tv Bloomberg Markets Bloomberg May 27, 2015 1:00pm-2:01pm EDT
corruption scandal. arefficials at fifa indicted on charges of money laundering and racketeering. they say they took millions in grantingfore hosting -- world cup cities. betty: we will speak to the ceo of airware. scrippsd we look at the national spelling bee as they get ready to crown a new champion. betty: good afternoon. mark: let's begin with a look at the markets at this moment. u.s. stocks rebounding from the biggest drop in two weeks, investors optimistic that greece has made progress in talks with his creditors. two thirdsup about
of 1%. nasdaq composite is not new in full percent. almostices have erased all of this month gains. gold is now at a two-month low. gold futures are down fractionally at $1186 and $.70. nymex crude oil is falling as well, trading below that $60 threshold. $57.73.ing at they: lots of movement in equity markets. take a look at what is happening in the bond market. the yield is slightly higher on the 10-year. 2.16%. that is much below the 2.2 we had seen just a week ago. in the currency markets, greece
ironing out the deal with its creditors. that has the euro stronger today. the dollar right now is also .trengthening against the yen, bailout talks with greece said to be going nowhere. the european commission president denied a statement saying the deal was close with international creditors. a greek officials said they will start dressing and accord today and a deal is close. not to beal asked identified because the talks are private. bill gross admits he did a poor job implementing his advice in shorting german bonds. he said it was well-timed but not well executed. he advised shorting the german bund in april. his bond fund ended up losing 2.5 in that period as he wager that they were traded in a narrow range. cuts could be on the
tradingank of america's unit. profits fell 23%. brian moynihan said today that unless revenue increases, more cuts are possible. staysthe environment flat, less volatility, we will reducingeep working at the expense base. he spoke at the sanford bernstein conference here in new york. goldman sachs is number one in london when it comes to paying bonuses. new figures show they paid bankers an average of $299,000 in bonuses, about 40,000 more than second-place morgan stanley. london bankers had seen their bonuses squeeze the last couple of years. the european union cap the variable pay at two times salary.
gone: cyber crooks and after the irs but did not hack into their system to do damage. they use the irs website to steal information on taxpayers returns,filed pick tax and got up to $50 million in refunds. officials have removed the website function that gave them access. the obama administration is expanding regulations on waterways. some say it represents government overreach. protection comes as the army corps of engineers issues final regulations on what rivers, streams, and wetland are subject to federal oversight under the clean water act. that is a look at your top stories. mark: coming up, we will speak with the ceo of airware about the company's aim at helping startups. betty: and we look at luxury retail.
tiffany's jumps the most in six years after beating estimates. mark: the scripps national spelling bee is trying to attract a wider audience. we will look at their new attitude. officers and fifa sports executives will be charged with bribery and kick backs to bring the voting for which cities will host troubled cops. the doj says to expect even more arrests. --future world cups. >> all of these defendants abused the u.s. financial system and violated u.s. law and we intend to hold them accountable. us now fromg philadelphia to see how this could affect soccer is the center of sports law at villanova. he also teaches at wharton and is a sports analyst for espn.
andrew, thank you for your time. we get into soccer, i have a question. we have been hearing a lot of stories about the effect it could have on soccer. if you are watching television now, are you asking why the justice department, why this is going to that level if this just involves sports? >> i think sports has become a microcosm of what goes on in society now. it bleeds over into the business pages, the front pages, and it is scandal and corruption. that is where we are today. you hope and pray that it has not infiltrated other sports, that it is not universal in every facet of sport, but listen, what they did today is years of painstaking research, discovery, tips and informants, finding out what they could. i'm told by people associated with soccer that this goes back generations, not years, but
perhaps decades of potential who ision of fifa, awarding all of these incredible tournaments around the world. not just the world cup, but regional tournaments around the world. every part of it seems to be corrupt. betty: you have to wonder what has to be unwound as they go through their investigation and try to unlock what has been gotten judiciously and what has been gotten through bribery and kick backs. so what happens to the world cup , thessia and qatar broadcasting rights that have been sold to these television networks? >> this is where, as you said, you will have to unpack a lot. let's be clear of what they said. up in russia and qatar in 2018 and 2022 will go
on as scheduled. that is today. there is a lot of space between now and then, especially with what we're hearing about qatar. they already moved it from the normal time, in the summer, when it will be a thousand degrees, to november. that seems on for the sports calendar to begin with. i don't think anything is safe year, including fee for president and lord as some would say sepp blatter, who is in his trying to guard up one peg be next. you know how this works. there will be deals made, lawyers. people will be talking. all sorts of things will happen from now on. the 14 people arrested this morning, of course they will not just go away quietly. this could move up the chain come all the way to the top. betty: so many questions that you raise. thank you for joining us, andrew brandt.
