Here are the top stories we are watching head of the belt goldman sachs, will Morgan Stanley reported more in the business than morris and more than five years. Posting revenue increases of more than 20 in Equities Trading in the First Quarter while many of the rivals reported declines of 1 . General electrics and talks to sell the biggest lending operation to wells fargo according to dow jones. Businesses business is worth 74 billion. The spokesperson declined to comment on the dow jones report. David einhorn says it rely capital took new positions and Chicago Bridge and iron company, General Motors and air cap. The firm exited short bet against a play and safeway semiconductors. Less than an hour until the close of trading. Right to the breaking news desk where scarlet fu is looking at the action. It is like a whiplash from friday. 214 point rebound from 280 point find friday. The dow and s p 500, the best day in a month. The nasdaq gaining the most with an advance of 1. 25 . China helped to cause the globally Global Equity selloff friday. Over the weekend in removing some of the sting from the decision by cutting the amount of cash thanks need to cut aside set aside from the reserve. The fx side recovering a bit from the 4. 2 percent drop friday. Shanghai stocks did not get much of a list. They close down trimming the year to date gain from 30 . I know you will be discussing greece shortly so i wanted to give you a snapshot. John 1 before the meeting. That will determine when they will pay the bill and pay the workers. The euro ending at 40 rally that took it from 105 to 108. The euro ending of fourday rally. Seizing Public Sector funds to avoid a default. The Prime Minister ordering local government to move funds to the Central Banks scraping together 2 billion euros. The country rambling to pay salaries and Pension Funds by the end of the month. Just how bad can it get . Joining me to discuss is bill rhodes. He is a former vice chairman at citigroup and author of the b ook banker to the world. Also joining us jacob kierkegaard at the Peterson Institute of international economics. How much breathing room does this 2 billion euros greece is scraping together really give them . It buys them a little time but not much was done between the financing and i am a. I think i do not see a lot of breaking before the meeting at the end of the week. They have to put themselves with a plan in front of the imf and trigger and the old tri oika for their own good. My concern is the banking system. They continue to lose deposits. The European Central bank has a little more leeway to get support. This cannot go on forever. This is so we do not have another cyprus situation. Olivia i have a chart for everyone that paying the picture greece and one ugly picture. Capital flows and greece. Unbelievable decline over the past six months. 62 billion euros running out of the country. Are we looking at capital controlled you co . I think whatever the great government does now to escalate the situation, whether they actually decide to postpone or miss a payment to the imf or perhaps cause the referendum or new election those types of things in those situations the level of tension is now so high we will look at capital control and bank holiday and other things that essentially in my opinion will cause a deep recession and again in the greek economy. Olivia does that wind up becoming an accidental default . We are already seeing default by the greek government against its own suppliers. We should also be clear the new law you talked about about porting local government cash is essentially a backdoor significant fiscal tightening. It will have significant implications of the greek private sector. The Multiplier Effect on the fund is very high. Default is already happening against its own people. The question is if it will happen against the official creditors. There is no doubt the downturn on the economy will be dramatic. Oolivia the finance minister meeting with the lawyer who helped to guide the default. He was meeting with several lawyers in washington, one of which i talked with. The scenario from my colleague at the Peterson Institute is unfortunately where things are moving, if they cannot get themselves together and put a plan on the table. I was with senior officials from brussels. He told me patience is running out, and certainly is at the imf. So they really need to decide what they will do on the Structural Reforms and have to get on building on significantly because the government is not meeting obligations olivia domestically. In the meantime, what point is it too mucholivia in the meantime, what is the situation domestically the eurozone does not want to see a greek exit. All of the things were talking about they say greece is more important. They do not want to see a greek exit, but you need to to tango so too is the core whatever you want to say to get this done. All we have is a lot of speeches and discussions and interviews but nothing like this is a plan and this is when we will implement it over what amount of time. Olivia going back to the news of the day, how unusual is that for greece to have taken this 2 billion euro worth of funds and the inherent risk as they move forward . First of all, i think we need to question whether it is to billion. I think it could be a lot less. I think it is operably what the government help for. This is highly unusual. This will hamper local governments and other state owned enterprises in paying their bills to their own supplier. As i said earlier, this is a significant backdoor fiscal tightening the government is implementing and one that is extraordinarily damaging to the greek economy. This will buy them a matter of weeks. Olivia it really is scraping the bottom of the barrel. Matter of weeks pretty dismal sounding. Coming up next, China Central bank could be taking a page from europes financial crisis handle to free up more credit. We will talk about the strategy after the break. Olivia here are the top stories we are watching before the world has vastly under underestimated the size and scope of chinas megacity. The Organization Says there are 15 china a best chinese megacities. Kinds of becoming chinas first Real Estate Company to default on the dollars. It is owed to onshore and offshore lenders. It is based in the Southern Area of china. The money major who correctly predicted the decision to cut many money manager said it is time to Pay Attention to asian stocks. He told betty liu parts of asia are a great place to be. Maybe, but china is getting desperate to stimulate the economy. Free up two point billion dollars to free up liquidity into the economy. Meanwhile, Overall Economic growth is slipping. Real estate firm tracks real time conditions and the market and bill rhodes. News over the weekend blew my mind china cutting the reserve ratio by 1 really trying to get banks to loan more money. What is this is significant of the 1 . Was not very significant. You cannot simulate when things are not lending to the right people and firms do not want to borrow. At the end of the day you are freeing up a bunch of liquidity. Extraordinary amounts of look at 80 in the system. Firms do not want it. They are not borrowing or spending. Olivia on the flipside, it did help to offset the capital outflows that weve seen in china in the first order which totaled or hundred 30 billion. Had to do something there. Look at the steep slide and capital outflows 2015. Since november they have dropped Interest Rates twice. That is not going to be enough if they want to stimulate. I think what we will see is a couple of things. Number one, what we see in the general economy is the bubble we saw in property real estate and construction is starting to burst or has been bursting. If you take a look at the gdp of china that is 20 and 50 15 and 20 of the global economy. The question is what will happen there . Shadow banking and all of the issues are coming to the floor. I think what you are going to see the debt and provinces will build up since 2008. I think we are to a new normal will growth will not exceed 7 . I do not think it will reach 7 . This year will be more like 6. 