ron will be taking the stage later today in new york. back to you. >> thank you so much. is jobs day. we will break down the jobs report tomorrow morning. "market makers" is next. what to do about those pesky activists? corporate boards know who to call. you'll hear from one of the world's top investment bankers. >> keeping investors in the dark. the networks anonymously. michael lewis's new book shining a light on it all.

>> producers making sure form videos with the discovery channel. you'll hear from -- ron howard. he looks exactly the same. >> welcome to "market makers." extraordinary the show from yesterday, but we are -- >> going to give it a shot. breaking economic news. i assume nonmanufacturing -- ism nonmanufacturing. michael mckee has the headlines. havetter news than we expected. manufacturing getting a little better. we want to keep an i on whether we're seeing the new orders come in. i'm checking through the numbers at the moment. 53.1 versus 51.6. a big jump from february. the employment index is what everybody is keeping an eye on

as well as new orders. a big rebound there. that may figure into people's estimations of what we get tomorrow for the payroll report. 47 is contraction in hiring. nobody thought that would continue. it was weather-related. his address we will see better-than-expected news perhaps tomorrow in the implement report on the service -- employment report on the services side. good news today. >> thank you very much. we got manufacturing earlier in the week, now positive sign on nonmanufacturing. top business stories from around the world. brookstone has filed for bankruptcy protection. they sell items such as drones and virtual keyboards. they're now hoping to sell spirit holdings. brookstone was taken private in 2005.

attendance at seaworld is plunging. the number of visitors felt 13% in the first quarter compared with a year earlier. the company plans to drop on higher prices in pure discounts. blackstone has reduced its stake in seaworld to about 25%. in turkey, the nation's highest court has ordered the prime minister to unblock twitter. the government says it will comply with the court order. managersist hedge fund really the investors best friend? beatent analysis shows a the s&p 500 by 17 percentage points over the last five years. haveunds they manage now almost 100 billion dollars of assets. corporate boards are not about to outsource governance but turned to bankers like f on to advise them on strategy and when necessary, to build an activist

defense. activism works for him. back.at to have you the activists themselves. they tell us that pours increasingly welcome them with open arms. is that true? >> that is a tough race. --rds generally appreciate they need to be their own best activist. if you are a company that is not attentive to how you focus on delivering in the short term, obviously, will not in the long-term strategic rationale for the company, you will have a problem. i think most boards today will say, what can we do with income statement on the margin statement and the balance sheet to make it more efficient? do we have the right set of assets? do they fit together? i think we have gotten much

better about getting her perspective that they really should be their own best activist. >> to corporate boards love activists? they're betterat equipped are willing to put more resources into digging into a company and the members of those companies boards. >> two points there. loeb? probably not. what is more important you can't be on a board today and not be really attentive to what is going on with the company. this goes back 15 years. there's been a sea change in how any member of a board takes his or her responsibility very seriously to do the right thing for shareholders. that is not to say that activism doesn't play a role generally in onping boards focus more what they've got to be doing. investors look at activist

investing as an important and favorable area of investing. weis more than -- it is more think about leverage. it is important. they do spend a lot of time asking firms like ours, if you were an activist, what would you tell us we're doing right and what do we need to do differently? they really do put into play these kinds of changes, often. there's a reason u.s. corporate sector generally on a global basis is far outpacing competitively any other market anywhere with any other set of companies. >> it sounds like we should be celebrating activist. >> i think what we should be celebrating -- if the corporate words -- corporate boards were not doing enough of this before and at the very least activism is one of the reasons they're doing it now , coming to people like you and saying, hey, what steps should we be taking because we want to

exercise good governance and also because we don't want to fall prey to activism, then activism sound like a good thing. >> i don't generally use words like celebrate, love. i'm very rational. >> that sad. >> i agree. a whole confluence to suggest companies are doing the right thing today. m&a,nk activism, like comes in all shapes and sizes. there are activist for whom i have deep respect for but may disagree -- >> like whom? >> and there are those that i think are in a different perspective -- >> like? >> we will put that aside. generally, the smaller firms or firms that have been doing it a long time. i respect someone who, when given the facts or an argument, is willing to change his perspective. becausee word "his"

most are men. would change his or her perspective and say, the company actually may be more right than i originally gave them credit for. you having a lot of conversations with companies who are under pressure to upgrade their boards since this huge influx of activism? is there pressure for companies to say, well, this guy was great, but at the day, he is a aboutd x, she knows more -- >> i think you need to consider a shareholder generally. activism in any company is 1% or 2% of the company generally. 90% of the shareholders also want you to have the right board. 98% of the shareholders also want you to have the right board. you're seeing them say, do we have the best and of skill sets doubtless? >> are they doing that more today then they were three years ago? >> absolutely. there is a confluence of reasons that contribute to that. >> let's say you think you have

the right skill set. the right people in those seats. the right ceo and executive if a rattlingt activist comes knocking, what is the best defense? >> doing what is right for the company in the longer-term. recognize no shareholders -- i think blackrock said recently -- have a longer-term perspective. you can't do things for the short-term at the expense of what is for the good health strategically and financially for the company and the long-term. >> is it fair for blackrock to opine on what should be done? blackrock youths to have a call with any company they want and they get a call back -- >> it is fair for every shareholder from including a shareholder with two shares, to opine on what they think that company ought to do. it is also fair for the company for the paid stewards of shareholders to run the enterprise to do with a think is the right thing for the enterprise's health long-term. the main focus or debate really

is around timing of certain things, generally, and how aggressive you are uncertain things. i would argue leverage as an example. we talk about leverage and buyback. the company that did a very large buyback in september 2008 -- in an example -- probably wasn't so happy to months later. you need to recognize whatever current state the environment looks like, it will change and you need to make sure your company changes with it. >> so boards of directors are under pressure to do the right thing. >> let me stop you. pressure, generally, because they want companies to do well, most boards or management's have a lot of stock. they feel the pressure. should.hey >> absolutely. and they want to succeed. >> up until recently, so much of what they've been doing, is why

