we begin with peter cook as the chairman of the u.s. federal communications commission releases his proposal for net neutrality rules. good afternoon. >> good afternoon, mark. his basel spelled out -- his proposal will affect every american who uses the internet and every web business as well. it kicks off what should be a giant fight that pits the most powerful companies against each other. responding to millions of public comments and a challenge from president obama back in november proposing to start regulating broadband more like a phone service instead of an information service, dictating strict new rules over how they manage traffic on their networks. the title ii reclassification is a big leap for the fcc. one he has been reluctant to take until now. it would impose rules barring ifc's -- isps from creating fast lanes, wireless networks will be covered and in a bid to soften the blow, wheeler promises this will be light touch regulation. no tariffs on bundling. that should give them some reason to keep investing in their networks. he says i am submitting to my colleagues the strongest open internet protections ever proposed by the sec. the proposal assures the internet rights -- proposed by the fcc. the proposal already been criticized by internet service providers including verizon which calls the reclassification unnecessary and cut a protective. -- counterproductive. the event association -- internet association says they are pleased with the proposal. >> what happens next with this plan? >> chairman wheeler will share it with his for other fcc commissioners tomorrow. that is the way protocol works at the fcc. they will have the chance to work at the details. it sets up for a vote on february 26. he will need to other commissioners to join with them. it is quite likely they will get that. they have been supportive of this approach in the past. >> has there been any response from congress so far? >> a lot of response from congress and a big issue to members of congress on both sides of the aisle. democrats already announcing they support what wheeler has done. republicans are very upset that wheeler is taking this step. some republicans have been trying to pass legislation to block him from doing this sort of thing. he has beaten them to the punch. >> corruption, bribery come in millions of dollars of losses. these allegations have come with the resignation of petrobras's ceo. and five members of her management team. the price of oil is falling once again, down over 7%. alix steel is joining me now with more. west texas intermediate wti -- the supply picture has not changed yet. >> therein lies the problem for u.s. talk had another record built last week. the largest four-week build on record. they are still producing even if there is no demand. that paints a very grim picture. the board of directors will be meeting on friday to find a replacement for the current ceo. it is unclear if she will remain at her post until then. there have been accusations of mid-level executives at the company inflating project prices and using the money to pocket for themselves and for kickbacks for government individuals to help wrap up the project faster. that is at the core is what is going on. the current president of brazil wears -- was the chairman of petrobras until 2010. will she be implicated? are there any accusations that might run up the chain to her? >> who were some of the candidates and -- in line? >> the company has a massive amount of debt, what are the $5 billion. -- $135 billion. reduction falling 9% year on year. this company cannot go to the public market. it cannot sell bonds until it reports results. you cannot report audited results until there is an idea of the size of these losses. downgrading the company's credit rating yesterday -- it seems like there is no more hope for this company except for some ceo who might miraculously come in and want to take on this scandal. >> argentina's president is seeking investments from china. the president sent to the country for a four-day visit signing 14 agreements for the chinese president. how bad is argentina need chinese money? >> it's the second biggest trading partner after brazil. they are basically aiding argentina in many ways. they are investing $5 billion in hydroelectric dams. if you go and write on the subway, all the writing is in chinese characters. these are old trains from china. most recently and most important, they have gotten an $11 billion currency -- they can draw on currency from them to boost their reserves. they have gotten 3 million since october. if you look at argentina's foreign currency reserves, they have been on the rise since then. they have had the biggest amount of influx and currency from them since 2008. >> let's flip the coin. what is in this for the chinese? >> they need a strong foothold in latin america. they have been doing this throughout the region with argentina and ecuador and venezuela. they need to feed their people. they are the biggest market for soybeans. they're helping to deliver up -- develop oil fields. >> there was no embarrassing situation involving the president. she sent out a tweet today that mimicked the chinese accent. the executive director of the argentine-china chamber of commerce is insisting the tweet will not hurt trader diplomatic relations. >> from the argentine perspective it is a joke. even the argentine chamber of commerce calling it a joke. there is a racial insensitivity in the country that is fairly rampant. what is underlying here -- it's hard to imagine china will be making its economic decisions based on a faux pas. they are fairly flexible with venezuela who was always saying they cannot pay on time. would you think has a bigger impact than a tweet. making loan agreements flexible with them. the thing