He cannot get enough. The jabbing, the poking. We are going to take you to scarlet fu. She is in the newsroom. The index is out. She is in the newsroom with the head lines. Scarlet an unexpected increase in the nonmanufacturing part of the industry. 57. 8, it tops all the estimates in the survey. The consensus was for an increase of 56. 2 or i should say, a drop to 56. 2. It is an indication of the weakness of manufacturing. Economists had expected this part of the economy would outperforM Manufacturing in a strong dollar environment. You can see the divergence between the ice on nonmanufacturing in orange is M Manufacturing in orange. It is mired a little bit in moderation, as opposed to the isam nonmanufacturing. Im going to pull up how stocks are doing right now. They were lower. They are continuing to extend their declines. They are not large declines by any stretch of the imagination. Cory thank you. Good stuff. Disney at it again. It posted quarterly profits that were 10 better than a year ago. Results improved at theme parks and merchandising. Frozen is still a big moneymaker. How much did you buy . Stephanie none. You think my sons like frozen . Cory higher production costs at espn heard that division. Firstquarter profit almost doubled switzerland almost doubled at switzerlands largest bank. There are talks of the Justice Department about settling an investigation. Ubs could pay up to 1 billion in fines. The European Commission has raised its growth forecast for the eurozone. 1. 5 this year 1. 3 percent in february. A weaker euro helped exports. The organization slashded its growth estimate for greece. Zoetis he wants them to cut costs. They are going to cut down or sell. Ackman took a 10 hes on opportunity and took it. Rhetoric and debt threw two reagan puerto rican bonds have caused problems. Islamic state claimed is once ability for a shooting in texas. The official Radio Station threatened more attacks. Two gunmen opened fire outside of a competition cartoon competition featuring the prophet mohammed. Stephanie ciscos John Chambers is going away. What not to far. He is stepping down as ceo after 20 years, but he is moving to the chairmans suite. His placement, chuck robbins. John, i hope this means that you are going to guest anchor with me. John chambers thats the be fun to do and you always want to have a backup occupation. I will be busy as executive chairman. Stephanie what is your new role going to be . What is it going to be like day today. Day . John chambers in areas where the next ceo once me to focus on. Watching him grow to be a great ceo, which i think he will be. I will be his wing man in many areas. Focusing a lot on key strategic partnerships, key customer relationships. Chuck will be the ceo and i will become his wing man. It will be fun. Im excited and i had my best nights sleep in 20 years last night. Cory i can only imagine. There were a couple of people in the running for this job. What was it about chuck . Was it his sales expertise . Cisco has gone through changes. John chambers it is really exciting. The board picked chuck. My job was to get several candidates ready. Their job was to pick the person they wanted to run over the next decade and for me to be his advisor as we do that. What was so unique about chuck, lets look at the results over the last 20 years. We have our stock in terms of total shareholder returns over 1600 . You have earningspershare up 3300 . You look at what we have been able to accomplish in terms of our business momentum, it is because we have market transitions right. Chuck is worldclass in vision and strategy and executing it. He has done that in enterprise and channels. He is also really good about aligning resources in the collaborative style that allows them to move quickly. He builds great teams. He is a perfect cultural match and he is very technical, a math major by background. Stephanie what does he need to do to really help ciscos longterm growth. . You have been in the seat for 20 years. John chambers we are very pleased with our longterm growth. He is comfortable with the vision and strategy. We are winning in the market and our customers get that. Both chuck and i were there last week. He would say that he would make tweaks. I agree with him. He is an execution machine, getting these pieces to work better together, real lining sources for opportunities. Stephanie what is the biggest piece of Unfinished Business you are handing off to him that he will attack and execute from the getgo . John chambers what is going to be exciting is, we have a chance to replay the Information Age where ciscos leadership in the 1990s powered our growth and changed our country and every business. Youre going to see an instant replay. You either change, disrupt, or die. You get left behind. Chuck will do a great job on it. Cory i have watched you skillfully negotiate between republicans and democrats. I wonder, when you look at your feature, so many people in Silicon Valley look at the world of politics as an opportunity where they want to have an impact. Is that something that interests you . John chambers it does interest me, but you have a problem. Im a moderate republican who likes democrats. I like to work with both sides. Technology needs to be agnostic. What interests me and government is for our country to become a digital country. We are behind. It will power the next generation of job creation and economic wellbeing. I also like to teach and youll see me probably teach in a number of areas. And probably work with young companies, startups, etc. , helping them go public. That and tremendous attention to my family, well deserved after doing this for 20 years, is what is in my future. Stephanie carly if she were to be elected, would you consider her a Silicon Valley insider in washington . John chambers if we do our job right, we make each candidate technology savvy. Silicon valley has to be neutral in terms of one candidate or another. I think it is important for both republicans and democrats to focus on job creation and getting our nation on track. Whether a republican president or democrat president i think you will see them online with technology, much like president clinton did in the 1990s. Jobs created, gdp and Economic Growth over 50 , that was powered in part by the internet age. The digital age has the same opportunity. Our job is to make sure each of the government stephanie you seem to know a lot of answers that may be a political official would know . Cory there is a senate seat in california that might be open for he soon, right . Are you interested . John chambers candidly no. I like getting things done. I would be honored to be an advisor to whichever president wins. I enjoy very much interfacing with cats and republicans. Democrats and republicans. Stephanie im afraid if you like getting things done, a future in politics is not for you. Cory can we just say what a great job you have done getting things done the last 20 years . What a terrific job. Congratulations. Stephanie congratulations. Cisco is lucky to have you. John chambers, chairman of cisco. Cory investors are going to blame central banks. Stephanie we have David Einhorn. He does not just dislike frackers. He was calling them motherfr ackers. Stephanie welcome back. Im Stephanie Ruhle with my special partner cory johnson. It is time to bring you uptodate on the top stories. Firstquarter profits rose at europes top bank. Securities unit increased and its divisions for bad loans fell. It has been cutting costs to boost earnings. It may still move its headquarters overseas. British politicians have been pledging to raise taxes after thursdays elections. Amazon prime customers will be able to access movies, tv shows and