spain's government is calling for an overhaul of the european union's common economic policy, according to a spanish paper who says madrid wants to play a greater role in avoiding future crises. they say the spanish government is urging greater mobile --financial mobility. former prime minister tony blair is leaving his post as .iddle east envoy a formal announcement is expected later. the quartet appointed him in 2007 with the goal of helping to develop the palestinian economy and institutions. betty: the bank of canada stays with its rate policy. policy makers cap the rate at .75%. it was lowered in january and has stayed the same since.
that is a look at our top stories. mark: now let's go to julie hyman, who has a look at the markets on this wednesday afternoon. julie: i want to talk about oil prices. we are seeing brent crude fall to a one-month low. saudi arabia will stay status quo in terms of what it is pumping right now, so that means supply will not change significantly. oil pulling back about 2% in today's session. take a look at what's happening with inventories. about one they are hundred million barrels above the five-year average. where we are now, this is the past five years. between you the gulf the two considering stockpiles, which is unusual, as we are heading into the summer driving season. some believe that we will see brent rebound in the short-term. they say we could see $80 a barrel in the short-term.
in the fourth quarter of this year, we could see a supply deficit of 1.5 million barrels a day. at the same time, we are seeing a number of refiners rising, being upgraded to outperform at oppenheimer. we are seeing them gain a little bit. they see refiners conjoining to reduce debt, grow dividend, and by that shares, as their financial stability improves. phillips 66 and to soar on not getting as big of a vote, but that is the call. betty: thank you, julie hyman. fund to invest in drones. cory johnson will speak to the ceo of airware. ♪
mark: welcome back to the bloomberg market day. finance ministers from the group of seven industrial nations are in dresden, germany. talks start today through friday. are thehe major topics greek bailout, oil prices, and getting the economy going again. hans nichols has a special guest for us. former treasury secretary larry summers. i am joined by dr. larry summers, former treasury secretary. knows his way around an economic crisis. a lot of talk about greece. does this feel different from any crises that you are at the helm for? different.isis is this one will be much better if they can work it out in some way. move.ides will have to greece has to get more serious and determined and clear on what the reforms it will take.
