editions is a special of "market makers," with erik schatzker's and stephanie ruhle. >> once again, stephanie and i globale at the milken conference here at the beverly hilton in beverly hills.

>> if you thought that yesterday was a big day, today will be equally as exciting. iger, bobave bob jane, and we will be dealing with the head of private wealth management at goldman. >> lets the forget about sean penn. >> who could forget? the exclusiveet interview we had with sean penn on the recovery efforts in haiti . let me tell you, it was hard for him to focus. it is a lot happening. also, will i am, a massive disruptor in the world of technology, also member of the black eyed peas. >> gives you an idea of the range of people it can attract. energy holdings became

officially filed for bankruptcy protection, with many months in the coming, it leaves goldman sachs, ppg, kkr holding the bag. that's jacobs covers leverage buyouts for bloomberg news, with us now from new york city. kkr,tioned goldman, ppg, and how long this has been in the making. txt you had enormous problems almost from the very beginning. how bad is the situation for those firms? >> this will be an almost right off of their $3 billion equity , when the 2007 leveraged buyout was done. the good news is that some of the creditors in the discount are going to wind up owning or than half of the company, leaving what remains of it with much less leverage. i, i supposeguess, that is a relatively speaking

that her situation for the creditors, but gas prices have been so was lower than anyone anticipated when the deal was done. how much of a recovery are people expecting those creditors to get relative to the 100 cents on the dollar they would have liked? west nile all the details of the agreement that was hashed out last night have been released of yet. what we are seeing in the overall plan is that as the competitive unit, the nonregulated utility is taken over by its creditors with the $23 billion of debt being canceled in that transaction, there is a lot of leverage being wiped out in this bankruptcy agreement. >> how much of -- do we understand what the sticking points were? there was an expectation back in october that the bankruptcy plan would be filed and that somehow an agreement could not be 270 millionthat

dollars was effectively thrown on the bonfire, paid to creditors at the time who did not -- at the time who many do not think deserve to be paid out. >> this has been many months in the making, as you know. six months ago, when we thought the deal would get done before bankruptcy, all the parties did not come to an agreement. there seemed to be a lot of dispute over tax liabilities and various other technicalities. a payment was made that shocked a lot of creditors and created a lot of ill will around them for several months. they have basically regrouped and come to an agreement that everyone is a little unhappy with, suggesting that compromises were reached behind the scenes. othert is just like any bankruptcy plan, subject to court approval. what is the chance that a judge will reject -- first of all, i should ask, is this a so-called

prepackaged bankruptcy? >> it is not as neat as that. they did not take it to a vote. it is actually a support plan just shy of a real rearranged to deal. they are asking for creditors were not on board, so it won't be as smooth as a real -- a real prepacked. that said, the plan released this morning says that they aim to get out of bankruptcy within seven months, which seems optimistic to me given how long it took them to get to this stage. >> sounds a little optimistic to me, too. beth, thank you, covering the bankruptcy holdings there at the once upon a time world's largest leveraged buyout. theme we are hearing here at the milken activism.'s not just amongst speakers, but the news today. when i read this story from "the

wall street journal," i said -- are you kidding me? ackman and carl icahn making peace in a bizarre way that only they can. bill was saying that carl icahn was not an honest man. all of it over herbalife. they had a fight before that, but herbalife is how it played out. any people speculated that the only reason he went long on herbalife was to mess with bill. it, too.n afford to do >> carl icahn had said -- i am pretty smart, interesting but they are doing. bill called his office and did not say i am sorry and said -- i am ready to forgive you, to which carl icahn call the next day and said that forgiveness is a good thing and the two of them seem to be making amends. it is all hedge fund drama, perfect fodder for the media. but what is activist investing doing?