back stock and raise dividends will stop are we going to see more capital put at risk on behalf of the shareholder doing the kinds of things that you also advise on, corporate m&a? >> great question. cap the allocation is one of the most important things the company looks at. the first winds is worried think the world is. when you say risk, clearly, if you're in a scenario where you think the economy at large is a bit more sluggish, you're going to be sensitive to thinking about m&a aggressively. the best way to do well is to be an high-growth environment. it covers up the tension mistakes you may have made and how you think about synergy, for example. i think how please are properly very disciplined and how they think about giving on the one hand capital to shareholders and on the other hand reinvesting in the business and then m&a. i am not a believer that we are in some incipient m&a boom.

i think m&a is just fine. it is probably where it ought to be to have a longer-term trend. it's fun. companies make decisions based on whether they think they can comfortably deliver while improving portfolios. >> we have much more to cover but have to take a quick break. blair effron. when we come back, we will head to d.c. >> import supreme court ruling. plus in the next hour, more of my exclusive interview with barry dillard who speaks out about facebook. you're watching "market makers." ♪

>> you are watching "market makers." .e are here with blair effron i want to shift the conversation not away from wall street, really, but draw the connection to core door during wall street and washington. you're an active political donor, a fundraiser, supporter of the democratic party and ally of the president. we need to talk about yesterday's supreme court decision. the racing some limits on a lot of political giving. how important is it? >> it's important. i think it is troubling. it's potentially a plus if it is going to get more fundraising in the open light of day, to see who is doing what. i have concerns like many people around some of the superpac

giving. perhaps with yesterday's -- >> doesn't level the playing field? >> it does a little bit. both parties will raise more and do more, so you tell me whether that levels the playing field. >> here's where it gets interesting. the parties now can raise unlimited sums of funds. >> correct. >> grievously, it only applied to superpacs and people perceived that are represented special interests of the mainstream party. if the mainstream becomes more flush, how does that change things? >> i hope it becomes, as you point out, less special interest. but i will also tell you, at some point, i'm not sure it is great for the process when you live,ve a few doing a making a big impact the potentially can be against the

goodwill of the many. have the last 24 hours we heard a lot of big donors are now getting calls asking for more money. are you? >> and asking were being asked? >> are you being asked? >> anticipate it will certainly atn up -- i would say, some point or anybody does with their giving across the spectrum of things, civic, nonprofit, political policy, my bed is it lessing to have modestly impact than everybody thinks because i actually think people are personally not willing to go beyond certain personal limits as to how much they want to allocate to particular area. know peopleme and i who are generous politically,

most of them have limits on what they're willing to do. >> it was said, let's pick a number. let's pretend the number is $1 billion. the candidate can raise this touch on in that set. it doesn't matter who it comes from, then off to the races. >> that is where we thought we were heading. i think there is real merit to it. believe as i do painful as it is to raise money for these guys, as much as it takes them from their day job, the fact of the matter is, being out at fundraisers, meeting 100 people in your district, relating, is an important part -- >> but you don't have time to go address the issues because you're out fundraising. >> well, that is the rough. the question to me is, do you really think we don't have time to address them or you think there are other elements that are at play as we speak right now to actually make some of the

progress you're talking about? is cynicism. yours comes mind. >> it is not cynicism. have a phenomenally well run and functioning process compared to the rest of the world. but what i'm saying, because things move slowly, i don't think that is a bad thing. >> the case has been made the wealthy have done better under six years of president obama then under six years of any other president, certainly in recent memory. why does there persist or why does the venom, if you will come on wall street against the current president versus come to mind? obviously,the camp, -- a lot of it is unfair. but the country's been through a lot. a place that nobody would have imagined we could get

to today. the relative health of the economy -- >> is a changing? are people coming around? >> i think people are coming around to the idea the countries on much better footing than we could have been had we gone down a different set of directives. or relative to other places around the globe. i think the question of the wealthy versus the not wealthy, i don't think there's anybody across the spectrum who doesn't think we need to do everything we can to make sure our growth is broad-based. to me, that is fundamentally the biggest issue we have right now, how do you get good growth, good employment -- >> that everyone enjoys. >> that everyone enjoys. i think you have venom from both .ides of the spectrum i think it is less now than it has been. >> i sure hope so. great to see you. blair effron is the cofounder of

one of the world's top investment banks and for many corporate boards, the first: the activist comes knocking. >> when we come back, wall street dark secret. we will tell you the big traders have an edge i trading in the dark pools, which i like to say is the worst possible name for something. that is coming up on "market makers." stay right here. ♪

>> welcome back to "market makers." it is time to go on the markets.

close to once again new record for the s&p 500. what has happened thus far this ism index coming out about 2 points higher than expected. a pretty positive number on the manufacturing two days ago, and better on the services sector today. important for those who are thinking about the fundamental underpinnings of u.s. economy in the stock market. >> i'm talking rock stars. pandora is gaining the most since early february after the online music's trimming service announced that march listener hours rose. having a very positive day. >> from feature films the 10 minute videos, we will tell you why hollywood legends are

teaming up with discovery. >> ok. ♪

>> welcome back to "market makers." lewis's new book "flash boys" puts the spotlight on a shadowy corner. unlike the new york stock exchange or nasdaq, trading and dark pools is anonymous. investors go there when they don't want others in the market to see what they are buying or selling and drive up prices, up or down, in anticipation of that buying or selling. dark pools have been criticized for their lack of transparency, among other things.