music on jetblue planes. It gives amazon access to a captive audience of potential customers. Passengers who are not amazon prime customers can sign up on board for a free 30 day trial. And the highestpaid female executive in the United States is apples retail chief angela aaron. Bloomberg figured out that she has made a most 83 83 million almost 83 million including a sign on bonus. Cory there has been a lot of taxes. Bill grossman says the super cycle is at an end. Lets look at that with bonnie. Were also joined by lisa. Bonnie, what do you make of the end of the super cycle . Bonnie that is a tricky word in a distorted bond market. I think it is getting long in the tooth. However a lot of people have lost money banking on the end of the bull market. That being said, going out with a whimper is a very real possibility. The bow market was above 2 today. Fundamentally, there is no reason for that to be. There is no inflation. There are a lot of technical factors impacting the market and creating volatility. Stephanie i had a chance to ask the lachman what he thought. Bill ackman what he thought. Bill ackman the credit markets are pretty tight. The absolute yields you can earn, very low. It is hard to make a lot of money buying a bond with a 4. 5 coupon unless the credit improves. That is still a tough bet. I dont like fixed income as a category. Stephanie bill does not like fixed income and crawled does not like fixed income carl does not like fixed income. They have been wrong. It is a bond pickers market. You do not want to go wholesale. As jeffrey has pointed out stephanie i have never heard of him. He pointed out, rightly so, we have pushed out the maturity wall. It would normally occur about now. There is a little bit of time and there are still Good Companies in high bond land. The place that we are fearful of our Investment Grade corporatees are investmentgrade corporates. Stephanie were you crunching the numbers at the met . Lisa in the past two weeks, it lost 200 billion of market value. Why . Nothing happened. You have to wonder, is it going to keep going . Does it mean that retirees and everyone that has been piling and this year is going to get sunk . Bonnie i certainly would have to think that Global Deflation is going to put some sort of a level on that. In a low gdp growth environment it is hard to see the 10 year skyrocketing. Lisa you think that we are red risk for deflation we are at risk for deflation . People are saying that we are really going to see inflation. Bonnie i dont buy that one bit. One robin does not make it spring. They have good news in europe. It does not mean theyre going to scrap the program that they waited way too long to implement. Japan has been at it for even longer. Who is not to say that the course of your code europe could look like japan . Stephanie all right. Get green. What do you like . Bonnie if you are a u. S. Dollarbased investor, stay away from the euro, even though the dollar has taken some lumps. Longerterm, we see a strengthening dollar in the future. Lisa emerging markets, isnt that toxic when the u. S. Raises rates . Bonnie the last time, what got slammed was emerging markets denominated in local currencies. Stephanie we saw Jeff Gundlach speak yesterday. He seemed to like puerto rico. What do you think . Bonnie i like the accent. If youre looking for yield, try to look for yield in places that have relative value you can understand. The parallel is, if you want yields, thoughgo buy greece. It has gotten so emotionally charged. Pick the credits. We like the new government, we like the bonds but at least you can have a thesis. Cory interesting stuff. Lots of opportunity. Stephanie thank you so much for joining us. Always a treat. Lisa, i appreciate you crunching those numbers last night. Cory we have shake shack here. We dont have that in california. Stephanie you have innout cory stay with us. Stephanie it is a special day. We let corey in the building. Stephanie you are totally going to want to come back after the break. David einhorn slammed the shale industry and the market is responding. Plus, we talk me funds, where Digital Media competes for the ad dollars that used to belong to mainstream networks and cable channels. Sorry, longtime sitcom. That youtube stuff is really funny. Really funny. Funny or die, i like that. More than traditional stuff. Stay with us. Live from bloomberg headquarters in new york. This is Market Makers with Erik Schatzker and Stephanie Ruhle. Stephanie it is Tuesday Morning and we are in new york city and youre watching moneymakers. Im Stephanie Ruhle. These are the top business stories of the morning. Surprise and Service Industry a surprise in Service Industry. The sector unexpectedly grew at a faster pace last month. The isn nonmanufacturing index rose to its highest level since november. It is a sign that the u. S. Navy able to overcome the slowdown in manufacturing called caused by the dollar and slumping oil prices. Disney reported Quarterly Earnings that beat estimates. Bob iger can do no wrong. Give the credit to theme parks and merchandising. It helps offset disney sold nearly 1 billion worth of frozen merchandise. They are up again. A big surprise over at sprint. The wireless carrier posted earnings that beat estimates. It also gained subscribers for the Second Quarter in a row. It will hold on to its ranking as the Third LargestWireless Company, ahead of tmobile. The Justice Department is joining the investigation into a leak of information from the fed in 2012. The fed agreed to turn over the names of officials who met with Medley Global Advisors at year. Janet yellen says that she was one of them, but that the meeting happened months before the leak. Medley got access to details to a report before it was released. And a meeting between two lame ducks. President obama made his final appearance on the night with david federman. Letterman. The president told him that he knew that he was not the first choice when it comes to getting guest from the white house. President obama i know you like michelle a little bit more than me. She was here last week. President obama i know. I assure you, you are not alone. But i am not going to let her have all the fun. And mainly i came by to say goodbye to this and paul. Stephanie the president also told Esther Letterman when they leave their jobs, they can go to a local starbucks and swap stories. Who has Better Stories . Dave has more. President obama was a Community Leader not that many years ago. Dave has been in that seat way longer. Cory different kind of leader. Stephanie lets talk about David Einhorn. Cory flip talking about lets talk about fracking. Stephanie what the frack. Cory David Einhorn took a big swing. His biggest target, pioneer natural resources. Valdis dombrovskisDavid Einhorn pioneer has dramatically is dramatically overvalued. The problem is, oil fracking is high cost. Cory oil expert, alex. Alex i did not call myself an expert. Stephanie when David Einhorn is on the stage conducting his frack attack, were you having a, no you didnt . Alex does he have a leg to stand on in the Oil Community . Take a look at the stock reaction. Off the bat, all the stock continental, pioneer, they all fell. Stephanie that could also be daytraders. Alex take a look at the stock today. Some are up and some are down. However, the big issue in the community is, have the oil stocks ran too far run too far . Barclays is saying they are producing 95 oil in the curve. It would have to rerate by 50 if oil prices do not catch up to that number. That is significant and part of the issue. The other part is, why do you own the stocks . Cory you should own oil and gas stock. Out if you have to find it to do it, shale is capital