Transcripts For BLOOMBERG Market Makers 20240621

Many democrats say the trade bill will kill jobs and hurt raises. Republicans are in the unusual and on situation of supporting the president s position. Sounds like the time or diplomacy has ended in the greek standoff. In a meeting with eu members greek was given up with 24 hours to end the proposal over bailout money. He officials told bloomberg that policymakers are examining all scenarios if greece refuses to compromise. That includes the possibility of greece leaving the euro. Olivia that attack of federal personnel records was a lot worse than ours bought. Bloomberg news is reporting that hackers in may of stolen data on as many as 14 million people. That is more than triple the number reported last week. The u. S. Has claimed blamed chinese hackers. One might be to target the data in a hackers. Mexico took a hit when oil prices collapse, but it couldve been a lot worse. The Mexican Government made trades with seven banks to lock in higher prices last year. Still, mexico relies on oil for a third of its revenue. The mexican president says the country has been hurt. He sat down with bloomberg editorinchief. I think in general that for emerging economies well, we have a lot of problems. We famous the volatility faced the volatility of the worst. The oil prices have affected us very negatively. Olivia he also reiterated his pledge to balance the budget by 2017 and to avoid tax increases. And here come the dinosaurs. Jurassic world opens today. It is the fourth movie in the franchise and it is expected to be a monster hit. It is expected that it will take a close to 130 million this weekend. I dont know. Erik i have to say that the promos look pretty good. We are going to be taking a closer look at the whole drastic franchise later this hour. It is very cool. Olivia im looking forward to it. Erik let us get you started with the five things you need to know this morning. Number 1 the u. S. Dollar had it biggest weekly decline in almost two months. The moves are being driven in part by Market Expectations and what the fed is or isnt going to do. A lot of it has to do with what came out of the bank of japan. Although, there were considerable strengths in the euro as well. Which i have to say is distressing. Im going to be landing in malan for a vacation next wednesday. Come on, euro. I want to love you more. Get a little weaker. Olivia you are still all right. Erik i liked it at 1. 05 better. Olivia i was surprised that how many officials were weighing on the currencys. In the last four hours, chancellor merkel says the euro is over. She said the strength of the euro was making it more difficult for some of the poorer countries in the region. Weve also seen kuroda talk of the yen. Same thing down australia. Number 2 were looking at Goldman Sachs. The bank is diving back into a highspeed market. According to people familiar with the plan, goldman has been hiring executives and investing in Software Trading infrastructure. Back in 2014, goldmans president called for reforms in the highspeed market. This is a little surprising. You remember when Michael Lewis came out and Goldman Sachs came out before that and said they would support ie x and the slower platform. Now it appears they are diving back into it is sort of a recognition that clients are dementing demanding the fastest execution possible. Erik i said before to watch what goldman does not what goldman says. That applies in this case. It is last to talk about the value of a platform like ie x when the interest is shared by some of the biggest clients. A lot of those are hedge funds. A lot of those hedge funds take big positions in particular and backed the notion of ie x and they do not like it when big positions is selling off. They dont like to be snide off by the highspeed traders. Olivia the number one trader. They lost their revenue last year and it got to compete. Erik moving on to number three julie hyman, what have you got . Erik ajulie a couple points to want to leave their these are typically big target movers. There are two reasons to watch that are around and we dont usually Pay Attention to it. Its usually because the prior ratings for both of these were so dismal. And in april, we had a drop in Consumer Prices. We will see if there is a recovery today if one is projected to the preliminary may numbers with the lowest in six months. Are we going to see better numbers coming out for both of these readings . For ppi, it is the main number. For sentiment, it is the june preliminary number. Olivia looking forward to those data points. Julie will break this down late all today. Number 4 we have china. Chinas central bank is expected to cut reserves early as this weekend. It is to counter search the Municipal Bond sales. If they do cut the reserve ratio , this will be the third time they cut it this year. They put out one estimate saying that they think they will lower the amount that lenders put aside by as much as 1 to 17. 5 . Erik the big question i think is what kind of relationship is there between these moves to ease Monetary Policy and the performance of the chinese stock market, which has been totally bananas. Olivia Inflation Numbers coming out of china and this week are a lot of concern. Erik number 5 succession plans. The house of murdoch. Toy for century fox i am talking about. Murdoch is getting rates is set down step down as head of the company and handing it over to his son, james. This certainly as they a lot of speculation as to who was going to succeed Rupert Murdoch. Some might say it is a little too late. Maybe murdoch shouldve given the opportunity to either james or lackland or elizabeth to set foxs Strategy Early in the game. There is a lot going back with the phone scandal. He had to separate the two companies which was 20th century fox and the new news corp. Olivia it is amazing how they bounced back from the phone scandal. They thought it was the end of the road, but clearly not the case. Some people say it is too late, but others say that as long as ruperts life, he will effectively run the company. What will this mean for strategy . Will fox make another run at trying to buy time warner . Erik we will talk to the saudi prince about fox. And we will talk about in other big company twitter. I want to show you what has been happening with twitter. A tough year. Sluggish user growth and Stock Performance that has come out of it is one of the big reasons why it dick costolo is out. No one knows the story better than emily chang. She spoke with dick costolo recently. Emily, we thank you for that. I want to know from you what this change in leadership has been. Jack dorsey coming back in as the interim ceo says about the future of twits part twitters product. Emily a tough year for twitter. Dick costolo what we are learning now is that he was talking about this idea that he wanted to step out of the role. At the end of the year last year, he was teasing the idea with or numbers. At the last Board Meeting weeks ago, he said look, i dont want to do this anymore. We have a great team now. I put together a great team that is ready to execute on some of these things and i think it is time for me to step down. I think me being in this position has become a distraction to the copy. Jack dorsey, the executive