German bond is the short of a lifetime. He joined street smart earlier today to explain why he is betting against German Government bonds. Bill its about five years forward in both germany and the u. S. , but the yield difference between those two is about 200 basis points lower for germany. So equal quality, yes but 200 basis points lower in germany. That says u. S. Treasuries are a whale of a by and german bonds are a whale of a short. Im suggesting if you want to hedge, the best thing is to sell the german bond and by u. S. Treasuries. Emily he says most investors want to wait for 12 to 18 months because thats when the u. S. Quantitative easing program is set to end. A generic drugmaker has rejected an unsolicited takeover offer from Island Pharmaceuticals saying the proposal does not reflect the value of the company. This comes after there was an unsolicited 40 billion offer. Mylan says it wants to stay independent. The saudi arabialed coalition has ended its airstrikes in yemen. Officials say it has succeeded in illuminating threats in the region by shiite rebels. The coalition will launch a new operation designed to protect civilians, distribute aid and restart political talks. A couple of food chains reporting earnings this afternoon shares of Chipotle Mexican Grill is falling, hurt by higher menu prices and supply chain problems causing a shortage of pork. Kfc pizza hut and taco bell owner, yum brands, is rising. The company is showing some signs of a turnaround in its china business. Ride sharing company, uber signs a partnership with capital financial. Cardholders will get 20 off when they use their card to pay for uber fares. Uber has already signed deals with American Express and starwood hotels. Amazon is entering the travel reservations business. They introduced amazon destination, which provides maps, hotel deals and travel information. The new site is an expansion of amazon local which connects amazon shoppers with deals close to them. Today google changed its search algorithm so mobile friendly sites are ranked higher in search results. It shows how much importance google is placing on mobile, but one person told bloomberg one business could see their Search Rankings plummet. They have said this could have an impact it is something that is potentially going to be something that is significant that can hit the bottom lines of some of these companies and there are some Big Companies that have not done it. I do agree its more likely to be something that will impact a lot of smaller businesses. Emily mobilefriendly sites have larger text and plugins that work on smartphones. Now to our lead ceo Marissa Mayer, head of yahoo , may need more patience from her investors as the companys latest Earnings Report fails to impress. Sales fell 4 to just over a billion dollars. While yahoo s overall revenue is declining, the company says revenue from emerging businesses like mobile, video ads and tumbl r, Marissa Mayer touted the microblogging services growth. We continue to be aggressive with that platform. Today, more than 350 of the world top brands not only blog on tumblr but advertise and spend on the platform. Most notably, we launched our Creators Network in q1 which lets brands find incredible artist and bloggers to commission unique content. We saw immediate traction with more than 35 rand spending on creators to date. Emily she has been making major acquisitions in this area. Its a key part of her strategy to get the Company Moving again in this post alibaba era. Joining me in the studio is bryan womack, who covers yahoo and paul sweeney of bloomberg intelligence. She is telling investors to be patient. How patient should they be . Guest you do have Something Interesting going on its just more of the same. The rates in growth are actually declining and when you look at the print, the core business is a big disappointment. You saw the stock selloff right away on that. Emily would you go that . Paul investors, as we move past the alibaba monetization issue the Management Team and advisers did a great job coming up with an elegant structure for that asset which will be positive for shareholders. But as we move past that investors are focusing on the core operations. What they are focusing on his Topline Revenue growth. This is an industry growing 15 plus every quarter and yet yahoo is unable to post any growth. In fact, the revenue declined about 4 this quarter. The operations are lagging and we havent seen any turnaround yet. Emily e marketer is saying twitter is on track to surpass yahoo . How crazy is that . Yahoo has 700 million users . More than a billion users . Twitter has 280 million. Brian it is a monetization thing. Yahoo is seen as old. It was a pioneer and a lot of great work early on but has not made the transition into we are something new and exciting. At the end of the day, marketers have a hard time being sold on this revolutionized yahoo story. Marissa is working on that, but theres a lot of work to do. Emily they may have five times as many users, but what do we know about how engaged their users are . Paul engagement has not been where i think the company wanted it to be, and thats one of the issues marissa and her team have been trying to fix since she came on board. Theyve been trying to do that through investments and acquisitions that will engage their users, the 1. 