that is underlying here is there is a question about the seriousness of the president as a leader. a president should not be making this kind of remark, whether or not it is considered a joke. >> while she is traveling abroad , she has more troubles back home. we heard about the recent death of the prosecutor. he was leading an investigation, using the president of agreeing to shield the alleged masterminds of the 1994 terror bombing. he was going to call for her arrest and some draft documents to that effect found in the trash. what is the latest on this? >> this comes at a time when her popularity at home is not doing very well. president that people abroad and domestic are questioning what is going on in her head. given her behavior in light of the death. the procedure right now is there was a question of the draft of a warrant for her arrest down in his garbage. why is it in the garbage? fear that it would never -- it would be too big of a political mess? this is unprecedented. now, they are trying to find a judge that will take the case. two judges have said they will not take it because it is not in their jurisdiction. the appeals court needs to find one willing to do so. we are hoping this investigation will progress. so far, it has been pretty much not going as planned. >> thank you so much. let's get you some of today's top stories we are following at this hour. general motors shares rose the most in a more than two months. reporting fourth-quarter profit that beat estimates. cheaper gasoline helped vehicle sales. chuck stevens discussed margins for 2016. >> we are solidly on the path to 10% margins in 2016. when you look at north america in 2014 and exclude the impact of recalls, margins were just under 9% for the year. of 110 basis points. very much on path to 10% margins in 2016. >> staples has agreed to buy office depot. the deal is valued at $6.3 billion. it would reduce the u.s. office of light industry to one major retailer. activist investor star board value had pushed for the deal saying the combination could save more than $2 billion. antitrust regulators are to take a close look at the deal. coming up back of the 1980's, you may have bought your household appliances at sears. the chain is struggling to survive now. the rise and fall of retail giants, next. ♪ >> welcome back. let's check bloomberg world news. jordan has executed to prisoners convicted of terrorism related offenses. came just hours after islamic state released a video showing a jordanian air force pilot being burned to death. dramatic video of a commuter plane crashing into a river just moments after taking off near taipei. a dashboard camera captured this scene moments before the crash. the trans-asia air wise -- struck a taxi and a bridge. 20 are still missing. rescuers used a crane to lift the plane from the shallow river. china's central bank trying to jumpstart the economy growing at its's lowest rate since 1990. putting more liquidity into the system. that is the latest world news. we have some breaking news on greece. let's go to the breaking news desk. scarlet fu, good afternoon. >> the headline is pretty stunning. greece may run out of cash as early as next month without ecb concessions, this according to people familiar with greece's finances. we're talking about the additional sales of treasury bills by the government. there's currently limit imposed on their short-term borrowing. unless they race that limit, the country would face a cash crunch . we have been talking about this for the last week. the new governments by minister and prime minister -- according to one official that bloomberg spoke with the cash squeeze is getting worse because a lot of people are holding off paying their taxes because they think they might give ground a little bit here. a lot of moving parts here. in terms of impact on the markets their markets are closed already. in the evening in europe right now. the euro is trading and is weaker versus the dollar, not much movement following these headlines. >> scarlet, thank you. in the last 20 years, the retail center of the united states experienced a rapid change as a new generation of shoppers moved consumption online. julie hyman is here to show us which retail companies adapted best to shifting consumer preferences. >> we know one of them is not radioshack. that sparked this idea. it would be interesting to go back and see what the biggest have been over the past couple of decades. we took the sales of various retailers and ranked them. if you go back to 1994, walmart was the largest. sears and kmart in the number two and three spots. they combined. we have seen their sales decline quite sharply. target also on that list and jcpenney, another retail now struggling. walmart is still on top. sales have grown considerably more than doubling. home depot now on the list, cost going to list, target and sears still hanging on. look at 2014 now. the full year we have numbers for. amazon makes his entry on the top five list. amazon was just being founded in 1994. apple on the list as well. walmart still on top, dwarfing the rest. >> we are hearing a theme here. the analysts think they will maintain that position given we are seeing generational and structural shifts. >> if you look at the sheer size of walmart, it would be difficult for the others to catch up. it has to execute better and continue to grow. earlier today, we talked to robin lewis. he is optimistic for walmart's prospects. >> i believe walmart will still be on that list because they understand how they have to evolve their business. they finally got this on the channel concept and are moving quickly in that regard. they have the potential to squash amazon. >> really? >> when their ceo says we don't have 4500 stores we have 4500 distribution points this is what