>> stephanie ruhle. i was out sick yesterday. >> i would say that brendan greeley and lisa a berlitz filled in greatly. carts thanks for all the twitter love yesterday. -- >> think for all the twitter love yesterday. you were so nice yesterday. i'm going to step it up today. here is the bulletin with the top business stories of the morning. it is a showdown in brussels between greece and germany. european prime minister's are meeting right now to discuss the greeks request to extend financial grade for six months. the government has art economized on many issues. here, just an hour ago, we had this. >> i trust that we are going to have one. the greek government has gone the extra mile and we are expecting parliament to meet us halfway or 1/5 of the way. i have no doubt that this will be a very cordial discussion and , hopefully, at the end of this, we come out with some white smoke. thank you. >> white smoke. post out. germany is willing to let greece leaves the euro unless it continues austerity. bcg partners has won its fight to acquire gfi group's. the price tag is about $780 million. let nick won a bidding war. and brokers handle large trades among large banks. he is also the ceo of campell that stale. a women's clothing store and taylor is looking to sell. and taylor is working with jpmorgan and has reached substantial potential buyers and also owns the loft. for months now, hackers have had access to the unclassified portions of the state department's e-mail system. officials familiar with the matter say that government and private security specialists are trying to get rid of the hackers. one official says that it may have originated in russia. >> let me take you back to the story back in greece. our international correspondent is in brussels. hans, you have the greek prime minister saying he's optimistic. others are saying that germany is ready to watch its hands of the whole thing and send greece packing. what is really happening right now? is it even possible to know? >> no. because the meeting is just starting. the finance ministers are going in. what we have is a great deal of optimism. the question is -- will he be isolated in that optimism when he looks around the table and sees 18 other finance ministers? we have talked to a lot of them and it seems like the german position is dominating. that is -- greece needs to make a substantial reform and they need to stay in their bailout proposal. there has not been a whole lot of give on that. eric and stephanie, if you are hoping for a split between anglais margaret -- angela merkel in the finance minister that does not appear to be the case. she said that she wanted to see significant moves from greece. greece says that they have gone 4/5 of the way and they need germany to come the extra 1/5. that is not like with it will happen, at least from the public roster. >> when they say get ready, we are going to see white smoke. is he being overly optimistic? >> potentially, yeah. he is struggling a lot of things. he has the banking crisis in his own country. he wants to appear as if he is driving a hard bargain for his domestic argument -- audience and he does not want to be blamed if the entire deal ends up blowing up. throughout all of this this is the third meeting in 10 days, he has been remarkably optimistic. maybe that optimism is warranted. what you are hearing from the germans is consistency. the consistent view is that greece is going to have to implement their a lot program and completed. in the latest newspaper interview, he said that they think it is inhumane. i'm not quite certain how you square the circle. they are there now and they are going to try and i will expect they will be there for a few more hours. >> what is to stop the germans and the rest of the europeans for that matter to hold the line and see how far the greeks go? we just got encoded a moment ago saying that gone 10 miles. will they make it all from marathon -- he has another 18 miles to cover? why not see how far they will go? >> because the original marathoner collapsed and died. greece collapsed and died at the end of these negotiations. there is nothing forcing germany to botch. if anything, germany has put a lot of pressure domestically where the bailout has always been a popular. if there is a third bailout it would have to go through parliament. there's nothing forcing germany to budge. if anything, they will be punished or feel pressure if they do compress. >> hans, what happens on monday or tuesday in greece if no agreement is reached? >> well, we see the outlooks. there have been various reports. i saw something earlier that there were two close. where are the greeks -- greek banks going to be raising capital? they are raising about 60 billion euros. it is a question of will greece the fact oh be enforced to put capital controls ain? that is the better control for the green bay. it has to be done by the government. that will be the decision and that will be the lines outside of the banks if indeed there are long lines. >> hans, thank you very much or he is our international correspondent live in russell -- in brussels monitoring those talks. >> now time for a real -- a little deal chatter. it would combine two of the largest brokerages outside of new york. financial is in talks to buy sterne agee. bloombergs only sell abramowitz is following the story. first of all lay it out for us. what is happening? >> steeple is a st. louis based brokerage. -- stifel is a st. louis they grow grace. it stems from a 1901 for -- for. it is a time where it is very difficult to be a brokerage. really, it is very difficult. >> it is really fair to say that this is a merger or this is an acquisition? last year, stearns agee got into a time of trouble. the ceo got forced to step down. this privately owned company is now being run out of birmingham, alabama and in control of new york last you. to me, this smells like a rescue. >> what i'm hearing is -- i think that is a fair point. it's not so much the former ceo that jim holbrook was basically accused of using the banks they count a credit card. he was going out and buying close and using it and buying condominiums preferred -- and not with his own money. there have been federal investigations into his actions. the question is -- how does the firm distance itself from that? >> was he the only one who got in trouble? >> i also think his son is being looked at. it is not the firm as a whole from what i am understanding and what is being told to me. the question is how do you distance yourself from that and go for it? to your point, yes. how do you move beyond that? >> a brokerage is a tough business. the question is -- how much room is there for competitors beyond merrill lynch and morgan stanley? >> merrill lynch and morgan stanley aren't doing so hot frankly. they have to cut back their bond dealing business in a major way. >> on the brokerage side -- >> on the brokerage side two. >> 26% pretax margin is pretty good on the business deal. >> hold on the. stearns agee has a print jim -- a legitimate business. what these big banks have done is shifted their business to be more brokerage like and to act as agent and not as personal. one would think that if you are in the brokerage bids this, not the principal paying business you on the good side. [laughter] >> this is why. >> welcome back stephanie. >> i think that is a fair point. a lot of these smaller firms are saying that if you have the merrill lynch's and the city groups and the jpmorgan's scaling back their wrong -- on brokerages in their trading businesses, they cannot use of much capital as they once did. at a certain time the speculation is that volatility will pick up in the right way, if not in this range back way that we have been experiencing recently. there will be an opportunity to step in and traders are willing to work hard and salespeople are out there. it'll be plumbing the ground for investors looking to make a deal and they will get some ground because the biggest dealers do not have the capacity to cater to what they used