Transcripts For BLOOMBERG Street Smart 20150406

Here are the top stories we are watching ahead of the closing bell. The fed president saying the path of rate increases is likely to be shallow. He made those comments earlier today. Dudley also reinforcing Janet Yellens message that borrowing costs are likely to remain low even after liftoff. Barclays has been ordered to pay 9 million. Barclays must release deferred pay to the former derivatives trader who claims the bank and fairly withheld compensation after he left the firm. Energy shares rallying the price of crude. Saudi arabia raised prices for shipments to asia signaling stronger demand. We have less than one hour to go until the close of trading. We want to get to the breaking news desk where scarlet fu is looking at all of the action. Scarlet we have got a rally on our hands. Look behind me. We zoomed up after the start of trading and have not turned back. We are near our best levels of the session now. Initially, it did look like the jobs report would be interpreted as bad news and lead to sell us to risky selloffs in risky assets but that did not last. In the dow, only Johnson Johnson is lower. The other 29 are gaining. The rally in oil prices, Energy Shares are the best performers in the s p 500. Oil of the most in two months. The dollar index turning higher. It did briefly fall but is back in the green. Nymex crude up by 6. 2 . Treasuries are higher. They did touch to a twomonth low earlier. Right now, yields are higher but the yield on the 10 year at 1. 9 . We have come back from the low. Alix thanks so much. We will check in later in the show. President obama negotiating an historic agreement with iran over its Nuclear Program. Now the hard part begins, selling the plan to a Skeptical Congress may prove to be more difficult than coming up with the agreement. Peter cook is at the white house with the latest on the efforts. It has been a revolving door of speakers over the weekend on the talk shows. What is the overwhelming rhetoric coming out of the sea right now d. C. Right now . Peter at the white house, they feel good about the reaction so far. They know it will be a struggle to convince skeptical republicans, but it is the wavering democrats, the details could compel democrats to hold off on reservations and allow it to move onward. The real question is when Congress Returns next week. We could have a vote in the City Committee next week on the proposal the president has threatened to veto that would give congress a vote on this issue. Here is how josh earnest talked about that proposal and the challenge posed by congress a short time ago. Josh entering into these kind of agreements is within the purview of the president. That is an important precedent and one the president will defend. Peter the white house wants to give congress some say in the matter, but not an up or down vote. That will be the challenge. How can congress have a say and still have the administration get their way . Alix does congress have the votes to override at this point if president obama is threatening a veto . Peter you will need 67 votes. Democrats will need to join. It is not clear republicans have it. Senator bob corker saying he was not sure the democrats are there. The stronger democrats feel about the agreement, the less likely we will get to the veto challenge. Alix more rhetoric to come. Thank you, peter cook. For deeper insight, i am joined by the director and senior counselor at the institute of international finance. He joins us from d. C. As well as bill janeway, Senior Adviser at warburg pincus. Thank you for joining me. George, what do you think the sanction relief question will do . Does it break the deal apart . George it is the one outstanding issue where there are wide differences. The iranians are under the impression if they sign an agreement by june, all sanctions related to the Nuclear Program will be lifted. The understanding by the u. S. And its allies is not quite that. There is a verification process. Gradually, sanctions will be lifted or eased in line with verification that iran is living up to its commitments. There is a wide difference between the two. Alix you wake up and you have invested in iran in the past and want to in the future. What do you do now . George there have been a number of inquiries by Global Oil Companies into irans economy and the possibility of going back. The iranians have been readying themselves for the onslaught outside investments. They are drafting Bilateral Agreements with international Oil Companies to set up investment plans beginning in september. Both sides are ready. However, sanctions have been severe. The infrastructure in iran has been to greater. The capacity the infrastructure iran has been degraded. The capacity is limited. It could be an Important Development in iran for the iranian economy at irans position in the middle east and geopolitically it could have implications. Alix you are the guy that has to put money to work. You look at a country like iran that has enormous potential when it comes to oil reserves. How do you factor in geoPolitical Risk when you have to make money . Bill there are so many dimensions where you can accept risk on a particular investment. Management risk, market risk throw in Political Risk, often a bridge too far, certainly for us. There are people who invested aggressively into russia at various points in time. We decided the Political Risk was too much to take on. I think this is one where you will see private investors, not Oil Companies, but private investors a very Broad Spectrum of possibilities being slow to decide the Political Risk in iran is sufficiently low to justify the commitment. Alix the geoPolitical Risk kind of tips the scales at the end of the day. Bill absolutely. Alix george, when you look at surrounding countries, saudi arabia unhappy with the deal. Israel unhappy with the deal. What does saudi arabia do now with so much power was its oil reserves . George saudi arabia will definitely reposition itself if there is an agreement with iran signed and sealed by june. They will reposition themselves with neighbors. They will strengthen relations with neighbors and create a mutual defense arrangement with egypt with a military power and prepare themselves for stiff competition perhaps with the run. Remember iran still has issues to resolve with the u. S. And its allies regarding its penetration of iraq the destabilizing role in lebanon, and so on. All of these issues have not gone away. Iran cannot quite act freely in the region and be free of sanctions and restrictions just because it signed a nuclear agreement. There are a number of issues. Im sure saudi arabia and its neighbors will be repositioning themselves for a new iranian role in the region. Alix we have heard that rhetoric quite a bit from analysts. You were nodding. Bill i think the first comment out of tehran was this was the first step. This is just a first up towards some kind of rapprochement between iran and the rest of the world. Alix great point. Not over. Many more months for us to debate this. George abed, thank you for joining us. Bill, i am making you stick with me for the rest of the hour. We will get more insight on the iranian deal. Do not miss that. Stay tuned. There is another deadline looming for greece. This is a 500 million when. Insider trading gets a second look. It could put dozens of cases in jeopardy. We will be back. Alix lets bring you up to speed with top