What you want to do in personal income tax is lower the rate as much as you can, broaden the tax base, and use it primarily for revenues. Some are worse than others so you want to collect your money in the least damaging fashion and spend it in the most beneficial fashion. It does not do that as i would like it to. Stephanie why are all taxes bad . Art because they discourage activity. Except for syntax. Fines for speeding alcohol, tobacco, firearms, those types of taxes might be quite good. They discourage a behavior. But all the rest cause us to lose the activity we are taxing. We recognize that and we have to get requisite sums to run government. You want the least damage caused the money and the most benefit spending it. That is the way all good orthodox economics looks at the fiscal situation. John whatever you think about art laffers use on the matter it points to an actual debate that will happen in the Republican Party. With marco rubio in the tax plan , you have an embodiment of reform conservatism, conservatives who are still very much program and want to cut taxes but they think the supply side orthodoxy, they need to be more concerned about income inequality, mobility, and they want to focus tax cuts rather than doing big and broad tax cuts. That debate will play out. Gaining some steam and they Republican Party but it is not the mainstream view right now. Can candidates will disagree. Art it is very correct. I have no problem the way i would like to see it done is writing checks to them i have six kids myself 30 write them a check. You do not use the tax codes because that helps the most and not the least, because only those who get the critics are those who have a tax bill already to pay. Those who do not file do not get the benefits. Do it the correct way and write them a check to rather than the tescos incorrectly. That is where i hope the debates go. Stephanie should jeb bush be a concern or publican . He is in a little bit of trouble. We have a pull that just came out over the weekend with a test of viability. Stephanie lets look at the graphic here. Request we said, would you seriously, maybe, or never consider supporting these candidates. Donald trump was the worst off when it came to most people saying they would never support. But jeb bush, 42 of republicans and independents. Within his own party, 42 say no way for jeb bush to look at the other numbers. Rand paul is 33. Scott walkers down in 26. That is a striking number appeared a lot of people in the Republican Party for one reason or another, either they agree with disagree with jeb bush or they just do not want to have another bush because the name carries a lot of baggage. That tells you there is a ceiling. A guy like marco rubio, six months ago, everyone said if jeb bush is running, marco rubio will not. Bush was rubioss mentor p or he will never take on his old guy paired and now, here they are and marco rubio is saying, i look at their poll numbers. Erik whose tax plenty like the best . Art they are all evolving or jeb bush is excellent and he gets it. He gets it very clearly. There is nothing wrong with jeb bush. I do not know why he pulled so badly. Rand paulss first bill was much worse and much different than it is now a they are working toward a progrowth agenda. I hope our core rubio evolves as well. If he does, he is as good a candidate as anyone. John art laffer is such a positive, optimistic guy. A Ronald Reagan conservative right now. Art you are so caressed in your interview. Correct in your interview. Do you know they charged water for farmers about 100 of the price for city dwellers . And then they cannot read well it . It is worth more than a watermelon. Erik the recipe for president ial economics. John and also for watermelons. I love a good watermelon salad. Erik thank you very much, art and john. Special coverage of senator marco rubios entry into the president ial race. Live with much more coverage streaming live at bloomberg politics. Com. The only thing wrong with our coverage tonight, no stephanie ruhle. Stephanie a watermelon salad with mint and set a cheese. John with mint and feta cheese and pork. Giant chunks of pork. Stephanie i am not with you on the pork. We have got to go. Going green is likely to be the wave of the future when it comes to transportation. We will speak with a venture capitalist about that and not pork or watermelon or jeb bush. Pork is the wave of the future. Erik should qualcomm breakup . One activist says it would not be good for the company or its shareholders. Erik you are watching Market Makers. The top stories of the morning spotify is raising new financing that would value the streaming music site at about eight lien dollars according to people familiar with the matter. Spotify is the largest prescription Music Streaming Service with plenty of competitors. Evaluation is double what spotify was worth and a member of the 2013 financing round. Groupons market value should be as high as 6 billion. Jean says the Ecommerce Company could you best for businesses including a self korean business site. As much as 730 million. Right now, it says it should be 20 higher in part because of the valuation. Groupon has about 1 billion on hand. Executives at pepsi quantitative person familiar with the matter, pepsi has signed a multiyear agreement replacing coke or the deal would give pepsi official status. Those were your talked stories top stories. The company being pushed to spin off its chipmaking unit. And if he the future of golf . Looking at deals after a predominating performance. Stephanie we all want to get places faster and cleaner. Promises that cannot quite deliver, the transportation of the future will be arriving before you know it. Here is some of that insight into what you can expect with a man investing in green energy companies. Welcome. When we think about transportation of the future, is it all about teslas . We love them but they are really expensive cars only for a certain kind of driver. They certainly are today. The premium luxury market, where they are winning today, that is just driving a cost down curve. Battery costs are