to be able to cater to. >> i know it. [laughter] >> it is all about lipstick on a friday morning here. >> congratulations erik. >> has stearns agee looked at potential biters -- buyers? kuester was a lot of rumor going on. i do not feel equipped to speculate on all of the various rumors. i just had heard that a deal could be announced within days between people at stearns agee. >> there you go. >> exciting stuff. >> our own lisa abramowicz giving us the latest in the brokerage world. >> coming up it may not be a greek tragedy for investors overall. we'll tell you what impact the greek crisis is having on potential markets. plus, the rise of the activist ceo. i sat down with cisco's ceo john chambers. that is what he says he is. ♪ >> i am erik schatzker. this is "market makers" on bloomberg television. bringing you some of the top headlines in the hour. they have won a vote of confidence on economic reforms. it would make it easier for companies to fire workers. france will still have a 35 hour work week. the u.s. is planning a spring offensive in iraq. it calls for iraqi troops to capture the second-largest city from the islamic state. u.s. central command official say as many as 25,000 iraqi troops will be sent to capture the city. first though, u.s. advisors will have to train these iraqi soldiers. it is estimated that there are many -- as many as 2000 islamic fighters. two cyclones and australia have been downgraded. the cyclones were a category five -- the most powerful storm with winds blowing at 55 miles per hour. no deaths have been reported. australian newspapers essay a number of towns have been extensively hit the damage. >> time and money are running out for greece. at this hour, eurozone finance ministers are holding a meeting in brussels. for a closer look at the crisis there an impact in the markers, i want to bring in jack risk in. he is the chief executive officer and has two half billion dollars in management. what you make of the situation? >> everything is happening behind closed doors except for the noise which is happening in the media. this is a case of lettuce do something now and then do not have to do it again in six months. they are trying to do something now. if they do not do something now and i think we have some real tour more -- than i think we will have some real turmoil in the markets. >> why? is the greeks -- if the greeks and the germans cannot negotiate a deal and greece runs out of money and little more than a week -- the bailout money runs out and greece is forced to do something likely the euro, what happens then? >> first, it will take them a wild to leave the euro. if there is no agreement today there will be continued chaos. odds are that people think that greece will leave busy -- leave the euro, the euro will actually increase in value against the dollar. that is what a lot of people are right now. you're going to have chaos. you're going to have some element of slowing down what appears to be a modest improvement. >> willoughby like what we saw in cyprus a few years ago -- will it be like what we saw in cyprus a few years ago? >> greece is a little bigger than cyprus. there will be noise. having the noise today versus having the noise three or six months from now. >> isn't that what europe specializes in -- kicking the can? six months from now, everybody keeps on trucking. >> as long as they get the euro down to basically par or below zero, in the course of kicking the can, that happens. then, there is the hope of the eurozone to operate successfully. >> what i still do not understand is why everybody is so afraid of this potential exit from greece -- of greece from the euro. >> it is a domino effect. >> do you believe that spain is next with that portugal is next or that italy -- >> as soon as they do the possibility is there that somebody could leave the euro. >> it raises the level of uncertainty. it is not so much that it will happen. in the long run, we will end up with two euros. maybe things will work out fine. what makes things work out fine -- >> not of greece leaves the euro it won't work out fine. >> maybe it is ok. >> they take care of problems like this. if the currency is weak enough you can have some good things happen within the you connie. -- economy. >> greece is not the number one thing on your mind. for you, minimum wage. >> i think the most interesting thing that has happened economically, vertically and the u.s. this week, walmart was effectively raising the minimum wage for the u.s.. as effectively what it amounts to. >> walmart is paying nine dollars an hour. that is the clearing price. >> because everybody else says "geewhiz." if i'm going to retain my employees, i'm going to have to pay even more because walmart's pay more. walmart, in addition to not just paying the more, walmart is saying -- which is sort of surprising, walmart is not the most enterprising country in the world. they are also saying that they are going to increase training. >> we were talking about people making $75,000 a year $125,000 a year, even when under $40,000 a year. what is a company like walmart get from nine dollars an hour -- $49 anfor $9 an hour. ? >> they are going to get more attention appeared they're going to get less turnover and they are going to get more training. that is what companies are going to have to do. they're going to have to make up for default in the u.s. educational system. this is effectively raising the minimum wage for the country. >> it is a good idea. what about the adverse affects? >> whether it is a good idea or not, is indication -- an inverse indication of the labor market. why is walmart doing this? basically, they must be having problems with turnovers. >> could this hurt manufacturing across the country? walmart is the biggest kid they have tons of dough. if i'm another company that heisman wage employees or the manufacturers here, could i start to save, if walmart is paying nine dollars an hour, i cannot pay nine dollars an hour and i'm going to move my operations from here to mexico? >> i doubt that they will do that. what is really going on is that there are 5 million open jobs in the latest jobs report. that is the highest it has been in more than 10 years. the labor market is tight. yes, companies can decide it is time for me to move someplace else if they want to deal with all the chaos and the rest of the world. what it is definitely saying is that the productivity improvements are fine, i'm prepared to pay these. >> let us that you are right. let us say nine dollars an hour or $10 an hour in next february does not make the clearing price for labor. hourly wage and target follows and everybody isn't paying that much follows. then, walmart has to take -- they have to like do it again. >> if the labor market is tight, they will have to do it again. >> is in a race to the top? hold on. we are having a race to the bottom for these retailers on cheaper and cheaper prices. if i want to play -- pay less in terms of target, is it now a race to the top in terms of labor? question if you cannot get people to actually man your business, you have to pay them to get them. that is what is going on here. the labor market is tightening. the fed is trying to decide if it is tightening or if it is not tightening. what we know and what do we not know? here's the thing -- the labor market is getting tight if you >> we have to go to commercial. what are we doing after the break? producers, are you listening? i do not want jack to leave. jack rifkin is the chief investment officer. >> "market makers" back in a moment. ♪ >> jekyll rest can -- jack rifkin on the investment and walmart. >> final thoughts. >>'s wages go up, ultimately prices go up. the labor market is tight. you have to raise wages. if you want to keep workers, you are going to have to raise prices or find some big element of activity. it puts us in this good cycle. wages go up. prices go up. inflation shows up in the fed raises rates. >> that is what we want right? so walmart could be the first step towards a normal environment. >> we