are you looking at? >> as you give us the eps number, it matches estimates, but the sales number is a big miss. comparable sales, spain -- same-store sales was down 1.6%. analysts were looking for a gain of 1.3%. what happened in the first quarter was the weather issues. frigid temperatures in february. multiple winter storms. amateurs were much colder in february than they were in the previous year. a late easter as well. inventory buildup that carried over into the first quarter and macy's had frequent one-day sales, giving you an indication of how frequently they had to markdown merchandise to clear store shelves. that pressures margins as well. in terms of growth margins, 30 .9% for the quarter. higher than what analysts were looking for, 38.7%. the key much the same as it was one year ago. same-store sales number caught my eye, and unexpected drop of 1.6%. what we hear from macy's is they have raised the share buyback by $1.5 billion, and it is also increasing its dividend by five percent as well. all of that flows straight through to the bottom line in the coming weeks and months as well. you have a meet on the bottom on sales.a miss in terms of the outlook, they say they are going to match the full-year guidance. >> when you mentioned guidance, ithe highlights the first quarter does not mean a lot for macy's, it is not back to school, and it is not the promotional christmas holiday. >> yeah, and people were looking on april because they are looking for that to set the tone for the rest of the year. the indication on the conference call is that april got some traction -- and they can build on that had the premarket price, $57.80 a share. it is down slightly from yesterday's close of $57.84 a share. much, chief very markets correspondent, scarlet fu. moving and shaking this hour, russia's foreign minister sergey lavrov said down with bloomberg's ryan chilcote and he discussed the crisis in ukraine, call it as close to a civil war as you can get. sergey lavrov also made it clear that russia has ties with ukraine that involves much more than geography. >> this is the model of the language,tizen, orthodox christianity, was born on the territory of ukraine as it stems now, and we do not consider ourselves foreigners. >> back in the u.s., president obama visits the tappan zee york, but there is more reasons for him to come to town, money. phil mattingly joins me now. how does the president said in to democratic plans this year? are democrats shunning him or embracing him? exit is complicated. read -- >> it is compensated. red state democrats do not want him to be around, however they need his money. what president obama can do better than anyone else on the map right now is pull in dollars and we have seen that in spades since the start of the cycle. entities,jor campaign the president has hosted about 24 fundraisers for the committee,national nine fundraisers for the democratic congressional campaign committee, and with the senate in play, and the map tilting toward republicans, he is held seven events already for the senate campaign committee with another scheduled for this afternoon. >> is there a tangible benefit when you have the president as chief fundraiser? you actually get more cash? >> you do. the public and officials that i speak to on a regular basis continue to hammer home that when you have the president, regardless of party, so did george w. bush and bill clinton, the president pulls out big names and big cash. of 2014, theinning three primary committees have brought in $240 million. it is not all because the president, because -- but he is a key component. what that does is it gives them an advantage, back to the senate races, over the fund raising that the republicans can do. even if he does not show up, he can send money their way. an industry that ends up shelling out the most cash for these kinds of events? firstce the president's campaign started in 2007, he has worked hard and nurturing parts of the economy, silicon valley, corners of wall street, and hollywood. that is his goto place this time around. on wall street, tony james has hosted a fundraiser for him. valley, to silicon where democrats have really pulled money in the last couple of years. marissa mayer hosted an event for him last week. majorars ceo has been a donor. the biggest names have to be hollywood in the sports world -- hari waldstein -- harvey -- harvey weinstein, magic johnson, alonzo mourning, and alan horn. talk about bringing in big names, that is the democrats see him as most effective, even as ratings are low. >> what? no big oil companies? i am shocked. [laughter] bell,ld reports after the and that is after the controversial "blackfish" movie. in fact, it has been a fabulous 18 months for blackstone. nothing unless she has more. -- cristina alesci has more. >> blackstone did an excellent job of taking advantage of the ipo window when it was wide open, and what that means for private investors is they got a lot of cashback, $11.8 billion in the first quarter. >> oh, my gosh. >> huge amounts of money, and they did that at huge valuations. we look at a company like helton, we thought it would be -- hilton, we thought it would be a terrible deal, but it has been performing pretty well. those are the sellers. >> tone was the seller. what about the by -- blackstone was the seller. what about the buyer? they are doing well. to 15%.s are up 12% the kinetic company like pinnacle, you're looking at a return of 50% from a public market perspective, and that does not factor in the deal than ellis with hill scheier, -- the deal they announced with hill scheier. >> what were some of the losers? i mentioned seaworld after the bell. how did blackstone fair with that? >> blackstone, when they took the company public and sold a piece of it, they were valuing the company at double what they paid for it. already, they will the prophet -- they booked the prophet. they are doing a good job in terms of looking a -- booking a profit. could they have done better without the controversy, absolutely. california is considering a proposed ban, and that creates overhang. >> do you think we want to see black sun sell at that kind of rate to wind down their investment in seaworld? >> yes. i think we will see them try to get out of that stock. on the other stocks, they take their time. if you look at what they hold in their real estate, they still hold 60%, 70% of hilton. they will be careful about unloading all of that equity into the market. they do not want to shoot yourself in the foot. >> thank you so much, deals reporter cristina alesci, really killing it for this quarter. highflyers -- a megamerger in the commercial jet leasing business. we talked to the ceo of air castle. -- plus, athat might wine that might shake you up -- a vineyard tilt on top of the san andreas fault. ♪ >> here is a look at our top bloomberg headlines. reporting af -- higher than expected loss. the company that owns the lucky brands reaffirmed its adjusted fiscal year guidance. won a big contract in china. chinese regulators said in february they will loosen the rules to encourage budget airlines. there'll be a big gap in wall street bonuses this year. bonuses paid for asset managers is expected to rise by 10% while fixed income traders could see a 15% cut according to johnson associates. johnson says this represents a sea change, noticing that the largest pay check will no longer come from wall