stories. U. S. Service industries grew in march at the same pace as a month ago. Keep in mind any reading above 50 shows expansion. The report indicates the biggest part of the u. S. Economy is holding up. Tesla shares are surging after the Company Posted strong sales for the First Quarter. Tesla delivered 10,000 vehicles beating the estimate. The company will unveil a new product line that is not a car at the end of the month. The electronic Trading Company is moving ahead with its ipo after delaying it for more than a year. The ipo was shelved after the release of the book by Michael Lewis which accused highspeed traders of rigging the market. In a filing virtu is seeking 13 million. Greece is on a Charm Offensive stepping up its efforts to find allies in the u. S. And russia. The greek finance minister assuring the i. M. F. The country will pay its debts. The markets seem to think so. What is the final deadline for greece . Joining me to discuss is my guest host, bill janeway, and joining us from San Francisco is axel merk. When does greece run out of money . When is the 11th hour . Alexel i think the greek finance minister wants to keep us in the dark. As we approach the deadline, he says dont worry. We will make any payment and that happily ever after. The only way he can do that is by printing his own currency. It does not look like that will happen. Towards the end of last week there was a highranking official that said we dont have the money. The euro did not hold up. The euro was strong today but the market has moved off from greece. That is bad news for him because he does not have as much leverage. Alix we keep hearing the market does not care. Who owns the debt . Bill i think the market is being baked in that greece is done. That one way or another the greek soap opera is going to wind up with some kind of massive readjustment. Whether it is greek exit, a new drachma, some kind of restructuring. I think the general view is so what, it does not affect portugal or spain. Things will continue without greece. That is what you hear out of berlin which is where it matters. The wildcard is where the greek debt has wound up. How much of it is in the European Central bank . Does it wind up back in berlin or frankfurt . When a nonevent becomes a real event. I think it is impossible to believe the current structure of eurodenominated debt owed by the greek government and private sector will be repaid in full in euros. That is all i think is certain. The consequences to a large extent depend on where the debt is now held. Alix good points. Where is the debt . Axel the banks have had plenty of time to offload the debt. The European Central bank and i. M. F. Hold the debt. Let there be massive losses at the European Central bank. Technically those have to be paid in by the member states. It would not be the first time the rules have changed. That means the losses have been socialized. The market is concerned about contagion when levered Financial Institutions have major losses. You dont have that in this case. If the i. M. F. Has a loss, it looks bad but so what. That is why the market is moving on and why he does not have much negotiating power. What happens to greece is greeces problem and not the rest of the worlds. Alix what is the game plan by talking to Vladimir Putin . Axel it is politics. The best thing putin can do is give a slap in the face to europe and allow input from greece. Will it cause agony amongst politicians . Yes. As an investor, it does not matter. Its interesting to watch but it does not matter for the euro or the stability for the world financial system. It does matter whether greece will be stable. They are digging their own grave i not moving forward with true financial reform. Alix does this matter . The guardian reporting there are talks with the party. Axel they can say we will get voter approval to put in tougher measures. They can do that and then go back to the lecture it and say, do you want this . They have said we are communist leftists, we do what we want. He is the pro in game theory. He is painting a dim picture of concessions. When he does not get them, he caves. Alix bloated take for you to want to put money in greece . What would it take for you to want to put money in greece . Bill i would have to see a discount. There is a need for fundamental reform. I would like to see people paying their taxes. Before i would want to invest, i want to see people paying taxes. The German Government and cypriots agree that greek capitalists and high earning people should pay taxes. That ought to be the basis for some agreement. If the u. S. And iran can agree on something that matters to both of them maybe people who live in athens can. Axel building robust Financial Institutions does not happen overnight. Bill i think there will be an interesting vote in berlin over bailing out the e. C. B. For the losses. That will be interesting. Alix in terms of the german polls, it seems over 50 do not want greece to stay in the eurozone. Bill that comes with a consequence. Germany will have to write a check to the e. C. B. That will be interesting political drama. Alix thank you for joining us. Coming up, how one federal appeals rejection could unravel u. S. Prosecutors Insider Trading victories. We will discuss coming up. Alix this is street smart. I am alix steel. A big blow to u. S. Attorney preet bharara. Federal Appeals Court rejecting to take another look at Insider Trading. It could put some of his biggest convictions in jeopardy. To break down mistakes, keri geiger and bill janeway join me. Keri, what is the biggest take away from this story . Keri one is this does affect the number of his cases. We are looking at between nine and 10 cases that could be overturned including michael steinberg, a big case. However, there were more than 80 cases convicted on Insider Trading over the last few years. The vast majority will stay intact. The really big take away is it is hard from a legal standpoint to define exactly what Insider Trading is. This muddies the water further. It makes cases harder to convict. Prosecutors did not like the decision. Defense attorneys loved it. It protects their clients more. We are looking to congress to pass some kind of law that defines with clarity exactly what Insider Trading is. Bill i entirely agree about the legal status and there has never been a formal law that defines Insider Trading. From an ethical point of view, i have been on the street for 45 years. There is a clear bright line. Alix is there . Bill absolutely. Keri in this case, it is the downstream flow of information. These two cases where the convictions were overturned these big cases, they claimed they did not know the information they were trading on was material nonpublic. That is the key point. Ethically, people know what is on the right side of the law and what is not. This adds another layer of complexity as to what you can contact the. Convict on. Bill i agree. It is vague and uncertain as to how somebody benefited. That is the key in these cases. If i am in the market, i am buying and selling. I get a tip. I better find out how legit that is and where it comes from. Alix much more to come. We are going to talk about unicorns. Its exciting. [office phone chatter] [frogs croaking] you know what, let me call you back. What are you doing . [scream] [frogs croaking] [yelling and screaming] its back Xfinity Watchathon week. The biggest week in television history. Its your allaccess bingewatching