have got to go. what a treat. ♪ >> live from bloomberg headquarters in new york. this is "market makers," with erik schatzker and stephanie ruhle. >> good morning once again. it is a friday here in new york city. i am erik schatzker. >> and i'm stephanie ruhle. let us take you to the bolton with the top of the stories of the morning. creditors are cranking up the pressure. the eu finance ministers are meeting in brussels as we speak to discuss greases request to ask the end the bailout. the greek finance minister has said he is arty given in on all sorts of things, but is optimistic about a deal. his german counterpart does not sound as confident. at the conference goes this morning, german chancellor angela merkel and the french president both said that they do want greece to stay in the euro. apple appears to be ramping up those plans to build an electric car. people familiar with the matter said that apple is pushing its team to begin production by early 2020. that could set the stage for a battle with tesla and of course, general motors. by 2017, they want to build an electric car that can go 200 miles on a single charge and costs less than $40,000. another change. chief economist paul mccauley is stepping down. mccauley has reamed joe and -- have rejoined pimco and last may. he accepted the job to work with bill who is basically priced out of the firm that he founded last year. now, he says that his mission with pimco is officially complete. and somebody will be driving around like a billionaire. an anonymous bidder has paid -- agreed to pay more than $122,000 for warren buffett catlike. he autographed the car and will give the keys over in person. the money will go to a charity that advocates for girls. >> the bond market is broken. you can thank dodd-frank in the fed stability board for that. two of the smartest gods -- guys from blackrock are here to tell us how. he is head of trading and liquid of these strategies. gentlemen, welcome. let us start with what is wrong picture -- what is wrong. richie? >> i do not think it is wrong it is the reality of what it is. >> when i say six, it means that it is not working as well as it did or it should. >> the bond market has gone from five and half trillion outstanding to 11. i do not think there is a shortage of capital. it is really how does the capital move around when the time the banks itself are under capital pressure? the traditional principal market making activity -- that is really what is that question. is more of a plumbing issue and we are in the middle of a transformation from what was solely a principle-based -- >> so is the secondary market? companies have no issue selling -- >> it is a principle-based market more than an agency market. >> how do we do that? >> the check is how to we get ice and to meet with less stress on the balance sheet for the bank. that is the trick. it enables buyers and sellers to be out in the public markets just like in equity. for example, one of our flagships ones -- one of our flagship funds -- for every dollar they have eight dollars trading for buyers and sellers. it can be used for more purposes. >> like what?? >> aircraft leases, for example. anything that needs a specific buyer and a specific seller. when you talk about bundles of bob -- bonds, a lot of that will micro -- navigate out of the exchange. >> is the banks and their balance sheet provide the liquidity and the buffer and it worked, why should we just persuade the fed and the financial stability board in congress to maybe go back there? >> i wish it was that easy. it is not going back. let us just be real. the requirements are here to stay. they need to be modified, but the basic premise is that there will be less banks balance sheet's put to work. they're not going away. >> the capitals expensive. what if mckinsey is right in big cities bed that -- and bank should instead use balance sheets for capital use? >> you are right. over time, you're going to have to see a change of behavior or customers like ourselves will have to pay an execution rate for execution as they do in etf's and equities. >> that is acting white people you are using -- that is exactly why people are using etf's to trade. basically, if you want to trade a bundled high-yield today, the cost -- >> which is? >> a flagship high-yield fund. if you want to buy today, it will cost you 50 basis points. the differences -- you do not need to go to a bank balance sheet to rent for a short. period. >> houston where is it to the embassies? if you wanted to go you would go to them is that for you wanted to go? >> maybe right alongside the cd ask -- the cd ask. the point is not that etf's are going to swap these other ways of trading. it is went to become another way of trading that is sometimes more efficient. >> what happens when liquidity dries up? when the high-yield market freezes or you cannot trade 5 million bonds, how does that etf get liquidity and all this underlying positions? question he saw in 2013 and 2014 that anytime you stress the high-yield markets can't for example, liquidity surges into the public trading market, meeting the etf. for example, when bernanke announced the tapering, 23 days in which aig traded more than $23 billion in trading, all that trading is not having to go through the stress of a bank balance sheet and no caps on required. >> hang on the second. why do we need the etf to function like a stock? why not have the bonds themselves function more like stocks? you are the buyers. you are the investors review determine what happens at the end of the day. one not force issuers like citigroup and bank of america not to have 1300 or 1500 or 1600 individual securities and just have one? >> archer impressed -- archer impressed -- are you not impressed? erik schatzker just throughout qsip[s at you. >> the security would be fundable with the other. >> i think you're onto something. as mark said a minute ago, they are on the very end of the fixed income market. there's not a prospect for that. you'll need another to help the liquidity. the ones that you just talked about of which only dozens are in the tag which make up -- >> that wouldn't really matter to anybody, right? >> that goes to the segmentation that you are pointed to. we hope that issuers over time would standardize the issue. the current environment with the insatiable demand for bonds from investors and there's not a lot of incentive to change their behavior. we are confident that will happen. >> with this shift, who is it bad for? banks? >> we do not see it is bad for anyone assuming the borrowers get what they want, which is effective financing. investors get what they want. the banks -- what we would like to see for the banks as their role as an intermediary is to get paid for that. >> isn't bad for the banks that they are losing control? five or 10 years ago, you have to call credit slip if you wanted to trade in airlines bonds. >> they would not change from a principal market maker to an agency service. there are still going to earn their fees from underwriting. >> they will make lay less money in equities than they did in credit. >> ever since 2008, there was an article in "the times" saying that capital rule is all about compressing bresky activity in banks -- risky activity in banks. they were made using go to make capital more expensive here today, we're seeing liquidity spill into etf. when that spread widens the bonds you're going to see people use etf and a more efficient way. the reason why is that capital is more dear. question before we go, how did you feel about duke beating unc in overtime? >> i was there. it was outstanding. it was exciting to say the least. classes at the moment of the year -- >> was that the moment of the year? >> is a little early. >> thank you for joining us. >> has a blackrock. just a reminder -- like rock is the world largest money manager. what they say about the money market kind of matters. >> when we returned, john chambers says no one in their right mind would want to break up cisco. imagine what he said about activist