>> live from bloomberg headquarters in new york, this is "market makers." >> empire building. the hip-hop mogul known as did he is already a success in music, fashion, and food. making a $200 million bid for a tv channel. >> back to the bond market. puerto rico returns to the first bond issue and over two years. can i buy enough time to restructure its struggling economy? class goodbye to "animal house." the fraternity will talk to a professor on a one-man campaign against. markete watching " makers."

class it is finally a bit of a warm day in new york city so i feel a great show coming on. we will take you to the newsfeed to talk business doors around the world. there is another twist in the search for the missing malaysian jetliner pier 1 of the two passengers that traveled on the stolen passport is iran. he says he was trying to emigrate to germany. cftc -- he says it does not believe it book -- broke the law but cannot predict the outcome of the investigation. it has to do with the incentive. he just filed for an ipo yesterday. in thes a new leader race to sell a free cars. whopping whopping gas 242,000 vehicles, a few hundred more than bmw. fornumber one in the market

nine years in a row. >> another story we want to make you aware of, steve:'s hedge fund management firm is changing its name. it is a family office. -- stephen senior management considered whether it would be simpler if he operated with a new legal entity and new names. a new set ofutting curtains on a house breaking down? they did not have a choice. they know they have to move to a financial office. he ran business development. what does that mean? the massive head hunter recruiter. the machine is not going to continue in its original state obviously. it is not clear what it will be

like. i have heard from a number of people inside the industry there are a ton within there who want out. they cannot necessarily leave unless another hedge fund pays them out and be able do not necessarily want to do that. >> will .72 make a difference? it must have something to do with the address. 72 on the outside of the building. class there you go. -- >> there you go. they are in new york and london and asia and they need to have all of these offices in infrastructure if they are going to be significant. one other thing to note. run $14ot always billion. he started with his own money and grew it a grand bigger. the guy is talented, no doubt. i do not think it is fair to say he will have to shut down completely.

class a family office. class but a very different situation. >> lately. a billionaire president of the japanese telecom softbank is in washington today. a message for regulators, mobile consolidation would be good for consumers. his son artie has a controlling stake in sprint and is combining it with team mobile to create an operator strong enough to compete with industry leaders. that would let him start a price war. listen to what he told charlie rose last night. >> three heavyweight fight. i would like to have the real fight and not the pseudo-fight. the real fight. fight, aot have a real more massive price war. class that is your pattern. you undersell everybody. you are willing to postpone

profits in order to gain market share. >> exactly. i want to be number one. >> we have a man on the mobile consolidation beat. his son, we understood he was going to go to washington to make the case with mobile broadband as an alternative for cable and satellite. >> this is maybe take three of the plan he is trying to get done. that ceo come you correctly stated in the introduction he is laying out a case for why number three and t-mobile should come together for consumers. this is why they should come together. sprint is in trouble long-term .f it does not do with t-mobile at&t verizon, wireless event -- business is a high cost business.

if you gain scale, each incremental customer that point can be profit for you, which is why they probably need to come together if they want to compete with at&t and her rise and in the long-term. the counterpoint is t-mobile has had a lot of near-term success doing exactly what was talked about their. in essence, starting a mild price war with verizon. they will give you services for lower prices. regulators look at this and say, wait a second, we are getting the competition we want from t-mobile so why let you come in the short-term they are doing great but long-term, we will not be able to compete unless we put the two companies together. he also wanted to theoretically talk about how wireless could be a competitor with cable broadband in the long-term.

the argument is, let's expand the market. instead of just looking at wireless players, let's look at all broadband players and then it will be more palatable for companies to put two together because they will not be so massive in the industry. it what his job is? we see ceo's is of any company .aking a case >> we heard from deutsche and he ceo last week basically says we do not see an avenue for the deal getting done anytime soon. what is interesting is there a saying they want to do a deal. there is a conflict where they're basically pounding the wall to get things done. deutsche telekom is saying we do not think this is the right time

for this according to our lead on regulators. will the clear force of will put on the table? >> the danger there is he finds himself in the same position as at&t, having regulators considering purchases of t-mobile and then rejecting it. inknow at&t is no longer that avenue because it is clear where it would end up. >> if you do this, you want to do it at the same -- the right time. is still something always floated between the two companies. it was tried and rejected and here we are in 2014 and it has not come back on the table. >> what about the idea regulators should look at mobile industries as an alternative to cable and satellite? five years from now it may be reality but it is not a reality today. >> it is a reality today and there is a question of whether it will be five years ago because of capacity issues. spectrum is a big issue in wireless, getting enough

spectrum to keep the speeds high. right now, we do not have a world where people are relying on their wireless service for home broadband. to say that in five years, we will be there, i think is a stretch still. it is not impossible, but the idea is if you want these high-speed capacities, wireless is just not there yet. it will again take billions of dollars to buy the spectrum and boost the networks themselves to allow people to use this and not rely on in-home broadband and five years might be pushing it. >> he takes my crystal ball and smashes it on the floor. >> we will see. i am not a nostradamus. well fine, i am right. if i knew the answer, i would be out on the beach. >> i get that. we understand that. class you can see more of the

interview with softbank today at noon eastern time on lunch money and the full interview is on bloomberg.com. the first big headache of the ceo of general motors. it is facing pressure to explain why it took a full decade to recall 1.6 million vehicles for faulty admissions. basically, a heavy key ring could make a turn off. it is behind 13 deaths. keith, we have heard so much about the new gm, whether it was whittaker or dan ackerson. thatthis story suggests the old, hulking, slow-moving bureaucratic gm still exists? class that would be the big question.