2 billion users to stay on yahoo on its Many Properties so they can monetize them better. One of the areas where they have lagged the competition has been mobile. The mobile experience on yahoo has historically not been very good, therefore the advertising has not been very good. Mobile is one of the fastestgrowing areas of spending across the internet and is one of the areas yahoo is playing catchup and to date, we have not seen the traction on some of those investments. The question becomes how patient will investors be as they wait for this turnaround . Emily today, their archrival, google is favoring mobile friendly sites. You have been following all of that money she is spending in the companys she is buying and the talent she is buying. All of this costs money. When we going to see this start to pay off . Brian that is the 4 billion question. We are almost three years into the turnaround now. She has had quite a while. Emily she just did a major talent reorganization. Brian right now, they are talking about trying to trim back and save money. It is a tricky spot for her. Its not like shes Walking Around picking up whatever business she wants and being able to sell it. Emily at the same time, we saw microsoft and yahoo renew their partnership. Where does this fit in . How significant is it . Paul search has been a real disappointment for yahoo over the last seven years. They thought by forming a partnership with microsoft, that they would be able to turn a business around and take back some market share from google. That has not happened. Since marissa has come on board and she came from google, she thinks yahoo itself can improve its search business, so they reworked this agreement with microsoft to give more priority to yahoo and its ability to drive the search business. We will have to see if they can take the reins back but it has not been an area of growth or turnaround. Search display, mobile and video these are the areas on multiple fronts yahoo is trying to execute on and as we take a look at this quarters earnings we have not seen the benefits of those efforts yet. Emily yahoo will be developing apps for the apple watch. Does that matter . Brian yahoo is always doing things like that. They were early on in a lot of mobile apps but getting traction has been a huge problem since the glory days of the 90s. Maybe they will hit a home run, but even now, some of their best apps dont rank near as high as other rivals like facebook or twitter. Emily what about the yahoo weather app . Brian it got some awards and some traction, but its nothing like snap trap snapchat or twitter. Emily what will you be watching over the next weeks and months from yahoo . Paul one of the things they mentioned that helped the stocks afterhours is a hired advisers to think about how to monetize their yahoo Japan Investment which could be worth north of eight billion dollars in the marketplace. It is the second leg of their Asian Investment scenario. They did a good job with ali baba. What kind of structure can they create that will generate the most aftertax value to shareholders . We got a little color today that they hired advisers and are looking at it. They will have some news over the next several quarters and that will likely support the stock. It has been one of the key issues for bullish investors in the name. Emily paul sweeney and bryan womack, thank you both so much. Coming up, we will be sitting down with the former Deputy Director of the nsa, general Keith Alexander tomorrow. Emily this is bloomberg west. Im emily chang. Turning now to the rsa conference one of the largest Cyber Security conferences in the world with almost 30,000 attendees in San Francisco it has been almost two years since the first revelations about nsa surveillance from Edward Snowden. In that time Cyber Attacks have become an ever greater threat to the u. S. Government and private sector. How has the nsas strategy evolved . Cory johnson has more. What is at the top of mind for people at the conference this year . Cory that is the big question. How has the threat changed and how has the response changed . We have seen so much and the world of Cyber Attacks from the target attack last year to the sony attack which is sort of brought a new way of doing things for hackers which means theres a new way of doing things for the government and the private sector and to talk about that, my guest joins us now, the former nsa Deputy Director. You are working as a partner at paladin capital as well. This intersection of public and private, trying to build a wall against Cyber Threats and hacking, what are the struggles happening right now . Guest one of the struggles as we tend to see the interest in this space as theres one as many networks. There is just one network, but there is a rising tide raising all boats. There are threats and sometimes we decry thats not on my side of the boat, but its all the same boat. Cory let me push back just a little bit. When target is hacked, what does that have to do with National Security . Chris the same vulnerability a suffer, the businesses they are in, those are vulnerabilities in the networks other people use, so National Security ultimately converges on can we in fact guarantee the nation can stand on a platform, the internet, and have confidence that it is going to be available to them and diplomacy can be taken care of in that space. It is National Security, it is private sector business and personal business all wrapped up in one. Cory president obama is trying to say we will protect them from lawsuits of certain types, but on the industry side, some industry people are saying the sharing the government wants is one way. We share with them. Nsa has and taking information out of private companies without their knowing that was the case. Whats the right kind of dialogue to have that provides security but also lets Companies Understand what the threat really is . Chris their instincts are exactly right. If the government has information that can benefit the whole, the government should provide that. That we need to distinguish between Edward Snowdens allegations and what is in fact true. The vast majority what the nsa discovers, that is where most of the holes show up. The vast majority of that is pushed to the private sector. It is not pushed in a way that looks like it came from the nsa overtly, but it is given to private companies through the