5 . A imf says 6. 8. At the same time they are trying to stimulate the economy they promised to take measures longerterm measures like freeing up deposit rates and putting in deposit insurance. All of this is happening at the same time. Olivia the issue that leave and brought up is no matter what they do, they still have to create demand. Isnt that part of the problem . Companies dealing with a lot of debt and overcapacity. Looking at loans demand there. The think people are getting most wrong overall is the talk of gdp growth which is not a real number to start with. Talk about gdp growth target. The central bank, government is not stimulating to hit the target. What is actually happening is an economy that is trying to fight off potential for deflation. They are doing just enough to be able to push back against and. They are not going to japan or europe route. They are doing just enough to push back against problematic factors. Olivia what kind of factors will we see . Will we see new policies . The wall street journal saying we may be able to see banks take loans and turn them to the central bank and get longterm loans . You are shifting around bank of ireland sheets. You have some terrible debt that is not worth anything right now. What the Central Government is saying is that instead of going to buy it out rate, they will offer it as collateral to try to spur lending. That sounds great, but they have to avoid taking these types of bonds as far as having been be the entire thing that commercial banks are focusing on at any given time. The reality is if firms do not want to lend or borrow, you have a problem. Olivia great conversation. A lot to talk about. B lynn miller with the chinese beige book. Coming up next a crisis and the mediterranean. Struggling to deal with the surge of refugees trying to make it to shore onetimes with fatal results. Sometimes with fatal results. Olivia european officials are holding an emergency summit this theres a to address the crisis in the mediterranean. This after a weekend of debate over how to handle the attempts of migrants to move into europe. 700 legal work people were in a boat that sank off the coast this weekend. Joining me to discuss the Economic Impact of this is bill rhodes. And jacob kierkegaard, senior fellow at the Peterson Institute of international economics. Talk about the humanitarian crisis to this. If we wind up seeing hundreds and deaths this weekend looking at 1600 so far just this year. It is accelerating because it is not only a push from libya but people from Subsaharan Africa moving through lydia because borders are poorest. The countries are in the midst of a civil war and there is no central authority. That is the closest to europe. It is right across the street from italy. I think you have to work out something about what you can do at the point of the perch or to get people to try to stabilize the situation. Longerterm they need some sort of a program like we are working on in this country with the situation between mexico and Central America going over the rio grande of the United States. It is a very difficult problem. The europeans have not agreed on how to do it. Poor italy is stuck with this. They do not have the resources to take all of the refugees. Olivia you study European Economic and demographic. This has been going on for a while. Why does it feel so much worse now, or is it . I do not think there is any doubt that it is worse for the reasons mentioned. It is worse than it used to be to take off from the shores of lydia because there is no government today in libya. It really puts the european authorities and italian authorities in the pet of the bit of a pickle because who was your partner and what can you do about this if you have no government in libya. I think what we will see is probably only going to be measures to increase european not just italian but european patrolling. Perhaps some surgical strikes against these types of groups in libya. It is very difficult to try to do something more fundamental without going in and trying to mediate in the libyan civil war which i do not think there is any appetite for. Olivia it seems like a much more aggressive policy from europe. I dont know about that, but i think jacob is absolutely right. No doubt that is the easiest thing they can do. Libya has been an open sore for the past couple of years. Europe in the United States have made a mess of olivia, no doubt about it. Egyptians are involved because of the excursions over the egyptian border. The real solution, if there is one, to get a stable government in libya. Olivia what happens to the migrants who make it to europe . What is like for like life like for them . The European Union has a lot of authority, but in terms of asylumseeking seekers and refugees, it is still largely National Rules that apply even though there are no internal border patrols in large parts of the European Union. Many of the refugees that come to italy will almost certainly migrate on to other european countries. Germany scandinavian etc. That is why i believe one of the crisis that will come out of this in the long run is really the eu needs to move towards more common asylum and refugees apologies so there is not a big refugee p helices. It is really about National Government trending over sovereignty. Olivia we have to leave it there. Thank you for joining me. Bill rhodes, always a pleasure. Coming up next, comcast deal for time warner. Alix welcome to street smart. I am alix steel. The bank is expanding in the u. S. , even as rbs and other european banks reduce u. S. Presence. John malone and buying the first Wireless Company in europe, a move that leaves the billionaire boys to shake up the business. Saying it agreed to by the number three wireless carrier. The purchase open the possibility between liberty and vodafone, the worlds number two carrier by customers. Groupon selling a controlling stake in ecommerce. Kkr and Hong Kongbased equity partners. The 44 stake sold for 430 million. Make brick to gain 230 million on a pretax basis. 30 minutes until the close of trading. Scarlet fu looking at the movers on this rally date. Groupon will use the proceeds of the stake sale on a buyback program. Stocks taking as much as four point 7 in the left part of the chart. It paired the advance, which has been the story for stocks. For the year it is little changed. Moving on ibm, the biggest contributor to the Dow Jones Industrial average trading at a six five before reports of earnings after the close. X acting 2. 