>> from bloomberg world headquarters in new york, i'm mark crumpton. this is "bottom line." today, the federal reserve releases its latest survey of u.s. economic conditions. the newwill go live to york auto show. consumer advocate ralph nader sides with big hedge funds. to our viewers in the united states and to those of you joining us from around the world, welcome. we have full coverage of the stocks and stories making headlines today. it matt miller follows the

latest trends at this year's new york auto show. michael mckee has highlights of fed chairman janet yellen's remarks. but begin with peter cook and the fed's latest take on the u.s. economy. good afternoon. >> the fed's beige book being released at this hour. the economy continued to expand and most of the country. businesses rebounded from the rough winter weather. some of the key highlights from within this book compiled by the richmond fed included economic activity through april severed overall economic activity increased in most regions. reporting moderate or modest expansion. cleveland and st. louis reported declines. i consumer spending providing some of the overall lift to economic activity, specifically consumer spending increased in most districts as weather conditions

improved and foot traffic return. auto sales were up in new york, philadelphia, richmond, atlanta, chicago and minneapolis. we will change from a year earlier in kansas city and cleveland. tourism was generally positive in most districts. --s mixed in th manufacturing improved in most districts. it was mixed in richmond. how about the jobs outlook? labor market conditions were mixed but generally positive. the new york, cleveland, richmond, chicago, kansas city and dallas districts reported ethical the finding skilled workers. seen that in the past. in terms of the inflation outlook and the pressures out there also on the mind of janet

yellen, wage pressures were contained and races generally were stable or slightly higher. to disagree here with what we heard earlier today from janet yellen in terms of the economic outlook. this is more evidence and more information for the fed to consider. >> peter cook thanks. more on the facebook coming up. diane swamp will join us from chicago. she will give us her take on the economic outlook and the fed's next move. in justp on bottom line a few moments. the base book follows release of a widely anticipated speech by fed chair janet yellen. michael mckee watching those remarks at the academic hub of new york. what the dr. yellen have to say? >> she pretty much outlines the same case. she said things are not good enough and the fed remains committed to keeping interest rates low for a long time. she organized her speech around

three questions. slackre still significant in the labor market? they find there is. a long way to go. it is not just the unemployment rate, but a number of other indicators including part-time work and the length of time people are out of job markets. there are still a ways to go. the second question is, is inflation moving back toward 2%? warning the standard about not letting it go too far. her third part, what factors may push the recovery off track? we have had problems in europe and problems in the nation's capital that have kept the economy from expanding this last year. the fed is mindful of all of those things and for all of those reasons is still reluctant to raise interest rates. >> investors won't happy with the fed after its march policy meetings.

did she do anything to repair that damage today? >> she did not do anything to hurt it any further. she tried to outline how the fed thinks bout things because the fed dropped that 6.5% threshold at that meeting. and did not replace it with anything. there was confusion about the charts and whether they meant anything. she said, never mind all that. what we're looking at are the gaps between what we expect full employment be, which is somewhere in the high 5% range to six percent range and inflation, which is our target goal of 2%. as long as those gaps are white, we will stay on the job and key policy easy. >> michael mckee, thank you. other news today, the annual new york auto show kicks off today. car makers around the world gather to show off their latest models. that is where my colleague, matt miller will be camped out all day. talking to the biggest names in the history. what is most interesting? >> as far as cars, i think the

editionyce ghost second , you should have one of those. i may pick one up on my way out and drop it off before i head back home. the interesting thing that people are talking about, a couple of things. gm recalls are front and center. rapected after mary bar gave a well-received speech yesterday at the auto dealer association forum but was mobbed by reporters. thele are talking about direct sales model from tesla. n new jerseyi yesterday. listen to what bill ford had to say about his sales model. >> we love our model. we have regulars and they have been through thick and thin with us. we have all gotten better. and ourmanufacturer