street's big banks. is filled with consolidation. everyone wants to win with original content, and even radio is saying a renaissance. for analysis, we spoke to a number of tech and media insiders. >> these are different technologies, and they do not necessarily -- the only ones that are synergistic are cable, internet, and landline phones. delicately all our separate. they will be buying a different technology that is not synergistic with what they have. they will operate two technologies, very expensive. >> i really believe that if you look at it over time the pipes of delivering content, everybody is trying to do it, so it is massively competitive space. the content is king. they will cost may be able to extract the most money. -- le who bridge the gap >> it is a lot of money. >> it is a suckers game. really, arers, looking for four things as they buy time today, and one is scale . advertisers are looking for local activation. how do they drive people into their stores, create traffic, and that is what radio does. the third thing would be social and we know how important social --ia has become, and social radio was the original social media. .> we are joined i wanted to get your take on the at&t-directv possible deal. is this a synergistic deal for the companies or not? >> i think it makes strategic sense for both parties. in fact, a couple of weeks ago we upgraded the shares of holdtv to a buy from a precisely for that reason. we have covered the sector for a long time and we think the stars have never been more aligned to make such a deal happen. >> does that mean we will see mean,ued salivation, i who will be left in the satellite world at this point? i think the time warner-comcast deal brought attention to the fact that the competition will devolve into a handful of players. one comcast and time warner completed the merger, you have more than one-third of the video market in one provider and a significantly higher share of broadband. are at&t and directory trying to do is counter that and i do not see this driven by synergies, but i would beg to differ with the other guest that suggested there would not be any synergy. it is really very easy to conceive of hundreds of millions of dollars of synergies and programming costs on the video side, and the consolidation of some functions. >> what will be the next catalyst for the media industry? we have gone through the potential consolidation when it comes to cable and broadband. what will be next? >> the next frontier will be streaming and over-the-top. we've already seen that, to initiatives around taking advantage of content online as well as mobile devices. you have a lot of disruptive technologies that the media sector is focused on, not just to contend with the disruption, but to leverage those platforms to increase digital revenue, and international and maintenance 14. >> you mentioned disruptive -- important thing. >> you mentioned disruptive technology. what does that mean to you? areo case with big implications. i think the challenge for ceos and executives is to be able to not only combat these threats, but two, you know, leverage technology to be able to increase their revenue from and we see more and more companies focusing on that. >> of course, it all comes down to how do you make money off of this, how do you monetize this consumer shift from tv to your phone, and to your ipad. " word, is the "m monetization, and i can't not enoughugh -- can't get comments from investors looking to monetize digital space. you can easily foresee a few years from now where the percentage of revenue will continue to grow, maybe potentially reaching 10%. at that point you will see the evaluation -- the valuation began to reflect that. >> you mention the other catalyst will be international. talk about that. fromof what at&t gets directv is exposure to latin america. >> that is exactly right and latin america has been one of the growing areas with the emerging middle class, and then you have other emerging regions -- eastern europe, you know, china, of course, other parts of asia pacific. so, when you look overall, across the media space, international growth rates continue to outperform a lot of areas whether it is box office fees or international licensing. a lot of companies are discovering found money, so to speak, and a lot of the markets are beginning to realize the appetite for western conference. -- every company likes to get found money. ,ou are very much, tuna amobi analyst at s&p capital iq. europeans now have a right to be forgotten online, a major pain for companies like google. new mystery at the federal reserve -- some investors might have gotten advance word of fed policy changes. we will discuss coming up. ♪ >> first. bloomberg. >> you are watching "in the loop ," live on bloomberg television and streaming on your phone, tablet, and on bloomberg.com. i am alix steel, in for betty liu. it is 26 minutes past the hour. bloomberg tv is on the markets. we're looking at futures pointing to a lower open, but really you could call them flat. the s&p is off just .2%, still treating around 1890. yesterday, the s&p was able to surpass 1900 for the first time ever, but not able to keep that steam. the nasdaq is off by about a point. we are on the markets again in 30 minutes. according to truly a, the american home slipped further out of reach in 2014 -- 2013. mortgage rates are up, and incomes are not, making homes in popular markets less affordable for the middle class. with me to look at where the prices are hot and where they are not, a chief economist at truilia. what is the criteria? >> we look at whether homes are in reach for the middle class. we compare the median income in the metro area to 31% of the cost of housing. thumb is your mortgage payment, taxes and insurance should not be more than 31% of your pretax income. incomes differ. the typical household in san francisco or new york takes more household incal atlanta. >> but we pay a lot more, and mike can attest to that. [laughter] >> the list of where places are most affordable for the middle class is obvious -- midwestern cities that are not growing very strong, akron ohio -- akron, ohio, lead your list. -- the a case of people middle class cannot afford housing, or is it a region-by-region thing across the country question mark >> the expense for middle-class homebuyers is very different. four out of five homes are affordable the class households in much of the midwest. it is one out of four or less here in new york, southern california, or san francisco. for people with a high school degree or less, it is even much more difficult. even metros that are more affordable like chicago, atlanta, houston, fewer than half of the homes are for sale in reach of someone with a high school degree or less. >> i guess my question is is it harder for someone the know where you live to buy a house, or did the crash make it easier in certain areas? >> it is easier than it was in 2006, but harder than it was one year ago. compared to one year ago, it has gotten much harder to buy you in the midwest, where prices have risen the most, and they were expensive to begin with. it was hard, and is getting harder. >> part of me wants to say go buy more homes and ramp up supply, and i will help demand and prices. is that too obvious? of thelies a big part equation. when you look at all of the expensive markets in the u.s., none of them build very much