pass to tvs hottest shows, free with xfinity on demand. Xfinity watchathon week. Now through april 12th. Perfect for people who really love tv. Alix here are the top stories we are watching the head of the closing bell. Bank of america is hiring michael weiss. Financial firms raised the most money in ipos last year since 2008. Bank of america ratenked fifth. The former Goldman Sachs programmer accused of stealing the secret sauce is reaching back the feds attempt to keep him in jail. The russian born programmer decided to fight to clear his name after spending almost a year in prison. The Financial Group planning to hire 200 employees from r. B. S. In the u. S. The deal is part of a move to violence to gain access to north american clients. We are 30 minutes from the close of trading. Scarlet fu is looking at the movers. The dow seems to be holding on to the triple digit rally. Scarlet i want to focus on a couple of stocks not participating in the rally starting with regional banks. Valley is the worst performer on the s p 500. Regulators have not yet approved the deal. Late friday, they notified the bank they will not leave the review by april 30. Him into a nmnt remains committed but hudson city says it needs time to review the matter. Analysts say there is concerned the deal will not happen at all. That is one reason there has not been a lot of consolidation in the Banking Sector. The bloomberg u. S. Airline Index Trading at the lowest level this year. The jump in Oil Prices Putting Pressure on the characters. Delta is near its lowest level since no member of 2014. Southwest, the worst day in most levels since generated. Microsoft is rallying after wells fargo raised it to outperform. The bank says to expect another round of cuts to reflect headwinds from the strong dollar and windows xp. All of that according to wells fargo is baked into the sauce and the bank is positive on sound moves by management cost controls, and mobile introduction. We will see how that plays out. Alix still with me, bill janeway of warburg pincus. In just five years, this company is leading the pack of billiondollar valuations. As many people like to say unicorns. How do you tell the difference between a unicorn and a real horse you want to bet on . Bill unicorns used to be scarce. Now there are more than 80 of them. Most coming out of Silicon Valley and San Francisco. Most of them offering some kind of disruptive service leveraging the billions of people on the internet with smartphones and Cloud Services to deliver disruptive services. Think uber and airbnb. Those are the poster kids. What is difference about the existence of these is the fact that thanks to open source software, cloud computing, the cost of starting one of these has dropped to zero. There are orders of magnitude more winner take all startups. As any of them get traction, it becomes possible to imagine the next facebook, the next twitter. They are attracting capital while still private from people who dont know what they are doing were driven by what is now known as here is another word for you. Fomo fear of missing out fear of missing out on the next unicorn that turns into the winner of the kentucky derby. Hedge funds, Market Investors managing money that can be taken away from them in the short run are making illiquid investments at premiums valuations that are above the revenue to price of Public Companies with no liquidity, no governance rights. This has not happened before. This will end in tears. Alix what do those tears looks like . If this is a bubble that burst what happens . Bill we have seen this with two Software Companies that went public delivering liquidity finally but at very substantially lower prices than the last private round. For the insiders, the entrepreneurs and venture guys the availability of the supercheap capital without having to go public to get it is wonderful. They are able to finance with enormous negative cash flow. They are able to share sell shares themselves without undergoing the scrutiny and discipline of the Public Market. Three of the leading venture guys in Silicon Valley, three of the superstars have each come out in the last three months saying dont rely on this this is not going to continue indefinitely and is unlikely to end happily. Alix do these firms go public and we see a similar situation as with box . Does the funding dry up and a good return does not happen . Bill we will find out. The idea is the 41 billion on uber will be validated in the Public Market . That is a long shot. It is not just uber. It is the followers that have not proven they can generate revenue, let alone revenue sufficient to cover cost. Institutional investors making these investments are doing so in the context of very low Interest Rates. Alix eventually, we get on this that hike cycle. Does that dry up the cash . Bill you dont have to have a phd in finance to know at very low Interest Rates, you discount the future. The possibility this unicorn will win the kentucky derby, you discount it at a huge rate could the discount is huge today. As rates rise that value drops fast. That is where the exposure comes in at the same time as the attempt to prove in the Public Market is disappointing. There are some startups with billiondollar valuations that are not even generating revenue let alone positive cash flow. The access to cheap capital from outside public Market Investors if that goes away, it will be very expensive for them to finance themselves. Alix which ones have a Better Business model . Which ones scare you . Bill i tend to think the ones oriented toward the Business Market versus the Consumer Market where it is such a lottery remember all the ones trying to be facebook before Facebook Like myspace that did not make it. That is very high risk. There are clearly some that have a focus on business customers and are delivering real value and are getting paid for it. They are not depending on advertising competing for the advertising dollar. Alix and that is the difference. I want to get your take on the broader issue in Silicon Valley. Ellen paos trial brought a lot of attention to gender discrimination in the tech industry. How do you think the Venture Capital world plays out after this . Bill i think there is a longstanding challenge into the entrepreneurial world. Some of the strongest and most phenomenal entrepreneurs i have ever known the founding director of my most Successful Company carol would stand up to anybody and sometimes do it without dropping an fbomb. Alix [laughter] bill there is no question when you look at the statistics where it slows down, once upon a time, Computer Science was driven by women. Admiral topper invented the standard business language for 30 years but she was an admiral in the navy. When you have 50 of the people in the Top Business School are women 50 or more in law school are women. It is time. I think you have to see a rollover. This may be a wakeup call. That will be a good thing. I have no thoughts on the merit of the case. What requires focus is the to statistics the statistics rather than the argument and counter argument. The statistics are stupid. The notion in the most significant for the future sector of the economy we should not be drawing on the full resources of the american educated public that is just stupid alix . Alix bill is sticking with me for the rest of the hour. Still ahead, big money in boxing. We will talk the current world middleweight champion and the man who wants to