investors. ♪ >> welcome back to market makers." -- back to "market makers." i've stephanie ruhle. mexico's economy is growing at its fastest pace since two years. it has grown 6.4% since two years ago. the rebound in the u.s. is helping exported an apology from one of the biggest makers and personal -- in personal computers. lenovo is apologizing for software that tracks customers. lenovo tweeted out instructions on how to remove the software. something that you do not see often in jordan. snow. heavy snowfall paralyzed jordan's capital and its surrounding towns. snow also fell on jerusalem and on israel's desert. >> cisco ceo john chambers says we are at the dawn of a digital arrow, and edge --era, an error of possibility, but also one of losers and winners. i sat down with john chambers in new york city yesterday and we talked about strategy activism and why cisco is one of the big winners. >> the first generation of the internet has occurred from the time that it was started to today. that was the information age. i think we got good economic results as a result of that. let us assume that this is now the digital era. in terms of how every company adjusts to that, if it were something to require genetically -- dramatically faster movement every company would be a digital and those that do not move will be left behind. a fortune 500 company over 25 years -- only about a third of them survive. today, out of an enterprise company, the average life expectancy may only be 40% of them that survive five to 10 year stint you have to change. those that do will reap the economic and a fit and job creation. those that don't will be left behind. watch what what you're saying -- seeing. airbnb is doing the hospitality. it is no longer the question about the quick taxi but all of a sudden, 10 years from now, we may not own cars we may be sharing cars. these technology models will continue to expand and transform every industry. the same thing will happen in retail. walmart's future is about the commendation of physical and virtual. if they do that, in their leadership gets this, they will continue to be the multi channel. you have to think differently and you have to move with a different speed. we can just be like we were in the 90's. the company has made the transition. we reinvented ourselves. we provided the technology partnership to help other companies make the transition. >> when you say 40% of the enterprise, what are you talking about? 40% of copies will not be here a decade from now. >> it does speak to the change. our industry is the same. my competitors 10 to 20 years ago do not exist today. five to 10 years ago, players like nortel are shadow of what they are today. this is what causes companies to be successful or not. you have to get market transitions right and technology and business. you have to realize that if you do the same thing too long, it can monetize you. you have to get agencies and you have to reinvent yourself as a leader. that is the speed of change. >> if you are going to reinvent herself and turn cisco into the same kind of company as it was in the 1990's in the next five to 10 years, you need to do something, including destructors off. you're going to need to acquire some companies. how do you do that effectively? $40 billion of your cash is trapped overseas and the stuff that you might want to buy over here is so expensive. >> first, if we do it the way we did it 20 years ago, we will fail. you have to catch the next market transition in a different way than before. you have to be willing to disrupt yourself and have a bunch of profit losses by individual protestant -- product. you are now focused on outcomes. you change your organization and about 40% of the leaders in the process. that is hard for us because i hired everyone i knew at this company. i do every office and every employee. and yet, if we are going to lead , employees and are still horrible's -- our shareholders expect us to move with the speech. -- the speed. to the second part -- every country in the world has a tax policy that is terror torture. zero rates are up to five. we had an old policy that caused this to go back to 35%. if that occurs, it is not good. when that happens, we will invest in others. >> you will do it in other words? >> yes. we are investing in israel. we are investing in india and france. leaders will also say, john, we do not understand your technology into tax policy. but if you're going to we had taken the right investment path. i'm very proud to be an american. we are in american company. i'm very proud to have the vast majority of our workers if you the lat -- majority of our workers you. a lot of the decisions are not here. >> a lot of times, technology companies have come under pressure from activism. hackers for still to go private even. apple, are you worried at all about activism? >> i think ceos should be their own activists. if you have watch what we have done, we have done many of the things that companies are challenged on. we do not have individual products. we integrate them together in a way that gets business results and has higher margins than sales. secondly, we deliver in our commitments. when we say we do something, we deliver it well. third, if we accumulate cash, we said that we are not going to return for our shareholders. any the things that other companies would perhaps be criticized on, we have argued on ourselves. that is the nice thing. we are our own activists. we are a leader. we are going to be the number one i.t. company. a number of our shareholders know that we have a good chance of doing that. >> have you ever had pressure from an activist shareholder in the makeup of the company to what you just referenced cash, to issues like secession would you get questions about all the time? >> i'm going to answer this differently. the short answer is no. when i get asked, i will always answer differently. quite the reason i ask is because companies that have never thought about conversations with activist, what is tim cook doing with carl icahn? >> he goes back to -- do people view your running the company in the most effective way? you make the tough decisions as well as the decisions that are importance to the shareholders the customers, the employees? >> if you believe that you are one step ahead, that is the best strategy? >> i think you should always listen to your shareholders. i think that we have shown an unbelievable capability to reinvent ourselves and make transitions and what we make commitments of the markets into our current -- and to our customers, we do. >> is the track record. >> it is a track record and i do it better than anyone else. >> be your own activist investor. >> john chambers could not be more bullish about cisco's prospects. think about it. likening cisco's opportunity today for the next five to 10 years to what cisco had was and did in the 1990's -- if you think about the comparison that he is drawn, that is pretty amazing. >> isn't his job to do that? scott o'neil sits next to us and he is the president of the 76ers. that is their job. the point being -- john chambers has not been the ceo cisco for 20 years by making promises that he cannot deliver on. >> that is a good point. >> one of the reasons that he is so adamant about being his own activists, for example. you might see that he got a little bit touchy and prickly about when i asked him whether cisco have been under pressure from activists because so many other well-established tech companies have come under that kind of pressure. >> especially tech companies that need to have another chapter. who had a ceo in a position for a long time. you are right. >> he does not want to be like and to the hp situation. he does not want to be likened to michael bell and what happened. michael dell was being private. with the way things that played out for michael dell at that time -- >> john chambers is tugging along. he is getting in front of the choo-choo and driving that company or. >> he does not want to get a call from carl icahn >> i would love to get a