that will not be politically easy for its leadership. recognizeans need to that there are limits to the degree of austerity that can be imposed. ultimately, debt problems get growth.hrough they did get solved through posterity. they will need to work with the greeks on a strategy for growth. i expect, but it is far from certain, that something will be worked out. >> at this summit? >> know, the greeks are not at this summit. but there is some time left. with good spirit on both sides, thatng into the real abyss it would be for greece, if this does not work out, and is terribly risky situation that it , i'm hopefuleurope that common ground will be found. >> does that mean there is a risk of contagion be on europe,
for the u.s., global growth? --for the u.s., global growth? >> i don't think we know. people could not have imagined a hedge fund could bring the financial system to a halt. was,ernanke, wise as he wasusly said that subprime no big deal on a systemic basis. there are many who believed the world was ready for what happened at lehman. how wrong they were. seeing a greek failure and areng what the consequences is an experiment that no one should want to run. >> do you get the sense that that view is shared in the u.s. and frustration, are they pressing too much, doing too much too little? leave administration to set its own course. there are a lot of people there with a lot of experience and
skill. i know they are very much aware of the state the united states has of successful growth in europe. thing the u.s. has weighed in on is the valley of their renminbi. they say it is accurately valued. what is your view? >> u.s. policy has had a real triumph here. a remnant be is up 50% in real terms on -- against all of china's trading partners since the days when they had a 10% trade surplus. about a 2% trade surplus right now. that is in the range of what happens to countries. i don't think there is the kind of systemic undervaluation problem that there was. i don't think that happened automatically. a tribute towas the economic diplomacy of president obama, of secretary others, butd many
it is time to recognize that that is no longer the kind of issue for the global economy that it once was. i am a believer that the exchange rate regulation issue is a very serious 1, 1 that the united states has to take seriously. if we are going to be credible in taking it seriously, we also need to have the courage to recognize when there have been major adaptations. that does not mean that you cannot argue about what exactly the right value is, but that is not the problem we used to have. nobody could argue before. now you can argue about the right rate. >> final question, what is the role of the g7, can you have an economic summit without china and brazil? sure, there are problems facing europe, the u.s., and japan.
top of the list is secular stagnation. growth from this recession has been inadequate. working out what to do about it for the industrial world should be a primary preoccupation here. we will not solve any of the problem, whether it is inequality, chronic budget deficits. none of that we will solve unless we accelerate growth. >> with that, i will send it back to you. exciting couple of days and the potential for something about greece on the sidelines. back to you in new york. mark: thank you. betty: one of the top funded drone startups is hoping to find a drone companies themselves. anware is hoping to launch investment fund for drones. mark: cory johnson is with airware ceo jonathan downey.
>> you launched drones and now you are launching a fund? >> last year we launched the aerial information five warm. -- platform. it enables drones to be used for an ever increasing number of cases. for each of those use cases, airware is always a part of the solution but there are often s, software's, other things, and we are announcing this fund to invest in these companies. it is a venture capital structured fun. it has lp's putting money into the fund with airware and myself looking at who the money will be invested in. >> so you will eventually be a fund manager for drone investment because you are the
ceo of a drone company. that you know which started show the most hope and potential successor you can direct the money better? >> that is the plan. i think we have a great understanding of what are the missing pieces in the ecosystem, where companies are building a viable businesses. cory: i would also mention the deal flow lets you see what everyone across the industry -- people who may not want to partner with you may want your money. they will say we have this cool solution, no one has thought of it yet, please give us money. moret gives you a lot awareness of what is happening in your industry. >> that may be the case but is not the primary motivation. that said, most of the companies we are talking to are already engaged in some sort of business development with airware. either they are partners with ours are they have a cloud data analysis tool that we are partnering with. redbird, a company from france,
and then another company from london, which we are announcing today. i wonder if this encourages the companies to use airware? >> i think it does. it brings them additional cups -- customers. people who want to use airware's platform or with data from another company, or they want to use complete drone services, which is companies provide as well. investmentkind of are going into this arena, how much money, how many startups are launching? >> we are writing checks between $250,000 and $1 million to dozens of companies over the next few years. but: really interesting clever approach. jonathan downey, thank you. back to you. mark: cory johnson from san francisco with airware ceo