take that title from him. They are boxing right there. Professional boxing industry is next. I used to box, by the way. Alix welcome back to street smart. I am alix steel. Professional boxing stands to make in the dough this spring. Recent tickets for the may fight between wood flavor Floyd Mayweather and Manny Pacquiao have ringside seats as much as 35,000. This weekend in new york city the middleweight champion title is at stake. Andy lee will defend the title against undefeated reader quelling peter queillin. Both are joining me from the trading floor. Back in my early 20s, i used to box. Im excited to talk to you. Are you friends . You need to get back into boxing. I definitely do. 39,000 for a ringside ticket is crazy. Lets it is a massive global event. People want to see it so they will pay for it. It is good for boxing. Alix how do you make money and boxing . Is it sponsorship . I think mayweather is making it off of your fighting. We dont get to see boxers make sponsorship money. For me, it is amazing to do that without a sponsor. Alix definitely. Is it sponsors that is how you wind up making the money . Yes, of course. If you can find a sponsor willing to sponsor a fighter why not . Alix give me some tricks of the trade. What do you eat before a match . Most of the time you eat complex carbohydrates. Pastas lean chicken, fish. I try not to eat anything heavy. Drink plenty of water and hydrate. That is for most athletes and boxers in particular. Alix do you have a ritual you perform . Baseball players have a ritual before they go to bat. Do you have that . My father is from cuba. They used to eat pidgeon soup before a fight. Now it is more asparagus, fish those types of food. No more pidgeon soup for me. Alix the fight this weekend, andy, you are defending your middleweight title. Tell me about it. It is the hardest fight in the middleweight division. Peter is a former champion. I won the belt and now we are both fighting for the right to call ourselves the true champion. It will be at the Berkeley Center this saturday. A big irish crowd, a big crowd from brooklyn. It is for all the marbles. We are going all in and well see who is the better man. We will find out saturday. Alix alix peter what is it like for you going and . Do you want to defend the title or is it less pressure not having to do that . He has worked hard to be the champion. I think he has the pressure to be formed perform like a champion. All i have to do is perform like a challenger. It is great for the story. I have been there before and been a champion. Hopefully, we come out this saturday being a twotime champion of the world. Alix and then you go out for a beer after that . We are friends now. And after. Alix thanks so much. Good luck to both of you. Middleweight title holder andy lee and former champion Peter Quillin duke it out this saturday night in brooklyn. The fight is broadcast on nbc and sirius xm radio. Next, i will get bills final thoughts on the market and where the innovation economy is going. Alix still with me, bill janeway of warburg pincus. I wanted to get your final thoughts by playing word association. He does not know what the words are. The first word that comes to his mind he will say. Ipad. Bill getting old. Alix . Really . . Why . Bill brand differentiation. It is like breakfast cereal now. You innovate with a great thing but then it is a little thinner, bigger, nicer screen. Where is the next one . Alix game of thrones. Bill that is a television show, i believe. I guess i am supposed to say bush versus clinton. Alix rand paul . Bill ron paul, never forget it. Alix Vladimir Putin. Bill back to the future. Not good, not good. Back to the future without michael fox. Alix indiana . Bill whoshoosier hospitality, not. Alix we appreciate having you on the show bill janeway of warburg pincus. Close is coming up. We will be right back. Alix welcome to our viewers around the globe. You are watching bloomberg television. I am alix steel. This is street smart. Stocks spending the majority of the day in positive territory. Lets get to scarlet fu at the breaking news desk. We are holding on to the rally but decelerating into the close. Scarlet keep in mind, the disappointing march jobs report was supposed to take stocks down. It did that for 30 minutes before the dow and s p turned higher and never looked back. Has the market shrugged off the data . It is hard to say. The European Market was closed today. This is the first full day of trading after the jobs report. Not really getting the full effect of the market reaction. It is the quiet before the upcoming earnings season. Questions about what the fed does next remains the big question. Bill dudley did say when the fed does start to tighten the pace is likely to be shallow. Alix thanks so much. Im here with Carl Riccadonna Lisa Abramowicz and a Market Strategist and Portfolio Manager who oversees 170 billion. Lets get to why we are seeing the triple digit rally. Really good jobs report, Solid Services data. It all turned around when bill dudley started to talk this morning. We were coming in expecting a softer open on the back of the jobs report. As we began to get commentary from the fed acknowledging obvious things weakness in manufacturing and retail and the jobs report, it is pushing up the expectation for the great increase which what was doubling the markets for the last six months. Janet yellen has to be careful when she speaks. A lot times we get clearer insight into the inner circle of the fed when we listen to the other members in agreement with her worldview. We heard a very dovish dudley focused on the dollar. This is something a lot of fed policymakers have shrugged off. He showed more concerned about weakness in the Energy Markets the strong dollar, and signaled the fed will have a tiptoe approach to tightening policy. Alix the 10 year yield is under 2. 0. I think if you look at the twoyear versus the 30year bond yields, you will find there was a steepening. There was a sharp drop in the twoyear yields. This is my interpretation. People are believing in the short term, the fed will hold off on hiking rates. That will allow inflation to kick up more over the longterm. This goes back to the idea the u. S. Is generally in ok position. It is generally supportive of riskier credit. The question is, if the fed is not going to hike what is to stop money from going into these assets . Alix especially when youre dealing with negative yields in many areas. The bow is coming up the bell is coming up. The dow is up by about 115. The s p still managing to claw its way up by 13 points. Gains. The service area of the economy showing some kind of strength. For today part against movers, lets go to the breaking news desk with scarlet blue scarlet fu. I am going to call this digestion day in terms of talking about jobs. Scarlet there was about 2. 4 billion, 2. 5 billion 2. 5 billion dollars of shares changing hands. This is on april 1 when tesla actually put out a press release touting a new product, it is the model w, which turned out to be an april fools day joke nevertheless, stocks spike there on the announcement so computers were working over time. I am going to move this a little bit so you can see the spike up in volume. Ok, lets go to the second day the third day, which is today, tesla got a big pop up in terms of trading, and in terms of thirst First Quarter delivery, we are seeing the highest amount in three months of forecast. That is two days of data in this year, and lets go to your Favorite Group of stocks, they are the winners and todays trade permit 5. 