fbi. Cory is that happening fast enough . Chris i dont think it is happening fast enough. The president has taking it has taken it as far as he can and he will encourage sharing to reduce the liability. By statute, we could go further and the culture at the end of the day is the thing that is going to make the difference. Cory i see similarities in the way pre9 11, when you had this information being gathered by government sources that was not shared, it sounds like what you are describing is not the similar. Youve got bad guys on one side and the same bad guys occasionally going after government occasionally going after private industry. Does that create a pre9 11 vulnerability . Chris i think there is an analogy to be drawn there. It is less about connecting the dots in achieving some degree of collaboration. You have a shard of information and someone has a shred and if we put that together at the bowels of the problem as opposed to the top, we might crack the net. Crack the nut. Emily cory johnson, our average or a large, we will be back with you later in the show. Do not miss our exclusive interview with general Keith Alexander tomorrow. He was the guy in charge when those snowden revelations came out. We will be right back. Emily this is bloomberg west. Im emily chang. Good news for the 62 million netflix subscribers hooked on Netflix Original series like orange is the new black. More original content is coming. Get ready for 20 or more original shows debuting this year. That includes a reboot of the 1980s and 90s friday night hit, for house. Netflix ceo, Reed Hastings told bloomberg that the company will produce future shows rather than renting its content. Tell me exactly what Reed Hastings told you. This is a big change in strategy in terms of owning as opposed to renting these original shows. Lucas after their Earnings Report, we were talking about their relationship with a lot of the shows a half. House of cards and orange is the new black are the biggest shows theyve had so far. They dont control does so they can sell on amazon and it has gone to try to lock up as many of those rights as possible. What hastings said was ownership and production is the next step in their companys evolution. When they started, they were just a licensor. When they the more success they had, theyve decided they want to get involved at the very earliest stage and carry through the show until the end. Emily can we talk a little bit about fuller house . This is a 20yearold show they are going to resurrect . Are the olsen twins going to play ball . Lucas i would be surprised to see the olsen twins involved. But in the press release they had for this they have johns day most they have john st amos on and they are talking to other cast members. They are hoping that enthusiasm about the show will cause other people to get involved. Emily i, for one, am enthusiastic. They are spending more on original content. How bad can that be for their bottom line . Lucas the risk is not one flop the risk is if they had a series of them. Now that they are going to produce and develop a lot of their shows, they did to work. If their future shows are not as successful as the ones they have already made, its going to be more expensive because they are going to be more involved in funding. Emily thank you so much. Coming up, more from the rsa security conference in San Francisco. Emily this is bloomberg west is quote where we focus on business, technology and the future of business. Im emily chang. A futures trader has been arrested for his alleged role in the may 2010 crash cap cash flash crash. Navinder singh sarao was arrested in the u. K. Hes facing charges of commodities fraud, and spoofing. The u. S. Is seeking his extradition. The flash crash occurred in 2010 when the dow jones plunged 1000 points in just minutes before recovering some of its losses. Democratic senators al franken elizabeth warren, and for more are asking federal regulators to lock comcasts proposed purchase of time warner cable. In a letter to the justice department, the lawmakers say the merger would lead to higher prices and fewer choices for consumers. Antitrust regulars are meeting with executives both companies tomorrow. The Chipmaker Arm Holdings says firstquarter sales rose 22 but revenues from licensing were up just 3 as it dealt with an order backlog. Here is the companys ceo. Our forecast for licensing growth in the mediumterm is a 5 to 10 thats going to be higher in some quarters and lower and others. Im not at all worried about a slide a bit year on year because its becoming such a high pace. Emily upgrades for faster 4g phones are helping to used their loyalty growth. This was after the worlds biggest wireless carrier said it added 53 million users to its 4g network. Blackberry is making an acquisition, reaching a deal to buy the filesharing security startup, watch docs. Watchdox. It is a key part of the ceos turnaround plan. Lets head back to the rsa Cyber Security conference underway here in San Francisco. Cory johnson is standing by with a man who knows a thing or two about leading to a crisis. Cory and a thing or two about leaks. When you think of the biggest leaks ever imaginable, who do you go to . Do you go to Edward Snowden . Do you go to the gulf spill five years ago . The man trying to deal with both of those things is former coast guard that alan tad alan. You were the last post on the booz allen website before the leak. That kind of crisis containment , leak, there must be some similar practices dealing with an unexpectedly like that. Thad the first one is complexity scale and scope. It stretches the limits of your operating procedures and policy. The focus should always be to create unity of effort and focus on the problem. Cory maybe there are some common themes about the causes but dealing with the crisis in the moment seems like a great struggle. Some