let's bring in the founder and ceo of liquid net, also an outspoken critic of high-frequency trading. you run a dark pool, but not the kind of dark pool that is criticized a number of times in michael lewis's book "flash boys." what is the difference between liquid net in a bank run dark pool? >> liquid net is an institutional lack trading venue. mutual funds and pension funds have grown their assets so large during the whole bull market that became also sector, basically. the 90 million americans that invest with these funds need a venue they can trade in the size , among themselves, safely, and away from the predatory traders like high-frequency trading that

moves the market against them. ultimately creating a tax returns for those people that invest in the funds. >> the firm that he highlights , in a manner of speaking is try to do the same thing as liquid net. would you agree with that? but that is the case, does iex pose a risk to your business? >> they work within the current structure framework. that is a leaky house. job atdoing a great catching a lot of the leaks. the problem i think is the high-frequency traders make so much money that they're going to find new areas they can create new leaks in. liquid net has created a whole new venue, also marketplace which every other industry has created when a wholesale sector has emerged. it is a whole new house. it is a house that is only for these large wholesalers and institutions to trade. we do not allow in any

high-frequency traders. it is only for the institutional traders. >> earlier this morning we got an official statement from charles schwab. the well-known discount broker firm. i want to pull an excerpt. here we go -- clearly, a very aggressive statement, especially from a company that gets paid from order flow. what do you think? to use one broad stroke to make anybody seen bad or good. not all high-frequency traders are bad, but there's a large segment that simply take money at the expense of these large institutional orders. it is typical wall street were very few make a lot of money at the expense of very many. there is a problem with market

structure and a problem with these high-frequency traders trading ahead of the institutional orders, knowing that a large amount of shares they have to buy in order for them to actually perform so that they're sitting ducks, the institutions, and unfortunately, that creates this tax on all of our returns that invest our money with these mutual funds and pension funds. so something has to be done and i'm very, very happy -- michael lewis is a little late to the game. this is sort of an old debate, but i'm glad it is in focus because we have to focus on this and we have to get market sentiment back. we have to get investor confidence back into the markets. i'm glad the debate is going on. >> is it an over generalization to say almost in every scenario somebody is a sitting duck? seven years ago if sap capital pulled 11 dealers on the street and said, give me for this, they're sitting ducks that are about to get run over. >> i don't think the market

should work that way. you can't please everybody, but you have to go back to what is the market therefore? the market is there so investors can trade shares officially without having to be concerned about being front run or taken advantage of. the market is there for capital formations. so companies can raise money efficiently in the public markets. if there's a segment of those markets essentially take advantage of the inefficiencies in the market, that is something the regulators and that entrepreneurs i click with net should try to solve -- entrepreneurs like liquid net should try to solve. they want to be able to anticipate those orders, perhaps trade ahead of them and find a way to make a penny were more per share and they can all add up of course, but to stephanie's point about retail order flow, charles schwab is one of those firms and you can find this in the annual filing to the sec,

the 10k, that derives revenue from selling its order for cash flow to firms like citadel or citigroup or ubs, for example. my question is, if charles schwab, the person or his company is going to take a stand against high-frequency trading, shouldn't it at the same time disavow the sale of retail order flow? >> i believe they should. i believe any time you sell order flow, you're limiting the opportunity for those investors who invest with those companies to get the best price. i think everything should flow into the marketplace. then everyone can get a look at that order flow. dark pools was created to handle institutional orders. you asked about the internalization engines of the big guys and other folks that i this order flow. their execution sizes are no onger than those found exchanges.

it is not good for the market to have these 50 shadow exchanges. liquid net provides next -- we arei from specifically for those institutional investors. standing side-by-side with the exchange, we are quantity discovery where the wholesale market is standing next to the resale market and that services both constituents much more efficiently. >> what do the exchanges need to do to behave more fairly? selling data doesn't seem to make sense. the fact they are for profit, some take issue. which ones are doing it right? >> i think they have to go back to basics. they have to figure out what is the underlying principles here. and that is you have to instill market confidence. you have got to maintain and integrity of the markets. these different order tabs that nobody other than high-frequency traders can access is wrong. we should have a few order types

that everybody can understand. should be the primary place for all retail trading. understand what other problems that going to the market structure. what is the underlying principle that facebook and the flash crash -- whether they occur? -- why did they occur? they had to rejig their systems to handle the massive traffic that only high-frequency traders meet. we should make the markets more simple, not so complicated as they are today. >> i think they should pick a better name than dark pools. it is nasty brand. >> we are a block trading entity. >> dark pool. it is a downer of a title. >> the ceo and founder of liquid net. >> pretty damn smart.

ron howard and brian grazer are turning to 10 minute videos for the web. we will share more of the very special interview with ron when we come back. ♪

to bring you breaking news from general motors. the carmaker has announced it is retaining communications expert doubt that responded to recall crisis. eller has a history on capitol hill and worked in the clinton administration and helped firestone and responding to the tire recall prices -- crisis. he's helping gm to respond to the orcall that led to tied to the deaths of 13 people. -- gmomes after gmc ceo has faced harsh questioning for many members of congress. retaining just eller to help

respond the recall crisis. back to "market makers." thank you for the breaking news. moving on, tv giant discovery is starting a digital studio with movie director ron howard and brian grazer. the joint venture is called new form. thare on senior west coast correspondent jon erlichman sat down with the two hollywood heavyweights for an exclusive earlier today. what did you learn? before you get into it, he still looks like richie cunningham. it is amazing. creams does he wear night to look in looking? it is a brave new media world. you can watch bloomberg tv on the new fire tv. you cannot say that we could go. hollywood things about what that means for movies and tv shows.