7 percent right there, lifting some beaten up energy names, and we should mention that overall firstquarter earnings in the s p 500 probably contracted five point 87 according to analyst estimates, and all of this is because of that plunge an Energy Crisis and Energy Earnings information. A 6 plunge in the First Quarter results. Alix wow, thank you so much, scarlet. I am now joined by bloomberg reporter and kevin, and we were just talking about stocks advancing on the heels of the discussion of how the feds will raise rates. Lets listen to what he actually says. For Financial Markets the information is just as important as liftoff. I predict the path will be shallow. In the aftermath of the financial crisis, this is particularly evident. Alix so we were talking about that, and it seems like all of the comments i was reading in december looks to be that there is when is the next one is the question, and perhaps there is a revision now for this . Carl we have seen maybe the liftoff date may be shifting later, but the pace is staying at about 125 points per year and i suspect now with this focus on the shallow path of her brakes and we have heard similar comments from other key fed speakers that this 25 basis points that move over the year may start to get compressed and we may look at a slower moving head. Alix how close did you look at this . [laughter] alix i embarrass you by asking this. No problem, when you look at the compendium of data, you can see a weakening of this, when you look at gdp, you mentioned the curve flattened substantially. Kevin when you look at the spread, it widened through the fall. When you think about what has been providing leadership it hasnt been stocks in fact stocks have been at their slowest start in five years. So what is this all about . What William Dudley was talking about today was the growth of the dollar, so it should not be about the feds tightening the Interest Rates, but easing the interests rates. For us, we would rather see an economy moving forward faster with more jobs and more growth, we can make more money about this as equity investors, and instead of raising Interest Rates in the face of stronger growth, well, we just dont have it. In the fed index, when they chat when they track gdp growth they side increase in the First Quarter. Alix like you said, the dollar is a large part of that story, and William Dudley also said that reaction to the u. S. Dollar is a major drag on the economy, he is saying that there is nearly a 50 inflation of the Exchange Value of the dollar in 2014, that is a significant shock. Dudley added that this would reduce gdp growth by about 6 10 of 1 this year, and this is echoing a lot of what economist are same. Lisa . Lisa they looked at highyield companies in particular and they actually have less exposure to the dollar, and they, too had some of their profits reduced, like 2 reduction in yearoveryear in the First Quarter of profits. This is at a point when overall it economy is not that strong and it can create a big dent, and that saying that being said, it can be making Companies Find themselves it can make Companies Find themselves in a better position. Carl you are now below trend, you are now growing at these speeds that are going to be sufficient to generate the inflation pressure that the feds are looking for. In short, president dudley is saying it watching financial conditions. If Something Else starts to move in the Financial Market that is tightening finance will situations like the dollar or the stock market or a backup of Interest Rates, that is doing work for the feds and they are going to move even more slowly. Alix kevin, what kevin so over the last several years, with the exception of this past year, the dollar has been week, right . Carl correct. Kevin if the dollar had not been week all of these years following 20082009, but carl absolutely, but the weak dollar has done an huge amount a huge amount in crating the contribution to growth. This is only 12 40 in the first two years of the recovery, post2009 the economy was growing at a 2 pace, half of that growth rate was due to the small but mighty export sector and had we not had the contribution to the weak dollar who is to say that we would have been at a sufficient momentum to jump start the recovery . Lisa alix lisa, did you have a question that you wanted to ask evan . Ask kevin . Lisa how long do the feds have to wait before they do a hike on the rate . Kevin we have been through a couple of bubbles and they dont want to see another bubble, we are by where we are today, and we dont want to stay too long before to log, it has been six or seven years now that we are looking at 0 Interest Rates and five and a half and put 5. 5 unemployment rates, so it is hard to say if you dont raise Interest Rates and then you hit another speed bump. Then what do you do . You dont want to be in opposition. Alix i just want to draw your attention to this, there is the idea that cash is the key, he quotes, i think most asset prices have been pushed by potential banks to elevated levels with a massive gap right now and he is putting most of his money in cash. Lisa that easy things that inflation is not what you take up all that much, and he wants to wait and see how it all plays out. That is a pretty dramatic statement. Alix kevin, what about you . Kevin one of the things that markets have not been acquainted within the last five or six years has been risk. They have gone basically straight up from the bottom since 2000 nine without any pullback, and when you look at any assets that are in availability around the world, we would tend to agree with him. We are looking for 6 six point 5 , that is much lower than they have been historically. So i do think that stocks are cheap relative to bonds, and in return, bonds are not particularly attractive. Alix what i think it is interesting about what he was saying is that despite the inflation eating away at your cash cow, the central bank has threatened this situation that he does not want any piece of that. Carl there is not any inflation so you are not eating into any of that cash pile too much. Kevin carl you want to be able to use this when the time is right. Kevin the Bigger Picture is that the Economic Cycle is not dead but it could be killed by a fed policy if they move to aggressively. Janet yellen and president dudley and the whole gang it the fed gang at the fed are going to move very, very slowly in this cycle, and it still has a long way to run yet. Certainly we have not seen a lot of investment spending, a lot of housing, there is still part of the economy to have to catch into catch up to that. Alix alright guys, thank you so much, carl, kevin, lisa, thank you so much for joining us. Coming up next on street smart, an iranian deal is officially on the table, but what about oil . And that we will hear about the next move from the reserve bank in australia. Alix this is street smart, i am alix steel. Russian inflation accelerated in march since 2000 and two 2002, and the estimations were slightly higher than expected. Rush wanted to ease policy this year after six increases in the benchmark last year. Ukrainian president has decided to call a referendum on the countrys in status. Ukraine has repeatedly rejected calls for the russian government to have a selfgovernment in the east. The president reiterated today that ukraine will