80 up from 2. 54 last year. Looking for revenue to drop 13 . Rbc Capital Markets says to look for firstquarter revenue and eps to miss estimates because of the strong headwinds, the negative impact of the stronger dollar. I wanted to bring your attention to google. There is a great story from ashlee vance who reported google negotiated to buy tesla and early 2013 four 6 billion. The stock is up not necessarily on the news that it wanted to bring you inside the bloomberg terminal because it is of fascinating example of what they spent their money on. Overall it has made 243 acquisitions worth 31 billion dollars. If you look at the biggest acquisitions it has ever made, Motorola Mobility in 2011. The next guest back in 2007. Here is a big one 2014 four 2. 3 billion. If you look at the deals google has made it does not typically bind the field. It bought 58 Company Since early 2013. Giving you a sense of how quickly it uses cash. Google has 67 billion in cash and equivalents. Plenty of firepower if it wanted to ever make a bid for Something Like tesla. Alix comcast proposal to merge with time warner will meet this week to discuss. The drg the doj likely to block the deal. Joining me to discuss the potential fallout is alex sherman and partner at sullivan and cromwell. Thank you. The interesting saga. We talked on friday and use of the followthrough is chaos across the cable industry. Who may come in and pick up the pieces gekko . S . I do not think there is another candidate. The only other option is Time Warner Cable goes on on their own and tries to make a go of it as an independent company or charter comes in as the largest shareholder. So the liberty back charter comes in and tries to negotiate a deal. For people that have followed this charter originally put Time Warner Cable of or grabs and made a hostile bid after they could not work out a friendly deal. The interesting thing is can they reach of friendly deal since they were not able to back in late 2013 and early 2014 . Alix in the meantime, what can they do . I think that is what is going to happen. Ultimately the argument they will make is you have satellite you have the Telephone Companies like verizon and fires and at t. So there is a lot of competition in the space. I think what they will do is come forward with a package that is the best teachers. It is going to be maybe assurances about providing services in rural areas, underserved areas and things of that sort. A combination of things that will give them through the doj. The doj says we will take you through court, it brings the parties to the table. I think at the end of the day they are highly likely to come to an agreement. Alix i was looking at the market cap numbers. It would double the market cap. Doesnt even have the potential to do that . It always has. Cable companies can take on a lot of leverage. They have Free Cash Flow coming in. Part of the deal would be stocks. It always has been. The comcast deal would be but also. Time warner cable has done fairly well operationally since. Your point is now in that charter may have to bid higher. Charter would be the only buyer. Comcast another buyer. A lot can happen between now and then in terms of concessions. We will have to see what the doj is pushing back. Alix the drg just asked too much. Dog just asked tooj just asked too much. Look what hbo is doing. They are basically bypassing Cable Operators going directly to the internet. Obviously cable will be very important for a long time, but they want to go beyond that. Also looking what fires is doing vios is doing. The economics of the industry will change over the next decade. So getting bigger quickly is going to be extremely important, which is why in my view they are going to reach a deal with the doj. Well the accept anything at any cost rocco of course not. But will they do things that are economics to keep the deal together . Of course. Alix thank you. Comcast meeting with the doj wednesday. When google was on the verge of bankruptcy in 2013 very page was ready to become the savior. I will have the details. Expecting earnings from ibm. Will big blue disappoints . We will have the details. Alix when tesla was nearing bankruptcy in 2013, google said to have considered buying the automaker. These details in a newly released book. This is by bloombergs own lance who joins me now from San Francisco. How did that conversation, about , and why google in particular . Larry and google have been friends for a long time. They were running into a problem where they had customer interest in the cars. People had made the preorders but just not ready to buy it. Essentially a new gadget. They were waiting to see how it played out. He basically turned to his friend for help. Alix could this ever happened now . What is the probability we could see a merger at some point . I feel like the stock has gone up so model so much. I do not fill it google wants to get in at this price. Right now they have been able to raise a lot of money to fund the battery plant expansion plans and things like that in the upcoming model x car. For the time being i do not think tesla is looking for a rescuer. If they struggle of it, they might. Alix is there a possibility of a different type of ownership Going Forward between them . It is funny because they are both working on technology and mapping and have not seen of a tie up for them. I know for fact they talk all the time. Elon spends the night at larrys house but he is very independent. Alix a sleepover between elon musk and larry page. Beginning of google, tomorrow the company will rewrite the way we search. Thousands of businesses will be affected. Those not up to speed will be penalized by google. Cory johnson joins me now from inferences to appear at what does that mean if i have a business on your iphone to gekko . Google is so large, that is exactly why the eu is involved with antitrust case. They recognize 92 of all searching on the internet happens through google. By virtue of deciding who filters to the top, google decides which businesses will fail and succeed. Alix who does this wind up being bad for . What companies will be hurt the most . Cory google does this all the time. They announce this back in february. It does not give us a chance to look at the importance of google in the world of business. As everything moves toward mobile, every little change in the algorithms that appear that effect which search results appear at the top, it will have a big effect on business. Google getting creative with the search that happens best on mobile. In some ways, that is what a lot of of tomorrows changes are likely to reflect. They make these changes on a consistent basis. I think the biggest thing is with the eu and the fcc staff found. The eu looks like they are bringing charges. The emf decided not to. Google was rather than the best for results were the results with the lowest pricing, google sometime surfacing their own services. Alix does that change at this time . It is unclear at this time. Last week in response to the eu google put out a blog post thing if you search for a flight from charlotte to San Francisco international airport, you will find that google results give you lots of things that all of the competitors are still doing significant