dealers as well. the issue going forward is not so much how you sell them but how you will service them. that is something that i'm not sure how we'll play out. >> that's what we're hearing from car manufacturer executives across the board. they don't have a problem with other. r people using the direct model. the dealership model is so cute and how do they business. >> will be sitting down with the subaru president later this hour. what can we expect? >> is always great to talk to tom -- subaru is such an interesting each because it is it isluxury car but more affluent people who end up buying those models. some are trying to get to the heart of who he's selling his cars to and how he is making

them pet friendly and safe for dogs. that has been part of subaru's marketing campaign. they're trying to build technology that makes it safe to bring your pets along with you. which is key for people like me. >> matt miller joining us live from the new york auto show. matt will be speaking with tom in just a few minutes. tomorrow, i will be speaking with honda america's ceo on his strategy to regain market share in the u.s. coming up on bottom line tomorrow afternoon. coming up today, the fed's economic outlook. we will take a closer look at the base book and see which sectors are the leading the recovery. when bottom line continues in just a moment. ♪

>> welcome back.. this is bottom line on bloomberg television. let's now have more on the fed's

take on the u.s. economy. me fromonk joins chicago. welcome back to bottom line. always a pleasure to have you on the broadcast. >> great to be here. >> the beige book says that reports from the fed's 12 districts showed economic growth in most regions. there were pickups in consumer , transportation sector strengthened and manufacturing improved. is this economy finally ready to take off? >> it will take off in the second quarter. we are seeing that weather-related catsup. the beige book there are to sum up what we saw in today's earlier reports in industrial production, manufacturing. the weather not having as much of an impact on manufacturing as it did on other sectors like construction. where thew places weather was the worst like the midwest and chicago, that had

big bounce back in construction activity. places like richmond and the southeast quarter where there are still whether problems. thing i thought was interesting is in the new york district, they cited an increase in layoffs in the health-care sector. something we have been watching for some time. that is really important because this used to be the higher of last resort. >> one of the big concerns continues to be housing. the beige book did note that reports on residential housing markets varied and that loan demand strengthened. where is the u.s. housing market right now? or credit standards helping hurting the market as a claims out of the basement it was in during the recession? >> we are not out of the basement yet. we are maybe near the top of the stairs but not on the first floor yet. that is really important.

we are coming off low levels of construction. tightll have inventories on home sales. we did see a pickup in mortgage applications and refinancings, but they have been running very low relative to a year ago. in housingry about is the uneasiness of the recovery and the move towards lossl and this move, the of the first-time buyer. with the overhang of student debt, eliminating what would be a lot first-time buyers. chair yellen made a point about that that the housing market is nowhere near it should be. >> industrial production rose more than forecast in march. congress reported that the pace of home construction rebounded less than forecast last month. what does today's mixed data tell us?

>> there are still some lingering effects of the weather out there. you will see stronger numbers going forward. the industrial production number was much stronger than expected. that was one ray of sunshine. that was good news. highe still not seeing the tech kind of things going on out there. what we saw really fueled productivity growth in the past. those kinds of investments -- we're still waiting for that to happen. we will see a very weak first-quarter around one percent. we could get close to four percent on the second quarter as we catsup. i'm hoping to hit that 3.5% rate in the second half of the year. that is very possible. what is possible is not always what is reality. >> you mentioned chairman yellen's comment at the economic club up in your she told investors to pay attention to shortfalls in inflation and the

jobless rate. is this approach going to translate into more investors scrutiny of economic data? >> there is a love scrutiny already. are they scrutinizing the right data? what chair yellen is trying to do is guide them in the right direction. a dashboard at her press conference -- a dashboard of data. that is hard for financial markets because they like an on spectrum ofnd not a numbers to deal with. she starting to get the message through. she is pretty blunt about it. listen, things have improved, but not enough. this is why. she's very straightforward about that. for reasons very well. as investors look closely at which he said rather than all the noises mike pointed out, they will get the right message. themes on thek's