call from carl, no one else would you >> "market makers" will be back in two minutes. stick around. ♪ >> "market makers" will be back in just a moment. when we return, you know him the founder -- you know him as the founder of priceline. j walker will be here as our guest host. ♪ >> live from bloomberg headquarters in new york, this is "market makers" with erik schatzker and stephanie ruhle. >> online travel wars one may end up making your vacation a lot more expensive. we will be speaking with the founder of priceline, jaywalker. >> we will see whether amazon is the biggest loser because of the government's new rules on drones. >> who do you think will be the big winners at sunday's academy awards? welcome back to "market makers." i'm stephanie ruhle. >> i'm erik schatzker. it's 11:00 in new york city. >> any chance you will watch the academy awards? >> yeah. >> the grammys are a lot more enjoyable to watch because it is seniors, performers -- singers performers. the oscars, long speeches thanking mothers, brothers hebrew school teachers. >> i'm not going to tune out let's put it that way. you? >> i'm going to watch what they are wearing for sure. i'm obsessed over the fact that there are swag bags this year, worth $167,000. we have a special treat for you today. jaywalker will be our guest host for the hour. he also wears a killer vest. he's a chairman of patent properties and the founder of the newly launched u.s. patent utility. he personally owns more than 700 patents himself. i'm going to make him name all of them. talk about a man with many ideas. >> hebrew school teachers? >> they are thinking hebrew school teachers? >> they think everybody and their brother. >> jay, we need to bring everybody up to date. it is called the bulletin, the top business stories of the morning. we will begin with the transportation department wanting more cooperation from takata the japanese maker of those faulty airbags. it is finding takata $14,000 for each day it fails to cooperate with the u.s. investigation. michael corbett, his total compensation was $13.2 million. last year, 9% less than a year earlier. a $400 million loan fraud, plus citi had to scrap its plan for a dividend increase after the fed said no. the largest maker of farm equipment has cut its forecast for the year. the government says farm income will drop this year by the most since the great depression. tired of waiting for your bags after an airline trip? delta has an on-time delivery guarantee. i wish this had been working for me a couple of weeks ago. if your bag is not in the carousel in 20 minutes or less you will be given 2500 frequent flyer miles. delta's offer expires at the end of march. >> sorry brother. >> another sign that the bill gross era is over at pimco. chief economist paul mcauley is stepping down. remember the long ponytail? >> so good. >> gross being the cofounder of the world's largest bond fund manager, gross was pushed out of pimco last year. mcauley says his mission at the firm is complete. >> now to the greek debt crisis. there's an emergency meeting happening in brussels as we speak. we are getting a lot of mixed messages from negotiators. the greek finance minister said he has compromised on many issues and is optimistic about a deal. his german counterpart being quite german, sounded much less confident. here is the eurogroup president about an hour ago. >> it's quite complicated. i'm talking to the main players, trying to find solutions. it will cost time, but there is still reason for some optimism, but it's very difficult. >> smoke, mirrors, posturing, politics. hans nichols is covering today's summit from brussels. we also have a bloomberg columnist to joins us from london. let's start with you. what is the freaking truth? >> the truth is it is 5:00 p.m. in brussels, and the meeting hasn't even started. the last i was down there finance ministers are still going in. that's a good sign. that means the dutch finance minister who you play the sound about, that means he can have some sideline meetings and try to hammer out a negotiation. it has been clear that the germans and austrians and dutch don't want to give much ground. they want to insist the greeks complete the current bailout package. greece has said that is not acceptable. greece will clearly have to move if there's going to be any sort of movement, or the germans will move. you take your pick on who has more to lose. having greece leave the eurozone would cause hardship for germany, but if greece is cut off from financial markets, which could happen very soon, it could be disastrous there. where we were a week ago, a staring contest, a game of brinksmanship. we will find out hopefully in the next couple of hours. i just spoke with the luxembourgian finance minister. he opened up the prospect of having meetings over the weekend. it's europe and they can always kick the can down the road. >> mark gilbert, to what degree do we care about what people from luxembourg, malta have to say? at the end of the day, it's about the germans that only the germans, isn't it? >> it needs not to be. the euro bloc as a whole has a lot riding on them. if greece leaves the euro, you're in the land of unintended consequences. you really don't know what the next domino to fall might be. it really does not move the european project, decades in the making, to be having these friday night talks to try and keep one member in the currency. this should have been resolved -- it should have been resolved in december before the new government came in. it was clear that cyprus was going to win power, elected on a democratic mandate of less austerity but he wasn't going to want to continue with the bailout package. this package is too important to be left to this kind of horse trading in the corridors of brussels. >> perhaps, mark. but to your point doesn't the fact that the future of the common currency being under negotiation at 5:00 on a friday afternoon say something about the project? >> the project has got many flaws, but it's overall intention to wrap these european countries together in a trading bloc that works for trade, to wrap them together politically so they don't go to war with each other for a while there it was working quite well. the economic crisis is bent about optimism, and the resolution they have put in place has been far from perfect. greece is where the shoe is pinching at the moment, but there are other countries that confine themselves in a lot of difficulty down the road, as soon as you prove that membership of the euro is not a revocable. >> i said that to you 25 minutes ago. >> and? >> mark agrees. >> hans -- mark makes an important point, the adoption of the common currency is informed in large part by europe's experience in the 20th century. something that was lost on many people who have not studied or did not pay attention during that part of history class. you are an american living in europe. explain to a predominately american audience what we are talking about. >> for the older generation of germans, the germans had fought in the war, they are perhaps the most committed to the euro project. you her angela merkel talking about pan-european, pro-european views as much as the greeks and french. how can you make the core of europe's stronger, and how can you really make the eu a binding and workable project? there is a view inside of merkel's party that europe as a whole would be strengthened if you excise greece. that was not the predominant view 2 or 3 years ago. there's a few that to make europe stronger you can lose grace. that is what merkel has to counter with. if they have an agreement she has to bring back to her parliament and get another round of votes past. that has to happen in all 18, 19 member states that use the euro currency. all positions -- these positions can be read as they are trying to prep the battlefield, define the terms of debate before they have to go back and sell whatever comes out of brussels in the next 16 hours, 36 hours if something does. they need to sell that to their national