jonathan downey. drone investment fund. betty: exactly. there will be an investment for almost anything now. as they were talking about, this is a huge market. investmentsplus over two dozen? before you know what, we will be watched from everywhere. mark: then there is the regulatory thing. betty: i will leave you with that thought. up, do the new banking regulations go too far to hurt the u.s. economy? we will look at a push from senate republicans to roll back some of the rules that were put into effect after the financial crisis. ♪
iraqi forces on the attack today against islamic state. confirmofficials operations are underway near -- the militants outnumbered 10-1 drove government troops from the city last week. shiite and sunni fighters have joined the counterattack. it hasitia group says arrested hundreds of militants. new plan calls for more countries in europe to take and migrants from africa and the middle east. up to 40,000 syrian and a jury in refugees will arrive in italy and greece and will be moved to other countries. italy and greece have taken in the bulk of the new wave of refugees arriving by see. in the state of texas, the state is one step closer to a law allowing faculty and students to carry concealed handguns on campus. the state house approved the measure and it now goes back to the senate. lawmakers say armed students could fight back in the event of mass shootings. the university of texas chancellor says arming students
could be dangerous. he is a retired admiral who led the mission that killed osama bin laden. basketball, lebron james is heading back to the nba finals. as thecored 23 points cleveland cavaliers completed a four-game sweep of the atlanta hawks. final score, 118-88. as will be the fifth straight time james has played in the finals. no nba player has done that in almost 50 years. winner ofill play the the golden state-houston series. hour, up in the next half shares of juvenile airlines take off in the first day of trading in shanghai. script's national spelling
bee is trying to appeal to a wider audience. a tale of two cities for luxury retailers. michael kors shares are getting hit after its earnings forecast fell short of analyst estimates. is bringing out the bling with shares jumping the most in nearly six years after reporting a stellar quarter. here to break down the numbers is olivia sterns. olivia: up until today, the two brands come of the two retailers that play between aspirational luxury and true luxury -- michael cores down the most --ce the company went public the reason for both comes down to what happened in american -- north american stores. michael kors was a surprise. huge disappointment.
falling by 5.8%. michael cores sales slowing. this is global sales and they are still growing. storesany, we saw global falling, but because it was better than estimated, he saw the pop. all traffic is down -- mall traffic is down. that is something the ceo of michael cores signaled out in the call today. it's a brand widely held in department stores. tiffany gets 50% of their sales from overseas. they get a lot of their business from foreign tourists shopping in the u.s. they are seeing less shopping in the west because of the strong dollar. the tea bracelets are
pretty cool. scarlet: remember those silver beans everyone had 20 years ago? this entry market for tiffany. items under $500. it is fashion jewelry, so they can have a higher margin and expand the brand awareness. mark: is michael cores the poster child for boom and bust -- michael kors? olivia: they have had an unbelievable run. they have great prospects in europe, could be a $2 billion brand over there and still has a 20% sales growth in europe. mark: thank you so much. small banks and credit unions --ld get regulatory relief it's called the financial regulatory improvement act of 2015. it was introduced by committee
did somerichard shelby democrats have signaled support for the bill's concepts and the talks will continue. joining me from washington is camden, the president and ceo of independent community bankers of america which represents 6000 banks nationwide. welcome to bloomberg market day. thank you for your time today. >> good to be with you again. mark: what kinds of reforms are community bankers looking for? what did they expect from this congress? >> we expect a broad menu of regulatory relief. relief in matters of credit extension, relief from reliefome regulations, across a broad front of different issues. community banks have been overburdened for years and years with heavy and unnecessary regulation. which, at the end of the day
come impacts the consumer. it prevents consumers from getting the kind of credit they deserve. mark: is this about rolling back dodd frank or fixing parts of the law that have not worked as intended? >> it's more the latter. parts of thefixing law that produced unintended consequences like in mortgage lending. it is very difficult for a first-time mortgage applicant to get that loan because of some of the regulations that were passed during the financial crisis. not just in dodd frank, but other ancillary bills. those particular regulations need to be rolled back so community bankers can get on with the business they're good at and that his relationship banking. that are you disappointed when you went other community bankers actually mention this to members of congress, apparently
were not listen to? >> that was disappointing. there were a number of recommendations we made six years ago that were not implemented that, had they been implemented, it would have been a much more robust recovery on main street america. main street on america has been slower than any recovery in the last century. becausethat reason is the pendulum swung way too far on the regulatory side. mark: we have some breaking news. let's go to julie hyman with more on this fifa scandal. julie: one headline that the federation of european football leagues barely calling for the postponement of the fifa presidential election. of acoming in the wake