economy, you wrote the following. many who temporarily moved up p into the middle class were later forced out. is this the scenario for the middle class for the near-term? then two forward and steps back. fed policies have made the rich, "much richer." >> does it actually help? it holds on the margin on asset prices. that is difficult. it helps but it is a very blunt tool. problem that it gets inflation -- low income households have a lower rate of inflation than high-income households. said inflation is

really high. and then another said, we don't have to pay for jet fuel. the fact that there is more low income households and fewer upper income households today, even the very top is growing rapidly. that is part of what i believe is contributing to the inflation situation as well and that is more sign of our economic weakness. >> to be continued. joining us from chicago. always a pleasure to have you on the broadcast. thanks for your time. >> thank you. >> we will tell you how the first investment bank to go public since the financial crisis did in its trading debut. that story when bottom line on bloomberg television continues in just a moment. ♪

reminder, there'll always to watch bloomberg television. on the web, on your mobile device, on apple tv and on amazon fire tv. the public life begins for mullis and company. shares are climbing today after the company raised less than it hoped for in its ipo yesterday. cristina alesci spoke with the ceo this morning. how is he feeling about that price? >> he's feeling much better now that the stock is trading up today. it certainly come yesterday or last night, things were not looking too good because they had to reduce the size and it is

still priced below the range. i asked him about his decision to cut the offering. here's what he had to say. >> the market got very volatile and do you have to price in relation to where your comparables are and they have all traded up 10%. we felt like it was a very well excluded deal and we wanted to stop the trade-off. market moved the against them. that is no question there. you also have to consider two other factors here. he is going to have a controlling stake in the company. he has the majority of the voting rights. if there is always a bit of discount when you take power away from the investor base. offering,ds of the 80% of them are going in the pockets of can and his partners. they are not going to reinvest into the business. it is a one-time payout. --se guys have earned investors will push back on that.

>> a one-time payout. talk to me. >> it's a pretty big payout. they raised 163 million dollars. 80% goes into the pockets of ken and his partners. that is the one-time payout -- he still owns a significant chunk of the company and that is worth $320 million and you have another $90 million in a trust for his family. oelis today.ken m that's the one thing he does have in his favor. they said that they see and a -- compared tong the same quarter last year. that is because we have seen a lot of the elected. how sustainable is that? >> there is more growth in the future than the past. theregulatory pressure of

big financial conglomerate competitors is unbelievable. i've been in the business 33 years and i've never seen the pressure on large competition that i've seen today. t will come out.com is saying is, all of the regulatory pressure on the big banks is going to leave the most talented people to exit those firms and he will be in the right place and the right time to hire those people. he has advised carl icahn and donald trump. this is not something that is new to them. it jumped today. sometime after the noise of the initial ipo, next day, really tells the story. cristina alesci, thank you so much. is 26 minutes past the hour. julie hyman, good afternoon. >> let's take a look at where stocks stand. we had janet yellen speaking earlier today. ,n the words of one economist

she did not really offer any correction but information. that information seems to be a stay the course situation for the fed. we saw stocks much more steady after her speech. and we're seeing a rally across , .6%.w gaining the most we heard her speech. curve,short end of the we are seeing a bit of selling. to .37%. bump up we are looking at gold as well. we are seeing a little bit of an increase. a very small one. after it came down yesterday. we're seeing a trade up a bit today. more on the markets in 30 minutes.