when we get into congressional hearings. those are the questions that will be asked. this ten-year time they knew about this problem. i first found out about in 2004, it is bifurcated. half came before the bankruptcy and half afterwards. still plenty of corporate gridlock that happened in the process since the bankruptcy. a lot of committees announced. in many cases, passed on it. does that explain adequately to you or anyone else how an issue of this seriousness -- thinkeople die, you would it gets elevated to the highest level of the organization immediately. how could -- how to get stuck for this long? >> they have solutions to this problem. getting into that -- dating back six,04, 2005 and 2000 and

-- 2006, it took almost 10 years to get to the corner office. are the things congressional investigators want to know and frankly, so does gm. she has ordered her own investigation and hired an independent attorney to investigate what went on as the same person who investigated the fall of lehman. even she is saying we are not happy with how this unfolded and we want the truth so it does not happen again. class could there be a direct fallout? this could happen on her watch. >> her watch only began january 15, the month before the recalls were announced. what we have is her first big handled it. she so far, she has done a public apology, which i'm sure the lawyers were not happy with

because it could open them up to liability. >> is it fair it to say it cannot happen on her watch? she for two been a ceo least. she was not that long ago a vice president in charge of global manufacturing and engineering. manufacturing and engineering problem? >> the cars were developed over a decade ago. projectnot head of development the time. a manufacturing executive who went on to be in charge of human resources. the analysts say what she really needs to do is find a way to break through the bureaucracy that has dogged gm for decades. the task as ceo, fine this way to never let it happen again. >> thank you. on the gm story. he --n we come back, did p ditty making a move.

trying to stand his music empire by making a $200 million bid for tv network fuse. all about music. we will have that story next. ♪

>> hoping to expand his music empire. the rap artist will roll the music channel into his own cable , which he launched last fall. i approached him recently about the need for his network. >> music does not have a platform like it used to. back in the day, there used to be american bandstand. before that, there was ed sullivan. there was soul train. there was a place you go to for music to tell you a story.

now, artists, we find ourselves going to dancing with the stars, orch is not a problem, performing even on good morning america. at thes getting consumed highest rate ever. audiences at concerts are at the highest rates ever. opportunity. quest for more on what it will mean for the music industry and the tv business, i want to bring in jon erlichman in l.a. and paul sweeney from bloomberg industries. a lot of people are comparing this to al jazeera buying currents. they are entering into a deal potentially that will get them a lot more eyeballs. >> i think it is about the eyeballs. this is a guy who is passionate about launching this cable channel. you do not see a lot of launches of cable channels.

it is not that he wants to necessarily take on fuse. he wants to get more people who can see what they're doing. it is still too early in the process to say, is it or is it not a success? it takes time to launch these channels. when you only are in a select number of homes, there is only so much you will get in both rather -- advertising revenue in whathich each -- each pay-tv channel will pay you. if you are all of a sudden available in more households, then maybe you have got a little more leverage in the process. that is where the comparisons ought to end, because he is looking for something far more successful than that. quest exactly. 75 million households for fuse, which is good, but they need more. they need to get up to 90 million households so they can get paid and revolt. that is backed by comcast so it is another way to make sure if in fact the cable music network

-- they're the better chance. quest is it suit -- too soon to know what -- how it is doing? critics will say if it is good or not. >> the critics will say what is good or not but the cable operators will come back and say, do we think we will make money with this cable network. the fact they only signed up a handful of distributors, comcast and time warner cable among them, some of the big guys, that tells you there is not a demand out there for music, just as it is currently set up. it is very difficult to get cable carriages these days. there is not a lot of open cable spectrum out there. if you want to get something launched, you better have a compelling story when you come to the comcast and directv's of the world. quest the way it is done now getting music on cable, what might he have to do differently in the future and in his perfect world once he owns fuse?

>> he always thought about getting the brand out in a bunch of different areas. that is definitely something he will have to do. he is right there is not necessarily one central spot where you look anymore for music. but people are very happy with their streaming music services, more of an interactive experience than just listening to itunes. you have also got other services like tivo, available on some of the new devices out there. rocher devices, which are pretty good. it is not just music videos. there is news and all sorts of stuff. we asked if he would be interested in buying fuse not too long ago and he suggested he would not be. i think they have done well in catering toroduct the new way people are discovering music and learning all sorts of mtv related stuff. quest do you think he has taken a wrong turn here? if we look at what he has done in fashion and music, he has not gotten it

wrong yet. it, and viva doing does not want to do it, is he wrong? >> you could argue there is a void in music. mtv is no longer the music video place to go. it has not been since its inception. isn't there a linear tv opportunity for music videos? that our form has almost died out. used to be so big in the 1980's nit 90's, and a lot of people are saying, maybe the internet is not the only solution. right now, we have not seen anything in the marketplace gain traction. quest little find out. jon erlichman and paul sweeney from bloomberg industries. no trouble in paradise, not today. to therico has returned bond market. that and much more when we come back. ♪

>> he plans to talk the company documents obtained from a former employee. violate laws.life let's break this law -- down. bill ackerman claims he is taking this trade to the end of the earth. >> he calls it a pyramid scheme. >> he is making a presentation later in the afternoon. he claims the documents are from a former employee inside the company. it has been a tough road. billionost half $1

already. the new york times than 200 grand in the last years. continues and it will be on the main stage this afternoon. we will be back with more in two. ♪

>> live, this is "market makers" with erik schatzker and stephanie ruhle. >> good morning. >> a great day here in new york. also a great day in puerto rico. they pulled off the biggest debt sale ever of any bond. $3 billion. get this. it was a very steep price thanks to the downgrade yielding as high as eight and 7/8%. he says the size of the deal it's about the situation in puerto rico. the cofounder and co-ceo and is

here with us now. smallillion deal for a island that just got downgraded. i am not sure if i think it is. do you? >> it is a terrible thing for the ricoh to have -- for puerto rico to have accomplices. their uncertainty about their ability to make good about a large volume of abilities. theirs a lot about willingness to accept the difficulty of their situation. and to adjust the real issues of puerto rico, building a growth opposition for the future. >> it was only a few weeks ago people were talking about the and maybe even probability puerto rico would have to offer yields in the neighborhood of 10% to sell enough debt. why relative to that did things go well? question to ask.