housing. when you look at the markets that build a lot of housing, none of it is expensive. the places that build a lot of housing, phoenix, las vegas, raleigh, austin, none of them is anywhere near as expensive as even some of those midpriced cities on the coast. so, building more housing would certainly be part of the solution, but those expensive markets are both hemmed in by geography -- often against an ocean or moms -- and building relations, like zoning, are often a lot more onerous. >> isn't there a certain nimby factor to this, too? >> absolutely. there is a political challenge. housing costs to one person are property values to a homeowner, and making housing affordable to homeowners -- to renters or future owners means slowing down housing values for current owners, and they do not like that. >> the question is what does this say about the broader housing market that we saw? janet yellen said she was worried about that. all data is not great. job wages are not going out. productivity is not going up. is this another reason to be worried? >> the affordability concerns in big, coastal markets are long-term concerns. even at the bottom of the recession, housing was still expensive in new york and san francisco. we are concerned about now in terms of the recovery is we have seen a slowdown in construction, a slowdown in sales, fewer applications for new or just mortgages. some of that has to do with a shift in the recovery, away from investor activity and bargain buying two households looking for homes themselves. we also see action on the rental side. young people are moving out of their parents homes, but they are renting first. if you're looking for housing recovery among first-time homebuyers, that is not where you will find it for the next couple of years. >> we have heard that banks were lowering standards to separate in first-time homebuyers. we have economic data breaking, michael mckee, looking at the producer price index. >> the producer price index comes in much stronger than people thought. we are talking about the possibility of a surprise yesterday. a core basis on from one year ago, and an overall basis, a month-to-month .6%., ppi was up by so, we're releasing some i look, and, alix, when at this, it is an area that will catch your eye -- >> are you talking energy? >> food prices. the largest increase in food prices since 2011. this is producer prices. when he gets to the table, we will see when it starts to feed through, but everybody has been predicting a big rise in food prices with a drop. >> especially in brazil with coffee prices shooting up. 11% of every% to dollar you spend because most of it will be labor energy. >> you can tell the coffee gender is around here. -- drinker in april is around here. food prices in april up 2.7%. to be a among?it it is difficult. >> you are paying more for coffee. alle found that one-third homes listed are still on the market today. homes are moving fast. it is tight on the low-end, adding to the challenge of people trying to buy their first home that is lower-priced and where we see some of the other action in the market. >> mike magee that banks will start lending more freely? >> interesting question because -- mike, do you think banks will start lending more freely? >> interesting questions because they have been tightening. yesterday's announcement by the that they would make it easier hold on to loans, that could make a big difference, it would seem, in willingness to make loans. quick start tutorial reasons why we should -- >> there are two reasons why we should see -- see it get easier. to bewill less likely less likely to have to take back loans, which should encourage banks to loosen underwriting standards somewhat. also, the refi business for banks has plummeted over the past year as mortgage rates have risen, meaning more banks are looking toward home purchase lending to pick up the slack in the business heard for both of those -- business. for both of those reasons, mortgage credit should be looser. >> banks not having to buy back a mortgage after three years, will that make some guy in the midwest who wants to buy his first apartment easier? said one of the reasons why they are not lending more is the risk they will have to take that loans, the outback's. -- put backs. the question is whether they indeed cut back on some of the extra layers of credit centers they have put on to take that into account. >> and, of course, as long as they have jobs. >> and that is improving a little bit, so if the housing market gets better, we get homes. but we will leave it there. -- >> we will leave it there. really appreciate it, jed kolko, chief economist at trulia, and economics editor michael mckee. coming up, we will talk to the ceo of air castle. response tohnson donald sterling's claim that he is not a good role model and weighs in on the clippers' owner future in the nba. they --n the loop -- stay "in the loop." ♪ airobile aviation company cap holdings is set to complete fleet severalof korean won largest companies in the -- in history. during the is ron wainshal, ceo of aircastle. what you make of this deal? does it make your life harder? >> no, it makes it better. about one year ago, the market cap for all the aircraft leasing companies that were public was about $5 million. now it is $11 million. >> does that mean there are more companies in the space? the $11 billion is for the four companies in the space, but there's a lot of investor interest and part of it is because there is a lot more to invest in. manufacturers are pumping out about $100 billion worth of aircraft every year, and that is almost twice what it was five years ago. >> are you taking part in the boom? >> we have grown a lot in the past two years. since we were on the show last year, we have invested about $2 billion, and that is a pretty big part of our growth plan. &a could be or may not be part of our strategy, but we are a great originator of transactions. >> are you worried? dr. companies went from a $4 billion, $5 billion market cap to $11 billion. does any of that point to a copy in the leasing market? leasing market? >> the leasing market has more to go. airplane travel is basically a gdp driven activity, and as recovery in the u.s. and europe continues, you will see more gdp, more demand for airplanes. >> you do tend to have exposure to, say, brazil and china, and there are inflation worries there. >> both of those have actually been pretty good stories, and that has been talk about how china has slowed down, and the growth rate is now only 7% or 8%, which any western country would kill for, and the air traffic is still drawing double digits in growth, so there's still a lot going on. the great thing about airplanes as they are portable. if there is a slowdown in one part of the world, our job as a manager of airplanes is to find the best and highest use of the thems cash assets and move . -- assets and move them. >> with china, it does not really match up when you see slowdown worries, credit restriction, the emerging middle class still trying to emerge, it does not gel with more plane travel. >> ashley, it does. the role of the government is quite big. it is not penetrating the u.s. market-- -- the chinese like it has in the u.s. and europe -- low-cost carriers. the bestt opportunities around the world, and our biggest deal ever was something we did in the last few weeks, a $900 million deal with , the top 1 -- one of the top 10 airlines in the world, and we do not necessarily bid on the same things that aercap or other people might. 