more bottom line coming your way next. ♪

>> welcome back to the second half-hour of bottom line on bloomberg television. i'm mark crumpton. thanks bursting with the spirit less check the top stories we're following for you. manufacturing is helping the u.s. economy rebound from that harsh winter. rosection three percent last month. that's the biggest gain in almost four years. in ukraine, government forces resumed their offensive against pro-russian militants. they sent armored vehicles into a town where gunmen fought with police. ukraine's prime minister accuses russia of wanting to return to

the days of the cold war. in south korea, almost 300 people are missing in a kerry accident. the ship was carrying hundreds of high school students two-way resort island. south korea media says it plowed into rocks in foggy conditions. fundsll street hedge fighting the federal government in court over the treatment of fannie mae and freddie mac shareholders have an unlikely ally. consumer advocate and former u.s. presidential candidate ralph nader. peter cook is back. nader about the unusual alliance. he is better known for taking on wall street players. why is he joining forces with them? alliancean unusual here. normally, he is on wall street protesting things going on there. at this time, use on the same page with some major wall street players. thathave made a large bet the government bailout and takeover of fannie and freddie back in 2008 will not eventually

passed legal test. their investments will eventually earn them millions of dollars. he is a private shareholder of the two companies. e andvested in both freddi fannie in 2000. well before the bailout of those two. frommakes them different those who invested sense that a bailout and crisis is that his investment was before 2008. he says he shares the same view that the government actions here were not legal. it was unfair for them to vaporize common shareholders like himself in the process and sweep up all of fannie and freddie's profits without giving any consideration to private shareholders. he makes no apology for teaming up with wall street in this case. >> the fairness argument is very powerful. now you have some hedge funds, real heavyweights who hire these

.awyers i'm glad they are there. there are thousands of people who put of these shares lockboxes for their kids education eared they deserve a chance. they will never recover fully. they deserve a chance to recover some of their equity. knowledges that there are some differences between his position and those of the people he refers to as day traders who have tried to cash in. the basic legal issue here is solid. he thinks the government went too far and he thinks shareholders like himself court andeir day in to be compensated for their investment. he is not asking for a subsidy. simply that they should be able to recover some of their original investment. >> is mr. nader part of that lawsuit against the government? >> he is not part of any of the legal action against the government right now. he stands to benefit if they win. a point he makes abundantly clear. he is very pleased that

high-priced lawyers are in the re making the fight. what does mr. nader say should happen to fannie and freddie? >> that is another part of the equation. perhaps where he disagrees somewhat with the wall street hedge funds and other big separate, he believes from the shareholder issue that die should beed maintained as they are while doing away with some of the aspects of the business that led to the trouble in 2000 eight. preserving the mission and aims of fannie and freddie without the portfolio issues that happened at the firms. on that debatein as well. calling for tougher regulation of the industry overall and for boosting the affordable housing goals or maintaining the affordable housing goals of fannie mae and freddie mac. he wants to weigh in on the policy debate as well.

overalldebating the fannie and freddie going forward. he thinks the proposal went too far. >> peter cook, thank you. coming up, we will go back to the new york auto show. matt miller will speak with the president of subaru, tom doll. ♪

>> bloomberg is the only business news service being offered on amazon fire tv. if you miss any of our interviews, you can now watch them on bloomberg on apple tv. featuring live streaming and on-demand videos. it is time for today's commodities report. my colleague joins me with details. >> good afternoon. we have energy prices taking a big kumble today after the latest energy department data showed a surprise, causing traders to do a double take. inventory has been more than five times as much forecast.

mexico grows by the most ever since the energy department began reporting this data, backing back to 1990. we are now looking at supplies of 10 million barrels. he called the build up huge and said this should be a reason to reevaluate the supply situation. an awful lot of oil along the coast. slipping for the third in four days. among forecasts of warmer weather had come despite the fact that we have a huge blast of cold weather bringing a jolt of snow to many states overnight. of thell a reminder winter we just had. traders icing that the forecasts are for milder weather. the fact that production is ahead of where it would normally say we will refill

storage and that has prices a bit under pressure. temperatures from washington and new york, 35 degrees. it was not our imagination. recorddest march on since 2002. >> what are the big movers today ? >> sugar rising the most in two weeks. been one of the runaway gainers this year. up 17%. a lot of that having to do with the situation in ukraine. we could see the market take a breather here after the sharp rise. a lot of traders continuing to watch development of the black sea. a note about gasoline prices. at the retail level, the current israge pump rate per gallon $3.65. up from $3.52 a year ago. prices continued to rise as we