market share. When i look at the exact test, i did the search on kayak and google, i found cheaper flights on kayak than the one google was getting a fee for offering. That suggests google not putting customers first. Alix cory johnson. Thank you for joining us. Coming up next ibm taking on a busy week for tech earnings. What will we hear from big blue as it tries to reinvent it will . Itself . Details next. Alix here are the top stories we are watching ahead of the closing bell hsbc will consider whether to move the head orders to london once the Regulatory Environment becomes clear. Hs ec makes calls to move after they increase the { levy on the Balance Sheet for the eight time this year. Canada at canada said to be exploring a sale of properties. Citigroup soliciting offers for the Louisiana Properties by as much as 1 billion. Nordstrom has been sued in a lawsuit that claims the family has paid cut rate these. A spokeswoman says the allegations are baseless and this did several assertions in the suit. Ibm shares rising by the most in september ahead of firstquarter earnings due out in just in its. Just minutes. Joining me with a preview is Bloomberg IntelligenceSenior Software and i. T. Services analyst. What is the number one thing you want to hear . What is something new we are going to hear from ibm. I think the most important thing would be the strategic initiatives. They have the they abandoned the roadmap a while ago. Olivia alix what does that mean . Services business is about 60 of the business. There is a portion that is slow going because contracts are being broke down. You have software where there is Certain Software that is slow growing areas that is not so much what i would call technologies that we used a few years ago, not not so much at this point. On top of that there is a lot of pressure on the top line numbers. All of that is under pressure well they moved the company to be an analytics company, a cloud company. Alix that is all i feel like i hear from these companies. Moving away from software. What will set ibm on a different track and competitors . Division is very clear. Now a question of execution. Possible the downward Church Rectory make you going for a few years phil the share of the higher growth, smaller unit that will take over that will offset the slow growing areas. Alix in the meantime, will investors be ok with that and wait gekko they are trading at a historically low level. In the meantime, will investors be ok with that and wait . Alix you are staying with me. We will check back with you when ibm reports. The close is coming up. Looking at a rally underway. We will be right back. Alix welcome to our viewers around the world. You are watching bloomberg television. This is street smart. Stocks rebounding from last week selloff because of a rally and technology shares. As the count down to earnings from ibm, we want road to scarlet fu at the breaking news desk. A big reversal of what we saw friday. The u. S. Stock Market Making a fake uturn from the selloff friday. No followthrough and volume. When i look at trading and s p and Nasdaq Companies anywhere from little changed to 3 below the 10 day average. Friday trading well below the average. That is a huge distinction between the moves today and friday. If you go inside the terminal you can see indexes took off in the first hour of trading. Then they took another leg power higher. Since then we are drifted around and not done very much. This is reflected in the trading volume. This was reflected in the nasdaq 1. 3 advance versus the s p and the dow 1. 2 of 1. 2 advance. Ibm reporting and a couple of minutes. Analysts have lowers the bar for this company before the earnings report. 13 analyst brought on Sales Numbers by an average 246 million. It has kind of been the scene leading up to the earnings season. The setup could be if ibm reports betterthanexpected earnings you could see an increase in the stock after hours. Alix thank you so much. Im here with the bloomberg bonds reporter and Carl Riccadonna and j. P. Morgan strategist jacob lee woods. Thank you for joining us. What gives . Seems like nothings changed since friday. Still have a stronger dollar instill in earnings season. What was the big game changer today . This was a move to provide and it measures over the weekend. The Market Makers have been struggling to find direction. This gave them something to grab onto and launch markets higher into the open today as we saw. Alix did you see something similar in the bond market . You know, range found use your adjectives. Not a lot of excitement. I think people are basically looking for direction. All say more stimulus, what does that do for us . I think there is the question of whether the head will hike. Whether they will continue hiking. Same old, same old. You have heard this several times over so very little new information to come from the fed. Quiet until friday when we get the durable goods order. Seems to be a direction with the market in terms of Macro Economic data. It will have to be earnings during the week for durable goods friday. I would agree with that generally. You get housing data which the market. Those pleas and they might otherwise given the lack of data coming out. Broadly speaking we are all things the same thing. You have the European Central bank easing. The bank of japan easing and now the peoples bank of china jumping in and coming to the party. Alix perfect timing, because there is the closing bell. The nasdaq is really the mover of the day. Overall, you have a day for the s p and the dow and nasdaq reporting its best day in about two months. All sectors in the s p are finishing higher, you have tech and utilities leading those market gains. As for those as far as those equity movers, lets go over to scarlet fu at the breaking news desk. Scarlet, what you have for us . Scarlet the fx five is raising although it has been all over the place, but fxi is raising, although it has been over the place, but at each step they were trying to figure out if they were tightening rules and over the weekend announcing a cut to the reserve ratio requirements to the stimulus that helped the fx i fxi recover. That is another factor overall in the market to consider today and finally, i just wanted to mention Morgan Stanley, hard to believe, but this happened this morning, Morgan Stanley reported its height adjustment revenue in over five years. They were trading at 15 adjusted to 2 billion, while equity rose 33 . Remember under james gordon Morgan Stanley has shifted away from management and towards equity. Gordon has promised to be able to hold onto the 22 20 5 22 25 profit margins. Alix . Alix thanks, scarlet, and now we are joined by our guests again, we have Lisa Abramowicz and our other guests carl, but what struck me about this situation regarding as that we want to see how this makes sense, david . David this has been up for debate in quite a while, and we did expect the peoples bank of china to do something at one point, so i think we are finally seeing it come to fruition. This willingness to step into the market provides support when necessary that is much more meaningful. Alix carl, it seems like in some ways, china is up for the same did eight as the euro zone is but at the end of the day you actually have to have loan demands, and we have