777re buying a fleet of aircraft, wide-body, state-of-the-art airplanes, and helping them transition. >> so, brazil, is that your favorite place? >> resume is a good place, but i do not a favorite place. >> brazil is strong, china not as bad as people think, recovery in europe. thank you. great perspective on the aircraft leasing industry, ron wainshal, ceo of aircastle. coming up, more than 1000 infrastructure jobs could be -- 100,000 infrastructure jobs could be at risk if congress does not act fast. we will take a look at what those jobs mean for the economy, and speaking of infrastructure issues, we will take you to california's oldest winery, and tell you why it is in danger of being destroyed. say it ain't so. stay "in the loop." ♪ >> it is time for the bloomberg number -- $380 million -- that -- the city of st. louis is investing in the city arch project. vice president joe biden was just there yesterday and he says the project is an example of what the country can do to rebuild infrastructure. -- the projectb would bring 4000 permanent jobs. in new york, president obama will use the aging tappan zee bridge to highlight the latest fight in washington over the new highway bill. peter cook has the details. we should break out our crisis countdown clocks. isn't this the next big shoe to drop in washington? to dust off the clock. you do not have to plug them in yet, but we are getting closer. fund could trust start bouncing checks by august, putting 112,000 construction injects, 700,000 jobs jeopardy. the president will turn up the heat on congress with today's event at the tappan zee bridge, and the big sticking point, money. inders agree on billions infrastructure investment, but they disagree on how to pay for it, and tuesday i spoke with transportation secretary anthony at a bloomberg conference here in washington, and he painted a dire picture. >> every community across the country has a to do list, and right now we are falling short, under-investing in infrastructure, and we need to strongly send a signal, not only to ourselves, but to the rest of the world that america is back in business when it comes to our transportation system. made the case for the administration's proposal with a four-year plan carried a price tag of $3.2 billion, after the funding coming from a increase on overseas earnings, and idea republicans have floated as well, but only in the broader reform, notax increase in the gasoline tax, and a bipartisan six-year senate deal was unveiled, but no plan to pay for all of the cash. dried by fund could be the end. that is why we are looking at a temporary patch to get us past the midterm elections, but again, the countdown is starting all over, crisis mode returning to washington soon. >> crisis mode and loggerheads between the house and the senate, what a shocker. is the funding for the tappan zee bridge in doubt right now at this point, peter? >> that is one project that is not really in doubt in terms of funding. it is to highlight a major project in this country -- 58 years old, 138,000 vehicles a day, designed to carry only one hundred thousand vehicles a day, the accident rate, two times the average. a new bridge is going in, and the president will highlight this. three point 9 billion dollars. federal regulars approve this new project and about half the time that was expected. the president will sign a measure today basically allowing process to be expedited across the country, one of the things he says he is doing in the meantime while congress dolls. >> that video is freaking me out because i've never seen a little traffic on the tappan zee bridge. >> that looks very unrealistic. >> here are the headlines -- macy's first quarter sales fell unexpectedly as cold weather kept shoppers out of stores. revenue at the second-largest department store company fell on .7% aaron -- 1.7%. deere falling short of its outlook after shipping less machinery in the most recent quarter with sales dropping to $9.25 billion from over $10 billion one year ago. at fortress look investment group is repairing a bit -- in new york, fortress investment group is preparing a bid. the new york-based private equity firm is seeking financing for and off you -- offer valued at about $4.7 billion. -- er ear up asing your online past. companies are not happy about it. wine taste better than grapes. we will take you to a vineyard on the san andreas fault line. stay "in the loop." ♪ >> well, when you think california wine, you probably thek that the valley, but state's oldest winery is actually located 150 miles south of there, right on top of the san andreas fault. in this episode of "secret ballot" we tour the vineyard and find out how earthquakes can be impact agriculture. >> we are about 90 miles south of san francisco at the derose winery, the oldest winery in california, which is a big claim to fame. when did this winery officially start? >> the doors open in 1851, and to do that means you have to made wine -- had to have made wine, so i'm thinking 1847 is when it was planted here. it is around the time when gold was found. there's a lot of old history around here, but you do not hear a lot about it. >> not only is this the oldest winery, but you are famous because you have the san andreas fault. peek?you mind us taking a >> i would love for you to see it. onright now we are standing the san andreas fault. we get rumblings all the time, day, little0 plus a ones that humans are not even field. i am going this way, and you're going this way. we are being pulled. there is not what you can't -- much you can do about it. >> do you feel safe here? >> i feel very safe, to tidy the truth. here.vy set up satellites things like that are recording our movements right now. see that white thing, it is recording our movement from the satellite right now. >> you have any sense over time how much things move? >> this is 40 years. >> all five of these trees used to be in a line? >> a straight line. >> that is amazing. talk about doing business with the san andreas fault. >> the rumblings bring up natural springs and water, and for us, he brings up the water and allows our grapes to feed. that is what i see it happening, it comes up in feeds that way, which means we do not have to do that. it is an historic site for that part of it, not just the wind. >> absolutely. >> time now for this versus that -- a court ruling in europe means putty of headaches and added expenses for internet companies. top is the european union's court, yesterday ruling that citizens have a right to be forgotten mine, in other words, companies with search engines to remove personal information, and if that does not work, they could ask courts to make companies comply. that is google, whose business is to handle large amounts of humans, and how that information will cost them time and money. the company is expected to be flooded with requests, and they might have to consider to have to charge the europeans to pay for the cost. quick check on the markets. it is 56 minutes past the hour. bloomberg tv is on the markets. european markets are looking at a lower open -- markets are looking at a lower open. we are on the markets again in 30 minutes. we will be right back. ♪ >> we are 30 minutes from the opening bell. you are "in the loop." i am alix