Companies Circle the wagons shut down networks and shut down all kinds of networks. What is the right kind of response . Thad you have to start before the event occurs. You have to think about the severity of a breach coming need to have an Incident Response plan, you need to have a point of accountability, a Single Person what happens. Cory companies are kind of busy as it is. I cant imagine a company with reset every shape and stripe devoting a lot of resources planning for an event that hasnt happened yet. Thad if you look at a breach or cyber event, a lot of people would say that the purview of the system. Cory the chief Information Officer or had i. T. Guy. Thad there are legal implications, regulatory implications reputation, all of that needs to be managed at a level higher so the system can work a technical problem. Cory are we seeing a change right now . The head of target is gone, the head of Sony Pictures is gone. Thad you become self and in a fight do this work up front. The right way to handle it is think about it if they are not doing the job, you can fire them. Cory is this the role of the chief Information Officer . Understanding how the systems work and where they have impact can only be done by the person who runs i. T. Thad but it is larger than i. T. And the consequences can be larger as well, depending on the business the firm is trying to run. There has to be a holistic approach and you need to do that with someone that is more senior that has responsibility and accountability. Cory what is the key message for the chief Information Officer to bring up to scale . I can imagine they are in a situation saying im not big enough for this problem, ceo, get ready. Thad one of the things we like to talk about is connecting the server room to the board room. You have to be prepared to deal with it at the board level. That can only happen if the Senior Leadership is listening. Cory interesting stuff. U. S. Coast guard admiral thad allen. Emily coming up, we will look at a cancer risk test that cost just one third of a competitor. Emily this is bloomberg west. Im emily chang. For less than 250 dollars, women can find out whether they are at a higher risk for developing breast and ovarian cancer. One company has developed a saliva test that screened 19 genes for harmful mutations associated with those causing cancer. It was a mutation in one of those very genes that led Angelina Jolie to have her rest ovaries and fallopian tubes removed. The test is more affordable, costing 10 of the usual cost. Here to tell us more is the founder and the ceo of minted. Com and investor in the project. Great to have you on the show. My first question is why has it taken so long to develop a test like this that is affordable . Guest its funny because we have been working on it for about two years now. Its a complicated thing to do. We have had to marry the best diagnostic labs and bring it together to create this kind of product. Its a complicated thing to build and you want to focus on quality, say need to make sure when you are dealing with information, you do it in the right way. Its quite complicated to build. Emily you and the number of highprofile women have invested in this company. Why . Guest first, ive seen them solve problems and i have the utmost confidence in his capability to grow a largescale company. But there is an incredible human impact from this test that its possible to save millions of peoples lives. People even know about it ive added would be an incredible social impact. Emily you have an interesting background you have a phd in biology from m. I. T. , yet you worked at google and twitter before doing this. Should every woman get this test . Should i get this test . Elad ultimately, the decision to get tested is up to the woman to decide and it is a personal choice working with your doctor to ultimately come to a decision on. Our focus is more on making this accessible and affordable to everyone so that if a woman of 4 chooses to do this, cost is no longer a barrier. Emily why is your cheaper . You dont need insurance to get this test. Elad we have automated everything with improved quality and it drives down cost. We have Automated Software and lastly, our Business Model is fundamentally different. Since we dont take insurance people pay for this out of pocket and we dont deal with insurance building which can be insurance to link, which can be expensive. And we take less margin. We are effectively passing back a lot of the savings to the people purchasing the test. Emily there are interesting things happening in Breast Cancer testing. I know they are not doing must ectomys until women are 40 years old, yet more of these tests are available. I wonder how those trends work together. Could you speak to this in terms of fighting the disease . Mariam im not a medical practitioner, but i do think it is interesting many people have heard about this and i myself talked to my doctor about talk to my doctor about it and was dissuaded from taking the test because of the cost. Its hard for doctors to ask patients to pay for the test. They have to make these calls that are raised on cost. I think the test could change peoples access to better care. Emily what are doctors telling you about your test in particular . There are competitors that make a more expensive test that insurance needs to help cover. Are they more inclined to recommend your test because you have to have a physician recommended . Recommend it . Elad you want to make sure there is a Health Care Provider in the loop and have access to your accounts. We Just Launched today, so we have not gotten full feedback from the market. In general, i think our primary for i marry focus is making sure everything we do is done in a thoughtful way and make sure women get this information so they can work with their physician on a personalized plan. Emily in terms of