seen a that weakens china because companies have a lot of debt and it affects a number of sectors. Carl thats right, and chinese banks are leaning in that direction, but you have to create the inherent demand in the economy, and the animal spirits to have an effective bankled stimulus program, so i think what will really be the cell though for china is a stronger europe and a stronger u. S. Alix thats right, the experts are still week. Lisa . Lisa thats right, we had a chinese Property Developer invest on u. S. Market bonds, and what does the safer the Property Development sector in china, and that is the big concern up. Alix and from asia and going back to europe and to greece, we have the greek Prime Minister ordering local governments to move their funds to the central bank, in order to repay the imf , and of course greek bonds are following after this news, and this is all for the nations debt restructuring. When you hear that, hearing that the central bank is saying, give me all your money, what does this make you say, david . David this makes me want to because is, as if we were not cautious with the Greek Central Bank already, but i think the most interesting thing that the greek threat poses to the euro system is different than in 2010 when it initially flared up. Now youre looking at a potentially political contagion where if greece takes on an antiausterity and antieuro sentiment, it is interesting to think if italy or other countries jump on board. Alix and the still does not solve the problem of massive outflows of that greece needs in particular, we had a bloomberg guest talk about over the last six months, 62 billion euros has left the country. Are we going to see capital control here . Carl it is going to be a long hot summer for the greeks, unfortunately, and there is not enough money to go around so either they need more tax revenue coming in or if someone does not get paid, whether it is the imf or the national creditors or the greek pensioners, this will be the problem that they are dealing with now, and they need to figure out a way to get money out of brussels. Alix and to davids point, there may not be the same sort of economic pain to be felt like in 2010, but there is still a huge affect, and there is a concern with costs that could rise and scarlet, we got some breaking, walker through the numbers . Scarlet we should mention that analysts had been reducing the reports of the much lowered estimates. 19. 64 billion is a much higher estimate than what analysts were looking at, but it does signal a 13 drop from the same time last year. Ibm has now posted 13 three quarters of a revenue decline for unchanged revenue, so it has not reflected an increase, but in terms of roche marred of gross margin, it is higher than what analysts have been looking for, they were expecting 48. 8 in the company, and the company itself, ibm that is, was up 4. 19 percent and in terms of impact on the stock price, ibm shares have been kind of trading lower leading up to these earnings reports. Of course, today, a sixmonth high. This afternoon, it is ending a pop in the after trading, about 5 or 6 right now following these earning reports, and again, the idea that the company was able to produce results lower than that is interesting. Asiapacific revenue is up 4. 1 million, so there are a lot of expectations heading into this that the stronger dollar would take a bite out of some of its overseas earnings, and we are going to look through this overall to see how this plays out. We will see how the stock is reacting right now certainly, there is a point concern when you have a Global Multinational Company like this, like ibm. Alix scarlet, hang on one second, i want to bring in cory johnson, bloomberg editor at large, who joins us now from San Francisco. Cory the big thing is the ability for them to tell the analysts what to do, and analyst will they go home, and as a scarlet pointed out, the numbers have been going down in the last few weeks, and the 13 decline in one year of revenue, they are trying to make it look not as bad by saying that it was only downfall percent, but it is down 13 . This is always the weakest quarter for the company, but this is a company that has spent over a 11 billion in acquisitions over the last five years. The revenue continues to be in great decline here. So the turnaround is pushed out even further here. Let me go and see the numbers a little bit more here. Earnings are down, revenue is down, they are blaming currency for this, but they did not blame currency when the numbers were increased in the past, so i was dismissed the blame on foreign currency like this, because when it is a tailwind, they dont mention it, but when there is a decline, it is not their fall. Alix scarlet, you are looking through as far as the forecast ibm said it would not be as strong of an impact. What i say now . Scarlet they are maintaining their fullyear outlook, so no change there, just to latch on to what cory was talking about Revenue Operations and making the distinct between revenue overall and Revenue Operations the First Quarter is down 12 , but if you take out the effect of the stronger dollar, you would flatten your revenue, and that is still not great. Revenue has been earning growth since the end of 20 11, so if you are counting the fact that your revenue was flat, you are not exactly filling investors with a lot of confidence about your growth confidence. Alix cory Gross Margins were up a little bit, that is something, right, and if the company is trying to reinvent itself and moving in the right direction, doesnt that count . Cory cash flow has changed a lot, and again, this is a small change for ibm, so for any big changes but what happens in the First Quarter is that means that Better Things can happen at the end of the year, and they have not quite happen here, so we will see and continue to go through this and try to find some more stuff, but the analysts expected not much from ibm and they got it. Alix fair point, thank you for giving us that perspective, cory johnson joining us there from San Francisco, and scarlet fu thank you so much for breaking down those numbers for us, we will take a quick break, we will be right back, so stay with us. Alix alix lets get right back to scarlet fu at the breaking news desk. Take us to the numbers one more time. Scarlet earningspershare are up then up farther than what analyst predicted, but keep in mind that analysts have been predicting to slash their analysts, not just for earnings before revenue. One out of 20 analysts cut ibms earning estimates by six cents. 