steel, in for betty liu. here's a we are working on -- futures indicate stocks will be little changed at the open, but the dow and the s&p started at record highs. plus, russia's foreign minister sergio lavrov says there is a real war in south and eastern ukraine. sergio lavrov sat down with -- sergey lavrov sat down with bloomberg. macy's first quarter profit matched estimates. as insider trading spread to the fed -- a new research paper found some investors might have gotten early words of change in fed policy between 1997 and 2013 -- unbelievable. economics editor michael mckee has been looking into the charges, and that time: set your time covering the fed. r you to blame? what is going on. >> i did nothing wrong. i do not need a lawyer. information releases were looked at, not just the federal reserve a decision combo the gdp numbers, the labor department numbers on jobs, and price numbers, and they tried to find out whether there were any leaks coming out of the lockups where reporters are put in a room and told the information ahead of time. they found none on the economics indicators, but they found movement in markets that they 20se significant 10 to minutes before the release of announcements, and they say it was significant, with money made by people trading early on the fed decisions. >> unbelievable. for so many years. my mind. of blows how does that information get released early? >> it is an open question, and you might have to look inside of the fed itself. the fed would reach a decision at its meetings around noon. by 2:00 p.m., they would've faxed information over. reporters would take the faxed copy, a couple of them would make copies, pass them on to the press room, and reporters would have three to five minutes to write their stories, and then a betle would be -- bell would rung saying you could ship that out. the fed has changed procedures since then, saying they have tight and everything up and they have their own mockup room within the federal reserve -- tightened everything up, and they have their own lockup room in the federal reserve. it is only a matter of time before we see someone like the sec investigate. it clocks if they do it for the big banks, you would think they do it for thethey big banks, you would think they have to do it for the fed. thank you, michael mckee. out, prod shaking this basketball legend magic johnson says donald sterling cannot buy his way out of this one, telling cnn that his racist remarks show the los angeles clippers is living in the stone age, and he defended himself against accusations that he is not a good role model. he is confident that still and will not end up owning the clippers. >> all i know is that donald sterling is not welcome back in the nba. he should not be welcome by the owners -- i hope they vote right. but the players, the former players, and the fans -- i was there at the clippers game -- they do not want to see donald sterling as the owner anymore. what hethinks and feels, he is in another world if he thinks everybody wants to see him back owning the clippers. >> decisive words there. how much are pet owners willing to spend to keep their cats and dogs healthy? as the owner of three cats, i can tell you the answer is quite a lot. we shelled out $40 million on veterinary care last year, and the number is expected to rise. bloomberg's olivia sterns went to a specialty vet center where pets are getting unbelievable care. >> nice work. >> she is a 100 ash he is a 159 pounds st. bernard and he is training on an underwater treadmill to strengthen his legs .nd core, one of the advances >> i could understand acupuncture in humans, but in dogs? >> yes, because there is no placebo effect. if they get better, their brain is not telling them that it will work or it will not work, and the proof is when she came in, she could not walk. >> nowadays, pet owners are spending huge sums on treatment we want associated with humans, like sonograms and physical therapy. >> he is doing a lot a -- p pooches.r spend close to $60 billion this year on their pets, and more than one quarter of that will be on their health. >> how fast is demand growing for specialized care? >> it continues to skyrocket. animals have left the yard. they are in our laps were on our couch, and they are really ingrained in the household. >> if people want the same medical care they can get for their kids that they could get for their pets. >> there are a lot of parallels. a trend this animal health company is focused on, developing medicine for arthritis, motion sickness, and even itchy skin, a condition that affects 20% of dogs. >> one of the elements that will change the way we treat dogs is itching, and it will be a significant revolution. zoetis hopesution to cash in on cap >> good boy, grizzly. way to work. >> olivia sterns joins us more. if theyuncture thing -- t,d that to make them chill ou i would pay as much as they asked. >> i do not believe it, but one of the cats that we saw getting the acupuncture -- at first, the cat was freaking out as the doctor started putting the pins in, then slowly calm down and he loved it. he was getting acupuncture for arthritis, and it seemed to be working. >> unbelievable. pet caredo we spend in versus human care? >> utley, we are spending a lot less money on pet care than we areare, -- obviously, spending a lot less money on pet care and human care, but there is a humanization. there no longer stuck in the backyard. they're bringing them into the house, into their beds, and they want them to be healthy and clean and they wanted to live longer. we are talking about things like oncology, diabetes, cardiology for dogs and cats, things we 40ld have never spoken about years ago. i saw a dog in there with a catheter. there have been studied advances. too, when you, look at insurance. i looked into insurance for my cat years and years ago, and it basically covered nothing, but i would assume the more oncology, physical therapy except, it might provide insurance. >> you would hope so, but this is one of the things that is financially advantageous to the animal health company because it is much more predictable. the degree, people do not use insurance, so they get paid directly. there are no government subsidies or third-party reimbursements. it is much more stable and protectable, and if you are developing the drugs, it costs less because you do not to go through the expense of clinical trials. >> i won a drug that makes cap calm. >> catnip. >> that makes them crazy, what are you talking about? i want my cats to love each other. thank you, olivia sterns. best video i have seen all morning. coming up, americans stayed home last month, what this says about the retail sector, and investigators playing hardball in a money-laundering investigation that could result in a french bank having to pay millions to settle the case. stay "in the loop as we head toward the opening bell. ♪ >> retail sales in the u.s. rose less than forecast with shoppers appearing to take a breather when it comes to electronics and furniture. joining me now to discuss trends customer growth founder and president greg johnson, who has 35 years of experience in consumer and retail sectors. i want to touch on macy's reporting, coming in light on the sales side, the stock is up overall. analyst overall seemed to be relatively positive. would you make of that? >> we do not do stock analysis, we do fundamental