you have ron howard and brian grazer who have worked together for years on all sorts of big projects, who are interested in learning more and investing in the sort of new world of things like unscripted and scripted short form videos. five to 10 minutes delivered everywhere. discovery, does interesting because that this massive tv operation but separately, they have this digital business they're trying to grow very quickly. david zaslav should a little more in our interview on that. >> this isn't like the cable business or the broadcast business where you're getting a license. we are taking advantage of the worldwide infrastructure. whether it is on the web or cell phones or the ipad -- all of those are screens today were people are consuming content. one ofourselves on every those screens. the great thing is, a great piece of content gets pushed all around the world. >> basically, you discovery and then howard and grazer investing

in this joint ventured a look at the short form stuff. >> does this mean facebook and twitter are the new venues? >> we asked them about that. where does this video go? they say everywhere. >> of course that is their answer. >> here's what i think will probably happen. you will probably get some different players from the world of technology who are looking to make their platform or their site unique who want to get some exclusive deals if the content is really good. we see this with netflix and amazon doing original shows. aol and yahoo! coming youtube, they do it as well. even on facebook and twitter are more were you share that stuff, but a certain point, you wonder if they're going to want to have it as well. or could be, let's put it everywhere and try to get advertising dollars associated. >> but that raises questions about which is the best is this

revenue use to generate out of content like this? would you be better off going to facebook where you're on the surly going to be relying upon advertising revenue or would you be better off going to a meal which dairy taylor's trying to -- dairy taylor's trying to turn it into video-on-demand maybe from content like this. he said the other day, he's going to go out and buy content, spent $20 million a year. >> that was a great interview. clear atswer is not this point because you're testing everything. what is clear is with some video, even when we talked about the advertising dollars tied to digital audio being a great growth market, in some cases you're not making that much for every video view. that has resulted in some models being different. we profile device who has tried them -- vice congress tried to move away from that.

i think they will try it out. the key is trying out more scripted video as opposed to just some of the youtube channels that have exploded over the last decade. they tried it in the early days of the internet and it wasn't very successful. i think with broadband everywhere, as fast as it is, maybe they can have more success. >> great interview. things are constantly changing in the world of content media and video production. jon erlichman covering the cool stuff. >> when the come back, we will raise an issue that blair effron told us about earlier, the wealth gap. just how big is it? a new study that sheds light on the answers. ♪

>> you are watching "market makers." the inequality debate tends to frame everything in terms of the 99% versus the 1%.

suggests that may be thinking too broadly. scarlet fu is here to go narrow. >> we're going to the .1%. the distinction is not so much income, but wealth. wealth is basically what and what you are in. it is the value of of your assets. housing, stocks, bonds, cash, minus your debt. we look at how much of the nation's debt is at the top .1% makes, we go all the way back to the roaring 20's. the 2008 financial crisis, they're barely a blip. if it continues, we're headed for the tail edge of the gilded age. it is interesting how that line at one point it is steady, but then it really takes a sharp turn the last couple of years. >> where does this data come from? .> uc berkeley

for those out there who are doubters, they can point out this is a uc berkeley generated study. sure. but the data was there. what is interesting is you break down the groups within one day percent -- 1%. let's put the second chart. the one to pay attention to is the red line which shows you the .1% to the .001%. it moves higher much faster than the other lines. seeing their wealth go up in value much higher than everyone else. >> it is so hard for me to understand this. if only i was the .001% maybe i would have a clear understanding. >> do you know anyone in that percentile? >> yes.

yes, as a matter fact. blair effron, i'm not sure whether he is in the .01%. he was talking -- he is a democrat, supportive of the president, talking about the need to correct any quality. -- inequality. the other guy who is most definitely in that percent, barry diller. we talked about this issue. any quality he feels passionate about. >> there are a lot of artemis against minimum wage, that it will hurt job creation. but -- look, i don't think any profit cant has a get away with not paying a living wage to every employee they have. >> now, that is a must exactly the same sentiment that we heard from the president just the other day. diller expressed it before the

president did. the idea that anyone with a full-time job shouldn't be living below the poverty line, more or less the same principle. >> it is. you wonder how this will affect the minimum wage debate taking place right now. and ae moved to $10.10 number of cities and states, the federally speaking, be on the federally contracted workers, there are still the debate about whether it was actually improving employment or hurting it. >> there isn't a corporate leader right now that isn't at least addressing talking about the importance of income inequality. i think -- this isn't a surprise. but what are going to be the actual -- >> prescription. >> some who say education is the route to solving the inequality problem and some say sobbing youth unemployment is the way to address -- solving the youth unemployment is the way to address it. >> but that solution will take 20, 30, 40 years. >> i don't know the solution that would bring about i

snapping her fingers and waking up tomorrow morning and everything is fine. >> earlier charts we show the demographic changes that is taken place as well across the world, whether it is angry young man in the rise of the demographic run the world and also the element of social instability added. >> blair effron said one thing, america in comparison to other countries around the world, does have the best system, is addressing this with another countries. maybe it is not much of a positive to say we are the best of the worst. scarlet fu, thank you. to be taking you "on the markets." this breaks my heart. barnes & noble, one of my favorites, down as much as 10% --er liberty media announced actually now down 12%. announced plans to sell most of its stake in the struggling bookstore chain and abandon one

of its seats on the board. i have to tell you, this breaks my heart. i am a huge barnes & noble and easiest, but sometimes when i'm there with my kids, i am buying books just because i feel that. i feel that i'm using the to buyes, it is easier them on amazon all stop -- amazon. >> they're doing so poorly because of amazon. amazon also is trading down today. not by nearly as much. investors don't appear to be wowed by the unveiling of the new product fire tv. we will talk about that more and the next hour. one thing i can say about fire tv that is terrific, bloomberg tv is on it. we will be back in a couple of moments. we're talking about amazon ramping up the battle for your living room. we will see whether the fire tv product is in fact a real channel changer. ♪

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>> live from bloomberg world headquarters in new york, this is "market makers" with erik schatzker and stephanie ruhle. >> drilling down with barry diller. in an exclusive interview, the media mogul opens up about mark zuckerberg's multibillion dollar spending spree at what it means for facebook. >> shakeup at jpmorgan -- one of the most powerful woman on wall the bank.leaving what does it mean for jpmorgan in the street? we will ask our contributing editor, bill cullen. >> and they look marvelous -- another marvel superhero film opens this weekend. of course it is going to be a block esther.