the 10% number lingering around was an easy number people anchored themselves into when they first started talking about a deal. two things happened. number one, the larger markets enjoyed attractive tailwinds on the turn of the yield -- the year for low supply as well as broader credit markets in terms of limited amount of product. probably as important as the efforts puerto rico took to be transparent here it was a pretty unusual transparency into their liquidity picture and really bearing all the ugly truths about the proposition was that made investors feel comfortable that they understood the downside risk and the potential upside. quest was there back not against the wall? if i'm a governor of puerto rico, i have no choice but to do this. quest i think that is accurate. that is important point of them doing this. it is acknowledging they had a problem and dealing with it in what is an expensive and large

scale, but a necessary thing to have done in order to avoid a much more significant crisis, which is to have to deal with the absence of any liquidity to meet obligations currently. you are right. probably was difficult and one of their only options. the fact they chose to do it shows they want to join the adult table of addressing their problems. quest what if they did not choose to do it? than what would've happened? >> we could argue that. i do not like to debate that hypothetical because the choice might have been something to see. to pick and choose winners. the fact of the matter is, they no longer have to do that and they no longer have to face those difficult prospect as long as they deal with the larger looming issue of growth in the

the next 12 months they bought themselves. >> you know, you invest in distressed minutes will credit. you know where to find value perhaps better than anyone else. fewis it so many -- so doomsday scenarios, because people were talking about puerto rico like a doomsday scenario, california and any number of other doomsday scenarios, they do not play out in an apocalyptic scenario. >> that is a great question. a lot of people conflate the issues. this is an enormously diversified marketplace. of 60,000 issuers, several millions of individual from aies all stemming vibrant decentralized public finance needs. if you think about it, we all know our local school districts and towns all borrow money for their own purposes. for the most part, they are in a very responsible in limited

fashion. they have unique operating leverage in the fact they run effective monopolies. they keep things inside the lines. puerto rico is a big exception to the rule. levered itself far in excess of the level it should have in order to provide financing and mask the absence of growth on the island. it is a unique and isolated credit story. the reason it resonates so much is its size. who isrd-largest issuer by virtue of being triple is widely held. it differentiates itself. it is and everybody's portfolios or was. deterioration of credit reverberated in the marketplace. when itrgely very sound comes to credit. >> less talk about the other trade in puerto rico. you understand what the proposition is to invest in these bonds. are you considering making the move? got confirmation he is

buying another two properties. it sounds like moving down there, small ones, 30 a month. place and know this you understand the tax implications. would you consider moving fundamentals their? -- there? back would be something i would consider of course. ofth be known, the idea creating growth providing billionaires on the island of puerto rico, it is hardly a single growth agenda. it creates a good environment for potential investment. the view of the island has to be more ambitious. a platform ofeate growth on the island that does not rest upon the vacation of a billionaires paradise. class i would kind of like a billionaires paradise. thank you for joining us. from fundamental advisors, joining us from boston. class coming up, state of the union. not that union. the biggest labor organization

in the u.s.. we will speech -- speak with richard. ♪

>> you're watching "market makers." it has been a tough year so far for organized labor. efforts to unionize in tennessee fell short last month. where does that leave the largest federation of unions here in america? the nfl cai oh resident richard. peter cook, all yours. >> thank you very much. thank you for the time. eric just mention some of the things that happen in 2014. we still have minimum wage bottled up in the congress. vote in tennessee

that went against organizing the union down there. what is happening right now? what is the state of the union movement right now? class we're working together among ourselves and with progressive orders more than we have ever done in the past. we see more clearly now the national debate going on in the field about raising wages for everybody now understands collective bargaining is the only way you can enter the quality. we ought to be bringing collective-bargaining. class you really think there is a different conversation happening today than a year or two ago? is absolutely can you can eat at in a number of different places from a number of different people. from the pope to the president talking about raising them wage , twoast food workers nurses in texas. people are talking about raising wages and how the system does not work and it needs to be changed. those who support the policies that would help raise wages are supported by 70 or 80% of the

american public. the policies that would restrict wages are about the same in the opposite direction. class what is happening in congress with the federal minimum wage. the president wants to raise it and is still not has -- it's still not-- it's happened. >> we will get a vote in the senate in the next week or two. it will pass there. 10-10 is not an outrageous amount. had keptnimum wage pace with inflation, it would be 1075. if it'd kept pace with productivity, it would be $18. if it kept pace with ceos, their increases, it would be 28 75. going to 1010 is the necessary thing to do. three point 5 million people, people of color, and will lift them out of poverty and help us with the economy. class it will also cost jobs, the ceo says.

there are mixed results in their report but it did say there would be a loss of jobs. >> they did not do a new study. they took the old studies that have been proven wrong 37 times because that is hominy times we have raised the minimum wage in the united way -- united states havee form or fashion, we not lost jobs. we took the old studies and said give -- if i apply the old studies, it could cost us. the economy is 72% jürgen by consumer spending. when you put money in the pockets of that many people, they will buy things they create demand and create jobs in the process. >> let's talk about a couple other issues. the votes in tennessee, a lot of attention focused on this. a very close vote in the end. >> anytime you have an organizing drive that you do not win, it is not good. let's talk about that drive. the law of the land is that we

will encourage collective bargaining. not only did elected officials encourage it, they threatened the workers with job loss if they voted for the union. that was the governor and the head of the state legislature and the federal senator. all came out and told untruths to the workers and threatened them with their jobs. we get another election and we will ultimately win there. happens within six to eight months. i hope it will happen. yes. if this election is not overturned, it would take a year. that is the time in between elections. if it is overturned, it will be held very quickly. >> so percent of u.s. workers right now in a union. where'd you see the number in 10 years? >> i see it going up here in people are fed up with the lack of progress they're making. the fact that wages are not being raised. the fact that they are losing benefits.