bezos has been driving for. yes to get distribution points. >> a provocative idea that walmart can squash amazon. he thinks successful retailers will have to have presence everywhere in the future. >> thank you so much. coming up, what does the return of the measles mean for vaccine maker merck? we take a look at this part of the ongoing story when bottom line continues in just a moment. ♪ >> with more than 100 confirmed cases of measles in the united states, vaccinations have come into the spotlight. the only shot you can get is made by merck. given the rise of anti-vaccine could the monopoly be in jeopardy? first, how did merck become the country's sole supplier of these measles vaccines? is that a problem? >> depends on who you talk to. merck became the full supplier because the vaccine market is highly concentrated. it is incredibly expensive and takes a lot of time. merck was the first to the table and developed the vaccine and got approval and have gotten government contracts and monopolized the market. i talked to patricia who said that is not surprising. merck is able to offer this vaccine at a reasonable price and that tends to discourage competition because they don't have an incentive to enter the market. merck is the only supplier of this vaccine in the u.s. and they make $1.4 billion on the results vaccine every year. most of that is made in the u.s. it is a drop in the market -- drop in the bucket for merck. >> more and more parents are expressing concerns about the merck vaccine. measles in particular. could merck lose dominance? >> the anti-baxter -- anti-vaccer movement has been around for a wild. it is because measles is spreading, that's why these voices are being amplified. -- has been around for a while. what could be threatening to merck is a pending lawsuit that alleges merck misled the u.s. government about the effectiveness of the mumps vaccine. that could take a few years to figure out. what really poses a threat is glaxosmithkline already has an mmr vaccine for measles. they have developed it. they have been testing it in the u.s. they plan to apply for a license in the u.s. i talked to a former cdc official who said that will spread out the market share because the cdc wants multiple suppliers. not only for leverage, but because it ensures you have the supply. it is supply safety. that could take away their market share. >> there was that outbreak in arizona near the site of the super bowl. one in homage country in ohio. something our public health officials are watching closely. thank you so much. oil prices reverse course. four-day rally halted as u.s. inventories exceed forecasts and climb to record levels. ♪ >> welcome back to the second half-hour of "bottom line." i'm mark crumpton in new york. it's time for the commodities report. su keenan is here with the details. >> we are seeing a big reality check for the oil bulls, reversing yesterday's strong gains. it shows the cautionary tale of when people try to declare a bottom out. the biggest four-day rally since 2009. we have been down as much as 9.5% today. very close to it -- nothing like a huge supply build to remind everybody. we had a government report showing a 6.3 million barrel build in the nation's stockpile double what was expected. we are at the highest level of supply in three decades. we were off the lowest level in six years. there was a view that companies are starting to cut back. maybe that is bullish. short covering had to play a role in some of yesterday's gains. some say it is hard to fight with fundamentals until you see them cut production. my favorite quote is from city futures -- hard to call it a bull market when we are down from 50%. >> not out of the woods just yet. >> that seems to be the call. the big question was whether the pullback would extend into the close. we have dropped close to 9%. i know you have stephen schork up next. often when they don't have the answers on fundamentals, they look to the technicals. that was between noon and 12:30 -- that is a technical story. where do we go from here? >> su keenan, thank you. stephen schork is editor of the schork report. he has been analyzing and writing about the energy markets for more than 25 years. welcome back to "bottom line." good to see you again. >> great to be here. thank you. >> is the seven-month collapse at an end? >> i simply don't see how anyone can say that we are at the bottom. we were at $100 a barrel prior to this summer. no one myself included, could tell you by this time that a months later we would be below $50 a barrel. no one saw this coming -- how they could declare a bottom to this market makes no sense. we have a situation where over the past four weeks, inventories in this country have increased by 30 million barrels, a record. we now have oil inventories above 400 million barrels for the first time since time magazine nominated gandhi as its man of the year in 1931. the four-week average production at the highest weekly high since the deal we started reporting its data in 1983. let's face the reality here. we are in the middle of a turnaround season. refinery demand is absolutely at a seasonal low. that is being compounded by upwards of 1.6 million barrels a day of crude oil capacity. we are at a situation where we have two much supply and we still do not have enough demand. given the structure of the curve, producers still don't have a tremendous incentive to pull back production. >> how long can the market handle this oversupply? what will it mean for prices in the near term? >> in the near term, consumers should get ready for gasoline prices to start to study. they will start to rise -- that will be a function of the rollover to summer grade gasoline which is more expensive to manufacture. we are not going to see any kind of rice consumer -- commensurate