-- going to be a blockbuster. joined bynie ruhle, my own captain america. >> erik schatzker. it's time for the newsfeed. this is what captain america does -- he reads the news feed. >> i thought you are from canada. >> another sign the country is starting to offer him all the winter storms -- service industries picked up steam in march after expanding at the slowest rate in four years. the survey covers 90% of the economy, everything from retailing to finance. fightdraghi is looking to i-formation, including quantitative easing as an option. inflation in europe has slowed down to just a quarter of the 2% goal the ecb maintains. and grubhub is rising its ipo tonight -- at the mid range,

this company would be valued at almost $2 billion. among the big investors are goldman sachs and spectrum equity. more of my exclusive interview with media mogul barry diller. hiserday, we talked about take on the streaming tv service he's backing and whose very existence is at stake in a supreme court case to be decided this year. he says if they lose, it is a life or death situation. he and i talked about number of other things, including facebook and what he eggs of mark zuckerberg's recent decision to spend $19 billion on what's at and $2 billion for the virtual reality not yet product from oculus. i wouldn't do it. i might do something equally misunderstood by something else. if you take it on value terms,

it's very hard to put a volume and against a business that has no revenue. if you are going to do so, you have to have a very big belief. facebook has a very big belief or they would not have done it. a speculation? absolutely. will it come through? possibly yes. will it grow into its valuation? possibly. it's possible for an outsider -- the only thing a shareholder should care about, the shareholder of facebook, which is the only relevance, is do they have enough capital that if this succeeds, it is fine, but if it fails is it going to damage the business i bought into? >> what do you think question are >> i'm not a shareholder of facebook, so i have no opinion. >> do valuations like that said angel's precedence? >> i don't think they set dangerous precedent because everything is self-correcting over time. that is historically true.

is a big deal. >> it everything in the investment business. >> right now, valuations are extremely frothy. >> would you say bubble? >> here is the problem with toble -- we relate bubble 2001 internet collapse. that was when there was very little revenue going around. there was very much audience accumulation and the growth of the internet. prerogativesess were not apparent until the bubble got pricked and people said you don't really have any revenue. you will never have any profits, and you're finished. it's not the case now. you have too many internet is this is. so the chairman of expedia,

those businesses are not part of a bubble. i don't think it's a bubble. >> you bet on john malone, lessman does -- would you bet on zuckerberg? >> he is the real deal. -- isot say what happens facebook enduring? i do not think that is yet in evidence. >> looks like user growth and engagement are beginning to drop off. >> there are businesses on both side of it, so i can't say it's enduring, but he is the real deal. >> i want to ask about inequality. you told andy lack in november that inequality is the one thing you worry about most. why question mark >> because it can sustain. because something has to change. grass rootse seeing

-- what is it? green shoots. little things we're seeing all over the place that this is beginning to be taken seriously. of cannot have inequality the kind the world has and we have forever will stop >> what would you point to? there are a lot of arguments against minimum wage, that it will hurt actual job creation. company that any with profit can get away out paying a living wage to every employee that they have. by living wage, i mean enough to create a family, enough to be minimumy kind of subsystems.

-- subsistence. that is minimal behavior to me. i see some things, but this is not easy to solve. we are always going to have income inequality. always. >> it's a capitalist system. >> that's the nature of it. but we cannot have a golf where the barbell is so high over here and so tiny over here. it's notall it -- called income equalization, but it is called you cannot have they primarily cannot survive, build a family and have opportunity. >> how important do you think it is to have people like barry diller, the one percent of the one percent, complaining about the inequality problem? >> i understand there are people who think --

>> the people who should be complaining about the inequality problem are the people who got the short end of the stick. >> they are complaining about it , but those people don't have the platform that barry diller does. they don't get to have an exclusive interview sitting with the likes of erik schatzker. of fact that the attendees dominoes are talking about it is important, but the question is are they looking at it too late? larry summers has been talking about this for five years. andalked about opportunity equality, education inequality. >> larry summers also plays golf with billionaires. >> just because he plays golf with cleaners isn't a problem. why do people have an issue with the fact that larry summers cares about the little guy but likes to party with the big guy? that's not a big deal. >> i'm not saying that's a big deal. >> you are because you pointed it out. >> here is the big deal -- whether it's from the bottom or the top, the criticism of inequality bothers some people

intensely, people like tom perkins, for example. prestigiousost venture capital firms in silicon valley. it bothers people like ken langone. you could argue the greatest entrepreneurs -- >> one of the most philanthropic guys right here in new york city , reinvented nyu hospital. >> i think it sets up a fascinating contrast. i asked diller what does he think about people about langone who say these complaints about inequality are tantamount to persecution. >> it's ridiculous. sorry. but --ct those people ridiculous is what he said. unfortunately we lost the rest. -- apparently it

might be queued up. it's ridiculous. sorry. i respect those people, but i contest. i think it is odd for anybody. ken langone is a very generous man, charitable in every other way and has very strong political beliefs. i don't think i share them, but he has every right to say them. >> and that is what is most important at the end of the day -- it's a free country with free speech and we should have this exchange of idea because there is no one person who is correct. >> i think people who are criticizing ken langone are criticizing his specific word choices, not the theory. this country was built on the american dream. it motivates me. kids andto motivate my can langone helps people pursue theirs. >> sure, he does, but there are lots of people who don't to begin with and the complaint