when the labor movement represented 40% of the workforce, we drove wages up for everybody. for union and nonunion alike in every industry. now that we are at 12%, we do not drive rages -- wages for everybody. we think there ought to be collective-bargaining out there for every worker in the united states, whether you do or do not have a union. you ought to be able to sit down collectively and bargain with your employer for a share of the wealth you produce. that is what we will work for this year. >> president obama, has he failed to deliver on the expectations the organized labor had for him when he was first elected? >> i wish he would ever of had a fair playing field we could have judged them on. it is tough to judge a guy when you have one group who would do anything the world, even hurt the country, to deny minimum-wage and infrastructure an extension of unemployment benefits, the republicans are willing to do anything to stop

this president from getting a victory. are there things i would've liked to have seen him done different? absolutely. i will continue to push them on things. but i would like to see him have a fair chance and a fair playing field so we can see what he could do. question is if the democrats take the house in the fall? >> there is a shot. >> left in 5050? >> i would not say less. i do not know exactly. the races have not shaped up yet. we are starting the handicap of all of them now. republicans keep voting against immigration reform and against raising the minimum wage, against unemployment insurance, i can guarantee you we will pick up a lot more seats on the house side in particular than we would have otherwise. they cannot run by saying no. the american public knows everything they are against but knows nothing they are for. >> we appreciate you joining us here. toh that, we send it back

you in new york. >> thank you. a very optimistic outlook for organized labor. collective-bargaining for employees. i'm not sure how that one worse. >> we will see. when we come back, we will change the conversation. we're talking about 10 college kids. one college fraternity says when it comes to new members, there will be no more animal houses. i do not know if that is good or bad. we will talk to a college professor on a campaign to and hazing. -- end hazing. ♪

>> welcome back. banning pledging.

since 2006, at least 10 deaths have been linked to hazing, alcohol, or drugs advanced held by sigma kyle flood. the band at one of the nation's groups, how will it change nationally? the author of four books on hazing a professor of franken college in indiana, he joins us now from indianapolis. , banninghat this means hazing? class it is a good idea for them to ban hazing and i would like to see other groups do it. we have seen with this the national went around its undergraduates, which, year after year, would not approve something like this. what will happen without pledging is that we will not have the semester long hazing that has led to so many of the deaths you describe. >> is it during hazing exercises when these occurred or could adjust the wild partying echo those are two different things. >> i keep track of the 170 plus

hazing deaths that happened at the collegiate level in the country. if i kept track of all of the party deaths, automobile related deaths, the number would be off the charts. >> professor, it is one thing for the national organization to make a decision as sae has done in this case. it is another thing altogether for each of the individual chapters to honor that decision. realistically, what are the chances that would happen? >> in the next four years, until this sroup of undergraduate graduates, they will have to keep track very closely. class how are they going to do that? if i am running a chapter of sae at penn state, clearly when the national representative comes, i will make sure the house is clean and the boys are in order, but come friday night at 1:00 a.m., things are going to get wild. class i think national fraternities can work more closely with greek advisors,

with student life at different universities. i think universities have to crack down as well, not just the fraternities. >> we have been saying this for some time. you certainly haven't other people have. such a going to provoke change echo if universities up until now, at least not enough of them have taken action against hazing, what is to say, hank, that it will happen tomorrow? class it will not happen tomorrow. last weekend, for example, and , in combination with a sorority at the university of connecticut, had an alleged hazing incident in which a young woman nearly died of alcohol hazing. we have seen such silly things as fraternities join sororities in hazing, which led to a death at utah state. a few years ago. >> help us understand. if there was evidence. let's say we are talking about the connecticut situation and it

is a few weeks or a couple of months from now and there is definitive evidence that hazing took place, why should sae not revoke the chapter at the connecticut school? why should the chartera revoke for that chapter and set an example for the rest of the country by maintaining a zero tolerance policy echo >> i agree with that and i think the universities need to do it as well. there are times fraternities have gained charters and the and vice versa. they need to be working toughen up the regulations. >> is there a business case to be made for positive effects of fraternities? everyday we talk about the effects of networking and having sponsors. you look at some of the nation's biggest corporate leaders, many of them were in fraternities and they keep those ties. >> exactly. business standpoint, it makes sense. there are connections to be

made. the other side, the best, perhaps, is the camaraderie that is there. a brother that is with you now is the person you will call up when you get a job, have a baby, loser mom. be laughed at. >> could there be a negative impact for some of the universities? having a big greek system in a lot of colleges in the middle of nowhere, it is how they recruit students to go there. >> it sure is. fraternities and sororities definitely are a drawing card. they are a high status group on campus, regulated with positive attitudes on the other -- undergraduates. nothing is behind closed doors. they can definitely be a force for the better on campuses. >> how would you advance the debate beyond what we are discussing right now? so sae has made a significant move banning

pledging, which they hope will get rid of the hazing problem. how do you get other fraternities to follow suit and other colleges to encourage fraternities to do what is done? i go back to what i was saying before. there is momentum, but it is awfully slow relative to the amount of discussion that has taken place over the past decades. withthink it has to happen the largest fraternities and then will filter down. we have seen sigma phi come in with a balanced program. we have seen phi delta theta pushing for alcohol free houses. been happening slowly and yet steadily. this is the biggest one, the one most problematic. the death of george at cornell in a hazing incident. it took a lot of national the reputation of sae. this is an attempt for them to try to come back and reform. >> thank you for joining us. we have to leave it there. more inbe back with

two. stay here. ♪ . .