>> it might mean that carl icahn and bill ackman, instead of being adversaries, might wind up on the same side. they are both activist, both going for shareholder value. maybe they find themselves as allies in a future deal. >> if that is true, watch out sleeping ceos, they are coming to get you. we are talking about activist investors with one of the original who is not bill ackman or carl icahn. really talking about the type of investing the carl icahn is doing, here he is, the one and only t boone pickens. >> i would describe it as a .aider who is the raider around here? these guys running these companies have no stocks to speak of. i was characterized as an asset stripper. icahn, billsee carl

ackman, the way that they conduct their businesses, you think it is a good idea? >> sure, i do. it creates value for the shareholders. >> what i love most -- >> is him saying -- who is the raider out here? [laughter] >> t boone pickens does not believe that what karl, bills, or any of the others doing out there today is any different from what he, carl, and others were doing back in the 1980's back when as he put it, they were called corporate raiders. >> and they did not have the media platform to get their voice heard. they had to take out an ad in "the wall street journal." a great point that he brings up, these corporate boards in certain cases do not have nearly as much skin in the game as someone like an icon or a t boone. if you are a ceo on top of a company, a great job, you're

getting paid a lot of money. >> all i know is that i could listen to t boone pickens all day long. >> so could i. >> broke the mold when they made that guy. disruptive innovation with technology, i want to bring over at contributing editor bloomberg fall. clearly you are here because we are in your hood. what are you here to talk about today? >> mostly the changes in assets as we get started. stuff like kick starter, all of these different crowd sourcing platform sites, they have really in some way changed a lot about how early stage companies get financed and are opened up to more people, become easier for small companies to raise money without going to professional investors, which is really changing the landscape of oculus . facebook was a kick starter project originally. it is arguable whether with that would have gotten funded in the early stages. there are a lot of parallels

involved in this stuff and it is an interesting change. >> why has it taken so long for people to wake up to the opportunity that exists in technology financing? >> there is a lot of scar tissue from 2001. it is a generational thing. i have people who were in high school or will school when it -- whenever the last bubble happened. mark entries was talking about people where he had to explain what lipstick was. of generational changes are the ones that let people say it is ok to take risks again. look at gilligan's island, interesting. >> there is a reason that so few in venturecipate capital, because so many of those investments just wind up -- >> right? >> think about those tech companies in the late 1990's that took the seed money and when things work out for those

companies the only people they got paid with the vc. >> even more than that, the vast majority of companies should never take venture capital, it changes the board and the exit that you need. i put in $30 million, you don't get to exit anymore. not a lot of people are going to buy 4 billion. so, you really shorten the numbers on the list of places you can sell your company too. there are lots of reasons not to. >> i ran into an investor here yesterday who has, for many years, specialized and long-term distressed investing. he buys distressed assets. he is going to silicon valley to plan.a venture capital he is effectively going to lend to startups. what do you make of that? a healthy sign? does that scare the daylights out of you? if there was such a thing as style drift? >> yeah, yeah. so many are doing that business

of lending on assets to young companies. what worries me is when people say that they can make more money at this than i can from the things i previously specialized that. also know that as much as i hate disruptive innovation, you hate the word entrepreneur. why? like has become competitiveness or education. we just say these things and everyone nods and says yes. >> on and real spirit is what i have an issue with. >> what type of business, right? let's talk about business owners and what we really mean. these phrases, not to be in any way say -- cynical, the phrase itself has become empty. there was a panel yesterday that came out 50 times in the discussion, neither one of them is remotely entrepreneurial or

has even met an entrepreneur. banning entrepreneurs, disruptive innovation? got anymore? done saying that right here. can we just bring t boone pickens back on? [laughter] that would be awesome. got soth us, we have much more to come with bob jane, the head of pacific asset management. if he is not cool enough, we have will i am. ♪

>> welcome back, everybody. i am erik schatzker, live the stephanie ruhle in beautiful, beverly hills los angeles. with us now, a man who runs one of the world's largest asset management firms. bob janie, overseeing some $420 billion. good to see you. >> thanks for having me.

>> where should we begin this conversation? what do your clients want? what are they asking you to invest in? >> i think that there is a lot of appetite for risk right now and people are looking to put money than youe have assets to buy. we are looking at things like mortgages, direct lending in emerging markets. the money is not gone. wants fixed income like volatility equity returns. like 2006 alll over again? >> it does. it feels like the middle of 2005, actually. lot less leverage in the system right now. >> you have started to see the m&a cycle coming back with takeovers, which has been meeting with buzz. if you go off the run in emerging markets, mortgage

infrastructure, there is a lot of opportunity that requires people to take more risk. -- do theyients understand what they are getting into? do they understand that getting out from the time comes when not be easy because everyone will be at the samethe exit time? >> we focus on them understanding what they are in for. and they are in strong hands and not we can. >> how are you attracting new money in, as well as new talent to manage money for you, as there seems to be such a rush in the hedge fund community? >> we have nine teams from our investment banks. what has happened is -- if you came into the business 25 years ago, like i did, you are starting to see those people move over to asset management. the other thing about the industry, people and clients want oversight in governance.