against inequality is not just about inequality. it's about things like dynastic wealth. if you leave so much of the nation's wealth in the hands of so few, social mobility becomes impossible. >> i think it is extraordinary some of those people who are at the top are addressing this issue and trying to help people. they are not sitting on top of the cash -- >> that's why i'm glad we talked to people like barry diller and ken langone to get their take on it. heatazon is turning up the on google and apple. we will see whether the new fire tv as much of a threat will stop i don't know about a threat, but it's a treat because you can watch bloomberg on it. on's "market makers" bloomberg television. watch our interviews on demand and on tv and we are on fire tv

also. ♪

>> the federal reserve is going to be without another governor. jeremy stein, governor of the fed has just announced his resignation. that's why michael mckee is here. not totally unexpected. >> they knew this was a possibility. he came from harvard and had a two-year leave as most academics to come to the fed do. his option was to either remain at the fed or go back to harvard because he would lose his tenure if he did not go back, so he is resigning to go back to school. the problem is it leaves the fed with yet another vacancy. vacancy foready one which nobody has been nominated by the president, so there are two and there are three who have not been replaced. if the senate doesn't

act to finisterre their confirmation, we could end up with a lack of a quorum. >> how often does something like this happened? all of theseion entities, i say holy cow. >> it's not unusual. over the last 20 years for the fed to operate in an extremely undermanned state. they are normally seven, but they were at 54 about five to seven years during the clinton, bush and beginning of the obama administrations because it has become so polarized that nobody can get anybody through. the obama administration has been very lax in appointing people to these positions. >> first of all, how many governors do you need to have a quorum? >> i believe you need for. certainly there would be a quorum in the open market committee because of the fed bank presidents who are there.

what it does do is leave them shorthanded in doing the day to day work they do, bank supervision and like that. an area of them has responsibility and it just means more work for the other people. it's a real problem and i've talked to a number of x fed governors to say i served when there were only five and it's just a pain because we don't have the support, you don't have someone else you can lay this off of. >> these jobs exist for a reason. >> there are an awful lot of things besides just monetary policy. stein will be a lost intellectually. he's been keeping an eye on what's going on in the markets and has raised the question about whether we've seen asset bubbles are not. he's been a sort of -- i don't want to say counter weight to ben bernanke because it's not like they had huge heagreements, but he has --

adds another intellectual voice. he will be a loss for the federal reserve. >> jeremy stein announcing his resignation from the fed and pending return to teach harvard. >> what is the future for amazon's fire tv? we will talk to a medium wig about the media streaming channel. you are watching bloomberg television. stay here. ♪

>> amazon is staking its claim to your living room with the introduction of its set-top ox called fire tv. ownon is also creating its video content in spending millions of dollars developing online games. the question is will this pay -- this play for your television set be a channel changer? joining us is the ceo of tech tv. he's also the former president of cnn.

what does it mean to have amazon in the mix? >> i think amazon want you to fire your tv provider. that's why they call it fire tv. there's a war going on in your house and it's the war for your wallet. you had media companies trying to get your money, your entertainment dollars through the tv and merchandisers trying to get your money spent on goods through your pc online. all of a sudden, you have a major merchandisers saying i want to get those entertainment allers. that's what this is about. tozon has got the ability market these devices. if you've gone on today, you've been bombarded. the amazon brand is equated with great delivery, you can return it if you don't like it, and they certainly eat the lunch of players like roque do have a narrower offering. amazon so it take

long? apple tv has been out there for years. lex a b-day world waiting for the right time for testing the project. the right time is when they decide. >> the fact that amazon is not afraid of low pricing, they care about pricing. is not really connected to low pricing. >> amazon is also going after gamers. demographic and it's the people who say am not spending 200 bucks a month for a bunch of cable channels i have no use for. i will spend $100 on this box that gets me everything else i want and i will buy the rest all a cart. this is a golden opportunity. >> we just launched our first

channel which is built around christian counseling to address problems. we are appealing to his super fans. we've gotten almost no request from consumers to make an apple or android app, but we've gotten tons of requests for a roque to app. why? because people want to watch video on their tv set. >> these are people who are a fairly older demographic. they are fine watching video on their phone, on the ipad, but they also want to watch on tv when they feel like it. >> like len back fans. >> that's right. -- we've top plays seen consumer demand for a set-top experience.

fans, there only super like sarahsonalities palin, glenn beck or rush limbaugh? >> just clearly defined. there's a very clear value proposition. your life is messed up and i can help you fix it. >> the christian way. >> but he does a lot -- >> it's a very specific group of people and we are living in the age of specificity. the more precise you are, the more people you will attract around your flag. >> what is it going to take for it to be on roque you and satisfy this demand? >> very straightforward. a little app development and putting it out along with the rest of the suite of roddick's. >> what is the economic trade-off? >> usually they want to see you participate in the economic summit.

to help you sell subscriptions, the terms may vary depending on the provider. all you got to do is create cap that talks to their system and away you go. it's a good deal if you want to reach more people and make it more appealing to your consumers. >> when you look at what you are doing,nd what amazon is who is this the biggest threat to? if i'm the head of nbc or abc, and my waking up? >> if you are a content creator, this is phenomenal. you got more places buying your product than ever before. amazon just bought the rights to the library of "24 cargo >> 24."le still watch " >> it's about to come back for a special new season, so you might want to catch up on the back episodes. to bingef being able on netflix, now you can binge on amazon and that's a great deal for the studio and the producers

"24." erika -- >> thank you for joining us. >> we will be back with more "market makers" in two minutes. ♪