chairman, someone who lives and greece twitter brees twitter is stepping back in. Listener know why he says he is coming back. One of the reasons that i am stepping into this in her role is the belief i have around our direction and our strategy and specifically, around the products. I have a lot of contacts for it as chairman and talking with the demand team running it. I do believe it is right. I do not anticipate any change in that strategy. Emily when he said that that there is not going to be any change in the strategy or product direction . Isnt twitter having a lot of product issues . That was really interesting. I dont know if he is trying to be supportive in that moment but theres a lot of criticism not just from wall street, but from plot of people product people that twitter has not lived up to its full potential. Olivia theres so much pressure growing actually. A lot of people like ben thompson and chris dr. , who you also spoke to wrote that staying critique called for cost low to go. What did cost low think about the cost low think about the pressure to continue running the company . Emily he was called for twitter to be Something Better than it is right now. There has been too much turnover and too many people leaving twitter. Before dick costolo resigned, he said that if he could figure out one of these things that he should still be ceo. If not, 80 twitter should sell maybe twitter should sell to a big company like google or microsoft or ive talked to dick costolo many times about pressure he faced as ceo. Take a listen as to what he had to say about that. The board and i are totally aligned. The more pressure is from an entire company of people looking for you to leave them anyone to be successful. You want to rally everyone together. Particularly it is a motivation of why you have to be successful and show them that those efforts are paying off. That is where the pressure comes from. Emily and the pressure apparently just got too great. Erik emily theres play a speculation about who might end up being the permanent ceo of twitter. What are you hearing . Emily a lot of reporting that jack dorsey always wanted a job back. He punted on those questions when he got them yesterday. He said that im focused on finding the new ceo. He did outline what theyre looking for. Take a look at what jack dorsey have to say. We are looking for someone who really uses and loves the product in every single way. That is going to be a huge attribute that the Search Community committee is looking for. Emily is that person jack dorsey . He loves the product and lives in brees it every day. Theres a Certain Committee form of Evan Williams and another cofounder. Theyre going to be looking inside and outside for somebody to lead this company. We will see how that search evolves. Erik emily, we thank you much for waking up early. That was emily chang its a go. Olivia arsons of interview with dish network ceo on a potential merger with tmobile. Dont go away. Olivia coming up later today on Bloomberg Television 2012 president ial nominee mitt romney will be on with all due respect to you dont want to miss it. Erik billionaire Charlie Ergen the founder and ceo of dish, may be looking at another dance partner. According to reports including ours, he is poised to merge his company with tmobile, turning dish from a satellite tv operator to a True Wireless company. Betty liu spoke with him an exclusive interview and asked what she thought of the tmobile merger. I think there are certainly a lot of positives to that if there are willing participants. But they certainly have done a fantastic job to be in the upstart company. Their team have really captured the imagination of the public in terms of attacking the main points that we have in the wireless industry. Their network is very similar to our spectrum position. Obviously, their growth rates are going to be more spectrum. Those things make some sense. I think there are some things that dont make as much sense. They are obviously controlled by a German Company who has Strategic Initiatives of the in europe and United States and they may not be in a position where they want to do anything. We have other options that may be more tractive to our board and our shareholders. I think there are a number of options that are out there. Certainly, tmobile is an option. Betty speaking about the german owner, there are reports that one of the reasons why a deal might not happen with tmobile is that they do not value dish shares as highly as you value them. There is a disconnect there. Where do you think dish should really be trading at . I can never predict the stock market. In the long run, we think our shares are undervalued. We think the spectrum value that we have we are probably undervalued. We have to prove it to the marketplace. Betty undervalued by how much . I dont know. I can only speak as a shareholder. [laughter] i still have the shares when i started the company. I believe in the longterm future of the company. This is our 35th year in business and i think are best days are ahead of us. It is ultimately how you managed the company and how you take it manage of the things that may happen in the marketplace to grow your business. You cannot be afraid of change and you have to have a team that can adapt to change and be willing to change. I think we have that here dish. Shortterm focus i think is that you have an attdirectv merger that if approved, we want to see the conditions. We publicly have not oppose the merger but have southern u have said there needs to be conditions that protect consumers for broadband rights. They have set aside for new competitors potentially could it is now set at three megahertz. A good behind for competition. That is really what stands a number in the way of at t and fries as that they controlled the vast majority of the low spectrum. Betty what is the number one condition that you want to see to say that this merger is ok for us . The main condition is that at t controls a lot of the broadband pipes. They on the the video and the broadband hide where you cannot take the best video choice for you as a customer if you want the broadband. What we want to see is that they make sure that broadband is sold as a standalone item. I think you want interconnects to the broadband line. The ramp to broadband you dont want that to be close. You will like to make sure that the conditions of the merger are going to survive court cases. Betty going back under wireless assets, some people estimate it could be 60 billion or so. What will you do with those wireless assets . There are reports that for you to be able to leverage them off, youre going to have to partner with a wireless company, but if you dont might you spin off those assets . Might you separate dish then its a video and wireless into video and wireless spectrum . We have looked at different Corporate Structures. We continue to look at different Corporate Structure so that you may end up with assets in different formations. The reason you would do that is to have flexibility for how it can get put to use and for the timing of one that could be put to use. We have looked at that and have not made decisions on that yet. It is certainly Something Worthy of looking at. Olivia that is dish founder and ceo Charlie Ergen. Like a