>> live from bloomberg world headquarters in new york, this is "market makers" with erik schatzker and stephanie ruhle. >> he won't give up the fight -- billionaire investor bill ackerman takes another shot at herbalife. this time he says the company is breaking laws in china. silencehis music man, is golden -- russell simmons talks about meditating your way to success. >> microsoft hopes the new titan paul videogame will boost sales of the xbox one console. matt miller is putting it to the test.

makers."o "market i'm stephanie ruhle. in the next hour, we are going to cover bill ackman, russell simmons, matt miller doing video games -- what -- why would you not want to stay with us? >> it is going to be an eclectic hour. but straight to business -- these are the top is the stories from around the world. there is a new name for sac capital, the hedge fund run by steve cohen. in november, sac agreed to settle cruel charges and pay a fine of almost 1.8 billion dollars. he agreed to quit managing outside money and it's now a family office. a congressional committee will investigate why it took general motors so long to recall cars with possible ignition switch failures. least 13 late to at deaths.

they got the first consumer replaying -- first consumer and plate in 2004. shares of jcpenney are up as much as 8%. citigroup recommended buying the retailer saying gates and fourth-quarter sales bode well for the future. sales were down for the year. billion airbill ackerman will be making a presentation today on herbalife's chinese operations, continuing his battle with the company that has included extensive lobbying of regulators and lawmakers in d.c.. philt to bring in mattingly who has been looking into both sides. how would you describe the operation bill ackman has played in d.c.? >> sophisticated. he's following a washington playbook. we've been looking into over the better part of last month. what he's doing is what everyone in washington does.

he's a washington hedge fund guy working against one company. why it is so fascinating to watch his this is one man with one trade. usually it's a large organization of trades, but this is a paradigm shift in d.c. and how washington works down here. sure how to express myself adequately, but why should it surprise anybody that bill ackman is lobbying members of congress and other public officials? it's like the line from "possible onto" -- i'm shocked them a shock he is trying to do this. thing --as been the nobody is really surprised in town. how they work is pershing square has hired a firm, global strategy group, that basically works behind-the-scenes and hires lobbying groups and grassroots organizations and works to get people to come in

and lobby. this is the playbook. this is what people did on interchange and repatriation. why people are concerned in washington about how this has occurred is he's got a specific trade on. they are not sure if this type of influence, if they are getting access to documents that might have an impact on a stock of herbalife -- that is what herbalife has claimed is going on and that is why people are wary. people have not seen this before. we're used to advocacy operations being deployed, but we have not seen it from a single individual like this. rex if you look at his history -- what's talk about herbalife and the sophisticated operation in terms of d.c.. >> it has been fascinating to watch. counteredhas everything he has done with an

identical step. you see the number of hispanic organizations lobbying the ftc and congress to start an investigation into herbalife. once that started, herbalife went out and hired some of the best and most prominent hispanic i'd -- inin d.c. do d.c. they brought on the former mayor of los angeles after bill operationawmaker -- on a lawmaker. every time bill ackman does something, herbalife response. washingtonas been in a long time. they have a lot of lobbyists at their disposal and from a registered lobbying perspective spend a lot more than bill ackman does. has the advantages he's a behind-the-scenes organization that has always been a step ahead of herbalife as they have been going through this fight. >> can we talk about an unintended consequence -- this story ends up a1 placement in

the "new york times was quote over everything else in the news. if i am mary jo white and the fcc, do i have to say i'm going to -- the ftc, i have to look at it or do you just say bill, you are wrong? bill ackman's entire point about this process is i believe i am correct. these groups align with me, therefore they are going to help push my case to the ftc. his whole goal has been to leverage congress and these groups to force the ftc to start an investigation. what's going to be interesting is if the ftc looks at the story and says because of what is going on behind the scenes, maybe we don't want to touch this. they be this doesn't look like something we should look into. but you always have to watch for the influence in washington. there's a chance he will are looking into what bill ackman is doing. herbalife has made public their efforts to get people to look at

bill ackman's activities. in theis becomes a one "new york times" can the regulators ignore it? >> or maybe they are not ignoring it and they just don't see anything there. i know you will blue watching at 2:00 today. -- you will be watching at 2:00 today. -- bill one thing ackman has been very clear about what he believes, but there is a difference between believing in something theoretically and it being a winning trade. they'll ackman's investors need to believe it because if they pull out as this continues, he's going to have nothing left to do. >> as we have discussed so many times -- every activist effort or campaign involves changing the status quo in one way, shape , or form. whether it's the status quo in the board room or in washington. it is a lot harder to get the

status quo in washington to change than it is in a boardroom. >> we were sitting here the other day with the founder of janus who said regulatory shorts is not the thing for me. hesaid it's not a trait wants to get into. i'm not saying bill ackman's back is against the wall, but if he comes up short with his presentation today, -- >> even if he doesn't, even if the presentation is compelling, is breaking the law and china going to motivate u.s. regulate us to act? that's what it's going to take for him to prove his thesis and drive the stock to zero. >> when we were talking about this trade months ago and he was on the other side and it was harel icon and a bunch of other people. that list has gotten shorter in the last few months. not all those superstars are on the other side, so it's not like he's got 28 bazookas on his front lawn anymore. but he still has about 10.