induces. Cive. Do you own them for their future monetization . Stephanie what do you think of the argument David Einhorn made that wall street conducted their business, they were the ones who raised tons of money for these frackers. Their analysts should be looking and saying theyre not making. They were just paying attention when they are raising fees. Cory it is a very different world with todays current oil prices. It is a very different world in production. I think the amazement when the first horizontal drilling turned up oil, the saudi arabia of u. S. Oil. But the lifting costs were so high. Alex there are distinctions in the shale producer world that make them better than a few years ago. They are getting a 30 cost production. Stephanie better than what . Alex in terms of stock, i am not going to make that call. What are they making more for their money . Yes they are. Their productivity is going up. 26 up, year on year. They are making more and paying less to do that, which means eventually they can have more production for less the cash. That is something relatively unique to shale producers. In these high producers well hi you can hedge. That is something more quickly valuable than it would have been. Cory depreciation rates depletion rates will change when the rates rise. Stephanie you have a new haircut and got to talk about oil. I got to decide discuss Hedge Fund Managers. Cory coming up, the next big hit on tv may not be on your big tv. New media, the new front. And other places where people are consuming media. Stephanie stay with us. We have so much more to continue. Stephanie welcome back to Market Makers. I am Stephanie Ruhle. It seems like everybody is getting into the content game. There have been dozens of shows announced, not from nbc or fox but from yahoo . Just another sign that we are watching television in a different, different way. Just as important, how advertisers are changing with it. Lucas covers the industry. He is usually in l. A. One of my favorite guests a new dad again, ben silverman. He is the chairman elect alctis. Lets start with why the new funds are important. Guest i think it is interesting that the new players have are at a play from an old playbook. They are trying to create an event around presenting their programming to an advertiser to compel a sense of demand. Part of the problem with the new front is that there is an incident amount of inventory available. Creating the sense of demand by putting on a great show and having a big dinner and wringing out a star does not quite work. I do not know whether there is going to be as much Advertising Money coming into it as much as they have invested against it. And you have 30 or 40 players presenting their content over the course of 10 days, it starts to sound like noise to me. Stephanie then why are you here . Guest im not here for the new front. Im here to visit my main clients. Stephanie and to come on bloomberg. Cory so you have the sense that a lot of the content is not going to wear that advertising has the you have these different places where the content is going, none of which rely on advertising . Guest the big shift is with netflix and amazon, as you say. You talk about shows offered online first. The ones that people care about our house of cards, marco polo, Stephanie Jane the virgin . Guest that is tv first. Youtube is really popular for short bits for young people. Advertisers are not sure how to play with youtube. It spent its presentation extolling its virtue. I think that works for some advertisers, not for the big spenders. Stephanie are advertisers putting money in the short form because they believe this is the future . Or are they doing it as a defense because they are afraid not to. Guest one of the interesting things that happened was that when comcast went on to explain, i know you are seeing all these amazing numbers, 3 billion views or 10 million subscribers across relatively dishniche players, take a look at how a saturday night live video plays. When you see the power of the comcast video content they come off of major Primetime Television platforms, they are enormous. Stephanie you say it is major tentpole platforms that figure out i am on a linear tv as well as digital . If you can be with those guys they have it all . Guest there is no question you have to Start Building content in specific ways for new generations area today, the old line is still the dominant player and when they move into the new world, they are either going to do it like amd networks a e networks or disney similar to how the Advertising Companies used to buy creativity. Or, theyre going to turn their lights over like hbo and say now we are ready for over the top. Im still long on the traditional players because they are the only ones investing at scale in development in premium talent. Cory for all the talk of the importance of mobile video and shortterm video, it overlooks interest people have in Traditional Television and movies. They all sit alongside one another. Yes, you need a short term play. But it is making a lot more money from espn and marvel. Stephanie they have so much money, maker is almost an option. It is not going to hurt you, but it will make you look like a fool if youre not in the business. Guest what was more interesting was their willingness to license daredevil to netflix. Daredevil, is one of marvels biggest icons. They chose to do it not as a movie and not to put it on abc, but to license it on a first run basis to netflix. Cory and they have luke cage. Guest exactly. I think that is a really interesting move. Cory here are my questions. Are the jimmy fallons, the snl, are they going to command a higher cpn online . An advertiser say that i can buy views and get statistics . Or are they going to say, i just want to do saturday night live or jimmy fallon and pay more for the higher cps. Guest the way those are sold are bundled. If you want onto the mothership we also want to to buy digital extension. On a probably pure cpm if you went in on one door, you may not even have access to one show. I think it is going to keep a lot of this up front. I think around certain things, i look at jane the virgin, it is on the cw cory and not to be me. Missed. Guest and not to be mi ssed. There is nowhere else to get in on it. It is airing in a short rerun cycle on hulu. But you have to invest in the cw. That is compelling to any advertiser. Stephanie what do you think about vices move . Guest i get the rationale, because there is still more money to be made in tv. It means that theyre going to produce a ton of video. They are already making hundreds of hours of video for hbo in a deal they signed. They make shows for karen and Europe Canada and europe. Stephanie vice is not the only place that needs to make money. Guest im curious. And show iso is the company. Stephanie what do you think they are . Guest i went up to them and asked stephanie what do you think . Guest as a consumer facing brand, i think they are still digital first. Unless that tv channel becomes a huge success. Stephanie unless he takes me to his 300000 dinner at the bellagio, he doesnt get to tell me. Ben we not letting him go anywhere. We are back after the break. Youre watching bloomberg television. Stephanie welcome back to Market Makers. Im Stephanie Ruhle. Cory johnson is here and legendary tv executive pencil norman is back. You have been a pioneer when it comes to creating shows. Jane the version is so important because it has targeted the hispanic audience. A few years ago, targeted shows like jane the virgin or empire would not have passed. Why has that changed . Guest a big difference from when i did ugly betty to doing in the version is that the census happened and came