good poker blackjack player, he keeps his cards close to his chest. Betty interesting what he said that about the spinoff. The number one ranked telecoms analysts says that the instance way that he could add value to the share is to sell those assets, those wireless assets and the stock would skyrocket. Olivia you think of this guy holding his cards to his chest but why did he agree to an interview . People are always calling and he never says yes. Betty traditionally, youre right. He is very publicity shy. He rarely grants interviews. Lately, he seems to be out there like donald trump. The reason why is that number 1 yes come back as ceo after a fouryear absence. Number 2 because he has been accumulating these wireless assets, because this has change of the last 30 years, and particularly the last five years, the story is not as well told. The live person that can really tell the true story of dish is Charlie Ergen. This is why he is out of his comfort zone and talking to people like me and to analyst. Erik i want to talk about Charlie Ergen the man because it is sort of Common Knowledge that he is a tough customer and a tough man to work for. Did he have anything to say about that . Betty yet a lot to say and i was surprised at how frankie was knowing that there are many employee complaints about him being a tough boss. We ourselves wrote a piece a few years ago asking if dish is the meanest place to work. He said i am a tough boss, but if you want to work it dish, then you want to achieve great things. If you dont want to do that then you dont belong at this company. That he did admit of there were mistakes that were made in the past on corporate culture. Erik like what . Betty we have detailed many of them. Mandatory overtime, examples of people having to share rooms on business trips and things like that. He is trying to connect more with his employees for one interesting anecdote i will tell you quickly every summer, he takes a group of his in terms and take them on a mountain height and this is a way for him to connect to the younger people at dish. So he is getting ready to do that. He apparently is a huge i asked him if he is about clever. He says no, i hiked. He hikes all the biggest peaks in colorado. He has done the base camp at mount of us. Mount everest. Olivia clearly a guy with endurance. The reason that he was looking at rockets is that Charlie Ergen is trying to launch his side. Betty thats how they get their satellites other. They have launched 21 satellites toddle total. They will launch the dragon spacex rocket. Erik betty, thank you for bringing us Charlie Ergen. You can see more of her interview with the dishs ceo throughout the day right here on Bloomberg Television. Olivia yes or yesterday, the bloomberg editor in chief set down for an exclusive interview with the mexican president. They are on track for a third year dividend growth. They talked about increased value of dollar options. I think in the end it is the decision position that the bank of mexico we have to take is an autonomous position. They have to take greater responsibility taking into account everything that happens on the world stage. You have also made adjustments and we have also maintained commitment of zerobased packages so we can resolve public spending and decide where investments go. And so we have one institution that is the mexican bank, who decides on those merits. You just mentioned the mexican bank. His term expires and expended in december. In december, you can ask you that. D think he has done a good job . I think he has done an excellent job. I have to say that he has acted very professionally and has been demonstrated as a governor of a central bank of mexico. He is also proved his diligence and other financial areas. For example, International Monetary fund. Thats a look at probably to me. Well, we will see in december. Olivia that was our editor in chief speaking with the president of mexico. Dont go away. Coming up after the break, we will be joined the biggest muscles on wall street. Erik it is not Morgan Stanley and Goldman Sachs. It is the winner of the decline brought. Olivia were going to pump iron. Dont go away. Erik this is market makers. A live shot of london where it is kind of overcast and 73 this morning. Olivia you are looking at the Great British summer. That is as sunny as it gets in june. That is the view erik . That is the story overseas. The question in america, is there any inflation in the united dates United States . The Consumer Price index has been so weak. The rebound in oil prices is evident in the headline number appea. Up. 5 . We are seeing features and prove just a little. Core ppi figure coming in up. 1 . We are still in deflationary territory. That is impacted by the stronger u. S. Dollar over the past several months. Core ppi yearoveryear up. 6 . We are seeing the yield on the twoyear at. 72 . Olivia thank you so much. Who is the fittest man on wall street . A title that for the last six years has been decided by a decathlon. We are joined by this years to top contenders. That two top contenders. Two top contenders. Great to have you on this morning. For the past three years, youve come in first. For the past two years, youve come in second. How awkward is it right now . Its not. The event is very good spirited. For a great cause. Cancer research. They treat more pediatric Cancer Patients than any center in the world. Olivia you are frienemies. Explain what is involved in this decathlon. Running, jumping and lifting. There is 10 events. 40 yard , 400 800 a wide array of things. There is no javelin, no pole vault. Olivia what is the hardest event . The 500 meter run. Everyone hates that one. Olivia why . The 800 is the last event of the day. At that point come everyone is really glad to see the finish line. The 500 saps everybody. Erik i have a friend that competes in the decathlon. He says in order to be a contender, you have to be a super serious athlete who was an allaround freak. How do you balance worklife and the need to train as hard as you have to train to be competitive in an event like this . The big thing is thinking about the cause and to help out this center. We are trying to raise 2 million this year. So far, last year one day alone, we raised olivia is that you . Thats insane. That is driven by the cause. You want to get better. Olivia you are working out 59 days a week . Before work or after. Its always making time. If you have 45 minutes come you can go to the gym. Olivia or you can have a drink. You can do that, to make. As 24 hours in the day. You are really motivated by the fact that you are asking people to donate and you want to feel like youve earned those donations. Every dollar that is donated goes directly to memorial sloankettering. This year its funding trials or 20 of children who dont respond to traditional cancer treatments. When you ask people to donate on your behalf, you want to feel like you earn it. I worked out six days a week in preparation for this event. Erik how many hours a week . About two hours a day. Erik same for you . About that. This is erik can you put it on . Olivia eric can put it on. It looks perfectly good on the table there. Its a highaltitude training mask. If you talk, you will sound like bane too. After finishing second for a few years, i thought i needed something different. No reason not to give it a shot. Olivia are you kind of shook right now . Yeah. That mask is scary. I dont want to see that. It might show up in my nightmares. Erik is this working for you . I will see on sunday. Erik i have to take this off. Olivia how do people support you guys . Today, we are trying to raise the most money the decathlon has ever raised in what appeared. Our goal is to a thousand dollars. 