head for the summer. driving season -- a lot of it has to do with the rise in oil. no break in prices as we had to the summer. >> sue, thank you. it is time for today's latin america report. in today's news, shares of walmart of mexico rallying from a three-year low. in march.rose 10% they are already up five percent in april. investors are betting on a spending rebound by mexican consumers. in venezuela to resume next week, ending protests. they have led to more than 40 deaths. venezuela's government has rejected opposition demands to release political prisoners and jail protesters. that is your latin america report. is inw york auto show gear. car executives, collectors and enthusiasts cap o gather from around the world. matt miller is there with tom doll. doll, here with tom

president of subaru of the americas. thank you for spending some time with us. you have not yet unveiled your new outback. you are going to tamara. give us the inside here. >> the outback is one of our foundational products alon. it is going to be larger. it is going to get 33 miles per gallon on the highway. it is doing to be a great package for us. >> it is such a successful car in the winter. i wonder if the climate change that we are all witnessing doesn't help subaru. i recall crawling along the highways of new york and watching subarus happily zip on by me. >> what was nice about this past hader with all the snow we is, we do not have a hiccup at all in ourselves. we had the best first-quarter we have ever had. we are off to a great start in april. the weather has made a subaru

more front and center in terms of people who may not have considered all-wheel-drive before. >> i was thinking about who your customers are. it incredibly popular car here in the northeast with affluent crowd. the same is true in the northwest. he thing about oregon and washington. what do you do in the parts of the country where you don't have that well-educated, affluent customer? we call them experience seekers. people that do like to go hiking and biking and camping and canoeing and kayaking. -- thectivities also sunbelt is just now discovering subaru. if you look at our growth, our growth is more than double in sunbelt markets that are norma northern clients. we still have unlimited possibility for subaru.

>> the brc has to be a great seller there. you supply your boxer engine for the toyotas. what is it about this car -- it's become the standard for club racers. a new product that people can get into. it seems to be -- you nailed >> you nailed it. you get a car that handles that well at that affordable of a price. it allows the person to tune in and make the car personal to them. from that standpoint, it has a unique market. >> this is something i think a lot of karmic factories missed out on. the idea i will take a product like motorcycles and make it my own. i spent just as much customizing my bikes as i do on the motorcycle itself. this is what you are doing with the brz. >> these are all products that

tuners and enthusiasts like to play around with and have fun with. it is great for the brand. x gettingve the new wr ready to hit american dealerships. what is the demand like? >> they're getting to the retailers now as we speak. probably another 30 days or so. we have another home run on our hands. >> i feel like your clientele must also want an electric alternative. i know you have a hybrid out there. are you working towards alternative fuel powertrains? >> the short answer is, not just us, but all manufacturers are working on electric vehicles. what we are trying to do is discern how big that market can be because there has been a lot of electric vehicles that have been put out and the market. they have not sold well.

with our company, we need to make sure we get an adequate return on are developing the technology and we have it. it for, we have to have california and the other 10 states that adopted the california regulations. >> will i be able to buy a subaru directly from you on the internet? >> probably not. >> you will stick with the dealership model. >> yes. >> what you think about the debate? why can't i buy a car directly from tesla if i want to? >> it's interesting -- tesla is one car. one model that has to be sold. when you take a look at what's happening, in order for new technologies to become accepted in the marketplace, they do need a different distribution method. noh the tesla, there is repair business port. for to go through the normal dealership channel, there is not

enough volume for it to make out. you can understand why they want to go this way. in our case, we are committed to the franchise system and we're going to stay with the franchise system. aboutme finally ask you the recalls that have been in the news lately. general motors and toyota have had their issues. how does your team go about figuring out when you have a problem and contacting the customer and fixing that problem? >> we are very proactive when it comes to any types of issues or problems that might arise in certain vehicles. her constantly looking at our processes and the warranty claim data and how the information presents and making assessments. we identify the problems before our retailers even tell us that there is an issue. really do try to be proactive and make sure we take care of the customer. we have to do this. if this is our response ability and commitment to our customers. to make sure we handle these