the subscription music service from dr. dre raised between 60 million dollars and $100 million. cristina alesci broke the story and joins us now. was timberland's birthday yesterday. >> did you celebrate? >> i'm giving him a shout out because i suspect he's watching right now. company thatyoung is spending like a mature one. they had a super bowl spot and they continue to advertise on television. it's not forget the business model is an expensive one. this is an on demand streaming music service. that means when you want to go , youout a latest release can go onto to the site and get that song. the right to do that and acquisition costs to provide

those services are very expensive, unlike pandora, where you put in that song and it basically comes out hours and -- hours andit .ours of music of similar songs there's a much less expensive business model in pandora that operates more like a radio station than an on demand service. >> this market is really crowded. just because you have dr. dre fronting it, can you take it to the next chapter? >> these guys are the agents of cool. that's why they were so successful with their headphones and p -- and people are paying $300 for a headset. you have a bevy of music executives -- look at that. all of these guys have been in the music industry and that is what they are selling.

ofy are selling the brand music executives of that world. they could potentially be successful but it's an uphill battle. >> $100 million -- is that enough to outspend pandora or spotify? ,s it enough to outspend apple which now has apple radio. it doesn't seem to have the same kind of track -- same kind of traffic. >> it is going to be tough, but let's look at the dynamic. this is a subscription supported business model and they're going to charge a lot. >> are you a subscriber? >> i'm not. >> most analysts say to make the business model work, you need between 5 million and 10 million subscribers. they have not released the numbers yet, so we can guess they are nowhere near that subscriber base will stop but they are going to need more and more capital to get there. this aree behind

willing to write checks for these guys. these guys want to be around cool people and pick up the phone and call luke wood. >> but remember the trap of film finance -- we've seen this happen in the film industry time and again. pockets want to roll with movie stars and they get burned. >> a do and that's a risk here. but these guys have established themselves as a savvy businessman with a headset business, so that's why they have been able to be credible when they talk to these finance sorter -- finance service -- finance sources. >> cristina alesci. what we come back, we might need ", marketthis show makers." when we come back, we are talking about russell simmons

and the sound of silence. >> and this may be the future of mobile advertising -- a program that gives people points for watching ads over the apps. ♪

but welcome back. apparently, president obama will go to great lengths to sell his health-care plan to young people. he even sat down on the cult internet talk show "between two ferns." the host, the star of the "hangover" movies is the host. >> it must stink that you can't run three times. >> actually, i think it's a good a thirdstop if iran time, it would be like doing a

third hangover movie. it didn't really work out very well, did it? >> this is funny and great that he's doing it, but it is advertising being done by the president of the united states, going on a fake talkshow to sell the health care plan. >> he wants to get people to sign up before the deadline by the end of march. >> do you think it's going to do that? >> honestly, no. >> i think it makes him more personable but in no way doesn't move the needle. >> but it could be good for his presidency in other ways. >> i would love to go on that show. we need to shift topics and talk about this -- what makes a mobile ad stick? one firm is giving rewards like game but it's or samples.

but is it just like what we watch? could these kinds of carrots become obsolete? with us to talk about that is the ceo of session am. let's talk about the difference between what you are doing and lane vanilla mobile advertising. >> what we are doing starts with driving engagement and loyalty with apps, which is a problem. lex say that one more time. >> adding people to use your abs everyday is a big issue. and loyalty. >> if you think of a storefront analogy, people are windowshopping but not actually going into the store to engage with merchandise. isdowshopping in mobile downloading a nap and checking it out one day and then never looking at it again. might it not be because the apps suck? >> you have to have a good up to

start first and foremost. but from there how there are things you can do to encourage and reward and provide value to users. think american express and how you get rewarded for using the card. we do similar things across the network of applications. there are millions of apps right now and often there are choices for the consumer, and we make it so someone is more likely to choose that supports apple or entertainment have because they're getting real value. on the value side, we provide them with mobile point they can amplify the points on that. they can get things like gift cards on the donations and sweepstakes. , people getupons rewarded for engaging. opt in and integrated

within the product, so it's not just a banner. >> when somebody actually buys something in the store, we provide a service for free. we take a share from the brand dollars will stop >> your interests are aligned. you're not playing a fat -- a flat fee just for providing the service. >> it's really in their interest to drive that traffic every day. >> i have not been experienced in anything like this. let's say there's an app and i'm not using it enough. he hires your firm and what do i see? >> you see a program introduced from the app. it's powered by session m and you can go in and learn how you can get rewarded simply for engaging. >> if i want to use a nap, i want to use a nap.

i don't want to interact with anything before i get to the app. >> you download it and start experiencing it and then you get the invitation to opt into the rewards program. it is all your choice will stop in for anything. when i get a sponsored tweets, i block it. who is your demographic? are expanding the population whose interested in this experience. it's an accidental click. between 30% and 50% of the thisation will opt into program. >> if the engagement level with ads is so low, how on earth this facebook making this much money? >> that is the question. >> this is more about first party relationships. so youa registered user

can target the ad effectively, we do that as well. we are approaching 10 million registered users and that's an important part as opposed to just say we are going to use scale and push it out. you competing with? >> we compete with a variety of players. we look at facebook, twitter, and things like that. people doing things in the ad space that is novel. we feel we are at the forefront of that. >> it's good to have you here. i might start to opt in after this. >> that would be a big deal indeed. own twisted thoughts. i don't like people giving me. >> when we come back, "market makers" has a lot more in store. ♪

>> welcome back. we're approaching 26 minutes past the hour. time to go on the markets. -- we weretters talking about yesterday. >> we were indeed talking about yesterday. urban outfitters came out with earnings -- the earnings themselves beat that the company is very cautious about the first quarter. a conferenceg on call that the first-quarter margins are under significant pressure. the stock is down 5%. to tell you about american eagle since i'm taking responsibility for the stocks that are down. american eagle forecasting first-quarter results that are short of analyst estimates. that stock is down also.