continuing to decline. Not just in the drivetrain side but also with comedic haitians technology and smartphones. It is changing the way people think about transportation fundamentally and the way people interacted with cars. Births are some things we are excited about. Stephanie pilar inclined to take in number and not the subway and that is not necessarily a good thing. The way people think about car ownership, when i turned 16 i cannot wait to get my drivers license. People are more excited to get a cell phone than a car. Represents freedom in a number of different ways, including transportation today. In terms of sustainability cooper has demonstrated that by lowering the cost of transport and potentially reducing the number of cars on the road, it can lead to a much more sustainable future. If you look at the global pool of assets, it is worth 20 trillion and yet we only use those assets less than 4 of the time. 96 of the time as we think about the emerging middleclass i will like to think about instead of building another chilean dollars in assets, can we get to 8 . Uber i think is a part of the trend. Investments in many Different Companies associated with transportation pair what do you think, will it be the electrification of a car or whether what tesla is doing or your company is doing, or is it going to be the self driven vehicle, or is it going to be Something Else . Or is it asset sharing like uber, for example . Classes hard for me to pick just one. The biggest driver is convergence. Autonomous driving converging with all three. It is really when all of these innovation areas converge when you see real destruction and basically, you are seeing driving the costs down, and the way we think about power at home. Erik there is a better ways for me to phrase it in what you think about investment . It is hard to say. We are blown away by collaborative consumption. The sharing economy. That is one area where weise a lot of innovation but i think that alone does not do it. We need innovations and software to medications but also better battery technology. We are excited about these things converging and presenting transformation in the sector. Stephanie is there a risk with oil getting so cheap . That is a driver of cost tradeoff, but we are seeing price points where the cost for additional mile of driving is already competitive with two dollars per gallon today of oil. Because of dramatic costs down. I think it is a threat but people are buying teslas because they are the best cars available and i think electric cars are really the only way you could produce the best cars today. Erik in the early days capital intensity on the one hand. Also, the time involved in actually making some of these things happen. It is not like you can just build an act what have you done or changed as a result of that experience . I have been in the sector for 15 years. We all learned a lot of lessons about where venture can play. We look for lower Capital Investments but we are seeing Technology Adoption at a rapid place and transportation much more rapid than historically we would see. That presents opportunities for companies to emerge that we are excited about. Stephanie thank you so much for joining us. Erik stick around. Erik coming up, a spinoff at qualcomm . 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. Stephanie welcome back. Overseas theyre getting ready to close down for the day. Taking a look at the action in europe. Scarlett the action in europe is described as careful trading ahead of the meeting on wednesday. If you look at what it did the gains are now closing at a record high. Energy stocks trading at a seven month high. More and more people are talking about how their earnings estimates for the energy group have been lowered so much the group will most likely rise after earnings. You see in almost 1 drop in minors. Evidence of a slowing economy not doing much to slow the rally down in hong kong and shanghai. It is the opposite, fueling speculation china will increase stimulus to boost growth. Bad Economic News is being interpreted as good news for asset prices. A sevenyear high capping a 14 eight day rally sparking a regulatory change that makes it easier for mainline chinese funds. You see the chinese composite adding 27 so far this year. Just to put the chinese equity bubble in perspective, i got a chart from alberto from rbs that Shows Chinese stocks versus that u. S. And europe. It normalized to 130 can see a real divergence begins roughly around the First Quarter last year chinese stocks, he says, four times what we have seen in the u. S. And evan times what we have seen since the tart start of 2014. He adds china not limited to stocks because bank loans are rising and you will start looking for defaults in a shadow Banking System with a lot of a Companies Like property developers, for instance not being able to pay off some of their loans. Stephanie if you look at the chinese stock market and participation in the last months, it has been quite a run. Scarlet because everyone is putting their money into stocks so where else will they go . Stocks. Stephanie all right. Thank you. Scarlet fu. Erik another page from the activist playbook, qualcomm is the latest company pressured to break itself up. Jenna has more than 2 billion invested in qualcomm. Here with more, cory johnson. The stock market is kind of telling us all we need to know. Qualcomm shares are up a quarter of a percentage point. Not many people thinking the scene has much of a hope here. What do you think . There should be a lot of hope here. It was up a lot in the free trade. It is not a voting machine for votes might be a big change right now, but it is something qualcomm wanted to do the last time we saw a big tech bubble. They wanted to split the company into two parts. Ira miller qualcomm talking about quite a lot. This is a big change very much on the cutting edge of what the future of semiconductors is, separating out expertise and design from the expertise in manufacturing. So qualcomm makes a lot of chips, probably the most important shift maker in all of mobile. That is the reason