200,000. You can donate to any competitor you like. Erik we wish you luck. I gather there are some younger athletes looking to dethrone you both. Olivia we will arm wrestle during the break. Still much more to come here on market makers. Erik thank you, gentlemen. Spring Auction Sales have wrapped up in new york at a record 2. 7 billion. We are asking the question should be regulated . Erik coming up in the next hour joining me and olivia talk about the newly announced plans at 21st century fox. The big secession plan. Olivia the auction season has just ended with record sales of 2. 7 million. Next week come art aficionados joins us now from brussels. We are here to talk about manipulation in the art market. We know the art market is an industry by appointment. There is tons of insider information. Who cares if some russian billionaire and suspending twominute dollars 10 million to much for a picasso . The art market has been a hobby for many people for many years. The weight a vault over the last fears was explosive. The way it even all over the last few years was explosive. You can see on the graph that massive evolution. If you look at the turnover the total volume was 40 million. Right now now, its about 900 million. In six years the increase has been 21 times. From 48 million, suddenly we are in the market that needs some kind of more attention because its bringing more shady activists. Erik shady characters, perhaps. The threat of counterfeit and lots of questions about providence. I think of the art market like i think of the institutional trading market. These are big boys. These people spending tens of millions of dollars on pieces of art ought to be aware of the risks they are taking an act accordingly. And act accordingly. Why do they need oversight . The headlines are focusing on the one or 2 million things. Thats 150 million things. Its like a pyramid. Its going down to the artists you could possibly by for yourself. Thats sipping having an impact on the whole chain. It eliminates the speculation its having an impact on the schools themselves. Thats what i would like to draw attention to this because i am an investment banker at but also a passionate collector. Olivia what do you think would be the optimal way to regulate the art market . First of all, it should start with selfregulation. Its very surprising that there is not even a professional association not even the most basic contract to explain to you that the most precious assets are the artists. 80 of the cases, there is no conflict between the artist and the galleries. The artists can move out through the door at any time. At the moment, there is heavy competition for the whole ecosystem. Big galleries are trying to attract the most valuable and thinkable artists. Bankable artists. When the selfregulation is setting in maybe it can set in stone regulation by the public authorities. Erik do they do a good enough job . Its a slightly conflicted role. Who was the client . The Company Buying shares . Those auction houses face the same conflict. The auction houses are donating a job. They are the only corporate mentality in this entire organization. When you are talking about can you repeat the question . Erik i want to know whether the auction houses i see the auction houses as being conflicted. They are turned to serve two kinds of clients at the same time. The individual organization selling the art and the individual buying the art. They have to entirely different sets of interests. Indeed. You are right to underline this. Its a bit of a problem we see across the whole market. You dont really know who is front of you and who is serving you. Who is the client . The seller paying the 8 commission to the auction houses or the buyer paying a commission between 2512 . Its sometimes a bit problematic. Ive been trading on wall street we still have an option. You knew the rules. In auction houses you have the chandelier bidding. It is sort of confusing for the nonexperts. We need some clarification at the auction house level, too. Olivia i like this segment. This is why i will go. Will up. Woke up. Im thankful to be inside. Take a look. [screaming] not doing it. Olivia for the first time in 17 years, millions of cicadas emerged from underground in central kansas. They spent two decades belowground. On special occasions, they swarm reporters as well. Erik we had our cicada summer two years ago. Washington nationals baseball game would be incomplete without the bubbleheaded president s. The real president showed up this time around. Heres your photos with the costumed president s. He shared photos with the costumed president s. Olivia i wonder if it was a decent pitch. Ive seen him throw it into the ground. Its a long way from home plate. Erik not that far. Olivia for me. Erik coming up twitter sees a shakeup. Erik lots happening out there on wall street. Lets take you to julie hyman. You will start with twitter. Julie i am going to start with twitter. The reaction to the ceo stepping down and jack dorsey stepping in. Shares up 3. 5 . Analysts are not changing the recommendations based on this. Two themes are emerging from the commentary ive seen. The focus needs to remain on monthly active users. The growth in users. User growth should be the new ceos shortterm focus. Thats the theme being expressed among multiple analysts. The other item, the potential for an acquisition of twitter by another company. Some analysts are discarding that idea. Google has been talked about but there is some skepticism over whether that would be a viable option. The idea that there was not another ceo lined up is the reason some analysts are pointing to as a reason to speculate upon the acquisition. I quickly want to look at williamssonoma. Restoration hardware with the earnings yesterday. Oppenheimer is upgrading the stock this morning. No reaction yet in the shares. The analysts are saying the housing backdrop is looking good for a retailer like williamssonoma. Olivia even though Mortgage Rates are above 4 now. There is a velociraptor on the loose. Dressing world is ready to take over the box office. Jurassic world. Its all because we love dinosaurs. How much do we love dinosaurs . The numbers behind the franchise. 1993 Steven Spielberg wows audiences with drastic park. Jurassic park. Dinosaurs, dinosaurs, dinosaurs. They remain a favorite for kids and adults. In the original king kong dinosaurs against the eighth wonder of the world. Estimates remain a modest 2. 