out. Everybodys anecdotal numbers about the growth of the hispanic population in america were underreported until that senses came out. Everyone looked at what they thought they knew and it was an even bigger number and a bigger projection about what portion of the American Population was hispanic. Cory and the media is much more divided. Not just the breakup of networks. What is happening online is informing. It is informing both advertisers and programmers about the opportunities to have the audience that is not over 51 of the world. Guest completely agree. At the birth of the womens network, it was still 50 of the population. Now you have an opportunity to go even more narrow. You can survive on it. In telling the right story, a specific story, my big fat week wedding greek wedding seinfeld, jane the virgin, you can have something universal. In the story of jane the virgin the mother daughter, and mother relationship looks like that in any household. Cory you mentioned the seinfeld, in the africanamerican community, no one watched seinfeld. Stephanie but seinfeld did not need that. Cory it had a huge audience. But i wonder if the real opportunities have been ignored by mainstream media. The Hispanic Community has huge viewing habits. Guest i do agree but on the other side if you took a poll of the Hispanic Community of their favorite show, it would be a general market show. One of the problems and how people have programs in specific markets, they brought the program down. My argument has been thomas than the same money that you would spend on a different show and put it in the different environment. I consciously chose abc for in the ugly betty. Im excited about the great storytelling coming out of south america. One of the stories that is not out there is the creativity in south america. Stephanie had we not watched latin american soap operas . Guest not only have i watched them, i am making a huge business out of them. I have recently partnered with an extraordinarily Successful Company out of mexico and we are working on a new show which i am super excited about. It is inspired from a format produced by televiso. The spanish is so difficult to translate. Stephanie we have to leave it. Ben silverman, one of my favorites. Market makers will be back in a few. Live from bloomberg headquarters in new york, this is Market Makers, with Erik Schatzker and Stephanie Ruhle. Stephanie disney just cant let it go. Earnings are higherthanexpected, thanks to theme parks and toys from the blockbuster hit frozen. Cory herbalife under the microscope. They are still shorting the stock. Firstquarter earnings may show the growth has hit a wall. Stephanie the average hedge fund did not even beat the s p last year, but managers are still cleaning up. We tell you who made the most were talking billions of dollars. Hold that thought. Welcome to the second hour of Market Makers, im Stephanie Ruhle. Stephanie cory im cory johnson. In for Erik Schatzker. Stephanie you wonder why populous opinion is so antiHedge Fund Manager. They dont even be the s p, and these guys were again thereto and 20. They are making in hundreds of millions of dollars. There like i dont care. Hate on me, im on a megayacht. Cory im on a boat. No, im on Market Makers, in this is the bulletin. 90 of the economy is the Service Industry sector, he grew at a faster pace last month. The index row to the highest its caused by a strong dollar and the slumping oil prices. Shares a disney over record high. They are up this morning, reporting earnings better than estimates. The analysts got it wrong. The big reason is theme park results and merchandise sales. Toys from the blockbuster frozen. The brandnew star wars movie the force awakens, bob iger gave early indications the movie will be huge. Bob iger the excitement around this movie is unlike anything we have seen before. The trailer had more the 88 billion views in the first 24 hours. It has more than 200 million to date. Cory Bloomberg Intelligence bricks it will bring in global box office. A surprise at sprint. They posted better than estimates. Sprint gain subscribers the Second Quarter in a row. 57 million users, meaning it ranks as the thirdlargest Wireless Company had of tmobile. Ahead of tmobile. Cory this Company Makes drugs for animals. 300 million in annual cost for 2017 ending up cutting a quarter of the workforce. They will close or sell 10 manufacturing sites, they took in a percent stake in so at us zoetis. And the longestrunning scripted series and television has another two more years. Mr. Byrne might say mr. Burns might say excellence. We are talking about the simpsons. It included a post from homer simpson. Homer says the donut index stephanie a boast or boost . Cory he says its doughnuts that are the reason he outlasted john stewart and dr. Mc dreamy. Stephanie disney produced earning magic in the Second Quarter, the Worlds LargestEntertainment Company was bolstered by improving themepark results and strong toys sales. David bank is with us now, the iphone, to discuss via phone to discuss the covenant. Is there anything not to like it is a world . David i dont know if you mean ride wise . Stephanie im talking the world of disney. David the surprise for me was the strange broadcast networks showing you when it goes right it all really goes right. Part of that was on the launching of the new daredevil, series on netflix. They produce out of the abc studios. It gives you a sense of the depth. With a broadness of the strength of the company. There was a little weakness at espn on the profitability side. You have new content deals kicking in. But really nothing to complain about here. They are just a monster, these guys. Cory i get the mr. Negative tag a lot on bloomberg west, but is there a better run company that disney . David i would say there are probably companies that are as well run as tuesday. The difference to me is that disney i thought you would have picked it up from your perspective. No company has really embraced rather than fought change in the ecosystem as much as these guys. At the same time they have been really astute at acquiring and exploiting intellectual property they also have been really proactive in trying to exploit the technological changes opposed to fighting it. That is what stands out to me. Or the globalization of the economy, all those things there, they just embrace change. Cory when you look at what they are doing, you mentioned online. In the deal with the cable networks. I am curious about espn and costs. Its not the First Quarter we have seen this. These content deals, we are talking about i presume some of the new football deals, yes . College football, should say. David in this quarter, you had cory the nba renegotiation . David there are a bunch of rights associated with the new revenues. The key is they have really good visibility on the affiliate fees. We kind of give them a little bit of the benefit of the doubt. As the programming costs step up, they are managing for margin because they have visibility with the affiliate revenues. These are multiyear, three to five year contracts on the affiliate side. If it was a we are buying all these new Program Rights and we really hope we can generate the revenue to pay for them that would be less compelling as an investment. But they have visibility in this revenue growth, i think it makes the stream and more comfortable. Stephanie anything we should be uncomfortable about . Star wars, is going to be a starspangled spectacular. Any reason to have pause . David im a financial analyst not a movie critic. Stephanie you didnt have to like frozen, to look and say this thing crushed it. David one of these things at some point is going to vomit. Bomb. Anyone movie