>> i'm going to take the green and i can believe it -- jcpenney is rallying because citibank raised it to a buy. for that reason alone, they are up 10%. i'm a little suspect of that. as ae may look at this cheap trade. we will be back with more. ♪

>> live from bloomberg world headquarters in new york, this is "market makers" with erik schatzker and stephanie ruhle. >> welcome back. i'm stephanie ruhle. as always, it's more exciting dream commercial break, but you are back with i and my partner, erik schatzker. first, there was whole wheat country,en they went then they went quinoa. the latest trend is alternative grains. you can buy oat groat a goal from your panera bread.

these grains are going mainstream and alix steel is looking into it. myx steel, i think of you as aiken woman. >> i'm bringing the quinoa. what restaurants are trying to go for is even all of garden is trying to make the switch. and they are the land of the bottomless -- all of garden as how many white bread sticks can you take down? >> part of that is gluten-free. basically same-store sales are flattening out and they are trying to test a lot of me andutes and attract eric -- healthy eaters from brooklyn. depreciatet to themselves. >> they want them to come into their stores as opposed to just hopping over to whole foods. >> you to brooklyn foodies are going to all of garden because they are saving -- serving gluten-free pasta?

baloney. >> the point is they are trying. it doesn't mean you are going to be successful. sprout but are not harvested. they are in the middle of the cycle which makes the more high-protein and lower starch content. it's more of a vegetable that a grain. it's also easier to digest which could be a benefit for people who have food allergies. >> talk to us about this and they're a bagel. an air of bread, i think to myself i don't necessarily want all of that white bread. >> i don't know if they have solved how they're going to make it taste good. you have to create -- >> it's going to taste different. >> but it will hopefully not alienate the customers they already have. it is interesting to look at the quinoa world because this is where the hippie grain really started.

>> do normal people eat that or talk about it? >> are you calling hippies not normal? >> alternative. alternative equals hippie. we've seen double-digit growth through 2008 and on. the u.s. imports about 40% of quinoa. a good example of how these alternative grains can succeed and people do find that they like quinoa as much as they like rice or couscous. even find kale in your grocery store at this point. >> we don't produce it in the u.s. because it likes high altitude and cooler weather. we are trying to produce it in areas like colorado and washington, but it's all about bolivia and peru. consumersse prices, are more price sensitive and only one percent of consumers consume quinoa over a two week time frame.

>> there is a connection between loving jerry garcia, loving health, loving quinoa and high altitude. >> i love jerry. >> we just got to the bottom of hippie grains. on that note, she's like i'm never coming back. >> when we come back, we will be talking about shares of electronic arts hitting a five-year high after the release of its new videogame. but the game could be a bigger boost for microsoft, which could use it. about thattalking when "market makers" comes back. ♪

>> i'm erik schatzker here with stephanie ruhle and you are watching "market makers" on bloomberg television. the most anticipated game of the " andis called "titanfall it hit the shelves last night. it is a multiplayer combat game available exquisitely on microsoft platforms. it could invigorate sales of the xbox one premium console which is lagging behind playstation four. bloomberg's own game boy has been up all my testing it. >> i am invigorated. up andd to pick those bill bell last week. comes with a book? >> this is the manual you get with the game. to $25can't afford manual, you will use the online version. --s shows the amount

>> that is some nerd boy pornography right there. >> is an amazing game. i went to gamestop first and allied was too long and was taking forever, so i shot over to best buy. i finally got the game around one. >> at midnight, you drive to gamestop and you can't get in? >> yes. >> who are these people online? >> a lot of nerdy dudes. there were almost no women. there were a few at gamestop, but none that best buy. >> he looks hot in those. k always looks hot. it took me about two hours to load it up. i stayed up three much all my playing this game. it's the first videogame that is going to operate in the cloud, so all of the artificial

intelligence that controls the robots that fight against you are controlled in the cloud. int way leaves more space the processor on your video game console to run these super incredibly detailed graphics. >> this is a big bet on connectivity. >> it is a huge bet on conductivity. i have to say i had no problems 6:30 a.m. --. and but we are having issues connecting it in the office. that could be a firewall issue we have at bloomberg. we are incredibly serious -- >> how much did all of this cost? bought the game and the controllers -- the game was $60 and the controllers are about 60 bucks apiece as well. people playing these games like big budget action films. >> but they are not going to see the films as often as they are playing the game. it is $60, going to a movie only

costs 30. gameuys who made this previously made a game called "call of duty." i also play that one religiously. has sold over $10 million worth of video games. that's more than thoser" and "titanic quote and you can throw in "frozen" if you like. thevideogame industry beats movie industry. but because it is balding 40-year-olds, you don't get the attention. hurting relative to playstation four. can this game drive sales of xbox one? >> that's the bet. xbox is too embarrassed -- microsoft is too embarrassed to give out the figures of how many of the new xbox it has sold. they sold about tree .6 million

last winter. waystation for, which came out at the exact same time, has sold 6 million since its debut. it looks like the sony system is winning, but this is the secret weapon. quote whichw those first came out in 2001 and was only available on the xbox, -- people at first called it an "ha lo" box. xbox -- sales of the lo?"id you ever play "ha >> i've played every version. back, meditating your way to success will stop -- meditating your way to success.