analysis. averagewas week, the ticket was week. essentially, the consumer is anemic. retail sales numbers came out yesterday. they were not a surprise. we predicted a 2% change year-to-date, and that is where it is. macy's is a strong company navigating through difficult consumer waters. >> if you look at the retail numbers, it seems to come from furniture, electronics, non-store retailers -- those seem to be the weak spots in april where clothing was not that bad in the past two months. has been okthing off of the deep bottom. month to month, numbers bounce all around. year-to-date, apparently is only 0.7%, which is pathetic, and that is why we saw heavy discounting of, not just at macy's, but across the board. are very weak because it is a promotional environment. --ple are inventory-having , difficulteavy consumer market with low growth and high heating bills. >> what has to happen to turn this around? stores are discounting 40% of their entire store. what will turn it? >> as the consumer comes back, the second half will be better than the first half. the first half was abysmal. a couple of hot spots are still ok. posco is -- cosco is rocking around. coles will do ok. challenge, day in, and day out, is the fact that only 40% of working age adults have a full-time job. if you have a full-time job, you are spending against needs and wants, but if you have no job or only a part time or to merge up, you're only spending against needs, so that depresses all of the discretionary categories. department stores are the centerpiece. >> it points to the changing retail landscape, and to that point i wanted you to listen to -- former ceoing of sears, lou d'ambrosio spoke about with betty liu this week. >> it is a completely different industry. in the past, if you talk to people that have been in retail forever, the merchants were king. the margin still play a role, but right now it is about technology, information, immersing yourself with the basiser on a day-to-day and have a continuous dialogue as opposed to an episodic relationship. >> does that mean that the departments are kind of too big to change with this industry that seems to be changing rapidly and going more to technology? >> well, we're not sure we buy the fact -- people do not go to a department store, or sears to buy technology. they go to buy needs that they have, whether it is apparel, textile, or whatever -- technology is an enabler, and he can help you get closer to your customers, but if you're not the productblic they want, they will not buy it. >> here. is there -- fair. is there one area doing better? >> the accessible luxury is strong. kate spade came out with strong numbers. michael kors is strong. tory burch is still healthy. coach is very weak. the overall sector is still growing 10%. not 20% like it used to be, but 10% is strong growth today. >> that says a lot about the consumer. thank you, greg johnson. crll to come -- greg -- johnson. videoill to come, a exploded yesterday. we will take a look at what this video is worth two companies like tmz. russian billionaires facing ukraine-related sanctions. we will have the details on that front. ♪ >> the saying that banks are too big to jail might not hold any merit according to people with the matter. seeking morers are than $3 billion from bnp paribas, and the number could get bigger. bloomberg finance reporter terry geithner joins me with more. this far exceeds the $1.9 billion hsbc had to pay. a much bigger could it get? >> it is a starting point, and potentially, we will go north. the fine will also include a guilty plea from the bank, and this is where we are in new territory with how the banks are howrmining bad behavior and things have gone wrong. this is one of many sanctioned cases we have seen with different european banks. this number is much different than we have seen with other ones, and we have not seen a too big to fail, or a too big to jail guilty plea. >> there are reasons for that because there are precautions. >> it is uncharted territory, but the market -- you could have customers blame the bank, counterparty risk, and we do not know the collateral damage, which is basically indicting the bank, paying the fine and the guilty plea. we do not know them collateral damage. they are taking a pragmatic approach that we do not know what is going to happen, but recently we have seen a distinctive we are going after the banks and they are not too big to jail. >> are there ways to contain the fallout much mark >> there are ways they think they can do this because we do not actually know. you could charge a subsidiary, which could shield the larger holder. >> a subsidiary that gets put in the spotlight heard >> exactly. that is one way they could do it, and it could be one way they do in this case as well. >> fascinating, interesting to see the progression financially as well as with the guilty plea. .hank you, keri geiger we are a few minutes away from the opening bell. we have the top 10 trades that you do know -- do not want to miss. keep it here on." -- keep it here on "in the loop ." ♪ >> first. bloomberg. >> welcome back. ."u are "in the loop i am alec still, in for that a little. -- alix steel, in for betty liu. it is 26 minutes past the hour. bloomberg tv is on the markets. scarlet fu. the market opening a little lower, giving back games. we had a read on wholesale inflation. producer prices rose in april by the most in a year, so the threat of inflation is decreasing. moving to the treasury market, prices are higher. use -- yields are down on the 10-year. the 2.6% level. there is speculation the ecb will stimulate the economy, perhaps through quantitative easing, which would make u.s. yields look relatively more attractive and for that reason the euro it is to weaken against the yen. mario draghi signaled lawmakers would be that he to act in june. we have continued unrest in ukraine and questions over what russia's intentions are there. we are on the markets again in 30 minutes. >> let's count down the trades you need to know about today. scarlet fu stays with us, and julie hyman as well. number 10, canadian solar, announcing a new partnership with ikea australia to build and install solar systems on the rooftops of seven stores. the project is the company's largest to date. --rect number nine, so does >> number nine, sodastream international, posting a sharp the klein last quarter, hurt by a challenging holiday season. lossmber eight, with a net increasing more than eightfold in the first quarter due to a charge related to stock related sales for flood power -- plug power. they fell as much as nine percent on the news. looking at pandora, number seven. tomond james upgrades outperform. lastly, pandora reported a 30% increase in monthly listener hours. i finally started using it six weeks ago. i am late to the party. >> you probably did not figure into the latest numbers. number six, sony, unexpected way forecasting an annual loss, it sixth in seven years. sony also said they would step up broad restructuring this year. >> number five is yahoo!. the mobile is gene start up blank, letting them send messages -- the mobile messaging startup blink. posting lower than expected revenue and they expect full-year sales to decline by 4%. , thember three, fossil watch and accessories maker tumbling after its second-quarter forecast trailed estimates. they also reported a decline in north american copper both sales, offsetting