it has gone headtohead and crushed intel might comes to mobile the future of computing, whether it is phones, tablets, or whatever. They also have a business of just inventing the chips and letting someone else make them. Selling the licenses on a technology they invent. They tried to do it in 2000. Qualcomm try to sell. Erik what youre making the case for is that the chipmaking part would be a boundary in the patent part of it, the intellectual property of the company would just he a divine firm for example. Cory and those companies that do not manufacture their own ships have a lot higher margins. You can see why wall street would like it and why qualcomm would like it and why the owners of the company erik wooden qualcomm say that there are advantages to be had by at least keeping some of your production integrated . Cory qualcomm made the case all the way back in 2000 and they would be better valued as separate entities. One thing we are starting to see, every company in every situation is different. We see a pattern with some of these spinoffs and there may be a groundwork laid, where the company that once made the case they have to be integrated are now sort of establishing that integration through longterm contracts and longterm exclusive partnerships keeping the benefits of the synergy, if you will, while splitting them up where the market values different growth rates differently. Stephanie what kind of Competitive Pressure this qualcomm face . Talk to us about that landscape . Cory manufacturing is its own thing. We have copies like samsung and taiwan, that manufacture chips and do so quite well and get better and better every year. From a design side there are a couple of different parts of the business, even cpus in rare occasions. They are fighting off Companies Like intel which is still chugging away and trying to make entries into the mobile space. There are a lot of other companies out there making the chips that are in a lot of devices that qualcomm is losing out on. It is a very competitive arena but it is usually a four or five year cycle. They are king of the hill right now when it comes to mobile here that is a good place to be when the market is not rewarding for that. Erik thank you as always. Stephanie how was the game of Thrones Party . Cory come on, game of thrones . I know you are a big fan. Stephanie i saw pictures of you on instagram. Cory it is a theme. Stephanie our own cory cory it is a theme. That is what they say in hollywood. Stephanie our own cory johnson it when we return, when you watch a piece of the 21yearold phenomenon it is going to cost a fortune. You know who i am talking about. The one and only jordan. Stephanie Jordan Spieth is golfss new 10 million man. He won over the weekend and many are comparing him to a young tiger woods. One of the most powerful celebrity endorsers in the country. Lets bring in the founder of the Sports Marketing firm in l. A. This morning. Talk to us about jordan, the power of the 21yearold and his marketability. Pat now that he has won a masters, it puts him in a new light, joining the likes of rory mcilroy and tiger woods. He won at an early age. Made about 6 Million Dollars in endorsements. Compare him to another young rory mcilroy, who has one four major championships, 25 years old. He makes about 30 million in endorsements. He may not be far away if he keeps winning. Classic both being young and exciting golfers to watch, could this be an exciting new story that we will watch over the next 10 to 20 years, the rivalry between these two . Pat as a golf fan myself, i hope. We won a what happens when they finally lose the competitive edge. They arguably have artie seen a decline in their respective careers. Hoping these two guys, as well as bucky, hopefully they can carry the mantle Going Forward p you cannot and i the ratings this weekend, 50 up on saturday and 23 up yesterday and they were in the mix. Stephanie maybe people were watching for tiger and fell in love with jordan. Pat hopefully so it how ironic a guy named jordan can be the thorn in the side for nike. He is represented by under armour. I think it is where he could really see a boost. He is only in the third year of a fiveyear deal with under armour, which will be desperate to want to retain his services because that is their face of golf. Erik how is golfs his marketability different today from one tiger won in 1997 . That with tiger, it was such a different feel. There had not been a young gun of that epic stature since the 60s. Throw on top of it the social significance of tiger woods being the first dominant minority athlete in the sport jordan cannot accomplish those sorts of things p he will not have the same cultural and social effect. It does not mean he cannot have a real impact. Though rory is great, because he is not american, he will only be able to have so much cachet as an endorser. Stephanie we saw under armour stock already up this morning and jordan is the face of the company in terms of golf. Pat i think he will be fine. They have got were he and tiger woods. I anticipate tiger will be competitive. He is just shy of 40 and i think he has another five good years and rory mcilroy has another 15 to 20 years there he will be fine. Erik what do you think about golfss popularity . Does Jordan Spieth combined with rory mcilroy combine the game of golf . Fewer and fewer people are playing golf. Hundreds of thousands fewer people then have played a few years ago. Pat people from all different sports talked about how valuable it is to get young people to watch the sport and play the sport. Crucial for later in life and golf despite Jordan Spieths success you have seen a decline in the play of golf for a variety of reasons. People are simply busier and there are more distractions. I think this will minimize the letdown in this sport. But unfortunately, i think golf is in that declined to state and i do not know if they will be able to rebound. Stephanie jordan is a new exciting face. The fact he is 21 cuts into a demographic. Pat apart from under armour at t and rolex, any brand more of an upscale trying to cater to a younger