parliaments. that's no easy sell. >> at its core, one could argue the greeks don't want to pay their taxes and create structural reform, and the germans don't want to admit they made a mistake. who will blink first? are the germans going to throw up their hands and say we've got to admit, we made a mistake? >> the greek administration will claim it has moved 4/5 of the way already in these negotiations. they really have. they have abandoned a lot of the demands they made in the election campaign. they are asking their partners to move 1/5 of the way. i have a lot of sympathy with that position. they have a lot of domestic problems. the tax problem is a huge one. they have made naive, basic political errors in the first few weeks of office, hiring back a load of government rigors who were let go under austerity raising the minimum wage, dumb stuff. merkel acknowledged this. she said, we need to give these guys time to learn how to be in government. that breathing space is not happening for them. that's the key error we have seen since this new administration came in and grace. -- in greece. they don't understand the rules of the existing bailout, it seems. they just don't have the breathing space they need to be able to sell something to the domestic electorates. they have been elected on a clear mandate. they will have to stick to some of those election promises. what they need is a breathing space, and germany is not giving it to them. i think hans is right, there has been a change of tone in the german administration. they have gone from the domino theory to the chain theory, which says if you lose the weakest link, the chain is stronger. i'm not sure you want to take the gamble on that second philosophy turning out true. >> what happens to greek companies next week, as we see more money flood out of the banks, if there is a run, how are they going to make payroll? >> people are talking seriously about capital controls, but i think the greek government would view that as a failure. it is a bank holiday and monday on greece. there is a three day window of opportunity. greek companies have still got money. the banking system even on the worst-case case scenario, still has 145 billion euros. there is still money in the country. people are still turning up for work. it is still a functioning nation. the issue is whether the european central bank continues to prop up the greek banking system. that is where you could have a collapse in negotiations, and then he could be game over for greece and the euro. >> thank you so much. hans nichols is waiting for this meeting to start in brussels. i'm guessing he's getting cold and tired, but i like him that way. mark gilbert joins us from london. >> next up, the attack of the drones trade the u.s. government paves the way for some companies, but not all, to take to the skies. >> american sniper is cleaning up at the box office. ♪ >> time for some of the top headlines around the world this hour. germany's angela merkel said she will not rule out further sanctions on russia over the fight in ukraine. merkel met with francois hollande after reports that pro-russian rebels launched numerous attacks on ukrainian troops. merkel says the ukraine visa process is difficult, but clearly worth the effort. the pentagon is planning an offensive to retake iraq's second-largest city from islamic state. a u.s. central command official says up to 25000 iraqi troops will be sent to recapture the city of mosul. u.s. advisers will have to train the iraqi soldiers, and it is estimated there are up to 2000 islamic state fighters and mosul. two cyclones that struck australia have been downgraded after their winds slowed down. the cyclone that struck queensland was a category 5 with winds of more than 150 miles an hour. no deaths and no injuries have been reported. australian newspaper saying number of small towns have been extensively damaged. >> no drones yet, but they may soon be buzzing overhead thanks to new rules outlined this week by the federal aviation administration. this is the first attempt in america to regulate the use of commercial drones. this is good for some companies bad for others. our chief washington correspondent is here, and our guest host for the hour priceline founder, holder of more than 700 patents -- he had some talks on drones, but peter first. >> welcome to new york, peter. >> what came out of the faa? >> everyone in washington around the country have been waiting for these rules. what we got from the faa was a lighter touch than people expected. they did not need a pilot's license to fly a drone. you don't need an airworthy certification to fly a drone. the rules they are proposing right now due limits what you can do with a drone. you can't deliver a pizza. amazon cannot deliver a box yet. you have to maintain a line of sight between the operator and drone itself. fly 100 miles an hour, 500 feet. >> can't you just walk there if you have to maintain the line of sight? >> that's a good point. >> you're going to deliver something to the beach, to someone 100 yards away? >> this is a first step. these are proposed rules. perhaps they have gone too far. it could be two years before this is finalized. >> jay, what do you think of the dronosphere? >> we are seeing a democratization of 3-d space. it used to be you needed a lot of capital and technology to be in 3-d space. anyone can fly a drone. thanks selfie on steroids. that is what will happen. >> this is not a commercial issue? >> it is a consumer issue. >> is like a bad, cheesy movie of what people thought the future was like. >> every camera is about a phone now. think of the video uploads on youtube. if you're not thinking about this as 3-d space for the consumer population, you are missing the whole story. amazon will make a lot of money selling millions of drones. >> is the faa just getting it wrong? >> i think the faa is looking in the commercial environment. you've got to look at this as an opportunity for the business sector. they point to aspects where you can save lives. all those people who climbed the towers the cellular towers and tv towers, 95 people have died in the last 10 years -- >> how will drones replace those people? >> you can send a drone to inspect, instead of a person. >> drones will be a $5 million to $10 million business. the government is regulating yesterday's way of thinking. i appreciate the way the faa thinks about jot -- jetliners. when you want to worry about the drone, it is not the missile you're going to attach to the drone you have to worry about, it is the bioterrorism you're going to attach to a drone. it means i can put a nerve agent , and a little bit of it. i can infect you with a pathogen a disease, smallpox. i can fly a drone, as long as i'm 17 years old. the most asymmetric weapon in the world is bioterrorism. drones can lift that. >> that is why they were so worked up in washington when a drone landed in the front yard of the white house. >> it's not an explosive third . -- explosive. for consumers, i just want a small camera, a wedding, i want my friends and i i'm going to be having fun -- >> gopro 2.0. >> the software on these drones can avoid other drones, fly inside spaces. think about what happened in hollywood when the boom allowed the camera to come off the ground. >>. you scared? if nsa employees can get their hands -- what about college kids? >> that's the world we live in. >> and you are ok with that? >> we don't have a choice. you don't put the technology genie back in the bottle. us not how it works -- that's not how it works. >> it's the faa rule. >> what will we do with the faa? >> it is not affect the hobbyist -- does not affect the hobbyists. >> they will be checking out their rules. >> college kids. voyeurism, that's not a powerful force. >> wow. >> we will take stephen tom's and pornography to the commercial cam. -- peeping toms and pornography to the commercial cam. ♪ >> coming up on "market makers" -- >> shakeup in the online travel business. mr. walker is the right guy to talk to about that too. he's the founder of