gains in europe and the asia-pacific. >> sears holding, the department chain announced they are looking at options for interest in sears canada. a 61% stake in sears canada and are considering selling holdings or the operation as a whole. >> your number one stock to watch today, macy's, reporting a nine percent increase in stock, beating estimates, -- sales, beating estimates, but sales cap, as income and whether shoppers out of -- inclement weather cap shoppers out of stores. you hear the opening bell. now for the call on the markets, a chief market strategist from >> a chief market strategist. jobs numbers are not so great. the housing numbers are not so great. wages are not going up. the productivity is not going up. >> it is progress, not perfection. we looked at the payroll number from a couple of weeks back. the last week i us a manufacturing services indexes, the balance of trade showing we are exporting more improvements, almost by the day, coming over in terms of revenues -- in terms of earnings. revenues and earnings beat in terms of earnings. five percent beat in earnings. getting better is what counts. class within that, you're looking more at industrials and materials. >> yes. very much like industrials and materials here. we are looking for global growth to come back. we think the u.s. is in the process now of a more normal expansion. europe is we think still coming around, notwithstanding the index ratings out of germany in terms of investor sentiment here and we have to look and see if improvement there, improvement in asia, that means industrials will move and the materials. they have already begun to. >> you have a couple contrary and calls. one of them happens to be in scarlet. >> bowls like to point to the strength of china in the u.s.. at home, we are at a reflection point. u.s. auto sales have a code. sales moderated in 2013 to rise eight are sent after three years of double-digit growth. emerging-market currencies mean higher price tags abroad. europe.n worries off of consumers are more likely to delay purchases. >> shoemake a good point there in china, companies have been banking on the emerging middle last. >> i will look at the u.s. market average of 11 years even after auto buyers came back. technology german automobiles. technology driven automobiles. think if we get asia to come back, loosely enough standards on mortgages again, we have fannie mae and freddie mac, our more traditional presence for them. we have to think the consumers flow back in auto mode did -- automobile showrooms. >> you have been looking at outlook for the group. >> i have. we talked to adam parker yesterday. he looked at the recent trend we have seen in the market of momentum stock, the growth stock in particular. he has it at gaps between value and growth. seen value outperform growth. he says when that happens, this continues for another 9-10. during that time, energy is the best performing group and consumer discretionary is the worst. repetition of the trend, which he believes we will, discretionary will be one of the worst forming groups over the next 9-10 month time. class i data differ. adam mimicked our 2014 target after november. here thatave to say what we expect would be the consumer would be back or small luxuries. think jack-in-the-box and also it on a higher and tiffany's global basis, that should look good. we also have to say when you think consumers for -- discretionary, it is a home depot kind of life. renovate. >> he was so pessimistic in terms of jobs. they do not have the kind of money to spend. look at 40% discount. it means you do not have confidence someone will buy full price. soaybe they raise rice is high to give you a 40% discount. it is possible as a strategy and also, i would have to they when we are at the point in the year, it tends to be when we need slowing. there are a lot of russians of what is going to happen. we think the second half will kick in and it is this for materials and industrial. class it seems like you like the high-end. and you like dividends. >> yes here and i do here and i always like evidence because i like to get paid while i wait. cyclicals over defenses in this case your we are market cap agnostic. we suggest to be prone to be alpha driven rather than data-driven. we want to beat the indexes by stock selection and look in those companies that can ideally pay us in small dividend, which iats zero point 35% last looked on two-year treasury. class thank you. great to have you here. -- >> thank you. great to have you here. as close to where as you can get, coming up. that is our exclusive with the foreign minister. more of the interview is to come. footage showing beyoncé's footage attacking jay-z yesterday here at how much is that worth. they opened -- stay "in the loop." ♪ >> here is a look at the top x stories. sony. the japanese consumer electronics giant with a one point -- reporting a 1.3 billion cost. the company ceo is under pressure to execute a long promised turnaround. mainstream after being available mostly by invitation or referral. the company announced yesterday its wearable computer will not be available to anyone in the u.s. who wanted. google will not lower the price so get ready to pay up. samsung valid to compensate employees said they got cancer working in the company. dozens were exposed to chemicals across several plant, causing leukemia and other blood related cancers according to some of the family. catch all the latest and greatest in tech media every week day only on bloombert west -- jay-z facing off in an elevator all over the web yesterday. in us wonder how much they pay for best videos and what is the area i amdollar terms joined now. how much did they wind up paying for something like this? >> i do not know. there have been reports on a lot of different things that a. . $150,000 for paid a video of o.j. simpson's break in. a lot of rumors but none of it has been confirmed. it is somewhere in the five figure range. that is my guest. >> they are pulling out five figures. >> they are making it in advertising revenue there you can kind of cap late that. you do not know exactly, but let's say they get 5 million and half are on mobile and half are on desktop. mobile, they are probably for thousand years. that would be $75,000. in mobile, they are getting a lot less. the $50,000 in advertising revenue. they only have one mobile ad. $60,000 and i could be off by a lot but that is my guest. >> does it matter how long a video is saying viral? on. will live does that matter? fax it will drive a lot of traffic over the long term. people will be googling back to this site. they will be taking some of the traffic and getting some of the attention. a does not look like tmz put video ad on this singular video. they did not do that. who knows live. may be an advertiser does not want to be before this. >> let's go to the trickle-down benefit for tmz. not monetarily tom of the date reputational lives here it >> that might be where much more of the benefit comes from there it it makes the next person who has something they want is no, a video or celebrity doing and that it makes them think, tmz. there is that dennis it. >> do you know how they wind up determining what is hot or not? whoever make their decisions, they have to be good at their job. you have to decide, is this real or not? you do your best. then you have to figure out, is internet going to go crazy or not? that is hard. will he do exceptionally well or medium well?