series of charges against fifa officials related to bribery and other corruption charges. the folks arrested in switzerland late yesterday and being extroverted to the united states. this presidential election had been due to happen this friday. there have been a lot of questions about whether it would indeed go forward. also, about why the head of the organization was not touched by this scandal. you've been following the situation all day. there were a lot of questions about whether the election would happen and now, indeed come at least one organization has been calling for it. we've been hearing from our -- he saidn brazil as long as this gentleman has the support of the various federations around the world, he will be fine. this looks like the first shaking of that confidence. mark: julie hyman with breaking
news. we will continue to follow this developing story and bring you more updates here on bloomberg television and on bloomberg.com. back to camden fine. we were discussing these markups to dodd frank and the bill being put forth by the chairman of the senate finance committee, richard shelby. thank you for your patience. i wanted to talk about something that happened today. reported that in the first quarter, profits and community banks were nearly $5 billion. that is a 16% increase year-over-year. where is that strength coming from given that you and your organization claimed to have been overburdened in some instances harmed by excessive regulatory environment? >> an excellent question. joke,inds me of the old
compared to what? 16% sounds pretty robust year-over-year. look at the years we are comparing it to. we had the worst financial crisis in almost a century. our banks are digging out from that crisis. if you go back to the mid-1990's or the first few years of this century, those figures that were posted today are still below the performance figures of 15-20 years ago. you have to ask, compared to what? the main street recovery has been slower than any other crisis, particularly since world war ii. know, there were two open seats at the fence board of governors. is it imperative that one of those candidates have banking -- community banking experience? >> yes. it is the law of the land.
was an amendment that was tacked onto another law that the president signed and the board of governors must have one member of the board with community banking experience. landon was nominated by the white house to fill that role. hopefully, he will get a hearing and be confirmed by the senate. mark: mr. fine, always a pleasure to have you on the broadcast. thank you for your time. still ahead, skyhigh in shanghai. the chinese budget airline debut.on its trading on its trading debut. ♪
mark: i'm back to the bloomberg market day. i'm mark did. let's get to a check of the markets. julie: just as yesterday we had the biggest decline yet, we are having a commensurate gain today. if you take a look at the dow and s&p and the nasdaq -- yesterday, even though we were foring, still only about 2% the major averages off their all-time highs. we are working back up there again. you can see the nasdaq is the -- just as we had a broad-based selloff yesterday, the gains are fairly broad-based today as well. the --lustrates all there is a lot of green.
the only area in red is energy. very slightly down. -- just discretionary as with all reflected with the nasdaq being the best performer, information technology as a group of 1.4%. the best-performing group in the s&p 500. if you look at the movers, some of the chipmakers are doing particularly well. sandisk, micron and broad, all trading higher. the stock is down about 20% year-to-date. they are optimistic that the type of chip -- there will be in undersupply a bit in the second half to two new smartphones rolling out. that should be good news for micron. also in technology, looking at the networking stocks, juniper and sienna trading higher. we have ericsson appear as well because people familiar with ericsson's plans say in my be
thinking some kind of acquisition in order to better compete with the coming juggernaut that will be gnocchi and alcatel lucent -- nokia and alcatel lucent. buying juniper or sienna would help it hold on to its predominant spot. those two stocks getting a big boost. ericsson little changed in u.s. trading. overall, technology is doing the best today. mark: julie hyman, thank you so much. let's get you the top stories crossing the terminal at this hour. scandal withifa the associated press reporting the union of european football associations is calling for the postponement of the people presidential election -- fifa presidential election and may boycott congress. the u.s. is charging officials and marketing executives with corruption that is rampant,
systemic and deep rooted, including bribery and kickbacks. mcdonald's has been mired in a sales slump. the world's biggest restaurant chain will no longer put up monthly sales figures. mcdonald's will announce same-store sales were june when its second-quarter earnings come out. and then it will stop providing the data. because he was a sales have fallen for six straight quarters. -- iag will have to convince they airline's largest shareholder, europe's biggest discount airline owns 30% of aer lingus. the airline is open to talks it a formal proposal is made. phone attempt have been rejected by regulators. scary moments aboard a singapore airlines jet. it had to go into a dissent to
restore power to with tensions after they both malfunctioned in bad weather. the plane was cruising at 39,000 feet and routes to shanghai prime singapore -- from singapore. the aircraft lost 30,000 people for power returned. it landed safely in shanghai. airlines are not having a good year. take a look at the bloomberg u.s. airline index. if you look at them from their high in late january, they have lost as much as 21%. that would mean a bear market for these u.s. airlines. carriers have been doing really well, trying -- flying really high. they wield a lot of pricing power over passengers. the consolidation means there is a lot less capacity and you and i did not have a choice if we wanted to go to california over whi hawaii.