blowing up is not a big deal. The thing that we worry about is a very rapidly evolving distribution world in paid tv. Our own Analysis Shows us that even if you havent seen cord cutting and mass en masse, stable, surprisingly. The major networks, espn included, have lost a couple million subs in the last year or two. It means people are narrowing their bundle. There producing bundles in ways that they can. You have to figure out if the sub losses at espn will be compensated for by new distribution mechanisms. That is what keeps me up at night, the ability of espn to stay fully distributed in bundles, not have death by thousand cord cuts. Stephanie david, i dont want you to be kept up at night by anything. You are such a good guy. Rbc analyst david banks. Cory im a big fan. Coming up, my cut to be Mike Huckabee running for president. Stephanie herbalife out with earnings after the bell. Guess who thinks the company had a bad quarter . The guy who bet 1 billion against it. This guy has actually been doing some homework on herbalife, for you. Cory i crunched some numbers. All for the benefit of the viewers. We will share after this little break. Stephanie we are back in a couple of minutes. Cory we are more than 90 minutes into the trading day. Lets get to scarlet fu with a look at the action on the streets. Scarlet the dow is falling below 18,000 this morning. The trade balance data showed a big jump in march imports that resulted in a downward revision of First Quarter gdp to a negative print, according to economists. That is waiting on the dollar as well and oil breaking above six dollars a barrel, finally. At its best levels of the session. Take a look at treasuries. We got nonmanufacturing data today which showed a pickup in the service economy, the bigger the biggest part of the u. S. Economy. Treasuries turned lower, prices are down for the sixth time in seven days. Lower prices mean higher yields the 10 year yield at 2. 19 consistent with european government bonds. The german 10 year bond yielding 52based points. Not too long ago, april 20, he was yielding 7. 5 basis points. Apple is the biggest drag on the Dow Jones Industrial average in terms of net points. The fifth the client six days. If you look at how its done since the last earnings report, which was better than expected its down 4. 4 . Apple is at it short term trend lined for the 50 day moving average. Some concern that fundamentally apple may not be able to keep up the pace of growth. Cory maybe the watch will make a difference. Scarlett we will see. Cory thank you. We will bring you the top stories of the morning. Stephanie i will take it from here. Speculation that the biggest you are going to have to move this thing forward. How about some news. Oil has rebounded from a sixyear low in march. Drillers have cut the number of Operational Oil links to the lowest oil rigs to the lowest since 2010. The fed has agreed to turn over the names of officials who met with Medley Global Advisors. Janet yellen says she was one of them, but that the meeting happened months before the league. Medley allegedly got access to details of the feds qe3 plans before was made public. The highestpaid female executive in the u. S. Is apples retail chief angela aarons. She made almost 83 million last year including a signon bonus and a grant for money should left on the table at her last employer burberry. Those the top stories in the hour. Coming up on Market Makers, in 10 minutes, we are talking about the best paid Hedge Fund Managers in america. Who is number one, and what were their performances . Mike huckabee announces he will run again for president. Bloomberg politics has a special report. Hopefully he is watching so he will know who to raise money from. Cory not us, because we dont contribute to political candidates. Stephanie we talk about the name that one Hedge Fund Manager loves to hate. Herbalife reporting firstquarter earnings today after the bell. Bill ackman told me yesterday he is standing by his herbalife short and is bridging they will have a bad quarter. Cojo has done a lot of work pouring over herbalife financials, not just pumping it up. Cory i think that the way the discussion happened, this bill ackman versus the company or bill ackman versus carl icahn the short seller versus the optimist. The fundamentals of this company dont look strong. Stephanie when have they ever . Cory it was a good cash flowing business the argument that it was immoral or a ponzi scheme but that aside, it was basically growing in this important market. When you look at the Sales Numbers and you look at their growth revenue, the thing that strikes me is the growth rate. Sales numbers are flatish but the growth rates have been, falling, and are not negative. Stephanie we spoke to executives who said thank you bill ackman. Because you shined a spotlight we tightened up our sales practices. If they did, maybe bill was right and it was always a hoax distributor model. It was never about enduser sales, it was something about roping in more and more distributors who got stuffed with product they then couldnt sell to any en users. Anotherd they dont have that practice, they are not making the numbers. Cory ive rarely seen a Company ChangeBusiness Practices as a result of those practices becoming public. Herbalife is done things like Sales Managers who had separate programs where they would get paid to sell their leads, those programs have ended. Herbalife has said this will be important tonight. Herbalife is that they are pulling back on something field sales. Thats when they sell stuff to a warehouse count it as a sale, but that warehouse within the product to distribute ors. Stephanie thats what people are speculating about mexico. There were a number of herbalife junkies they are who follow around bill ackman who said we need to take a close look at emerging markets. Their places like mexico where there could be massive warehouses where products are just sitting and rotting. Cory that can make for a big quarter, that will recognize revenues from those sales, even if the product never made it past the lips of a powerlifting consumer. Stephanie does the strong dollar matter . Cory probably a lot. Last quarter, they had horrible problems with currency across the board. They dont break up things on a country by country basis, but they give us the region. Many of the regions will be a real problem for them as it was last quarter. Theres the problem of Free Cash Flow. The ultimate success of any business is Free Cash Flow. How much money do you make what it is all over . What we see from herbalife is declining Free Cash Flow rapidly and consistently. Its not a one quarter problem, its not a bill ackman problem, its a problem with their business not turning up the cash flow used to. Stephanie everything you have discussed, none of this has to do with the problems what bill has pointed out is saying this is an immoral company, taking advantage of poor latinos. That is why he is ringing the bell for regulators to get involved. You were just looking plain and simple at the core business and why they are not making money. You kind of have it coming from both ends. Cory bill has done so much work on this. I can see how you reach that conclusion. At the end of the day, if the business is failing, that stuff will not matter. I mean matter to investors. Stephanie herbalife, we will have you on tomorrow. I spoken i have spoken to their ceo, we havent seen him in quite a long time. We would love to have you on, happy to make the time. Come to california. Cory interesting to me as well. Stephanie after the break cory people get paid. Stephanie im so happy. Market makers, is that, we are talking Hedge Fund Managers. Cojo did a driveby yesterday. Cory i love these guys who do the work, who know their names and can present an idea in great depth. Stephanie you think thats why they deserve the big bucks. Cory there are box, and then there are big bucks. Stephanie heres how much some of these dogs got paid. According to institutional investor, the top paid manager was the details ken griffin. He earned 1. 