priceline. ♪ >> live from bloomberg headquarters in new york, this is "market makers" with erik schatzker and stephanie ruhle. >> welcome back to "market makers." it is 11:30 a.m. in new york which means overseas we're approaching the market close for the week. let's take you to the breaking news dekes, where alex -- desk where alix steel has the breakdown. >> not a lot of fear in the market. the u.s. stock 600, it's relatively flat. even the tax slightly higher at one point touched an all-time high. it is the third straight update. -- up day. even greek stocks are pretty much flat. not a lot of fear across european stocks. if you take a look at the intraday, the euro versus the dollar you can really see where the action is taking place. it's relatively flat, but you see the first leg down started around seven. around 10:00 we saw a continued uptick in the euro-dollar, the eurogroup president saying, there's still reason from tourism. . continuingto see choppy action there -- continuing to see choppy action there. we take a look back for five years 75% lower than it was back in 2012. an unbelievable lack of risk premium being priced in their, guys. >> i can't believe things are relatively unchanged in europe. do they not know what is going on there? >> i don't know. >> alix steel giving us the close in london. >> let's go back to our conversation with priceline founder jay walker our guest host for the hour. he made it easier to buy airline tickets right now he's making it easier for businesses to manage inventions. the has a subscription service that helps companies figure out what has already been patented and what hasn't. how does this work? let's ask him. >> how does it do it? >> right now if i want to know, i have to hire a lawyer. >> american businesses need to innovate. you can do it yourself, or you can find the thousand dollars for every dollar you spend on innovation. but where do you go? it used to be you had no place to go. it turns out the u.s. database most people think about as a bunch of inventions, but it's much more. it's millions of ideas, people and organizations. think of it as a 20 story tall haystack filled with ideas and you need some needles for your business. if you are hiring a cfo, what do you do? headhunter. they go through a stack. the dates and say, these are the candidates for you. if you need to improve a product or service, how do you do it? we have created an innovation service provider. think about it like a browser, what the browser did to the web. we are using the data so you can ask a simple question about your business, go to the u.s. patent utility and say, i'm trying to manufacture it this way, who's doing it smart? we go through the patent u.s. database and we find ideas that statistically match what you're trying to do. >> who pays for all this? >> $1200 a month. >> who pays for this? >> the ceo who wants to understand the competitive dynamics of what his competitors are up to. the world is innovating, but you can't find the innovation. how do you find it? >> why would you charge more? i'm listening to this saying, if i want to hire a patent lawyer you charge me $1000 an hour so why don't you charge me $10,000? >> when you create a democratized service, a utility that is cheap for everybody, guess what happens? >> everybody uses it. >> if you're trying to create innovation by making a price so disruptively low that the head of r&d or engineering or new product development says it's a no-brainer, you go to the u.s. patent utility and give it a try. >> over time you will jack up the price? >> no, over time you grow your market. the smartest companies like walmart don't raise prices, they lower prices. your market grows bigger when you serve more people with lower prices. big data software once you have built it, doesn't cost anything to run. >> we lower prices. >> how many genuinely great ideas are out there dying on the vine? >> how many answers to problems you have are inside other companies? all the smart people work for somebody else. that's the rule of the game. for every dollar you spend there is $1000 being spent by others. >> isn't that why big guys have salesforces? >> no. when you are trying to solve the problem of how to make this pen better you can do it yourself. another company in indiana that is doing this, you don't have to do all that r&d. companies are trying to improve their products faster and cheaper and better than competitors. going it alone is blackberry. building an ecosystem is apple. >> that's a beautiful comparison. >> the database is the greatest collection of people ideas and companies. it isn't the patent itself. it's a fact that the patent isn't advertising meant for calling -- is an advertisement. a small company called microsoft said you know what, we have pretty much the world's best software, but this is a smart idea. we will be a member too. herman, 80 cross -- we have just begun. it's not just big guys. anybody can say i got a problem, show me the companies i should be talking to. >> for $1000, aren't you kind of interested? >> absolutely. >> anybody might say, i want to troll around that. >> that's why i working on it. if we don't put innovation in the u.s. economy, make american companies faster and better to compete create an innovation service provider just like we created an internet service provider -- >> this isn't just open to u.s. companies. >> other companies will follow. once you have big data, people will say, use big data a whole lot smarter for the patent database. find people, ideas. find people i can work with. >> i thought the value in you coming today was that vest. i was wrong. when we return, the online travel industry is starting to look like the airline business with only a few major players. what that means for your vacation plans. ♪ >> welcome back to "market makers." expedia will buy travelocity and orbitz for a total of 1.5 billion bucks. critics say the deals will mean fewer choices for consumers. we will talk about that with one of the pioneers of the business our guest host for the hour, jay walker. he founded priceline way back in 1998. people love to use priceline against travelocity against kayak. as everybody is merged, where will the deals go? >> is innovation thing really works in the marketplace. the more you consolidate the old-style -- the seven dwarfs are consolidating and priceline is snow white. at the end of the day, there will be massive innovation in how we serve consumers in the travel space. the old generation always consolidates before an entirely new set of ways to serve customers appears. that is what is happening here. >> how will it evolve if it's not what we see today? >> what will happen in the travel space -- i am not a spokesperson for priceline, just the proud founder, so i do not speak on behalf of the company in any way ok? i my tombstone they will say guy who hired bill shatner. what is going to happen is back to the future. the travel agent, which was the personal advisor who wanted to deal with all the problems is going to come back not as a human. they're going to come back as a videogame smart avatar. you will be talking to a travel advisor for as long as you want. he or she will show you videos, rooms, travel choices will not be on the clock because they are a piece of software, and you will have personalized service. >> do these capabilities exist today or does the virtual travel agents require some form of a.i.? >> they are almost here today. you're going to want some a.i. but you don't need a lot of it. travel is a very confined discussion. we are talking about flights rooms, cars, places to go, dinners. >> it's not that complicated. >> it is a confined space to talk about. at the end of the day here, you will see a complete reemergence of a virtual travel assistant. >> who's going to pay for that? >> the system itself will pay for it. literally you get people who buy more travel because now they can have an hour-long discussion over three different days with a piece of software that appears to know what they are doing. look