takings a capacity creep place that is reducing some of that pricing power. oil prices are recovering. this is a seasonal effect, but still recovering. jet fuel is one of the biggest expenses. mark: with these prices going down, consumers are not feeling that. airline ticket prices are still pretty high. ofrlet: they are kind fighting over passengers. american airlines also said they would aggressively match pairs of low-cost airlines. this is great news for anyone looking to apply this summer. to fly this summer. mark: the travel season is coming up. the singapore jet story, that is pretty scary.
a controlled descent. when they lost power, the pilots dissented because part of the training is you dissent and collide glide down and try to throttle the power back up. can you imagine being a passenger on that flight and waiting for the sound of that engine to kick in? bad week.n abou malaysian airlines which has is in theown problems midst of completing its restructuring. they are finally getting to the point where they will tell their employees what happens next. whether they get moved to the or slimmed-down airline whether they will get let go.
this is a big week for those 20,000 employees. 20,000 people in malaysia waiting to hear their fate. mark: what did i tell you yesterday? the rangers will win this game. you almost guaranteed a victory. mark: you and i have the most interesting discussion -- i go over to scarlet's desk saying he is backing up in the net too much. scarlet: i said he's almost perfect in game seven. he's a seven-oh in the garden. -- 7-0 in the garden. , espn takes ap break from athletic competition to show the national spelling bee. the move has not always felt success. we will spell it out, next. ♪
mark: come back to the bloomberg market day. it is that time of year again. sweated out ones stage spelling words you did not even know existed. david breaks down the scripts national spelling bee. espn is broadcasting the -- hundredelling bee 38,000 viewers tuned in last year. -- 938,000 viewers tuned in last year. not great. hee company that sponsors to bee is doing all it can to drum up interest. there is no official app called buzzworthy. the company that makes the apt words with friends has contributed $5,000 to the winner's prize package.
280 five kids have traveled to the nation's capital to participate in this year's competition. seven more girls than boys. 57 spellers have been before. this is her fifth appearance and her sister won the bee in 2009. spelling has developed a cult following. scripts collected all kinds of stats about this year's contestants. their favorite food is pizza, favorite sport is soccer, favorite novel, harry potter and their collective dream college's harvard. harvard. >> tomorrow is the semi finals. the finals will be televised in primetime on espn. synopsis, percolate and dyslexia. if you have a child, they have expensive hobbies. how expensive is this? webster'sle is this
dictionary, third edition, $129. if you are good, you will hire a two-door coach. -- a tutor or coach. >> why do tv viewers keep coming back to this? >> it has been broadcast since the 1940's. yesterday and has been able to bring some drama. desk espn has been able to bring some drama. there is a lot of drama here. it's something to watch. mark: looking at the spelling bee. thank you so much. coming up, bill gross. ♪
latest details with fifa. scarlet: you've heard about elon musk. what about his brother? mark: big media m&a continues. john malone is back with time warner cable. why is he still be on men out -- maodd man out? good afternoon. i'm mark crumpton, here with scarlet fu. stocks recovering from yesterday's selloff. indexes opened higher and have been building momentum throughout the session. nine out of 10 industry groups are gaining. take a look at treasuries, getting back some of yesterday's gains. lower price mehi