13 cut their First Quarter revenue forecast by an average of 247 million. When it comes to the top line, ibm it reported a drop of about 30 in sales from the same time last year, so if you include this last quarter, ipm has not reported a quarter of Revenue Growth since the end of 2011 the end of the Fourth Quarter of 2011, that is talking about top line growth. They have been holding on and maintaining its full year earnings estimate. You want to turn to this for a moment, because this redline tracks the full estimate of year earnings. You can see that it is a bit lower since september and october, and then since then it has ratcheted down a couple more times. Ibm says it will stay at this level for now until it gets a better sense for the rest of the year. Share price has recovered from about a sixmonth high. Alix scarlet, thank you, and also joining me is cory johnson from San Francisco. Cory, take a big picture look here at ibm, and is this quarter helping it do that, is it on its way . Cory lets look big picture and small picture, so big picture lets go small picture first, if thats ok. Alix yes. Cory spoiler alert, none of them are up, they are down 18 , i mean, they are down 11 , so all the people they try to send in to fix parts of your business, theyre out, software is down 7 there is selling down 24 even finance is down, so of all of their businesses they are shrinking dramatically despite all of the efforts of m a and the intentions that they have towards other business. Alix but, but, but cory yes . Alix they just said that revenue was up 7 , that is the point, yes . Cory every single Business Unit is in decline, so it is a clever thing to say and maybe it is the focus of the business, but all of their Business Units are in decline, including of those that have cloud as part of it. I think looking at the 30,000 foot view is the 13 in decline in revenue is the a guest fall in revenue going back more than a decade, except for one quarter of the Great Recession in 2008 for example, in 2009, they had a similar decline, not bigger, but this is one of the worst quarters of growth that ibm has reported in decades. That may have been in line of what analysts have predicted. Alix you put a big picture view there, one of the worst quarter growths for ibm in over a decade. So let me ask our guests, what you think about what cory just said, wasnt really one of the worst quarters for growth that ibm has seen in a decade . Guest they have art he said it would take some time, and they are he said it would be a while to focus on the company to a Technology Company of the future, but i kind of mirror your thoughts in this case that the cloud revenue was really good and that the analytics revenue was also very good, but if you want to take out the fx and the other parts, the company again decides what to invest in something or not, it was not as bad as you know, the headline makes it out to be. Alix cory, what do you make of that . Give them a break basically . Cory well, hes nicer than me. [laughter] coruy theyre offering has been really fantastic but their tradition of selling hardware and telling people to go run the hardware for you and so the the software will run is fundamentally challenged by the cloud itself. Amazon at ones services and rackspace or others, they all challenge ibms old model of business. It is hard to sell a watson when amazon is giving you the latest software and the latest greatest whatever you want and you dont have to buy it. That is a hard turn to make an fundamentally, what ibm may be turning into is a much smaller business. Alix unfortunately, we have to leave it there, so we will look and see if they will eventually transition their business into a cloud business. Thank you for joining us. Up next, it is 420, and it is a big holiday for pot enthusiasts. We are going to look at the weed industry, coming up next area coming up next. Alix this is street smart, im alix steel. Saudi arabia is beefing up security around its oil company ramco in the shopping malls of the capital city of riyadh. This is because of the possibility of a terror attack according to an interior official. The coalition is carrying out iranian allies in yemen, and it is also targeting Islamic State militants. Earlier today we received reports that u. S. Ships were sent to the waters off of yemen. I spent to the spoke to the official of the u. S. Department of command, and they say the ships were not sent to intercept iranian vessels. And a pulitzer is going to reporters reporting on tax invaders. It was announced today by columbia universitys graduate school of journalism. Congratulations april 20, or 420 has become a known day for consuming marijuana. The market already reaches a 3 billion business with the possibility of growing to 11 lien 11 billion. The founder and managing partner of med men joins us now. Thanks for being here, so what do you do, if i am a pot company in new york, what i do . Founder we are a facilitating company, we look into the consolidation and almost the role that is happening already and we look at bay company business, mom and pop pot is dying and will be dead, so we have restricted licenses being handed out like we see here in new york and this is for people who do not necessarily have the operational expertise to run a. Alix and they all operate under your umbrella, essentially . Adam yes. Alix how do you deal with different states that have different regulations . How do you deal with that . Adam i did were seeing momentum of a country and as a people to change this, and so this fragmentation is because it is still a schedule one narcotic and all of the federal rules that come along with that, but this will soon be a thing of the past. Alix what about banking . Is it difficult for banks to invest in its money if they literally smell . Pot smell pot . Adam we are moving past that. The department of justice alix but i mean, have we though . Adam yes, the department of justice is looking at changing these and banks were not investing in business, but now in illinois, florida, maryland new york, tanks and all of those states are thinking and will be banking in the spirit in this arena. Alix how big is this going to get . Adam i predict 38 billion by 2020. Alix whoa 38 billion by 2020 well, thank you so much adam coming he is from med men. We are glad to be joined by steven sat off when we come back. t of action in the afterhours section today, so cheap correspondent scarlet fu is at the breaking news desk. Scarlett, what is shaking up right now . Scarlet it is currently the weakest quarter of the year for ibm, as is the case for most tech companies, but there is a sluggish quarter, and the numbers are show the earnings were shared it two dollars were shared at 2. 91, and this is after analysts have lowered the bar. We saw that people cut their earnings by an average of six cents, and revenues fell by 13 . This is following ibms streak of not posting revenue since the court says the Fourth Quarter of 2011. As you compare to how it traded at the end of friday, it is still up by about 2. 