at these massive multiplayer online games, how really feel. this -- it's coming back. >> this is the equivalent of "scar jo and her"? >> yeah you will have a consolidation in the old-style, self-serve travel business, but priceline was built on an innovation of name your own price. priceline's management is smart and good. those guys will innovate bigger and faster than i suspect anybody else. >> what is the point? >> when your businesses are shrinking, it's all about efficiency. what happens in the world? consolidate. >> we have seen this movie before. when a market gets tired and old, it consolidates. the technology moves so fast. >> why will it be priceline that innovates, and not some startup out of somewhere? >> they are all going to be innovating. priceline has an advantage of scale and relationships. priceline will by an innovator. smart companies don't do it in-house. they watch the world outside, and those with capital by those. when facebook spends $18 billion to buy a startup -- >> the problem is what those new technologies are valued at. >> the game still goes to the big player with a stock currency to buy. if facebook is the kind of person you want to have, if you want to buy in the social networking space -- >> when you see these valuations for snapchat or oculus, what do you think? >> they are not buying what wall street has talked about. what they are buying his position. remember when people used to pay for your position in line at a corporate jet? what these people had that they are paying billions for is a position in line. usually it's a couple million. >>if you don't buy the position in line, the defensive cost is high . for companies paying with stock and not cash, it is a dilution question, not a valuation question. the valuations seem nuts to a values player. was the youtube price high or low? everybody said google was out of their mind, buying that thing. >> best billion dollars ever spent, or maybe instagram was. >> we will come back with more from priceline founder jay walker. it is not a blockbuster year at the oscars. is the academy out of touch? ♪ >> it's time for top headlines from around the world. mexico's economy is growing at the fastest pace in over two years. fourth-quarter gdp rose 2.6% from the year before. one main reason, a rebound in the u.s. is boosting exports. an apology from the world's biggest maker of personal computers. lenovo says it preinstalled software that potentially exposed pc users to hack attacks and unauthorized monitoring. the software is made by a company called super fish. lenovo tweeted out instructions on how to remove the software. something you don't see very often in jordan, snow. a heavy snowfall paralyzed jordan's capital, amman, and surrounding towns. snow also fell in jerusalem and on israel's desert. >> it is oscar weekend in hollywood. everywhere, for that matter. the industry's highest honors are being bestowed sunday night. it has been an interesting year for the movies. of the eight best picture nominations, only one can be called a genuine hit, "american sniper." the odds on favorites right now "birdman" and "boyhood" according to the pundits. neither of those broke the $50 million mark. jay walker is sitting right beside us. do you have a pic? >> "imitation game." i own a working enigma machine. i'm rooting for the enigma machine to win. >> can i ask for a moment, why is this business so relevant? why is it that people love the hollywood industry? they love technology, they love hollywood. they hate wall street. >> one word, fantasy. people love fantasy. that is what life is about. who could i be? people love the fantasy world of hollywood represents. >> a few moments ago you brought up oculus rift. five years from now, will we be going to movies, or will be be watching hollywood movies on it oculus eyepiece? >> both. going to the theater is a social experience. there will always be newer and better technologies in social spaces. oculus rift is immersion. you are going to be in the movie when you're in a 3-d oculus rift. you are going to be going to the movie when you go to a theater. >> remember when the movies or the theater was a social experience, people dressed and interacted and spoke after and now we will be doing it wearing a headset? >> we are getting older, you and i. we read about these young people and how things will change. what next, rock 'n roll? of course you can be worried about all the things it can go wrong in the world and all the ways these things and technology changes us, but we are on the ride. >> this doesn't disappoint you? >> it does, but we need to figure out how to get people more engaged, more human, more involved with their family friends, and health. >> ibis technology do that? >> -- how does technology do that? >> i think it does the opposite. >> 200 years ago, did technology exist where you could speak to your family and friends when they weren't around? no. is that a bad thing? >> my mother's phone number shows up on my tv so when i know it is her, i don't answer. >> the world is changing, but we will figure out how to work with what we've got. lamenting it will not help us. >> i love it when you are here. >> jay walker is the founder of priceline, chairman of patent properties. thank you for being our guest host. >> we will see you monday. ♪ >> greece is a word. the dow trading its way back to neutral after we heard some more constructive comments from the eurogroup president saying maybe something can work out with grace. joining me for today's options, and equity derivatives strategist at baycrest partners. where is the risk? why aren't people freaked out? >> the s&p 500 earnings have oriented around a 10% earnings left to be reported. the market seems to be taking greece's story in stride. there appeared to be constructive developments over there. the eurozone is finding its footing or finding support around $50. fix allowing $60 -- vix allowing $16. [indiscernible] >> should the vix be below 16? >> i believe it should be with all the major macro events pretty much in front and at the same time the resolution of those defense in front, i think the vix should be turning lower from here. we should be seeing a peak in volatility. >> must talk about one stock in the news, deere. 2015 earnings forecast was lower. lower crop prices, lower income, the lowest farmer income since the great depression. that means less money to buy really big equipment. what is the option market telling you right now? >> yesterday there was a big trade before earning, but today expiration around $.33. if it starts dropping around $90 today -- there was very shy action yesterday. -- bearish action yesterday. the options are sort of moving in that, but the stock is not down as much as it was in the morning. >> home depot what are you doing? >> i am short them on neutral but three months bullish. i want to buy the main expiration under 15 strike call. that trade only costs me about one dollar or so. this is a great way to play this stock. the stock is up almost 46% in terms of total return basis over a one-year period, around 6% year to date. >> looking at that chart, it seems like a lot of loss and not a lot of green. >> this is home depot, and the chart shows a wide range. the implied move is only 3%. as a result, we are not really expecting a huge loss. what happens after tomorrow? i would be left with the 17-strike call. >> thanks so much. we've got to go. "money clip" is next. ♪ >> welcome to "money clip." we bring together the best stories, interview, and video in business news. i am pimm fox. around the world, the european leaders getting out of their cars game in brussels again. must be another meeting about greece. in sports pitchers and catchers begin to play ball in warmer climates. cc sabathia and ron darling talk america's pastime. in politics, there is one thing a potential candidate cannot do without, a dog. details ahead. there is one person who has more oscars than jack nicholson meryl streep and tom hanks

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