what we saw a year ago. we are looking at six months. if you are a producer, you looking at a $10 premium for oil -- oil a year from now is $10 more expensive. i can take my oil put it into tank, sell out features and i still have a guaranteed profit. it is not until we see all of the available storage tank it around the world on land and in tankers maxed out. you will not see the complete incentive to hold back production. we are looking at another six months of oversupply. >> the chairman of rabin beanie global economics was on bloomberg tv today. he told betty liu the fundamentals said just oil prices will increase gradually. is he right? >> absolutely. in the long-term. wall street lives in the short term so everyone is try to pick this bottom. i do think we have another $10 -- we can still break $40 a barrel. the economics are divorced from reality. this is similar but in reverse to what we saw in 2008 when oil prices set above $100 a barrel. that did not prevent oil from going to near $150 a barrel. we are at that situation now. oil break that 65-$70 range. he is correct. we will rebound. i would like to know when. >> you mentioned the strike. employees of 200 refineries went on strike on february 1. the sites affected by the walkout account for 10% of u.s. refining capacity. what impact will this strike cap on fuel output? will consumers feel the effects? >> they could, potentially. this is a long strike. when we have to start maximizing our summer grade gasoline in april, this will have a detriment to the consumer. if you are taking off 1.6 million barrels a day of crude oil demand, that is less oil going in. that is bearish for oil prices but bullish for the stuff you get out of the refinery. it is bullish for the product fraction. if we start to see -- the own striking and six refineries -- they have 200 and their umbrella. we see this strike last into the spring then yes, we're talking about, even though the market is well supplied right now we are at a point when demand is at its weakest but if we get into april and may and have that capacity sidelined and demand picks up there is only one way for the price to go. >> stephen schork joining us from philadelphia. it always a pleasure to have you on the broadcast. planning to go to cuba? better keep your receipts and records on file. the u.s. treasury denies americans -- there is still a treasury sanctions in place. ♪ >> welcome back. it is time for today's latin america report. the ceo of mexico stock exchange says he's open to proposals from groups interested in buying a stake in the board. gappers reader -- the operator of brazil's -- like a 50% stake -- 15% stake. this fight to the easing of rules, most sanctions between the u.s. and cuba remain prohibited. the deputy director of the treasury's office of foreign assets control said americans traveling to cuba or engaging in transactions with the country are still required to keep records for five years. his office will continue to enforce the cuba sanctions program and will take actions against violators. that is you are report for this wednesday. coming up, frozen stays hot. disney's planned to have outside and and a joint cinderella's party -- elsa and anna joint cinderella's party. ♪ >> it is 45 minutes past the hour. let's check bloomberg world news. president obama's pick to run the pentagon says he is inclined to back increased u.s. insistence to ukraine including lethal arms to fight against russian back antigovernment rebels. that is confirmation -- ashton carter says he leans toward advocating sending weapons to ukraine. >> we need to support the ukrainians in defending themselves. the nature of those arms i cannot say right now because i don't have -- i have not conferred with our military leaders or ukrainian leaders. i'm inclined in the direction of providing them arms . >> mr. carter had this to say about defense cost overruns. >> the taxpayer cannot comprehend it, let alone support the defense budget. when they read a cost overrun, lack of accounting and accountability, needless overhead and the like. this must stop. >> new figures from the united nations show more than 5000 people have been killed in ukraine since april of last year when separatists -- the separatist conflict began. 220 people dying in the last three weeks of january. three people were killed when a shell hit a hospital. that is a look at world news. we will have an update in 30 minutes. fans of elsa and anna fueled disney's stellar quarter. at an all-time high after beating analyst estimates. trish regan one joins me here. >> unbelievable, the merchandising business here. the film and all that goes with it -- i have two little girls and a little blood. my girls have been crazy about the frozen franchise. -- two little girls and a little boy. clearly, this is a worldwide phenomenon. will they be able to do it with star wars? we will seep we can bring that up for you. he said absolutely. this is an opportunity for us. -- we will see if we can bring that up for you. i also asked him, how much do you weigh in on this movie? are you in the edit room before the final gets cut? he said i have a lot of terrific people doing this but yeah, i'm going to do go and watch the film before it airs. i might see it once, twice maybe three times. disney knocking it out of the park. the other interesting news, they will be opening shanghai china disneyland shanghai in spring of 2016. they were originally said it would happen toward the end of 2015. then they said 2016 and he says i cannot give you an exact date. we were able to pin him down as far as the spring season. >> richard carmona the former surgeon general you will be talking about measles. this is something pitting and anti-vaccer contingent against health care advocates saying get your children