>> live from bloomberg headquarters in new york, this is "market makers" with erik schatzker and stephanie ruhle. >> welcome back. >> i'm erik schatzker. >> there's a lot for us to cover. morgan stanley's chief financial officer isn't happy about the fortuneer of women at 500 companies. she called the lack of other high-powered women and embarrassment and might show the need for new laws. there's no shortage of women who are talented and smart. women accounted for just eight percent of the five best paid employees at each of the s&p 500

companies in 2012. all month long, all year long, we are talking about this. i want you bring in bill:. he's a contributed -- i want to cohen.in bill what is your response? >> she said some of the men boarded her career early on. i love this. when she became a more senior executive, she went back and looked at the report that had been done earlier in her career and found the men wrote that she did not have what it took and going to be a flameout. she prove them wrong and that was one of the other things that she talked about will stop i give her a lot of credit for

sticking with it, for being bold and speaking out. i think it's incredibly important. morgan stanley realizes what an asset she is. >> this is why i want to talk about life masters. she runs the commodities unit and is leaving the firm upon jpmorgan selling his business. at the age of 28, she was the youngest managing director ever. was one of the founders of the business and only started in the commodity business seven years ago. explain in europe union light jpmorgan would let one of the woment paid most talented walk out the door. michael cavanaugh left the firm.

>> in a word, inexplicable. it cannot be explained. here is an incredibly talented woman who they should be keeping at all cost -- maybe not at all cost, but reasonable cost. she has accomplished so much. she's taken some grief over the years, but so has everyone. it's like trying to blame lou ranieri for creating mortgage backed securities. i don't know why in the world they would let her go. they've been telegraphing it for months. especially in the last month when they sold a big chunk of the commodities business to a new equity investor. like she became a woman without a portfolio, which is ridiculous. >> we've seen it over and over and it's not like we are hearing she's leaving to go to x, y, or z firm.

why not have her stay there? >> i wonder whether diamond's fulton to defense of masters during the for investigation was and everything appeared to be from the outside? this out thereng -- maybe mr. diamond and other people out there were far more ambivalent about masters than they appear to be in public. i suppose that is a possibility. if you work for jpmorgan and you are under the gun the way blythe masters was, you would want diamond and everyone else at the firm behind you, regardless of what kind of relationship you might have. good positionery to be in. >> i will just point out the guy i used to work for a jpmorgan was also under fire from the fed.

guess what? they removed him from being the at but found a nice fine jpmorgan chase to keep him going there. full throatedirly defense until that happened. but that's right will stop when senator levin pushed back on that publicly incited him by longer be the no cfo, but they found him another place. be we don't know the whole story about what happened in the commodities business. aom the outside, she's superstar woman unless there is some 30 -- unless there is some dirty business. >> what do you mean? she ran the commodities business. it's a black box. we don't know anything about the commodities business.

maybe it's not making as much money as it has been. it --old a big chunk of maybe she did not want to have a much smaller job. maybe she wanted to continue to have a big job. x there was a scandal about the way they work in that they are business. >> if diamond and jpmorgan's board thought that scandal were a truly extensional threat, they would have taken action much sooner. prosecutors have been all over jpmorgan. there's anything to be learned about masters that posed a true danger -- jamie dimon defended her. she's a very high profile woman and i think it's amazing that they would want to keep around. there's plenty of jobs at jpmorgan they could have had and i'm shocked they are letting her go.

she will probably end up at a hedge fund and be fine. but she's probably going to crush it wherever she goes but why would you let blythe matchers -- life masters walk out the door? what's fits him astray. why would you let mike cavanaugh lockout the door? >> he got a big job at carlisle. >> he could have had the big job at jpmorgan chase will stop >> maybe he's looking at it saying jamie is not that old guy and he's not leaving. >> mike cannot has been a loyal trooper for a long time. it must be an indication jamie dimon is not going anywhere. fine, you don't go anywhere, i will go to carlisle. that's a good point will stop not rolling the dice.

bloomberg's contributing editor, thoughts., giving his >> captain america fights the forces of evil and brings in a ton of money for disney plus marvel studios.

>> i'm erik schatzker. you are watching "market makers." if you are a big-money political donor, your phone has been ringing off the hook because the supreme court struck down the amount in total cash you can candidatesolitical and parties. phil mattingly is in us. democratic supporter and ally of the president, a big donor himself with your earlier today saying this would maybe level the playing field and take power away from special interest groups because the cash can go to the mainstream democrats and

republicans. is that what you are hearing? >> i think a little bit of that. that's why the rnc is publicly excited about this ruling and the dnc keeps their powder dry a little it because democrats are opposed but they will benefit as well. the practical implications are that candidates will get more money from big-money donors. that should take some of the money way from the dark money groups and super packs. if you want to donate to all 435 members of congress, all 36 senators up for reelection, you can match all dollars to each one of them. forcap set were in place donations to everybody are now gone, but what has been amazing is big-money donors i've spoken to are already hearing about it. the limit close to already no longer have the excuse of i'm maxed out.