things properly and take care of them. we make a commitment to them. >> it reminds me that i forgot to ask you about your doggie restraint system. are you beefing up the technologies to keep my pets happy? that.are working on we have worked with an organization that has developed a pet seatbelt system. we are still working on that. hopefully we will have some good news on that. >> thank you very much. the president of subaru america. a seatbelt for steve coming along. >> matt miller, thank you so much. coming up, depressed and us. we will tell you what park workers did it to cheer her up. hot shots is next. ♪

>> is time for hot shots. look at some of the most compelling images of the day. here's one for your bucket list. running the marathon in the

north pole. 47 runners from 20 countries borneo iat russia's station in the geographic north pole. the course was the standard 26 miles with a twist. -22 degrees fahrenheit. patrol guards were stationed along the course to fend off polar bears who might take a fancy to the runners. noticed, park workers that their giant female panda seemed depressed after her panda commanding was sent to another part of the country. to cheer her up, they build her a mini amusement park. they build her a swing, parallel bars and her own tv set. it she has regained her appetite and is back to her pesky self. stay with us. another check on the market movers is on the other side of the break. bottom line continues in just a moment. ♪

>> at the latest headlines at the top of the hour on bloomberg radio and streaming on your tablet and on bloomberg.com. that does it for this edition of bottom line on bloomberg television. i'm mark crumpton in your. thanks for joining us. on the markets is next. i will see you tomorrow. past the hour which means bloomberg television is on the markets. at where you look stocks standard we have an hour left in trading. we do have a rally. the 500 -- the s&p 500 at the highest in the session. production coming in better than estimated.

we had jenin yellin speaking today. holding the line on the fed being supportive and accommodative of the economy. we are looking at treasuries on that front as well. you take a look at the treasury market -- a bit of a mixed market good we have buying on the longer end of the curve, selling on the shorter end. overall, not much movement there to speak of. with interest rates refusing to rise this year, even following ared thirsty investors looking to get creative in areas like stocks and junk bonds. the aim to give all of that in one shot in multiple asset classes. talk us through it. his johnson yesterday in insight and action was looking at the same kind of thing. looking fortill yields. it's been a couple of years and this has been a big thing. it just won't go away. the same pages as

adam, that's a good sign. we look at the etf and talk about dividend paying stocks. all sort of separate. they go out and rapid altogether. one of those that illustrates all of this is the will to asset income etf. i picked this one first because it is yielding over 6% and its .oll perce etf. a 10 in 1 they charge 60 basis points and the waves away the fee of the underlying. you get access to these popular products like the high-yield bonds and dividend paying stock etf and they also have the treasury etf to stabilize the risk of it. has propelled the return up nine percent this year. heavy, the fixed income

that explicit goal to be a high yield instrument? >> yes. people who are retirees can invest in this. all the etf's out there have lf the volatility of the s&p. >> let's talk about some of the other ones. another is the s&p diversified income etf. >> it is the fastest-growing. $600 million a year. >> what is it about it that has been so attractive? >> it is even buckets. 20% in five buckets. this one really gives you everything. even within the reach space, it has mortgage reach.

it gives you the whole package. not too much you can say that about this on. >> really interesting topic. thank you so much. be on the markets again in 30 minutes. street smart starts next. ♪ >> all right, stocks seeing their third day of gains, yelling using the head of the fed -- saying that the central bank has a continuing commitment to support the economic recovery. what do you know? investors like that one. "street smart" starts now. i am trish regan. ♪ ok, welcome, everyone, to the most important hour of the session. stay on "street smart." we are talking about google glass. google is going for growth here. we will tell you how the technology company is getting into just about everything