3 billion in fees and gains on his own capital. Jim simons considered to be one of the smartest and most ordinary guys out there. Ray dalio right behind canken. And bill ackman, he raked in 950 million. The top 25 earned a combined 11. 6 million last year, down in 2013 it was 21 billion. The guys we have here did perform pretty well. There are other guys the top of that list, mike platt people running these platforms where they hire these run and gun teams, and give them a certain amount of money and say you are off to the races. In you see thes big hedge funds are only getting bigger. These asset allocators dont want to give money to a new guy, they dont have to answer to that. No asset allocator gets fired for giving ken griffin another 100 million. Cory it is clearly in a u. N. Game. Aum game it. Fantastic results in a couple of years are not drawing a lot of assets. I talked to a lot of people who have funds under 100 million. Its really tough to draw assets when you dont have assets. Its a very difficult game, and it is getting harder. Stephanie david is normally at the top of this list, he actually dropped off along with john paulson. Steve cohen doesnt run to fund anymore. Its just his own money. Hes giving money back. There is a managers who arent in the Asset Allocation game who say i bring in about 30 , 40 year. There are only so many trades i can put on. I dont want more money. Cory the lesson is always be raising money. Always have your hand out and know what was going on in the fundraising world. Stephanie the thing that is crazy is that many investors want consistency. They are not looking for the big thing they just want consistency. Hedge Fund Managers make a lot of money. Cory more breaking news coming up. Live from bloomberg headquarters in new york, this is Market Makers, with Erik Schatzker and Stephanie Ruhle. Stephanie welcome back to Market Makers, im Stephanie Ruhle. Cory im cory johnson in for Erik Schatzker. Stephanie the republican president ial field grows more crowded by the day. Others jumped in the race yesterday, now its former arkansas governor Mike Huckabee. Mark halperin and John Heilemann are entering our coverage. Gentleman, take it away. With you in new york. Mike huckabee someone who has become a force in republican politics over the last decade plus running for president. We have that today and Hope Arkansas. His announcement speech will be carried live here on bloomberg television, bloomberg politics. Com. We expect them to come up in just a few moments. Huckabee is someone who brings a lot of strength to this. Why do you think he is doing what is traditional but has not been done by everybody a formal announcement in his home town in arkansas . He is battling the sense that he is not a fresh face and has to reenters himself to the party. He had that success in 2008, hes been on fox news, a radio personality, a book author. He kept himself in the public view. One of the things this race is shaping up to be, we discussed this many times who can best take on Hillary Clinton if she is the democratic presumptive nominee. Mike huckabee is going to frame his campaign as i know the clintons i came in after bill clinton, i have been fighting against them and cleaning up their messes for long time. Thats what makes me the guy who can best take her on. Market we at the arkansas record mark we looked at the arkansas record when he ran into 2008. What are his strengths . John he was an economic populist. He was an economic populist. The club for growth put out a scathing indictment. I think it will be a plus in some caucuses. You mentioned the commutation of a burglar who went on after the campaign to kill some police officers. That is going to haunt him up. One of the reasons his advisers thought he would shy away from a campaign in 2012 was because it was a lot of scrutiny at the time, generated by some of his potential rivals to look at the record of the case al mentioned, as well as several others. The other thing huckabee brings to the race i think we did talk about a little more is a former pastor and television performer, great performance skills. It doesnt hurt in politics. John you mentioned 2012. There was a reason why the obama campaign, when they thought about who they didnt want to run against, they thought about my company as one of the people who most worried him up. He is one of the most likable figures. His skills on television and interviews on the stump, intimate retail settings, hes congeniality. He called himself a conservative that wasnt mad at anyone. Mark this is the university of arkansas college, here is Mike Huckabee, former governor of that state, announcing he is joining the increasingly crowded field of republicans seeking their partys nomination for president in 2016. Mike huckabee. Thank you. We want mike. Thank you, very much. Wow. Folks, it is a long way from a little brick red house on 2nd street in Hope Arkansas to the white house. [applause] mike here in this small town called hope, i was raised to believe that where a person started didnt mean that was where he had to stop. I always believed that a kid could go from hope to higher ground. I like a lot of americans, i grew up in a small town that was far removed from the power money, and influence that runs this country. But power and money and political influence have left a lot of americans lagging behind. They work hard in the lift heavy things, and they swept through their clothes, grinding out a living. Sweat through their close grinding out a living. But they cant seem to get ahead or even make a living. Even break even. My dad wasnt educated man, but he was a smart man. They had honesty to the bone. They taught my sister and me the basic lesson of life that we were to do unto others as we would have others do unto us. [applause] Mike Huckabee it was here in hope that i learned how to swim. How to write a bike. How to read, how to work, and how to play fair. I learned the difference between right and wrong and i learned that god loves me as much as he loves anyone. But that he doesnt love some more than others. [applause] Mike Huckabee i learned about america. In miss marys kindergarten, as well as an Elementary School, i learned the pledge of allegiance, the lords prayer, and the preamble to the constitution. [applause] Mike Huckabee we pray at the start of each day, and again before lunch. I learned that this exceptional country could only be explained by the providence of almighty god. [applause] Mike Huckabee it was here in hope i learned how to handle a firearm at a fishing pole. I spent a lot of hours with both. I got my first bb gun at age five years old it was a daisy, i still have it. It is in mint condition. I learned the basic rules of gun safety, and i never thought about using a firearm to murder someone. [applause] Mike Huckabee iran trout lines all night with my dad and grandfather so we could catch catfish that we would freeze and live off of for weeks. It was here that i was baptized in the garret Memorial Baptist Church after accepting jesus and the Vacation Bible School when i was just 10 years old. [applause] Mike Huckabee i truly went from hope to higher ground. It was here that i met the girl who would become my wife of 41 years, and give me three children and share what will soon be five grandchildren. [applause] Mike Huckabee we knew each