the actual Science Behind it, is it any different . The science elad the science is fundamentally the same. It is standard for clinical testing for these genes. We use a sequencing platform they are very standardized technology that have been Battle Tested and proven to work well for this type of testing. Emily and this test is Available Online today . Elad people can purchase it online. Theres a physician ordering component to it but we are trying to streamline the process so that if a woman so chooses she can get access to this important information. Emily i know you do investing in the side. How does this fit into your portfolio . Mariam one part of this is you want to work with people you enjoy working with. Thats a big part of it. The other is thinking about how to have impact. I focus on my company, but i like to have impacts in other ways and heres a way to help a lot of women in a known way with a big market potential. Theres a great business potential here and a great way to have social impacts for me thats a different part of the portfolio because it addresses a social need as well. Emily that test is available today. We will check back to you to see what check back with you to see what the response is. Thank you both. What does the intel cofounder think about the big anniversary . I will speak to his biographer, next. Emily this is bloomberg west. Im emily chang. 50 years ago the cofounder of intel famously predict did that Computing Power, the Computing Power of an integrated circuit or chip would double every year. That is premuch what happened. Today, there are 1. 4 billion transistors on intels postage size chip. So what would he think about the 50th anniversary of moores law . Here to discuss it is the author of his autobiography offer the author of his biography. Why are we still talking about gordon moore and how big of an impact has he had on the world of technology . Guest great questions. I will try to answer them quickly. He was the cofounder of two of the most Important Companies in history of silicon valley. First, Fairchild Semiconductor and then a spinoff from that the intel corporation. Emily a Little Company called intel. David for which he was to date the longest serving ceo and certainly its chief technological strategist. We are still talking about gordon moore and moores law not only for intel, but for the importance of the silicon microchip in our whole Digital World. It is the Material Foundation for the Digital World and it is responsible for an incredible profusion of electronics because they have made electronics incredibly cheap. From the development of the first silicon microchip to the present, cost of microchips, the cost of electronics and therefore the cost of computing has dropped a billion fold. With that, our entire society has been suffused with electronics and computing. Emily gordon moore was a local guy and i understand he now lives in hawaii. Im sure he lives quite comfortably. Tell us about his background. David he was born here in San Francisco, but his family lived in a casket arrow in at ascadero. Probably in the number of years you can count on the fingers of both hands, his life was spent there. His story is the story of a person who changed the world largely by staying at home. Emily i know he is quite active in philanthropy still. Does he worry that moores law could be undermined or disproven someday . David he does have a concern that he sees fundamental limits coming up to our ability to shrink transistors ever smaller and put more of them onto chips. At the same time, reducing the cost of electronics. There are a couple of fundamentals the size of an adam and the speed of light. These are physics areas in the way. He is concerned that within this decade it may end, but he does say he hopes hes wrong and he is quick to point out that it many times in the past, he and his colleagues have only been able to see 10 years into the future. But there seems to be growing uncertainty. Emily you cannot get beyond the size of an adam. Of anatom. David brock wrote the biography of gordon moore. Thank you for sharing that with us. Now it is time for the bwest byte, one number that tells a whole lot. Our editor at large, cory johnson, what have you got . Cory how about this number 783. Last year, there were 783 companies that suffered data packs in the United States alone, up from about 600 data packs in the United States. Data hacks. Its something every company has to be concerned about an thats why this rsa conference here is such a big deal. For all the companies out there with data, that is premuch everyone. Emily what does the biggest concern seemed to be this year at the rsa conference seem to be this year at the rsa conference . Cory it is twofold it is the patients hackers are showing. They are not dashing in the door and sneaking in the back. The type of attack is changed where the bad guys are getting into the system and staying there big ring out how the system is most vulnerable, when the least competent people are manning the controls and expanding that kind of attack. That is what we saw at target and at sony and thats why this is a big deal. The notion that the threat could be so much larger and costly is a big concern. Emily we will be delving into those issues in more depth tomorrow with general Keith Alexander thomas former head of the nsa. Thank you for watching this edition of bloomberg west. We will see you later. From our studios in new york city, this is charlie rose. Al the most Influential Democratic Party insider today is john podesta. Chief of staff to president clinton he spearheaded an historic Climate Change pact with china and he is now chairman of Hillary Clintons president ial campaign. We are pleased to have him here. Thank you for being here. The clinton rollout has been colorfully carry a graft but lowkey. Is this contrast with 2007 . John