-cannot just be about their profit margin. probably pass -- class it is a very interesting conversation. able get into the conversation because then the newsweek doubt and you have a problem. just like any other commodity, it is a tricky thing to do. >> look kind of competition do they have in the market? x tons of other sites to pay or post rings. i do not know the rate they are paying. i think it is one of those situations where the winner becomes the place. from theot that video hotel, maybe x y and z but probably they thought i will take it to tmz. once you start to win the neck or just the network effects and the public effects. the next time somebody has something crazy, they think tmz. >> thank you so much. the thompson. .e appreciate it coming up, the u.s. government is punishing russians facing sanctions by taking away toys. more on that when we returned. -- return. ♪ >> time for global outlook. there is a real war going on in southeastern ukraine, he says. believe for this national concede, it is necessary to ensure equal participation before full regions of the ukraine, not only east and south soldiers, but the regions of the last. where we also have some issues related to determination of minorities. cultural economy, as manifested by the statement of the hungarian prime minister. this exercise. the direction of national dialogue is welcome. standing -- should the separatist that have been fighting have a seat at the table? >> this is a very rhetorical statement. in relation to the syrian crisis, when the west said anyone could participate in the part of the government and negotiations, those who have led on their hands. they qualify the people with the blood on their hands. they will be coalition members fighting for this. down in february, they become the secretary of the security council the ukraine. seen carrying sniper -- so on and so forth. national reconciliation or the winner takes it all. >> the search is on for shiny toys in the u.s.. russian facing ukraine related sanctions. the action president has sanctioned 45 business leaders, including four designated members of bloomberg's circle. talking more, we're joined now from boston. what is the department of homeland purity really looking for? they're looking for bank accounts investments, yachts, planes, paintings, helicopters, russiansthat wealthy may be holding. class you say they may find the asset. what does that actually mean? >> it means they cannot use it without permission from treasury. that means the asset is isolated. it means they cannot provide loans for them and they cannot get insurance. the company's that provide services cannot actually interaction -- interact with that. lesson real estate, is one of the blacklisted russians came here and stayed in their home, what does that mean for them? >> they are prohibited from doing that. there is going to be someone standing guard at the house. they're not permitted to do that . it is up to the federal government to enforce these sanctions. >> my question is, will it be hard to track? they tend to pay cash for a lot of these invest in. how hard is it? class it will be difficult. to find them will require information and foreign governments. -- ill probably have to >> is the own is going to be on private companies to help them? they are expecting help from private companies, from banks especially. banks are pretty sophisticated when it comes to scrutinizing their customers. they are required -- these sanctions as well. that's interesting. we will have to see how we can need to track it. think is so much. "in theps it up for loop" live on bloomberg television. upare on the markets, coming right next. ♪ >> bloomberg television is on the markets. we are 30 minutes into the start of u.s. trading. stocks pulling back asterisk -- after the s&p and the dow made new highs. prices rose by the most in one year. onto the treasury market, where prices are higher. the central bank will be ready to engage in quantitative measures. that would make u.s. yields more attractive on a relative racist. they would also continue to push a euro -- a year lower. on continued tension in the ukraine are at we will continue to monitor that trade. 5.5 years after the lehman brothers went bankrupt. a small group of hedge funds is still making billions of dollars off the firm. lisa looked into this and she joins me now. this is incredible for the hedge funds. the irony is inescapable. class that the lehman brothers could deliver hedge funds out there. completely. it really was one of the catalyst that's bird the fed to start this unprecedented program this isrted $3 billion. really part of what is really driving the increase in asset racist here all of these hedge funds invested in, and delivered these lean dollar returns. who do they buy the debt from? some of the biggest banks were counterparties from the derivative contracts, realistic contrast, all of the different businesses lehman was engaged in. morgan emmy, the royal bank of scotland, credit suisse. they could not hold hard to as hasssets easily funded. to really review bankruptcy claims. these are incredibly complicated claims and they rely on bankruptcy judges to make decisions that may be fickle. prices, for asset example real estate. in 2009, that was not as clear that as it might seem in retrospect. the hedge fund could come in and bush -- it off your books, and it is an incredible trade or them. these are liquid pieces of securities. hedge funds are in a better position to make good or dabble on that. >> to give you an example of how good a trade this has been, the inman brothers entity europe, the claims were originally priced at $.25 an hour. 100 $.50 on the dollar. >> how long will the gift keep giving? it is an incredible story and you cannot make this up. >> lehman has been a trade that keeps on giving. >> especially now. you going to get these kinds of returns? double-digit returns on an ongoing basis. i think that tells it all. thank you for this incredible story and how it keeps giving for the hedge fund managers. we are back, markets in 30 minutes. "market makers" is up next. ♪ >> live from bloomberg headquarters in new york. this is "market makers." >> we will be told about the state of the real estate industry. >> the russian foreign minister says the ukraine is as close as one can get to civil war. stay -- tot more to say. >> goodbye numeral and hello new neutral. be a much better era than the last one.

Related Keywords

New York , United States , Canada , Japan , Germany , Brazil , China , Boston , Massachusetts , San Andreas , California , Syria , Russia , Washington , District Of Columbia , Point Peter , San Francisco , United Kingdom , Ukraine , Hungary , Hollywood , Phoenix , Arizona , Houston , Texas , Ohio , Spain , Chicago , Illinois , Americans , America , Canadian , Chinese , German , Syrian , Russian , Scotland , Russians , Japanese , Hungarian , American , Freddie Mac , Adam Parker , Bloomberg Olivia Sterns , Raymond James , Mario Draghi , Greg Johnson , Marissa Mayer , Joe Biden , Morgan Emmy , Bloomberg Ryan , Los Angeles , Sergio Lavrov , Harvey Milstein Weinstein , Asia Pacific , Sergey Lavrov , Michael Mckee , Mike Magee , Janet Yellen , Jed Kolko , Las Vegas Raleigh , Terry Geithner , George W Bush , Tony James , Olivia Sterns , Peter Cook , Keri Geiger , Phil Mattingly , Betty Liu , Alan Horn ,