remain a unified state. And president obama spent the weekend defending the framework for irans Nuclear Program. He says that iran does not mean it will forfeit its authority and it will not fail to protect israel. Here is obama speaking with the new york times. President obama what i want to do is make the kinds of commitments that would give everybody in the neighborhood including iran clarity and understand that if israel were to be attacked by any state, that we would stand by. Alix meanwhile, i rons state News Agency Says that ayatollah has full knowledge of the nuclear deal and ayatollahs approval is needed for a final agreement to go through. Lets stay with the ron and turn our focus to the oil markets. How does the deal affect with iran and turn our focus to the oil markets. How does the deal affect the oil markets . It is such a great pleasure to talk to our guest Daniel Yergin today, daniel, thank you so much. What were some of the key layers involved here who were some of the key players involved here who got this done . Daniel Daniel ernie moniz is a leading a Nuclear Physicist and he is also very familiar with political life, and i think his knowledge and his patients came to the forefront, you saw him sitting at the table next to john kerry, and across the table from him was the former foreign minister who also has a phd in physics from m. I. T. Alix so a lot of high people im being, highlevel people i should say, making these decisions. And what ec would happen with the deal coming forward with the oil of the markets . Daniel i think the oil market today was really listening to the american position, which said that intels sanctions will only be lifted, this will happen with iranian complaints, there is the notion that there is going to be a big movement, and it has really been pushed into the second half of the year, and that is one of the big reasons we saw a jump in price. Alix iran is one of the biggest producers in opec, and saudi arabia is the biggest producer and it did not want a deal. What kind of internal dynamics might we see in the oil body . Daniel i think that one reason or part of the saudi era gulf had the decision to not cut production a let the price fall was because of the notion that iranian oil would be coming to the market at some point, and there really wasnt room for it, and so i think the question is going to come next autumn does anybody make room for iranian oil, or does it actually add to pressure of the market. That is when we will see u. S. Production going down. Alix do you think that saudi arabia could yield its role as the biggest swing producer in the world to sort of pressure iran as we have them pressure Oil Producers here . Daniel i think the main thing that the saudis were focused on is market share, but i think that given all of the other tensions with iran, look at this, a proxy war going on right now in yemen between saudi arabia and iran i dont think that they mind this, it will add to this pressure on the arenas at this time. Alix much has been written, it written, for example strafford written strafford wrote that there are much more frightening element to this. What do you think about that . Daniel i think both parts are true if iran was not moving forward toward a nuclear weapon, it would see an arms race an arms race. You certainly feel it when you go to rod and you talk to others and you kind of are surrounded by iranian proxies, whether it is a rock or in yemen or syria or has below, so i think that there is this sense that iran wants to be the predominant power in the region, and certainly in the gulf, and that is something that the saudis and others want to kowtow to. Alix at what point do we see irans economy changing . When we see Oil Companies coming in . When we see other International Companies coming in . Daniel this will occur next year or the year after when these Companies Start coming in and the sanctions start coming up. We can say that is is no longer a 110 barrel world, and that is why next door to iran, qatar is a huge exporter and iran exports nothing. People see iran as eventually becoming a new emerging market but a lot of things have to change, including the politics and the domestic economics of that country. Alix daniel, thank you so much for joining us, again, Daniel Juergen Yergin and much more street smart street smart, coming up next. Alix turning to asian markets, investors are watching closely the investments call coming out of the central bank. They surprised economists at one time already this year. Joining us for some context is the chief strategist at a local management group, flies to australia all the time, used to live in china. What is so significant about this decision. Decision . Patrick this is all about china and the economic slowdown on the regional economy. That is the main reason why iron ore has fallen well below 50 and that is well below the production price of a lot of producers in australia, their biggest export. It is going to hit them hard and it is going to have a ripple effect. When you listen to most commentators, they say, iron ore is going down, so they might cut the rates, but on the other hand, the housing boom is going so they might keep the rates up, it i think it is the wrong way to look at it going forward. Going forward all of these things are connected permit the Banking Sector has all been driven by this metals movement and when that gets derailed by a slumming china, it is going to have a rebel affect. Ripple effect. Alix is it going to affect them for the longterm . Patrick they said that the turnaround is just around the corner, the Housing Market does not have anything to do with china, the resource boom, etc. But it depends on whether they see the linkage or not. Alix how will this affect the dollar . Patrick everybody is trying to keep their currency down, and australia has suffered from the dutch disease because they were exporting so much that Australian Dollar was very strong that heard a lot of their industries and now that their iron ore industry is coming on hard times, they need the Australian Dollar to go down so it makes them more competitive in other sectors. Australia is incredibly inspect incredibly expensive when you look at it. Alix what are some of the tools that the reserve Bank Actually has . Patrick i dont know, i think they are going to find themselves when one rate is not going to be enough and this is the thing about australia, it has not had a recession in decades or more . Nobody remembers the last time they had a recession. So if they actually did it puts them into recession, i think that they would have to pull out the kind of stop that europe or the United States had to put out. I mean, right now, the Interest Rate is 2. 