8 million. Thats about 51 million for adjusted for inflation. The movie shattered the Opening Box Office record with equal 51 fords 20th anniversary Universal Studios rereleased the film. For its 20th anniversary. Sequels were always on the scene. Lost world makede box office bank. After a decade of development hell Jurassic Park for finally arrived. Four finally arrived. It will still make tons of money. People love dinosaurs. Olivia did you see that dinosaur shark that fish eat that fish . Market makers will be right back. Live from bloomberg headquarters in new york, this is market makers. Erik good morning once again come everybody. Olivia Stephanie Ruhle is off today. Im having a great time. We have a crazy show for you. Erik an amazing our coming up. We will hear from prince alwaleed bin talal. Olivia president obama on the verge of a congressional victory. He can thank his allies, the republicans. He went to the congressional baseball game last night and Many Democrats say the trade deal will kill jobs and hurt wages. Republicans say it will help workers. Erik inflation at the wholesale level. You can blame fuel prices. Energy rose 6 . The Producer Price index was up. 5 . Wholesale prices are still down. Alexis sippers is pushing Alexis Tsipras is pushing his countrys finances. There is still hope. Greece has to show it is willing. I would just like to say once more, where there is a will there is a way. If the will must come from everybody and that is right that we talk to each other again and again. Erik european officials are preparing for any possibility, including a greek exit. I thought i would sum up the week. We have a stronger dollar today. 25 higher. Angela merkel talking down the euro it is still above 112. It has weekend from its highs weekend from its highs. Its been more difficult for the economies on the periphery in europe. To make adjustments to the strong euro. We all know the euro has weekend substantially in the past few months. Germany is a big exporter. Those that speak of currency wars had a lot of fodder this week. We had comments from the japanese governor making comments earlier this week. That is having an impact on the end as well. On the yen as well. Erik breaking news on capitol hill president obamas head there to meet with houston regrets on the trade bill. We take you to peter cook. Peter this is the big showdown ever has been waiting for. The president s trade agenda. Critics will stand in the way. Thats why the president is coming to the hill on this surprise visit to make a final pitch to democrats not to blow up his most important Economic Initiative of his second term. They have the opportunity to stand in the way and he is try to convince enough of them to stand shoulder to shoulder with him on this issue and join a whole host of Congressional Republicans will vote in favor of the trade agenda. He knows how much is riding on this. Thats what hes coming here to try to lobby this. Olivia a lobbying frenzy on capitol hill right now. Peter there is a lot at stake. You know how many major corporations have been in favor of these trade deals. The Transpacific Partnership would pave the way for the final negotiations for that deal. 40 of global gdp huge multinational and Small Businesses making the case that this is a deal in their best interest. Major lobbying push by those business groups. You also have a major push by organized labor. Making the argument to democrats, listen, this is our best chance to block these kinds of deals. If you fight the president now on this, you will get a better deal down the road. Erik when there is a bill of this importance of for a vote there is always a ton of horsetrading. Sure the highlights of the backandforth between the white house and the democrats and republicans. Peter the horsetrading here has been the president and john boehner on one side trying to satisfy democrats on the other side. One bit is the process today. The republicans agreed to link to this trade legislation i separate bill a separate bill that provides training for American Workers who might be displaced i trade. By trade. They are targeting the second bill they will vote against the second bill because if that goes down, there is no fasttrack at all. A strange strategy. No clear outcome how this will play out. This could go either way. Nancy pelosis vote could decide. Erik time to move on treasuries are supposed to provide safe harbor. What Bond Investors may be facing in a choppy or season. Choppy season. Olivia investors are snapping up bonds. A 13 billion hail through the strongest demand since september. Deal drew the strongest demand since september. The sign of a new trend in bond market volatility. What does this tell you . There has been mixed messages in the market. If you look at where treasuries are and dollar, it has moved from seven basis points to above a percent. What it means to investors, he should expect greater volatility in the bond market Going Forward. Theres a couple of reasons for that. Number one, the data itself is mixed. If you look at the economy its sending mixed messages, too. First quarter gdp, there was a pair off. You look at payroll numbers that came out recently pretty good. Recent retail, the consumer number is encouraging. Erik despite the selloff some of it makes sense because its off such a low base that some of that is investors saying i cant take negative yield anymore. Olivia we saw the german 10 year unwind. Now a 2. 5 . Where do you think how do you play a rising Interest Rate environment . One thing that is going to be here for sure, that volatility. Where that tenure is going to end is difficult to call. Whether they race this year or next year one way to play volatility you can hang on to a greater amount of cash. Any given time, you have some cash coming back. When the rates do go up, you can reinvest at the higher rate. Erik the move index does a job of measuring bob volatility. Bob volatility. Bond volatility. There is some of that and some technical reasons why the bond market has reasons the way it it trades trades different issuance. Olivia where do you see opportunity in the credit markets right now . If you look at the underlying issue rs, a lot of companies are doing ok. Different surveys out there look at expectation onward. Things are starting to heal. People are hiring again. If you look at where capital has slowe flowed come in close to the biggest and most liquid of issuers they are too big to go to the neighborhood banks those companies are still pretty interesting. Erik have you observed was some other investors have been observing as of late . It is hard to hedge your exposure. You may want to have some downside protection. The erosion has made that difficult. What do you do . Its back to fundamentals where you do your homework and before you buy, you must understand the fundamentals. You cant go in and say i will hedge my risk. You look at where the index has a lot of energy names to it if you hedge against the index, theres not to the same extent Energy Exposure in your hedge. You may think you are a hedge, but youre not. If you think about her equities and bonds have moved i see equity options. Erik equity options as a hedge. Its one way to think if you think about bonds and equities. Olivia great to have you on. Erik thank you. When we come back who is going to be twitters next ceo . Olivia lets check our top stories this morning. The legal battle is over he was acquitted of aggravated charges it lasted nearly four years. Sex parties held during the Global Financial crisis. Germany is dropping its investigation into the alleged hacking up Angela Merkels phone by the u. S. The allegations came when a news