vaccinated. >> going back to disney this started in disneyland at anaheim. i asked him if it affected park attendants and he's said park attendance has been up. it has sparked a lot of passionate responses from a lot of people. a lot of political folks getting into this. hillary clinton coming out and saying you have to get vaccinated, vaccines work. chris christie over in the u.k. signage be a parent's decision but later came out and said i'm for vaccines. this is something in recent years that has gotten a lot of attention. a lot of people are very educated and very affluent, making the decision not to vaccinate their children. it will be interesting to see whether we see a real turn. >> part of the controversy, merck has a monopoly on this vexing. >> anytime you get a monopoly it's never good. we will talk to him about it. whether or not you need -- a lot of doctors feel you don't do it all at once but stage it at different times so the child does not get some any different vaccines in one given period. >> "street smart" coming up at the top of the hour. but get you some of today's top stories we are following at this hour. u.s. copies hide more than 200,000 workers according to the adp private payrolls report. -- u.s. companies hired more than 200,000 workers. the jobs report comes out on friday. we will have the details as soon as the report from the labor department comes out. bill gates gave 1.5 billion dollars of microsoft stock to an undisclosed entity back in november. the transfer decreases his stake in the company to 3%. he has a net worth of $82.9 billion according to the bloomberg billionaires index. we are getting word that universal pictures will release a movie about the life of steve jobs on october 9 of this year. the studio acquired the project based on the biography from sony. alibaba making its first trial drone deliveries in china. its e-commerce rival, amazon wants the u.s. government to speed up approvals for its drone tests. amazon is limited to testing remote deliveries outside of the united states. that is a look at the top stories this hour. seahawks fans, turn away. the patriots have been making their way through the snow we streets of boston drawing wild cheers from giddy fans. well-wishers pumped their fists and screamed from behind barriers as the team set on the world war ii style amphibious vehicles. some fans leaned on massive snowbanks. string to get a glance of tom brady, bill belichick and other players. the victory over the seahawks with the patriots fourth nfl title. stay with us. scarlet fu will have another edition of off the charts. "bottom line" continues in just a moment. ♪ >> the conventional wisdom last year was that it made sense to hideout in the shortest term debt to prepare for the inevitable higher interest rates. are these notes safe or are they produce some pain? scarlet fu goes off the charts with lisa brummel it's -- we saw from what's -- >> this charts how wall street is positioned in bonds. walk us through this because it looks like it's a negative number. >> wall street's biggest bond dealers, that trade net short two-year treasury bonds. the most short for more than a year. which means they are expecting the price of two-year treasuries to go down. >> does this reflect our view? >> it could be that they are hedging against other positions. the treasury books used to offset risk and corporate credit and other things that are more competent at. really, this has reflected the overall view from wall street that two-year treasury yields will almost tripled by the end of this year. >> this goes back to the idea that they don't by the federal reserve's argument that interest rates will head higher this year. >> the rest of the market is not buying it. this is the interesting thing. two-year treasuries have done pretty well this year and people have been going back to them a bit. the fed keeps saying we are going to hike rates. this is not a normal policy. >> there could be a surprise from the federal reserve in terms of what they do. look at the commodity prices, oil prices, for instance. down more than 8% today. since september, off by 50%. we see a bit of a recovery. >> as much as the surf for safety, it comes down to pick your poison. think about what's happening in singapore or china. the banks have been in surprise territory and the fed has come out and surprised the dovish also. the hawkish may come out and say we will hike rates sooner. if people are very long, short-term bonds could prove to be a problem. >> 11 plus year treasuries, a very different story. >> the biggest banks are going into the longer dated bonds sing expectations for inflation are much lower than the fed is saying over a longer term. you have investors overseas coming into longer dated bonds on the relative value basis based on negative yields and 10 year bonds in switzerland and other places. where are you going to go? from a technical perspective and longer-term inflation, especially with such low commodity prices longer-term bonds look pretty good regardless. >> we will see what happens. there is the big question of liquidity as well. >> thanks so much. get the latest headlines at the top of the hour on bloomberg radio and streaming on your tablet and on bloomberg.com. that does it for this edition of "bottom line." thank you so much for joining us. "street smart" is next. ♪ >> we have six minutes to go until the close. we have the market fluctuating on earnings news of this climate energy producers, offsetting gains in consumer shares. oil resuming its decline following a rise in u.s. inventories. the euro weakening for the first time in three days, as greece wants to renegotiate its debt. yum! brands. "street smart" starts now. here is a look at so

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