demographic would try to be the one going after him, potentially in energy drink, it could be in his future. He has already aligned with some brands within his sport in particular that cater to a younger crowd. That is who i would look at, companies that cater to a younger demographic. I did want to see this be a little more competitive yesterday, but again, it was history. One of the cool things about being a fan of the sport of golf is there are a lot of different guys to root for. Rooting for tiger to eventually get back to close to where he was. Justin, in a story as well. Great thing about being a golf fan, there are nice storylines for everyone. Watching Jordan Spieth make history yesterday, that was something special. Stephanie his dad went to lehigh. Erik it is time to bring you up to speed to the top stories of the morning. Marco rubio will officially enter the president ial race later today. Donors this morning, he said he is uniquely qualified to be the republican nominee. The 43yearold was first elected in 2010 and is the son of cuban immigrants and a swipe at clinton, he called her a leader from yesterday. He will hold a rally in miami. If you have waited this long for an apple smart watch, you may be waiting a while longer. The delivery date for some watches was pushed into july. It officially goes on sale april 24 when delivery begins for devices that have already been ordered. The customers ordering some models will not get their watches for almost three months. And we are mourning one of our own today at bloomberg. Ken prewitt died over the weekend. In 2012, he was diagnosed with brain cancer and he went on leave the following year. He distinguished himself in so many ways, whether he was entering interviewing a billionaire or simple reading the news. In his career earlier come he worked for cbs and abc. All of us who knew him remember him for his intelligence, his kindness, and of course, his great voice. We will miss him. He was 68. Stephanie ken wasnt absolutely was an absolutely awesome guy to work with. Erik it is that much harder to say goodbye today. Stephanie stay with a spirit youre watching Bloomberg Television. Stephanie welcome back. I had an extraordinary morning here. You remember why the kids are here. Through our march madness charity bracket competition myself and gary cohen of Goldman Sachs gary chose a perfect final four that raked in 360,000 for charity. There is a photograph of those kids with myself and mike bloomberg. The money going to the program, the money was founded in 1991 as an Enrichment Program for 22 boys who will play baseball in an abandoned lot. It serves thousands of kids in east harlem. Last year, 100 of their seniors graduated high school and 97 went off to college. This is in a neighborhood where 42 of students graduate high school. A huge win and a huge charity. Erik that doesnt for Market Makers and we wills that does it for Market Makers. We will see tomorrow. See you tomorrow. Scarlet Bloomberg Television is on the market scared i am scarlet fu. The dow, the s p, and nasdaq stocks taking aim which would match the longest winning streak in more than two months. It will be a busy weekend it is not yet. Earnings kicking off tomorrow along with march retail sales, and joining me for todays options insight is jim, and i strategist. It will be busy but it hit is not yet. Jim it has been rather sleepy. In the options market, we have seen a lot of days where volume has been 14 million. It has been a little bit slower with earnings kicking off and other macro events, maybe some investors will get more engaged. Scarlet the regular policy meeting, they have artie cut and announced quite him easing. What would happen there that could spark another flood of money from the u. S. Into european stocks . Jim i am not sure surprise there would impact that. You look at gains in europe stocks are up almost 22 year to date. Global, making in new alltime highs. Outside the United States, there is certainly a lot of activity inequity markets. I am not sure the ecb would just be a catalyst to that. Clearly, the fed begin tightening and that will drive volatility in our markets and likely across asset classes. Scarlet until then, it is a waiting game. No one expects this to happen in april. Lets talk about earnings. We do get earnings from jpmorgan and wells fargo and that will hopefully get more activity going on in the equity market and what type of earnings season are you looking for for the financials . Jim among universal banks and investment banks 2. 5 postearnings, about what is implied right now by the options market. They will kick off this week. We count 40 of constituents in the s p Financial Sector in the nested as we speak and with jpmorgan and wells fargo tomorrow. We are not sure the earnings themselves are tradable, but this could be a catalyst are financials down 2 year today. He only sector that has performed worse our utilities. It is also worth noting they have typically done well in march, up 4. 5 in the last few years after the stress test it not happen this year. Scarlet give us your trade, what tracks the financials. Jim implied volatility is low enough that you are not paying too much for the calls. We like exposure to the sector and we think it could outperform in the next few months. We do not want to be too close to earnings. Scarlet why not longer . Jim that is a good question. We want to capture the upside and get a good taste of the beginning of fed tightening later this year, and argued we go out later this year and apply volatility well enough to allow that. Scarlet all right. Thank you very much, jim. Money clip is up next on Bloomberg Television. Pimm welcome to money clip, where we bring you the best video in business news. I am pimm fox. Heres the rundown and politics. Italy clinton says that she is your champion in the attacks are already coming. The u. S. And cuba make history with a handshake, but for now, they agree to disagree on many issues. In media, game of thrones returns with the leak with issues and plenty of blood and gore. And top schools werent the numbers in order to shore so