have these people would started their own hedge funds, now they come into asset management. >> where is the opportunity on the asset management side? you have been in business for 18 years at credit suisse. what are the opportunities on the investor banking side for talent to make money? >> it is healthier than you think. there are only eight or nine right now. the people here want to invest in the emerging markets and people in emerging markets want to invest here. >> you know, a lot of people are going towards financial supermarkets. we think that people like boutiques, specialization.

that is why the hedge fund industry pulls thousands on leverage that you can for origination, ideas, support, distribution. we think a multi-boutique structure is the right structure . some people are developing very large financial supermarkets. and then there are a lot of boutiques. >> you ran the equities division to be one level removed, but as we watch all this news about high-frequency trading and dark pools, what do you think will happen to those banks with dark pool businesses? big aestly, it is not as story as everyone is making it out to be. the sec is doing a good job here. there is no question that the small investors are benefiting. have figuredestors it out, but in general we have very deep liquid equity markets.

i don't really worry, dark pools are one away, they would not be the end of the world but i do not think of that is the right structure for the act the concept. >> has the playing field to be leveraged -- leveled in equity trading? seems like there was in him -- an imbalance for several years. people taking advantage of loop holes and market structure for , in the case made by michael lewis, other places like credit suisse see in need. they spend billions and technology. has that made it? frankly, everyone says everything gets slower when technology comes out of the system and it would be a benefit for everyone. think the high-frequency system is fine, i don't think the speed is that relevant. i don't think there's that much money to be made in one

millionth of one millisecond. i think this high-frequency thing is that the wording has been bad. dark pools, high-frequency trading. it all sounds so nefarious. suisse and across finder? >> that is ok. >> do you feel you are in a disadvantaged position trying to with u.s.e business and swiss regulators? do you turn and say that this should be a lot easier? >> a lot of the regulation is quite sensible when you get to the heart of it. i think the world has gone that way. instituted -- institutionalization means regulation and our climates are best clients are more comfortable with suitability. it is a big pain in the neck, frankly, but it does create various interests. >> i think that this guy will be the ceo of a bank one day.

>> i appreciate it. >> he oversees over $420 billion. a pretty cool number. indeed. you are watching bloomberg television, live from the milken conference in los angeles. stay with us. ♪

>> we are approaching 26 minutes past the hour. stephen, eric, and stephanie are in los angeles. the broader indexes are across the board with the second day of gains. i want to single out one stock that is getting absolutely crushed today. take a look at go go, the air wireless service that barely works for your mobile devices on a plane. at&t is apparently interesting

-- introducing a competing version. think odds for all of us. coming up, actor sean penn teaming up with dennis o'brien out in l.a.. ♪

>> this is a special edition of "market makers" with erik schatzker and stephanie ruhle. conference, as you probably know, is a mecca from financiers. michael milken once upon a time was the junk-bond king. many of his associates are here, and their acolytes as well. michael milken has since transformed himself into something of a visionary for the health industry. forof those is the chairman research and development in vaccines that got close -- at

glaxosmithkline. [no audio] and if you are the partners in the conversation, you are not the player. those are two that there's --

two factors. >> so much of drug development is motivated by the idea that people are going to be willing to pay for it. if you come up with a wonder drug, everybody is going to want it. most people don't think about vaccines until it is too late, until you have a pandemic on your hands. fortunately, public health officials think about vaccines because they understand that they are most effective for prevention. business 15 or 20 years ago started to think about pharmaco. economic -- economics. this is something that the pharmaceutical business is in

the middle of learning and implementing. it is a same level of demonstration of value as always. >> is the payoff for a company like glaxosmithkline as good in vaccines as it is in drugs? >> there are various financial models or opportunities. they make up the kind of company we are. they are attracted to investors. >> are you worried about how much r&d will be done by big companies in the future? there is a company out there which has a business model different from what glaxo or other big pharma does. we are only -- only interested in late stage development stuff.