>> so it's a case of be careful what you wish for. where is the money going to go. let's talk about a republican donor, but it could just as easily be a democrat donor. are they going to shotgun their money to all candidates running in the congressional midterms? one democrat came close to his limit. than $100,000. this frees him up to give to every democrat if he wanted to. single individual can now give $3 million between senate up 30 timesthat's which you could give before this ruling. willhe strategies workout be the interesting part of the fallout. we talked a couple of campaign finance lawyers in one of the

main thing that's going to happen is joint fundraising committees set up by the most powerful members of congress will be able to funnel million dollar checks into different candidates and that will be the most interesting thing to watch. >> talk about what's going on in d.c. at the white house -- president obama is an entangled in yet another selfie situation? >> leave it to a member of the boston red sox to do something that is so transparently terrible, all about corporate interests, all about selling the good name of the white house and the minorities with this stunt that he did. i am a diehard new york yankees fan. what samsung accomplished with a brilliantis marketing campaign. 40,000 tweets just a few weeks after david ortiz signed an endorsement contract.

he said he did not plan to do it. the white house had no dia -- had no idea he had an endorsement contract with samsung. what you want to talk about organic marketing -- this is effective and has immediate impact. >> david ortiz knows how to win the game. thank you for joining us. good luck with the yankees this year. we will be back with more "market makers." it's the superhero movie that may set a record this weekend. captain america is opening nationwide. we will look at the studio's secret to success. ♪

>> this weekend, marvel's ninth comes top in america" the theater. avengers raked in $1.5 billion, grossing moviest ever. stanley sat down with jon erlichman about why these movies are such big hits. >> i remember when i was a kid,

everyone wanted to see king kong. everyone wanted to see frankenstein. people love things that are bigger than life. they didn't make that many until recently, when the producers areovered these superheroes the most popular things ever with the public. >> someone who saw the potential for these films was his knee ceo bob iger thomas who paid $4 billion for marvel entertainment. the superhero success is this week's cover story of "bloomberg businessweek." >> when "captain america, the winter soldier" opens on friday, it will be marvel studio's ninth movie in six years. all have done well at the box office, some phenomenally so. how do they do it? here are four keys to marvel's

successful thought stick to the comics. hollywood screenwriters tried to redo the ironman origins story because they thought the one in the comic book didn't quite work. but marvel said let's just do that and ironman grossed $585 million in its first year. has tried to stay faithful to the common books ever since. don't cast megastars. chris hens werth was a relative unknown when he was cast to play thor. made $640 a sequel million. his celebrity did not overshadow the character and marvel do not have to pay him a ton of money for either movie. a universe. years ago, marvel sold the rights to spiderman two sony for a pittance which the company now knows was a huge mistake.

of marvel has a universe more than 5000 characters with storylines like ironman and the word that can weave in and out of each other, dating in a megaproject like "the avengers." finally, never forget the sequels. world war ii movies don't sell a lot of tickets these days, he so you might think that captain america origin story might have been moved to the present day. at the studio took the long view, giving him enough fish out of water angst to fuel a string of sequels. madeirst captain america $370 million. the sequel is on track to do even better. a, but superhero movie fan? >> i am the mother and spouse of comic book superhero movie fans, so they are in my orbit. are you? >> you can tell me you didn't like "ironman." >> but i liked it because i like robert downey junior.

he's on my list right now to be honest. thise that movie but marvel partnership, acquisition was genius not just because the movies are great but the costumes in my house are ridiculous and they're not even mine. >> we will be back in two minutes. ♪

>> that is going to be it for "market makers."

tomorrow, does having millions of twitter followers really help the company's bottom line? plus the growing digital " -- thet -- "the onion newspaper that is so wrong that is right will stop we are going to break down social media. everyone talks about the importance of clicks and followers, but what does it really do for a business. >> overstated or not? >> right now, it's time for bloomberg television to take you on the markets. >> earlier today, the dow and ed new intraday's highs. ceouest is the founder and of market taker mentoring and says it will be a pivotal day for the markets. withined now from the cboe today's options inside. the jobs report is due out tomorrow, why will today's trading be so important? >> today, we are leading into the unemployment report for

tomorrow. first good insight in the reports of this month and good earnings figures in the first three reports. today's was a little lackluster but kind of expected. it was actually more favorable than expected. the bond market did not really react to this somewhat negative news today regardless, so it could be a nonevent. >> you also want to take a look at citigroup shares. this is going to be yet another transition year for the company. this comes after the fed said they had failed its stress tests. what is the options market showing us? >> the implied volatility of citigroup options is recently elevated. that means it's kind of expensive. whoe are a lot of traders own citigroup stock and their hedging. they want to protect themselves. we have seen some higher lows on

several different occasions in the past couple of months, so we are in a tepidly bullish, potentially recovery phase on the stock but investors are very cautious. the stock is down 9%. i know you are also looking at apple shares. apple options are looking very cheap, the cheapest and more than two years relative to the tech select sector spider fund. why do you want to buy these options? it's ake this because short-term play. i'm looking at the april 525, 530 put credit spread. we can sell it for $.80 or better, probably better with a pullback today. theke it because as long as stock stays above $530 a share between now and april expiration, the trade ends up eating a winner and the $.80 or

more premium i collect on the spread -- just as long as the stock doesn't fall another 10 bucks. play? about a longer-term anything longer you would like to trade on apple? >> i want a little visibility when it comes to apple or things. i would not put on any major positions going into earnings. may be a time spread earnings lay a day or two before. i would have to see with the volatility picture looks like. long-term, i am bullish and would like to put on some trades that might appreciate as the stock continues to rise and maybe some diagonals where i sell a shorter term out of the money call. >> so much of the bullish sentiment around apple is the cousin of rumors they're going to come out with a new game changing product i could steal market share back from their competitors. did the launch of amazon's new fire product make more

competition for apple? >> it sure does, but the world is changing. without coke, the there'd be no pepsi and without pepsi, there'd be no coke. as the world evolves and customers viewing habits continue to evolve, the market is going to continue to grow and be a great laying field for everyone involved. >> thank you for joining us. markets. it for on the we will be on the market again in 30 minutes. "lunch money" is up next. ♪

>> live from bloomberg headquarters in new york, this is "lunch money." >> welcome back to "lunch money." i am adam johnson. intech, it is all about the launch. productsbringing new and new competition. movie producers ron howard and brian grazier trying to make video for the digital generation. by the way, they are short videos for short attention spans. we have heard about high-frequency traders, but how do yoit