other from Elementary School and we started dating her senior year of high school. It was also here that i got a job at kxar radio age 14 years old. That job would pay my way through school and give me the opportunity to be mentored by haskell jones, the station manager. And one of the few republicans in the entire county. [laughter] Mike Huckabee it was here that i became the first mal in my entire familye lineage to redwood high school, at the same campus that stands today on main street. It was from here that i went on to college at washita baptist university. It was also here that i first ran for elected office, when i ran for Student Council at hope junior high school. [laughter] [applause] Mike Huckabee it seems perfectly fitting that it would be here that i announce that im a candidate for president of the United States of america. [applause] [cheers] we want mike. Mike huckabee thank you. Im glad you reacted that way, it would have been a very lonely day if you had not. [laughter] Mike Huckabee it was a years ago that a young, untested, inexperienced and virtually unknown freshman senator made great speeches about hope and change. Eight years later, our debt has more than doubled, americas leadership in the world has instantly evaporated, and the country is more polarized than ever in my lifetime. 93 million americans dont have jobs. Many of them who do have seen their fulltime job with benefits they once had become two parttime jobs with no benefits at all. We were promised hope, but it was just talk. And now we need the kind of change that really could get america from hope to higher ground. [applause] Mike Huckabee veterans who kept their promises to america who have kept us free, now wait for months for our country to keep its promise to veterans for basic health care and assistance to cope with the scars of the very wars we sent them to fight. [applause] Mike Huckabee our veterans should be getting the first fruits of our treasury, not the leftovers. [applause] Mike Huckabee and my friend, when i am president , our veterans are not going to be left on the streets and in waiting rooms to rot. Theyre going to be treated with the dignity they have earned and deserve. [applause] Mike Huckabee when i meet men who have an American Legion cap i never fail to say thank you for giving me our freedom. We own them more than a pat on the back. We need to take them from hope to higher ground. [applause] Mike Huckabee washington is more dysfunctional than ever and it has become so beholden to the donor class, who feels the Campaign Coffers that it ignores the fact that one in four American Families are paying more than half of all of their income, just for housing. Homeownership at the lowest level in decades, and a lot of young people with heavy student debt arent likely to afford their first home for a long while. Our federal policies for formal housing are designed to protect families but rather to protect bureaucrats. We have a Record Number of people enrolled in government operated health grams like food stamps and my friend, it is not because people want to be in poverty. Its because they are part of the bottom 90 of this country of American Workers whose wages have been stagnant for the past four years. [applause] Mike Huckabee the war on poverty hasnt ended poverty, it has prolonged it. I dont judge the success of how may people who were on government existence as to the success of government. I judge how many people have good jobs and dont need government assistance. [applause] Mike Huckabee we dont create for good jobs by americans by entering into unbalanced trade deals that forgo congressional scrutiny and then looking the other way as the law is ignored so that we can import lowwage labor, undercut American Workers, and drive wages lower than the dead sea. That is unacceptable. [applause] Mike Huckabee as the governor mentioned a moment ago, i governed in a state that was the most lopsided and partisan in the country. No republican governor had more democrats and fewer republicans. I challenge the deeply entrenched political machine that ran the state. And my friend, it was tough sledding. I learned how to govern it read and i learned how to lead. And even in that environment, we passed 94 tax cuts, reveals our road system, saw dramatic improvement in student test scores and fought the corruption of the good old boy system, so the workingclass people would finally be given a fair shake. [applause] Mike Huckabee and we saw Family Income increased by 50 during my tenure. There are some who propose that to save the safety net like medicare and social security, we ought to chop off the payments for people who faithfully had their paychecks and pockets picked for politicians and promise their money would be waiting for them when they were old and sick. My friend, you were forced to pay for such security and medicare for 50 years. The government grabs the money from our paychecks and says it will be waiting for us when we turn 65 years old. If Congress Wants to take away someones retirement, let them into their own congressional pensions not your social security. [applause] Mike Huckabee as president , i promise you will get what you paid for. How can anyone ever trust government again if they steal from us and lie to us . It didnt help when Congress Took 700 billion out of medicare to pay for obamacare. [applause] Mike Huckabee instead of helping families find Affordable Health care, we created a monster that forces us to buy coverage we dont want, dont need, and cant afford. [applause] Mike Huckabee imagine members of congress boasting they will fight to repeal obamacare, and then turning around and signing up for it. Real Health Care Reform is going to focus on prevention and yours, rather than costly intervention. Cutreres. Hope comes from finding a cure for cancer, diabetes, and alzheimers disease. The same way we once lined up at a courthouse, took our vaccines, and eradicated polio. Real cures can give real hope to families who here a dreaded diagnosis and are sentenced to a slow and agonizing death. All timers disease alone will cost al timers disease alone will cost a lot. Focusing on cures saves money, lives, and families. I remember president kennedy telling us we were going to send a man to the moon and bring him home within a decade. President kennedy didnt live to see that come through. But i did. And it made me believe that america could do anything it said its mind to. [applause] Mike Huckabee as president , i would launch a curative approach to health care and save money and lives not just to save a bunch of government programs. [applause] Mike Huckabee we face real threat from radical jihad is an in the form of savage groups like isis and state terrorist like iran. We put more pressure on our ally israel to cease building bedrooms for their families in judea and samaria than we do on iran for building obama. A bomb. [applause] Mike Huckabee dealing with radicals who chant death to america and to fund rockets to murder civilians in israel is nonsense. What i hear her current president say he wants christians to get off their high horse so we can make nice with radical jihadists, i wonder if you can watch a western from the 1950s and be able to figure out who the good guys and the bad guys really are. [applause] Mike Huckabee as president , i promise you that we will no longer merely try to contain jihadism we will conquer it. [applause] Mike Huckabee we will deal with jihadis just like we would deal with deadly snakes. And let there be no doubt, israel will know, as will hold world the whole world will know that we are their trusted friend. And the ayatollah of iran will know that hell will freeze over before they get a nuclear