simmons and how it worked for him. >> this is a good time. ♪

>> welcome back to "market makers." hip-hop high in year and business mogul russell simmons has a message for the frenzied workday masses -- keep still. in his latest book, he outlines why being calm is so crucial for success. he spoke about it with me earlier this week. >> my nickname is rush and i used to believe by moving fast and even insomnia, the whole idea of a fast-paced life was what made me successful. but the truth is as a creative person, really creativity came in the seconds of stillness. as a focused person, i was able to do more in less time. this idea that i take attending -- 20 minutes in the morning and an evening to meditate and then take an hour and half to do

yoga, it seems like it would be counterproductive to some. but i do have four foundations, i have tv company for film , apany, music company fashion company shipping to macy's today, i have lots of financial services. because i operate from a calm site, because i am able to still for a few minutes and let my thoughts settle, i'm able to give the world something much greater. >> how do you translate that mission you have for yourself to all your different businesses? one would think if i work for russell simmons, i want him to notice me, i want to be the ceos of one of his entities. i would not necessarily think i'm going to get there by sitting and being quiet. >> thoughtful, conscious actions are what make you good. disjointed thoughts and fragmented ideas or work ethics

don't make you better. fact is, we need to be awake and i have all kinds of research -- you know when you're eight years old, left side of your brain and right side of your brain starts to separate? meditation brings them together will stop when you settle, your nervous system gets better and your immune system gets better and brain functionality grows dramatically. can actually see on a scanner in your brain the grey matter grow within a few weeks just by meditating consistently. >> when you wake up in the morning and turn on the news and see the chaos in the world, where do you think most could of silence? the act >> everyone can benefit from stillness. say be still and know -- every profit from every great religion taught us to be still and operate from inside out. happiness sits inside. there is nothing the world can give you to promote happiness.

this idea that things make you happy is mistaken. money doesn't make you happy. makes you money. if you operate from a calm space -- needing nothing attracts everything. >> say that one more time. you happy,esn't make happy makes you money. >> that's a beautiful sentiment. >> when you are happy, thoughtful, hard-working and focused, you do better work. you can't make money in the future. you've got to make money now, when you do the work. to do a good job, that is attractive. but when you are dysfunctional or there is noise in your mind, that's the cause of all the suffering. mind is thein your cause of all the happiness. >> how do you balance staying in the moment and trying to be happy today when you wake up

with these massive overarching goals for world domination? the i think about all businesses russell simmons isn't, i don't think he must wake up and look for simplicity and happiness of the moment. he's got to be goal oriented. >> i am not goal oriented. not in that way. we have goals. i don't worry about results. i do the best i can and it lets me sleep. results don't let me sleep. good efforts do. doing the best you can, that's something you have to learn to appreciate the art itself. >> though work is the prayer? >> prayer makes you happy when you are awake and present. you may get a song. it's not what people are going to think later or how much money you're going to make. it's the beauty of making a song , one melody brings you in. if not for that, you won't make

a good song. it's the effort. are, you how rich you can only sit your ask in one seat at a time. if you are comfortable in your seat, you will do a good job and be more attractive. it's simple. --itation is a very simple basketball players get in the zone and they can't miss. and if you the zone are in a car accident, everything moves slow. the world is moving that slow. is the fluctuation of the mind to keep shoe seeing the beauty of the world. you want to see the world's beauty, this is critical and simple for us to start. awake, ando be everyone has to start. findually, everybody does this reality, but we want to do it sooner rather than later. >> that was the legend, hip-hop

mogul, entrepreneur and author and yogi russell simmons. and to quote the great russell "it doesn't matter how rich you are, your ass can only fit in one seat." >> coming up, we'll talk about the momentum on the s&p markets. ♪

>> that is going to be it for

us. >> tomorrow, we've got the senior managing director at the blackstone group. he runs like stone's investment bank. like stone is the worlds largest manager of alternative assets will stop >> the last time you and i spoke to him, we were in dominoes. that was where world leaders come together and give their -- give theirtop outlook. it would be great to get a view whenever a company is looking to sell and they want to ring the bell -- does that mean we are hitting a high note? we will find out tomorrow, but for now -- >> its 56 minutes past the hour, and that means bloomberg is on the market. are diving straight into derivatives with scott bauer, a senior market strategist who says it's hard to place the momentum in sp y options.

189 seems to be the resistance level. it can seem to move above it. what would it take to push things above the 189 level and make a breakout? >> i think maybe a little more economic news coming out and a little more stability coming out of russia. everything calm down in russia and with the tensions that have put a again, that has short term hold on it, but i see it going to 189 pretty quickly. but if you look at the implied volatility, if they drop another five or 10 points, that is a caution area. the last time they got down to that level, the last five times, we have seen a correction in the marketplace will stop -- in the marketplace. i know that when it comes to the mix, we are a long way off of

the ten-year average of 20. but over the last couple of weeks, we have seen a trend higher. there was that jump in early february to come off that level. we have beenn trending higher. what does that tell you? >> much of that is coming out of the tension in russia. mix,d see a climb in the well over 15 for about 30 minutes. traders in the pit were wondering what is going on and immediately we saw a pullback. that seems to be the new norm for right now. 189 and vix go back down to the 13 handle. increasedalso seeing action with boyd gaming.

holding ofsed a about 7%. are people pricing a big acrease given the push for bigger return on their investment? >> there are a lot of upside call buyers and the inside volatility has risen quite a bit on this news. it almost looks like a simple aero on the chart. we had a chart -- had a top a few months ago and on this news, we see this recent rise up and there is a lot of upside call buyers. >> that's something we will watch again. you have a trade here, looking at 3-d systems, a 3-d printmaker getting an analyst upgrade, allowed to pair some of its tech line this month. what is your strategy here? >> i want to take advantage of the negative article that came out over the weekend about these 3-d stocks. 12%, ick is down 10% or

want to buy the 70-80 call spread. i can do that for about $1.75. i've got about five weeks or so left on this and i like this a lot because my upside is all the way to $10 on this spread. ,f you look at technical charts the 50 day moving average is up to 80, so there's a lot of shortage in this stock. about 23 million shares. all we need is one rally at this is going right back to 80. >> thank you for joining us. we are on the markets in 30 minutes. "lunch money" is next. ♪

>> i am adam johnson. gm hits another speed bump as congress is investigating the recall that has been years in the making. wants to get at&t and verizon on a weight-loss plan. edward snowden's new message, he wants to keep people say. sean c