9 on the session, comparatively, to the end of friday. Alix all right, scarlet, thank you so much on ibm. Here are the top stories we are watching after the closing bell. There is a new positions taken by green light yesterday. And comcast and Time Warner Cable will meet the Justice Department this wednesday to discuss their planned merger. Comcast would ultimately walk away from the deal if the concessions are approved to be too strict. A bloomberg exclusive back when tesla was struggling to say a float in 2013, elon musk was considering selling tesla to google. Googles larry page at greed to an 11 billion deal to let them run the company for eight years, but before the final agreement, tesla began selling thousands of cars and began posting a profit. And stain on google, get ready for changing the way you shop and eat and find information on your phone. It is releasing a new algorithm that will post mobilefriendly results higher. What does this mean for the retailers who are behind the times . Well, Stephen Sadove, the former ceo of ruby tuesday and other companies, joins us now. How has google change the rules . Stephen they have change the rules a lot, those were not mobile friendly and not staying on top of the trends are not going to get first place, and what is happening is this is only happening on mobile, it is not happening on the computer or the tablet, but it will affect mobile results when you type that on your tablet, so that will affect people who will be looking to put some skin in the game. I am not so sure this is going to be a small issue, but this is an issue of animation, whether you make your app readable, for example, is going to determine where you land. It is going tos clearly is going to clearly say that you need to make investment in technology. Alix that raises the question of brick error mortar brick and mortar versus online and that was in regards to a situation with target shutting down its website over the weekend with the website encountering too much traffic for Lilly Pulitzer been posted on the website. Stephen this is an example of target getting its mojo back. People went in there yesterday morning at 8 00 a. M. And the products were gone by 8 05, and so they also crashed the website, so they are sane if you have the items the people want at the prices the people want people are going to buy, target is being innovative, and now they are back to being innovative. Alix do you see that would be about reselling that for 1300, or putting these close back on moments after being sold . Stephen yes, thats a little disappointing. Alix when you see target getting the lineup the door everyone talking about these things and you need, apple was one who did that, they tried posting their sales for the apple wash online, but they said that did not work, and next september theyre going to go back to the line around the block at the end of the day. Stephen they were looking into bringing in the luxury selling process, and the way you sell a luxury product is you romance it and make it an experience and make it an appointment. That is probably the way to sell a high end product like this and you are not going to get the demand that you get out of an iphone immediately. They are doing is getting luxury product standards. Alix so increase the hype around it . Stephen yes, a hype, make sure that it is not generally available, and there is exclusivity involved. Alix i do 90 of my shopping i have a sixmonthold but i do about 90 of my shopping online, and Cyber Security experts are gathering in San Francisco for a big conference today, it is basically an arms race for Cyber Security which has accelerated since we had sony target, jp morgan, all of whom were hacked last year. What do you say to retailers when they have to deal with this constant barrage of cyberattacks . Stephen the thing is coming you are going to get these cyberattacks, this is a reality at this is a fact of life, and if they go someplace else, there are going to be others to get attacked, but in the meanwhile there are cigars that you can put into place. There are credit cards, we are looking at the ability to share information across the companies, were looking at National Standards for notification when there is a breach, so i think that there is a lot of activity taking place but the reality is, hackers are out there and they are going to continue to be out there. Alix they are always one step ahead of the retailers at the end of the day. Stephen absolutely. Alix thank you so much, that is Stephen Sadove ceo of sacks of avenue and other Companies Joining today. Stephen thank you so much. Alix why we come back, bloomberg wins a pulitzer, and countering chinas influence. Alix Bloomberg News has won its first pulitzer for Zachary Meyers reporting on Corporate Tax avoidance. Columbia University Graduate school of journalism said that it was a painstaking, clear, and and retaining explanation of so many things of that corporation dodges, which is taxes. Sack meyer joins us now. How did it feel . Thackeray zachary this feels great, i am so humbled and it feels great. Alix what do you get for that . Zachary i dont know. [laughter] alix you wrote this article what was it about and what was your conclusion . Thackeray zachary i wrote a conclusion about a series of articles called inclusion, and it was a renouncing of the u. S. Citizenship, as it were, for a corporation, to reduce their tax bills significantly, sometimes cut their tax ill in half, so whole Budget Company last years so a whole bunch of Companies Last year left the u. S. For the u. K. And other countries to reduce their tax bills. So i wrote about the phenomenon to try and show how it happened it became this way and how these companies are doing it and what it is costing all of us. Alix and what was the outcome . There had to be a big conclusion at the end . It had to move the market in some kind of way . What was your result . Thackeray zachary bigger and Bigger Companies started to admit that this was a problem, as of the u. S. Treasury weight in and tried to make in versions in versions inversions less attractive for companies, but you will see them still moving forward with that, it is still not a thing of the past. Alix you have set the bar high, what you up to now . Zachary i have only known this for about an hour and a half, so i can give you an answer as to where im good to go after this just yet. [laughter] zachary i just want to support the same kind of work that was recognized today, and the fantastic reporters all around the world. Alix well congratulations, though, you are very helpful, but you one bloombergs first pulitzer prize, Zachary Mider congratulations, and please take the day off and have a congratulatory beer. Moving on now to asia china had a summit in jakarta, and a few countries are facing ongoing contracts ongoing conflicts, so how would this meeting set up a dialogue for tense negotiations in the u. S. . Joining me now from washington is the Eurasia Group analyst scots, and first of all, what is going to be the rhetoric between japan and china in the leaders meet . Scott clearly we are entering into a. Where both sides really want to dial down some of the tensions that we have seen over the past few years. So i think there are definitely going to focus on seeing the things that they can cooperate on and obviously focusing on areas where they dont think they can make as much progress, so i look to this as being a really forwardlooking meeting. Alix what about japan and the u. S. Trying to nail around this trancepacific partnership what are the chances of you seen this happening . Scott well we are definitely hearing the right thing on both sides, and we know the negotiators are working very hard in tokyo, they did not reach any agreement yet today but they will continue talking about it this week, so i am hopeful that they will make more progress, but i think whether theyre actually able to cobble together a final deal in time remains an open question. Alix you said that china and japan want to tone down their rhetoric, but is there a sense of urgency to get this passed now that there is a rise in china and the structure of the asian banks . Scott you obviously have a u. S. President and a japanese Prime Minister who are both looking for pretty sizable