weapon. [applause] Mike Huckabee and i commit this to you today i will never ever apologize for america. Ever. [applause] [cheers] Mike Huckabee we face not only the threat from terrorism, but also the threat of new kinds of dangers. From a cyber war that could shut down major financial markets, to threats of an electromagnetic pulse from unexploded device that could fry the entire illegible grid and take this country back to the stone age in a matter of minutes. Entire electrical grid. Waiting until it happens is too late. We have lost our way, morally. We witnessed the slaughter of over 55 million babies in the name of choice and we are now threatening the foundation of religious liberty by criminalizing christianity and demanding that we abandon biblical principles of natural marriage. [applause] Mike Huckabee many of our politicians have surrendered to the false god of judicial supremacy. Which would allow black robed and unelected judges the power to make law as well as enforce it. Amending the equality of our three branches of government, as well as the separation of powers so very central to the constitution. The Supreme Court is not the supreme being and they cannot overturn laws of nature or of natures god. Government in washington is dysfunctional because it has become the roach motel. People go in, but they never come out. [laughter] [applause] Mike Huckabee as president , i will fight for term limits on all three branches of government. [applause] Mike Huckabee that would help return us to the founders dreamed of serving the public should be a temporary duty, not a lucrative career with generous pensions and paychecks that arent available to the very people who pay for them. [applause] Mike Huckabee if someone is elected to an office then give the taxpayers what they are paying for, and the job that you said you wanted. If you live off the government payroll and you want to run for office other than the one you have been elected to, at least have the integrity and decency to resign the one you dont want anymore and to pursue the one you decided you would rather have. [applause] live from bloomberg headquarters in new york, this isMike Huckabee as president , i would take seriously the tent the moment. I would abide by. The 10th amendment. Our constitution was explicitly clear about keeping the federal government small should be able to focus on simple things like providing military. And securing our borders. There are things being done at the federal level that should have been left in the hands of the states or even better, the families. There is no Constitutional Authority to dictate education from the federal government. [applause] Mike Huckabee why even have a federal department of education . It has flopped, and it needs to be expelled. Flunked and needs to be expelled. Education policy should be set by states, local school boards, and best of all, by the moms and dads of the children. [applause] Mike Huckabee and common sense tells us the best government is the most local and the most limited. We have supersize the federal bureaucracy, but we downsize the military and left our borders open and uncontrolled. We need to address immigration issues, but not with amnesty. We need to start by taking control of our own borders. [applause] Mike Huckabee but as americans, we ought to get on our knees every night and think god we still live in a country that people are trying to break into rather than one they are trying to break out of. [applause] Mike Huckabee i am running for president because i know there is a difference between making a speech and making government accountable to the people who have to pay for it. [applause] Mike Huckabee you cant spend money you dont have, you can borrow money you cant afford to pay back. The federal government ought to live by the rules that you have to live by. They should function under a balancedbudget law, just like i had to every year i was a governor. [applause] Mike Huckabee i dont want to hear politicians talk about tinkering with the tax code or making little adjustments that still let powerful washington interest pick the winners and losers. We can never create prosperity for working people, never grow our economy out of a Bottomless Pit of debt never be able to move america back to the greatest economy on earth if we continue to punish productivity and subsidize reckless irresponsibility. [applause] Mike Huckabee there was a man i met at a machine shop in new hampshire. He told me how we started working a double to help his daughter pay for grad school. He figured that if you work 16 hours a day rather than eight he would bring home twice the pay. He found out the money he works for on that second shift put him in a new tax bracket and the government got more of it than he did. Its not that our tax system is punishing the richest people in america, they can afford accountants and lawyers who will find a way to protect them. It is the people who are working for wages who cant get ahead if the government penalizes them for trying to do better. [applause] Mike Huckabee as president , i will work to pass the fair tax which would no longer penalize peoples work. [applause] Mike Huckabee we wouldnt penalize peoples work or their savings, their investments whether good stewardship. And by the way, it would be the end of Big Government bailouts and most importantly we would finally rid ourselves of the biggest bully in america, the irs. [applause] Mike Huckabee the irs stephanie president obama at the podium announcing his joint chiefs of staff. President obama yes, our system of equipment and technology our logistical capacity is unmatched. But what makes this the best, the reason no other nation can do what we do, is our people. The patriotic men and women who step forward, raise their hands, and took an oath to defend our nation. It is our men and women in uniform, and their leaders, who make our armed forces the very best. Among our military leaders, the chairman of the joint chiefs of staff is the principal military advisor to me and my National Security team, including Vice President biden my National Security advisor susan rice, and the secretary of defense, ash carter. In recent years, i have been deeply grateful for the service of our chairman, and rumored he didnt say. And the vice chairman Martin Dempsey and the vice chairman. They will complete their terms later this year. I will have a chance to say nice things about them later. I can tell you that they have been outstanding. I could not have asked for better team. Today im proud to announce my nominees to be the next chair. And the next vice chairman. I want to thank general dempsey and the admiral for being here today. Marty and sandy, we are expert in early grateful for all you have done and we will have in opportunity to pay tribute to you in the months ahead. I have relied on you both, your advice, your counsel, your judgment as we have navigated the challenges of recent years. Remanding the combat mission in afghanistan, to leading the International Coalition to destroy isil inducting humanitarian action in the philippines to fighting evil in west africa and strengthening security alliances from europe to asia. At every step, you have been critical to the processes and i have valued not only your counsel your friendships are you at the same time, marty and sandy have helped guide our forces through difficult fiscal times, especially sequestration. They stayed focused on Readiness Training and modernization, they are also more opportunities for women in armed forces, we are tackling the hours of sexual assault, which has no place in our ranks. We have made progress because leaders like marty and sandy have majored we are recruiting