article said the west may have been spying on her phone for years. Mitt romneys president ial defeat is not six declared or likely candidates are in utah for the third annual retreat. Mitt romney will be joining the with all due respect team tonight at 5 00 p. M. Eastern. Erik more on the management shakeup at twitter. They costdick costolo steps down on july 1. For insight, we turn to michael parikh. Great having you back on the show. I suppose at some point this was going to be inevitable. We just talked about what he was going to due. Who is the next ceo going to be echobe . Julie michael there are a number of good options. One name that has been talked about he has a product heads up product. Externally, the names that have been talked about by wall street , people like Ross Levinsohn. Other names that have been also talked about have been kevin sustr of instagram. Facebook has a competitor of twitter. There have been some outofthebox names that have been talked about. I would put them in the category of aqua hires. One of the best entrepreneurs founders, brought a lot of innovation to netscape back in the 1990s. One of the things that hoax folks like him bring a lot of the discussion has been around finding relevancy. One of the opportunities, to make it happen and to acquire that. He would be an interesting candidate in the sense that he also brings huge relevance in terms of technology credibility. Olivia who do you think is the right person for the job . Michael this will be up to the board of directors. Olivia if you were on the board. Michael i would say dont be afraid to think a little more outofthebox than just a ceo. I think mike mccue would be interesting. People have talked about jack. There is a template erik there is something worth pointing out between the candidates some of them have a tech dna and some like Ross Levinsohn have a media dna. What serves twitters interest better . Michael the company has been embracing media. At the core, it is a technology company. When you look at the opportunities and challenges of the next three had five years, to migrate olivia we will have to leave it there. Erik it is 9 26 a. M. Just a few minutes away from the opening bell. Paul hickey is the cofounder of the spoke investment guru. This is where we talk about what is moving markets. So give it to me. Tracy it has been a terrible they have posted the biggest outflow since the financial crisis. In total about 9. 3 billion left the emf equity funds. That came from china. China as we know has a lot of nervousness about the equity market there. Lots of talks about bubbles. Olivia we hear theyre going to cut the reserve ratio for the third time this year. Tracy theres a bit of uncertainty there. In this theme of chinese bubbles. I want to talk about beijing technology. The share prices of 4000 since the ipod for five days ago. I cannot figure out what they do. If you look at the chart, it is stunning because it goes up by the daily limit constantly. It is just straight up. Olivia i dont want to slander. Im sure the legit business. Tracy number two has got to be u. S. Gdp. Everyone is looking at the model gp gdp. The atlanta fed model is now up to predicting a 1. 9 growth rate for the second quarter, which is higher than it was before. People are looking at that because next week we have the big fomc decision. All eyes on that decision. I personally think that is the first meeting we have had an a long time where the possibility of the rate rises actually on the table. Paul i dont office on the table, but its possible. I think those first two points youre talking about go handinhand with each other. U. S. Economic data is picking up which spells higher Interest Rates and the stronger dollar. When you see that, youre going to see emerging markets underperform. They want to bring that capital back on shore with the Economic Data is stronger and get the potential for at the margin higher rates. Erik i get the question guess the question whether that trade is played out or whether short em is still the place to be. Tracy i think a lot of these positions are getting fleshed out because we had such big moves and markets lately, but it just keeps going. I dont know. The markets position all one way much more than he mightve thought. Paul i think Going Forward that you are better off in more developed markets like the u. S. And then you are in emerging markets because in a rising rate environment, emerging markets of the most volatile. You expect more tournaments in on markets and its going to impact those sectors of the market more than others. Erik with the opening bell, give us number three. Tracy number three is earnings next week. Jeffries is wall streets on bellwether. Everyone listed it to see how it did in terms of fixed income trading. People want to see signs of that volatility actually feeding into bank earnings. They also want to see that the banks are able to list in that volatility without reporting big trading losses. Olivia its a positive and that is what we saw on the First Quarter for the banks. Tracy but it can be negative. If it is too bad, it can break models. Investors want that goldilocks volatility. Paul equity markets have been the least volatile equity market that we have seen in the s p ever with this year. A lot of turbulence we have seen is in june. Jeffries numbers wont necessarily cover them. Well have to see what they say. Tracy may was pretty bad. Erik both in affects and in bonds. Paul we just looked at the bund and its off the charts. Olivia the week i decide to get a mortgage is when Mortgage Rates are high. Glasgow to julie hyman. Let us go to julie hyman. Julie lets start with twitter since that is a story everyone is talking about. How much is a gaming is a it gaining . When dick costolo announced he was stepping down, the stock shot up 10 . Its interesting now that it is only up 3 as investors are focusing on who the new permit ceo will be since jack dorsey is only an intern choice for now. What does the company do Going Forward . How does it pick some of his issues and improve product and approved user growth as well improve user growth as well . Gains not quite as spectacular when the news first came out. We are looking at dish as well as tmobile. Tmobile shares up 2. 