25 i think we could be looking at bringing that rate down significantly as the australian economy gets hit i what is going on in china. Alix thank you so much for your perspective, perspective, having lived in australia, the chief analyst of silver crest asset management. Coming up next on street smart , we are going to weigh in on a certain companys pending ipo. Alix stocks closing up the day firmly in the green, a second straight day of gains and scarlet fu is at the breaking news desk with the news on viacom. Scarlett, what have you got for us . Scarlet yes, scarlet yes, viacom is getting job cuts involved though no exact numbers were given, but it was a pretax charge of 785 Million Dollars in the First Quarter and annual cost savings of about 350 Million Dollars. They are going to temporarily suspend its share buybacks and it will resume the buybacks by october. During the regular session right here is during the after recession, so it took a big leg down and then it rebounded. It is not very heavy and it is not very active, so take this all with a grain of salt, but this stock is moving on its latest announcement. Also, regarding headlines on greece, regarding a few minutes ago, i just want to recap this to you, the president is begin to lawmakers in athens, and he said that voters asked for radical change back on october 25 and they need answers on the countrys bailout. As you know, greece is running out of cash to pay back imf loans, and this has been a drag on the euro, even as auditing of easing has pushed it lower. Greek leaders are negotiated the conditions to perform the bailout, and last week, they said there were not a lot of details to release, so it needs to improve before they can disperse the next round of money. Alix all right, thank you very much, scarlet fu at her breaking news a desk. Minneapolis mayor says it will take years for the city to overcome the damage to indianas religious freedom law, and that law was meant to protect gays and lesbians after the outcry on the business community. Mayor going into the future, they have to make these decisions, so will we take a hit on this . Absolutely, it will take years of rebranding and it will help it will take years for people to understand who indianapolis really is. Alix turkey is trying to block access to twitter and youtube, this is after the sites both refused to comply with a court order in turkey and turkey has been tightening internet control since december of 2000 13 after reporting a politician allegedly engaged in corruption had a video posted. And merchants gives ebay merchants, and ebay has remained at about 25 million in the past two years. Speaking of merchants, joining me now is alyssa schaefer, one of the owners of at seas most successful shop the three bird nest, and what do you say about people jumping ship from amazon from ebay to amazon . Alyssa a lot of people are buying from amazon, a lot of people love their prying and the availability to get your products so quickly, so people want to be moving over where they think they are going to get more views and get more customers. Alix would you move to amazon . Alyssa we have looked at it, we would not move, but it would definitely be an addition to our marketplace, but have definitely considered it. Alix at the is looking at an ipo, and a 1 billion valuation so what is your feeling of at the going public and how would that change your interaction for you as a seller . Alyssa for me, i am a little uncertain of how it is going to affect the selling community, it could increase the percentage is that we already take as well is the per listing charges that they already take, but on the outside on the up side i am excited about additional features that will be able to have additional things that they might not have been able to afford to break out to the sellers so it can really help a growing marketplace and give us more options. Alix and the issue for a company like at the is that they have a lot of homemade things and so they will have to go and faced the effect that their losses are white even other their sales are growing. Even other is a 20 . 20 per sale fee how does is make you feel about them . Alyssa we have not received any assurance and i dont think they can give that answer yet. We will not know until i think that comes up, and they will probably want to increase those dollars that come in almost like a property tax, and that is a great way to do it, and to get the money from them or to look at other ways that people might be able to increase such advertising on the site or there are some other areas that i am a little bit has a tent about that might change. Alix thank you so much alisa alicia chamber cheaper. Schaefer. Coming up next on street smart , can webtv keep up with changing trends . Alix a big week for mustsee tv, the final seven episodes of mad men kicked off last night and viewers will have to choose between march championship games and debtor call saul, and game of thrones fans are gearing up for the premiere of that season. We are joined now by an expert on television viewing. What happened to sling tv . What where wrong . Porter when you get an event like the ncaa and the kentucky finals game, everybody around the world is just watching and it just crashed. Alix would you call this a general streaming problem . Porter Porter it is streaming rules, it is a problem of rules the sec is trying to impose and netflix went behind the scene and paid comcast to improve the delivery and the distribution, and that is going to be a big issue for anybody in the streaming world. Alix we were native we were waiting for the sec fcc Net Neutrality rules to come down. Porter technology is improving and we are about to make a big quantum leap. Google has a system in five cities in the u. S. Right now that delivers top and streaming at 1000 times faster than any of the cable companies. Alix allow. Oh wow. Porter comcast says they have one coming on at the end of 2015 that is faster than google, so technology is really moving at an incredible pace. Alix in the meantime, everyone is trying to make money, and you have Companies Like cbs tried to get money for their programming but at the same time, you have netflix with its original programming, so who is going to get the bulk of the money . Porter right now the money is rapidly shifting, and google is getting increases every year of 50 or more, so the networks, the broadcast networks, Linear Television is eroding. We are looking right now up front where they are going to get less than 7 im sorry, more than a 7 drop from last year, and lester they had a more than 6 drop from the previous year, so advertisers are fleeing network television. And so are viewers, by the way. Alix you can only come up with so many good shows, and i used to work in theater, good ideas dont come around all the time so might we see some consolidation in the industrys incentive never producing x amount of shows or cbs producing x amount of shows . Porter they cannot put enough product out there that is going to be compelling and that is going to make money, there has to be consolidation. I love what amc has done. It was an almost unrecognized Cable Network that came on with mad men, they came on with breaking bad, they came out with walking dead, and now better call saul, and i think that amc is an acquisition target by one of the big players. Amazon, Netflix Netflix knows that it is not easy creating hit shows, they have done it with house of cards and orange is the new and oranges the new black and now they have moved onto a new season of house of cards. But they could run out of gas. Alix no spoilers here. How do you watch tv . Porter on multiple devices sometimes on an iphone but sometimes on the big screen, but it is not coming through my cable system because i like sports, and the ncaa has proven that live sports is the most compelling content that you could draw millions and millions of viewers two and there is nothing that can equal it. Alix we are seeing the rush of that right now, were seeing that sony and view tv and other companies, so what do you think is the best position to emerge to get your attention . Porter well, right now, cbs has my attention because