do you think that represents the future of the pharmaceutical business? >> i do not. i think one of the critical challenges is sustainability. 15, 20 years depending out. it is not academic research. it is industry. that the model as you described it is sustainable. the system is one where you have your own innovation that not only produces your ideas but gives you the insight to be able to pick and choose outside who is having a good idea. in terms of vaccination, in babies, rsv is a very important

disease. also in babies and mothers, infections that happened during the delivery from the mother to the infant. --the developing were you developing world, malaria kills thousands each year. and developing a pneumococcal vaccine that is more effective than what we have today will be important.l be >> on malaria, do you have an opportunity for bioengineering to supplant drug and vaccine development? there is talk about bioengineering sterol mosquitoes -- sterile mosquitoes. is that viable from where you ?ee things

could it be a viable model for other things? >> i don't think that a single point of intervention is going to make a difference. i think eradicating mosquitoes, transforming mosquitoes with aerile mosquitoes, having radius dies -- having irradiadized -- >> but bioengineering is worth pursuing? >> it's an interesting idea. i would wonder how the -- it's an interesting idea. >> that was the chairman of r&d of vaccines that glaxosmithkline talking to me here at the milken global complaints -- milken global conference. when we come back, stephanie sits down with dennis and sean to talk about how they are rebuilding haiti -- denis and

sean to talk about how they are rebuilding haiti. ♪

>> welcome back to a very special edition of "market makers." joined bynie ruhle, my partner, erik schatzker. yesterday i sat down exclusively with denis o'brien. the founder of the largest cell service provider to the developing world as well as mobile phones in places like haiti, south america, papua new guinea. he has partnered with movie star sean penn, who founded his own relief organization in haiti. two had to saye about recovering a very special island. >> in the immediate emergency, it was our first mission before we got into sustainable programs and so on. it became clear that the force of sustainment, which was also

ofng the lion's share international wor -- share of international work, was this company digicell. us as an clear to emergency preparedness organization that the problem would be in jobs. out of his support of organizations like ours and independent work that his foundation does and the job creation that digit cell -- digicell does, we continue to find common ground and look for the focus on the answers to where we go now in terms of harvesting the care that still exists. >> here we are several years out. you've built hospitals, schools. you've partnered with ngos. you're also there to build cell towers. >> ngo's won't change a country.

they will contribute to change. long-term, economically, haiti has a pretty good future. the whole issue around job creation is still a challenge. about $300 put in million. they are attracting inward investment. manufacturers into haiti that will create employment. it is all about taking people and giving them a job. that's how you move people from being very poor to a much more sustainable level. then you need education. their are a lot of positive things. -- there are a lot of positive things. there are a lot of really good things happening in haiti at the moment. >> what is it you love about the country? why haiti? >> i will follow-up on what he said. 10 million cubic meters of of the essentially all

rubble post-earthquake has been removed. this is a monumental success. this was done because of the spirit of the haitian people which are an hour and a half flight from miami. you have the fastest galloping economy in the caribbean -- fastest developing economy in the caribbean in haiti. what we are hoping is that, like what we see, in terms of the value of investment in haiti today, that others will get on board. it is developing itself but a very quick rate. it is a world of difference pre-earthquake and today. businesses can assume to operate. different ins so terms of the ability to move things forward. even the access of roads, all of these basic infrastructure

things. it is more of a 10 or 15 year plan to look at the but -- the big strides that are going to happen. --are you trying to being bring business leaders down there to open other retail? you are the kind of glue who could bring that together. >> sean rings and many donors from the u.s. we bring business people -- sean brings in many donors from the u.s. we bring business people. heineken has made an investment in haiti in beer manufacturing. they bought a local company and upgraded it. they have done fantastic work with suppliers to make sure they don't import all the stuff they need. they have done a top job. when heineken put in $100 million, that will bring other investors in. a lot of korean investors as well. as a manufacturing location, haiti is first class.