5 . Betty liu sat down with dish ceo Charlie Ergen could he says that tmobile is a logical merger partner, but he did not comment specifically on the talks between dish and tivo by this point. He says the one big stumbling block would be Deutsche Telekom which is tmobiles owner if it doesnt want to do a deal. And on the subject of housing Restoration Hardware with its numbers. You and not know anything about rising Mortgage Rates from this companys numbers. Sales at 50 , which is quite an enviable level number. When you do get a mortgage and a place, maybe you can go buy some. Olivia i am laser focused on that. Restoration hardware has amazing towels. Julie youre not the only one who thinks so. Erik it is so 1995, come on. Olivia we were talking about trace of tracy in the fall totally of the bond market. Volatility of the bond market. Lots of green since the mid90s. Are you still trying to plot cash or do you buy the divs . Paul people read too much in these things. If you look back historically there is no sign that that portends bad things for the markets Going Forward or necessarily good things. The 10 prior years where it was nearly as narrow of a range, we were positive for the remainder of the year nine out of 10 times. The average returns are right in line with normal. You wish was more of a sign that it was bigger than that. Erik the problem is that no investors can have a strong stomach for volatility. And a lot are leveraged and volatility hurts. Paul you hear people getting so worked up about a 100 point move in the dow. That basically is half a percent now. If we go back to the volatility that we have seen in prior years more historically, i think youre going to see a lot of investors get upset stomachs. It is just going to feed on itself. Olivia what you think about valuations where we are here . A lot of investors look at record margin debt and say they are frosty. Paul valuations are above average. Theres no way to slice that it is cheap. We are at a bull market in valuations do tend to get expensive. It is not major worry. Margin debt when people talk about that, its a big bogeyman. Youd saw in 2007 and 2000 that nearly a quarter of all argent readings have been record levels. Margin debt goes the same way. Erik what do you like to use to gauge equity market valuations . Paul we want to look at rest of the market and track realtime indicators of the economy are doing. One jobless claim is a weekly data point we get. It has correlated since 2009 very well. Erik i was the game or the like pe, adjusted pe schiller pe. Paul i gets a lot of talk, but its so overvalued on that. It is looking at 10 years. If i could be like the way i was 10 years ago, i would want to be that way, too. As time goes on, things change. We dont have to focus on that. The average market valuation averages 16 times earnings. We are treading about that now. It is not egregiously above average. Olivia paul hickey, thank you so much. Erik when we come back, youre going to hear from saudi prince alawaeed, 20th century fox and twitter investor. A great conversation along the way. 15. Stay tuned. Erik he is one of the worlds greatest investor, billionaire saudi prince alawite our lead. Prince i will lead them to love. Alwaleed bin talal. He is on the phone from the saudi desert. Your highness, thank you for taking time for us on your weekend. Let us start with fox. You have long been an investor and supporter of the murdochs Alan Nunnelee Murdoch Family and the first public the supporter of james as a successor. Prince alwaleed im in discussions with james and rupert since more than a decade it i believe the latest move by mr. Rupert murdoch by handing over the reins to James Murdoch and being cochairman with his son, i think it is very good to have. I fully supported. Use ago, i did nominate and ask for mr. Murdoch to be in that position. Im thankful it is happening right now. Erik how is fox going to be different under james as ceo than it has been under his father . Prince alwaleed remember that mr. Rupert was still the cochairman. No doubt that mr. James murdoch will be injecting a new blood into the system of fox ecosystem of fox. James is young and very much tech savvy. I think with what is going on and integration of technology into the media arena, he will be playing a big role in that aspect of fox. Olivia would you like to see fox taken of the another run at time warner . Prince alwaleed i think the last time of the shareholders of time when not happy about that and the shareholders of fox were not happy about that. I dont think its a good idea right now. I think fox has enough subsidiaries under it to grow without any mergers and acquisitions outside that sphere. Erik in other words, fox does not need to be a consolidator in the Media Industry to be successful to thrive . Prince alwaleed no. At the right price, time warner would be great for fox. I fully support that. The last time the price became so exuberant, it became difficult for shareholders of fox, and im one of them. Mr. Murdoch and i are cognizant of the fact that we do not want to dilute our shareholders at fox. Olivia what do you think happens to chase their chase perry . He has been a very welcome addition to the murdoch plan. Does he now leave . Prince alwaleed as i read it in the release he will stay with company and i think that mr. Murdoch, james, and lackland saw his ideas favorably and he will stay with the company one way or another. Erik have you had a chance to become james since the news emerged yesterday that he would be his fathers successor as ceo . Prince alwaleed for sure. I was in touch with james and we exchanged text and talked. Adam lanza talk with Rupert Murdoch today also. And i will talk with Rupert Murdoch today also. Erik can you share with us anything about what james told you . Prince alwaleed discussion between us is very ceremony obviously. James has been implanted at fox for a long time, so he is not a newcomer. We were only establishing the situation where james is now running the show. I just congratulated him and we greeted agreed to meet the summer. Olivia you were an early investor in twitter and major shareholder in twitter. Who would you like to see the place that cost low d cost ick costolo . Prince alwaleed i know him very well and i know jack dorsey very well. The fact that he is taking the reins is that he was the founder of the company and he knows it very well upside down and inside out. I think the fact that jack dorsey is now going to run the show on a conditional basis gives them the ability to continue until a new ceo is found for that great company. Olivia do you think there was a strategic misstep by dick c ostolo . Was something wrong or was it a slow bleed as investors left and users decelerated . Prince alwaleed let us give credit to him. Under his reign, company is going to have more than a half billion dollars of capital. The majority has come from mobile more than 80 . We have new technologies like vine. If all those models are integrated well into the ecosystem of twitter, i think it will be a big force to be reckoned with. As gone way beyond the Venture Capital thinker the question right now is how to increase users. Number 2 how to get more mileage out of each user . Also, the new projects and execution of these products will begin and integrate into the ecosystem of twitter. Erik could twitter benefit from a little less transparency . What i mean by that is that there is so much private capital available in the world today. Twitter stock price has suffered because all its trials and regulations have been so visible. Is it possible perhaps that somebody could think about taking twitter private . If an effort were underway to take twitter private, would you participate in that . Prince alwaleed i am against that completely. I think twitter should remain public. Twitters good days are yet to come. I think right now that we are at the stage where we integrate all those products like vine and yahoo and doubleclick, etc. Disintegrate and have the same rate poured into abita and its income. Erik would twitter do better as a part of google or a larger tech company . Prince alwaleed the benefit of the company is to integrate. We are financial investors, but clearly at this stage in its history, i believe that twitter should remain independent until it proves itself