political wins they have had lots of bad news to contend with over the past few months, so clearly this would be something to look to as something that would be a very big take away for them this year, but again, i think that they want to proceed cautiously. Both sides need to be able to go back to their prospective model perspective lawmakers but they will always have china on the back of their minds, but they want to make sure that they are doing what they can domestically as well. Alix speaking of radicalization, Prime Minister abe is a speaking to Congress Next week, what is the significance of that . Scott it is quite nice for abe it is the first time that a japanese Prime Minister will be addressing the u. S. Congress, and his grandfather on his motherss side, the Prime Minister of japan back in the 50s, addressed congress, but my understanding is that it was only one of the houses, so this is the first time that we have a joint address. Alix great perspective and obviously we will look for any headlines that come after that, thank you so much for joining us, scott seaman, coming out of the asian group. Next, i will tell you why both hbo and showtime will be very happy. And Ross Greenberg joined me on the other side of this break. Alix 67,000. That is how much you can pay for a ringside tickets to see Manny Pacquiao and evander holyfield. All tickets may remain in the hands of the venue and the promoters before being directly distributed to brokers and networks. At that is not stopping sellers for offering tickets for premium costs, which has eventually created other costs, and Ross Greenburg has 151 emmys and eight peabody awards, and joins me now to discuss the fight and the ticket. Ross yeah, i went over that this morning, i was at showtime and i think i have my ticket. Alix oh, oh, your ticket, will sell it will you sell it . Ross no, probably not but it is hundred djokovic. The face value of the event may go the aunt six to 7,000 but when you get into the Second Market or something because basically youll have many on sale to the public, or not many so you have mgm who has two Good Networks into promotional and two promotional companies scooping up all of the tickets so really, every celebrity you can think of has contacted all of the networks and everyone else, sorry, i just probably devoted a couple of hundred celebrities on showtime. Alix is this unusual to create i mean, i hear this is a futures market, is this unusual where i am promising, i will give you 100,000 or 200,000 . Ross well first you have to get your hands on the tickets, because there have been places where companies have said i will get you two tickets and it will cost you 200, and people will fly into the venue and suddenly they have no ticket, so hopefully that will not happen out in las vegas but the money is staggering in this fight, i was involved in boxing for the last 35 years, and the numbers are out of control the site numbers as we just discussed, but the television revenue, the payperview numbers, will be astronomical. Alix i was going to say, what does this main for hbo and thats what does this mean for hbo and showtime . Give us some quantitative numbers . Ross Floyd Mayweather could make anywhere from 100 million to 280 million that night, and alix not a drop in the bucket literally. [laughter] ross that is what he deserves if he is revenue to if he is generating that kind of revenue. Alix who do you want to see when . Come on, you want to do it . Ross i have lived with Floyd Mayweather for many years, and i work for showtime for god sakes, so floyd is close to me, and i have been here with him since the beginning, and i have a relationship with manny to come but my heart is with manny my heart is with floyd. Alix consumers consider cutting the cord but will cords be the saving grace of television. We will consider this in regards to live television. Alix this is street smart, im alix steel and here are the top sports stories that we are watching. If bn is in disputes with verizon, and verizon say that their customers should choose whether they want espn, and espn says it should be offered as part of all basic packages. And tim tebow has reportedly signed with a oneyear contract with the eagles. He last played with the jets back in 2012, and he has been serving as a College Football analyst for espn. To cut the cord or not to cut the cord . That is the question facing many cable survivors like those who use apple tv, and amazon is increasing their offerings. But for sports fans, there is a way to get all touchdown and slamdunk available on additional services, but so for now, the answer is no but this is probably one of the most important, or if not the most important, offerings for cable. Ross greenburg, howdy think this ends up turning out . Ross well i do think Sports Television will begin in begin to carry Cable Systems into the next decade because all of these networks have scooped up all of these rights for all of these events. The ncaa tournament goes through 2024, the nfl is locked up for another, oh, i dont know another 28 years, baseball is the same so the reason these deals are getting so long is that these monolithic giants in television have figured out, wait a second, i better keep sports here on the dial live so i dont have to have them cut the cord, because if they do cut the cord and cant give their hands on these sporting events they will be out of luck sitting at home wondering what to do with themselves. Alix why cant espn doubledip . Why cant they have rising cable but have a standalone app on television . Ross and they will, there will be a time when all a cart will be the rule of the day, and that time is coming quicker than anticipated, and that is why it is happening, and that is why showtime has announced, and that is what all these companies are starting to look at the consumer that will cut the cord and looking to energize their programming so that it is vibrant, vital, and that people have to get that product. It is like anything on the shelf on a grocery store. Alix lets talk about the quality quality in apple tv is very different than you might get on cable how do you deal with that as a viewer when you are a sports fan . Ross thats true, and you do have to make sure that your product on an hd set comes through in life and living color and is beautiful, and if these alternative Distribution Services dont supply that kind of quality, they will be in trouble, so you do have to maintain a that and it is vital, vital to the future. Alix would you ever cut the cord . Ross i dont think i will i am too old school, i am 64 years old for god sakes, i remember black and white television, so that is just sad, so i am too much of a sportsman, i cant do it. Alix not quite yet, thanks so much for being here, what a pleasure, thats Ross Greenburg. We have an and raising have an amazing week planned, like Danica Patrick with her first gold medal award, so i am so excited, stay with us, have a great night everybody, with all due respect is coming up next. John with all due respect to all those other fake holidays we mention on this program, this is the one we actually celebrate. Happy the only day that could make sense of that open. Yes, 420, sports fans. If you like reading and you hate hillary clinton, boy, there a book for you. Clinton cash i