they are broadcasting the ncaa tonight. Alix who are you rooting for . Porter well, i am from kentucky, so i it just so i just experienced black sunday, but duke is a major talent that just wont quit but billions and billions of dollars have been put into sports programming through various leagues and organizations like the ncaa, and at some point there is going to be an end to free sports and it is going to be a very expensive commodity for viewers like me. Alix and then of course the person who wants to get that access is going to get your dollars . Porter get my dollars absolutely. Alix i wonder if sling tv is going to make it tonight, are you ready watching . Porter Porter i am not really watching, i will be watching cbs, but i think the 800 pound gorilla is google, and they are putting professional content, longform content on youtube, and they have their arms wrapped around advertisers so they are in the position to drive everyone else down. Alix porter, thank you so much, i really appreciate it, good luck tonight, and good to see you as always. Coming up, what streaming at music means to artists. We are going to get perspective from billy corgan lead singer of the Smashing Pumpkins and a preview of his interview with pimm fox, that is coming up next. Alix streaming services are changing the moneymaking model for many musicians. Last week, there was a proposal to bring more money back to musicians. Pimm fox spoke to Smashing Pumpkinss front man billy corgan. Billy corgan the greatest artistic music is the one that sells the most. The beatles were some of the most successful artist because they made the most money and they also were the most artistic, and yet if you really look, the great artists really do tend to sell the most. Alix pimm fox has more on his interview so he will have that coming up. Tim pimm critically acclaimed music does not have to be mutually exclusive club and he points out that while there are so many people pretending at least in the world of the Smashing Pumpkins and grunge music that the idea was not to pretend that you wanted success overtly, that you did not want to make a bid for any type of critical acclaim, because that was not considered to be cool, it would just happen to you, and he said no, no, that is not the way it works. It was hard work and the focus on detail and the focus on music. He has released over 20 million albums in the United States, and their critical acclaim has only complemented their commercial success. Alix he also has a new album out, too, tell me about it . Pimm yes, the smashing punk and says a new album and he is obviously the lead singer of the Smashing Pumpkins, he is the primary songwriter this is well, not a return to the Smashing Pumpkins but he clearly is someone that knows a lot about the music business, he is smart about the music business, and understands that it is a business. He is also passion and has returned to his native chicago, and he is passionate about the chicago cubs, which had their opening day game against the st. Louis cardinals, unfortunately they lost, but here is what billy corgan said about the cubs. Billy corgan i really supports of the Ricketts Family and i think what they are trying to do is eldon organization is going to endure, last, not leave wrigley field, and it should be the same tradition as boston with fenway, and i think we were to move it into a 21st century team. Pimm the Ricketts Family, the owners of the chicago cubs there were quite a number of glitches on opening day. The field is over going a 757 Million Dollar renovation, long lines for bathrooms, the bleachers are gone, they are not there, there is a lot of Construction Material that is still around, i mean, there is ongoing construction while they are play baseball. Alix dov a have an app now were you can time when you go to the bathroom . Is it not necessarily for the cubs, but isnt there an app where you can grow where to go . Pimm i did not know that, maybe they could also apply that for the lines at the beer concession. Alix thats what i am talking about, beer app, precisely now did he also talk that unifying artist together and how they have to produce music versus a record label . Pimm he actually produced music free online and that went back to going to a record label, so he talks about that and talks about why this is about making is this, this is about making business money. Alix the business of music, you can watch the whole interview at 5 30 p. M. Eastern, pimm foxs interview with billy corgan, do not miss it. We are going to talk with the Academy Awardwinning actress geena davis and her fight for gender equality. We will be right back. Alix this is street smart, i am alix steel. Lloyds banking is meeting its diversity goal, saying that 25 of its senior roles are now held by women, and they have a target set at 40 of women of leadership roles by 2020. Iran is easing restrictions to allow women to attend sporting events. However, the band still attends still applies to swimming and wrestling competitions. We are tracking a story about the journalistic story from Rolling Stone on the Sexual Assault at university of virginia, the article was retracted. Gina davis is now working behind the scenes to further the push for a quality the Gina Davis Institute on gender and media gender ingeena Davis Institute on gender in media. Geena davis what is lacking is a female characters, which i noticed when my daughter was a toddler, and i started watching little kids shows, and i think because i had been able to play some really great parts for women and that i had spoke to women, i had a heightened sensibility, but i really noticed that there is wood to be really far fewer female characters than male characters for little kids, and i didnt intentionally take it this far but i found that other people seem to three seem to be listening, and when i asked other people, they would say the problem with any sort of gender inequality had been fixed by virtue of their being characters like lead female characters that seem to strong but not thinking that the world was to raft of female characters. Alix what extra steps to think we should be seeing . Geena davis i think we have to see boy and girls boys and girls sharing the sandbox weekly, as it stands now, for example in crowd scenes in films, animated and live action, only 70 of the characters are female. So in these fictitious world that are being created for kids they are seeing worlds nearly empty of female presence so we even if there is an important lead female character, the message that is being sent to them is that girls dont take up anywhere near half of the space in the world, and they definitely dont do half of the interesting things in the world. Alix interesting. Jim davis gina davis geena davis for female lead characters, their goal is very often to find romance which is almost unheard of for a male characters goal to be finding romance. Alix did that inform some of the roles that you have taken in the past . That i hope you . Did that help you . Geena davis i thought about women and the audience, and i thought about, what are they going to think about my character . I do not think of her as a role model, but do they make their own decisions based on that . Alix geena davis was awesome thank you so much. Stay tuned. John with all due respect to the ncaa to pitch game, the real manus is just about to begin. That one is hit deep, back, back. John Company Opening day happy opening day, sports fans