more to the public. Obviously, i will die for deferred to the board of directors. Erik do you think twitter to be a 73 dollar stock again . Prince alwaleed i will not speculate to the price of what twitter would be or any other companies. The important thing to me as an investor is to look at an entry point for the entry point at Kingdom Holdings for saudi arabia was 14 for from the socalled crash of 75 to the mid30s is now two and half times better. I caution that any investor in twitter right now should be very cautious about entry points. Our entry Point Holding was very favorable. Olivia i would love to get your perspective on everything going on in the region right now. Let us start with the leadership transition and saudi arabia. Have you think that the relationship between saudi arabia has changed from the bushes and your uncle to the present they relationship between president obama and the new king . Is the kingdom losing faith in the commitment to saudi arabia . Prince alwaleed i think that solomont and president obamas relationship can be categorized as professional, mature, and businesslike. From my position as saudi leadership, i know that the relationship right now is very good. We just had the number two prince visiting the white house. He ultimately visited camp david with other d. C. Members. Olivia but the king himself did not go and many in the u. S. Press read that as a slight . Prince alwaleed saudi arabia is fighting a war with human. Saudi arabia has many internal issues that has a very bad neighborhood here. The king has a big issue and saudi arabia. We cannot exaggerate this matter beyond any limits. Erik how do we interpret saudi arabias newfound assertiveness in the region . It has always been the most powerful country, but it has not until now for the most part flexed its muscles the latest in yemen and elsewhere . Prince alwaleed that is a very correct observation. While under the leadership of king solomon, we are becoming more masculine. We are being more assertive. Saudi arabia is playing its role. Im glad that saudi arabia is flexing its muscles, and i believe right now that under the reign of the king that we are beginning to see early indications of a new saudi arabia as more assertive and more defending of its rights nationally and regionally. Olivia you mentioned the chaos in iraq. Currently, the u. S. Is expanding its bases in iraq and sending more military trainers to the region. You think it is going to take u. S. Boots on the ground to defeat the Islamic State . Prince alwaleed im not sure the Obama Administration or the u. S. Public wants to commit any more troops to iraq. I believe it is inevitable that more fighters will need to be sent to iraq. As president obama mention lately, i think he is going to add 500 more fighters to the fighters already out there. I do not think it will be an allout war with more boots on the ground. But there will at least have to be more in the training process whereby some numbers in the thousands will have to be there to help against the threat called isis. Erik saudi arabia is not just flexing its might in the gulf region. It is flexing its might in the oil market. You and i have spoken about this before. From your perspective, the saudi arabia and the king believed that saudis oil policy is working . Prince alwaleed we have talked about it for sure, but i did not tell you we were flexing our muscles. In the oil arena, saudi arabia has to face the reality by accepting a fact that fracking in the United States and Oil Production in the United States right now is so high. United states last month overtook saudi arabia by producing more than 10. 3 billion barrels a day. It is a fact they have to live with. That has caused the price of oil to collapse. Saudi arabia has to continue producing at high levels for one part of that equation to be on both fronts having low price and low production. We decided to keep production high. Although the price went down the amount of oil being produced by her country on a daily basis. Erik is saudi arabia comfortable or happy with oil at 60 a barrel . Is that the right price . Prince alwaleed its not about being happy. Its about the pragmatic and logical. Has to be based on supply and demand. I think a price of 60 right now is rendering some shale Oil Production in United States being economical. I think at the end of the day the marketplace has to play a role. Supplier and demand supply and demand has to take over from any other factor in the process. Olivia youre not concerned about shale oil supplies . Prince alwaleed we are concerned. Shell oil is another product. Its like gas. Its like coal. Its another factor in the ecco system desk ecosystem its another factor in the ecosystem of the oil industry. We have to keep our eyes open to the shale Oil Production and United States because after all that is causing the prices to collapse. We see the point at 60 whereby the market is not happy between the consumers and the supplier. Erik the International Monetary Fund Forecast that saudi arabias budget deficit is going to be 20 of gdp because of low oil prices. Is there any concern in the royal family that the impact that this environment is having on the countrys finances . Prince alwaleed this is a really major issue. That is one of the agreements i have with the previous government and saudi arabia whereby the was not much concern about the opening of the valve of expenses. But right now with this new administration under the new king and his deputy friends, im pushing very hard to really lower the amount of valuation and go down from our reserves. It is a important to be alerted to it. We have a huge amount of research right now. Reserves i know. If we keep using the reserves at the existing levels, they may be exhausted in a decade or so. Erik they briefly before we go, does the king recognize this as the timebomb that you describe it to be . Prince alwaleed king has a lot of time bombs out and he has a timebomb with yemen and iraq and syria. Yes the population growth and saudi arabia. He has many issues. The king and his government officials know these. I keep tell you about it in the coming months that it will take on a major step in that direction. Erik youre right behind us, we thank you so much for your time this weekend in saudi arabia. Prince alwaleed been to allow been to allow on thein talal on the phone. Olivia i thank you Erik Schatzker for getting him on the phone. Erik it is still playing out because it is only the early months since the new king was correlated chlorinated. Olivia and what he thinks the u. S. Role should be in the middle east. Erik olivia, you look back with me will be back with me on monday. Stephanie still has more interviews. I will be back in a couple minutes. It is 11 00 in tokyo. Erik it is the bloomberg market they appearday. At this hour, president obama is on capitol hill trying to change the minds. Erik plus Charlie Ergen spoke exclusively with betty liu on the future of how we all will be watching our favorite shows. And the raptors are back. The first Jurassic Park movie in 14 years will be out today. And Companies Want to make i cant believe im saying this dinormous money. Scarlet morning. Im scarlet fu. Erik im Erik Schatzker. Mike mckee is in the newsroom on consumer confidence