haiti is making tablets in the technology area. there is a company making a magnificent tablet in port-au-prince, where they have all these workers trained up. >> are you doing something with your ngo to help train haitians or educate them to be prepared for these new jobs? happen, forings example, the tablets were branching out from the former of diw again local ceo gicell. we work in close support of each other. when we relocate people from displacement in camps back into the community, that is followed up with livelihood and training programs, community centers to develop capacity in the communities that we work. the idea is always -- and the cliché -- the good one is to put yourself out of business as an ngo. what is so exciting about haiti

inbecause haiti is finally its first peaceful transfer of one party to another in government, because they do have good leadership in haiti, that resilient personality of the haitian is getting a boost haiti is able to show they can take over. >> how do people give to your organization? >> you can support the organization with cash, in a broadway. -- brought way. -- broad way. the milkenlk about institute, there are a lot of people who have a lot more to bring to the game than money. the website is very comprehensive and shows a lot of ways in which people can get both people who have a lot of money and just people who

have a lot of whale -- will. >> i thought sean penn would struggle to make his points but he did well. a place like haiti, like the philippines, indonesia, there is a huge amount of attention and relief efforts when the media is there immediately following a disaster. unfortunately, when the tv cameras leave, often times international support does as well. denis is building cell towers and networks and has partnered with sean penn. sean penn went after the earthquake but hasn't left. built schools, job training programs. heineken is building -- is the re. they are building tablets. we are seeing manufacturing happen. it is an hour and a half like -- flight from miami. >> i love the point that sean penn made, part of the reason he is here is to ask for more than

money, task for ideas and support, because this place is overflowing with creativity. >> and often times ngos might have the right idea and they can do it hon -- do a ton to raise money, but to have thought leaders -- to use their brain power to help a place like haiti -- >> solve problems. >> denis helps a lot more areas in the world. i have a feeling they will be partnering a lot more. when we come back, we will share an interview i had with another superstar, the black eyed peas m.star -- cofounder, will.i.a. ♪

>> welcome back. i am stephanie ruhle. >> i am erik schatzker. we are here at the milken global conference in beverly hills. >> yesterday i sat down with a superstar from the black-eyed

peas.-- black eyed will.i.am. guess what his favorite song is? >> what? "happy."rell's talked about music festivals. when he participates at a music festival, he is doing it specifically for that on you and. -- for that audience. it makes magic. take a look. >> coachella, regardless of who is performing. it is for people to get together. people come here regardless of who is speaking because they want to network and communicate. the speaking is like entertainment. then i go and conduct business with people i can partner with. same thing for festivals. didhen i asked him, sxsw,

it make sense to go from music to technology, he said without a doubt. it is about sharing ideas and creating more. woulds point, coachella sell out within minutes before you know who the artist are going to be. people love the festival. >> they trust the brand. >> his favorite event was a conference -- concert they did in france where for three straight days just the black eyed peas sold out. he had so much to say in terms of technology, education, business, commerce. i asked him our politics in your future. i asked who he would want to have dinner with, if anybody. he picked george bush, barack obama, hillary clinton. politics in your future. he said he is not looking to get into politics. yes he what -- guess what he

thinks is our future from a political standpoint. politics.s they are educating our children. you come out the womb and you know how to use that. that is crazy. when was the last time an infant just one-year-old could operate a tool that sophisticated that adults use and do business with. apple is an amazing company. i think tomorrow politics will change. >> it is interesting. when he answered apple, i thought our you kidding me, but it is -- i thought are you kidding me, but it is about -- you absorb it and thought about what it meant. now the amount of information we have, that you can create and put out there. he talked about 3-d printing, creating your own content on youtube. no longer are the world's influencers telling us how to think and live.

>> it reminds me of the media theorist who said the medium is the message. you used to get your information in a newspaper. now it is being delivered to you by these new platforms that companies like apple and google are creating. >> or you are creating. doesn't need to receive information from an organization. he can be the creator. what is the favorite song he has ever created? "i've got a feeling." party song. black eyeof the d peas. >> it is time for "on the markets" with matt miller. >> all the news you used to get in the paper on your television. markets up across the board. the s&p up about 1/3 of 1%. the nasdaq up half a percent.

the big mover as far as games is merck. a lot of -- as gains is merck. a lot of news. merck impressed the market. a gain of 3%. pfizer and bristol-myers squibb are down. they have been moving the market. also in the news, a couple of tech companies we will see after the bell. bothand twitter are reporting earnings. we will give you those numbers as they cross. tiwtt -- twitter up 1.5%. quick break and then erik is back with more. >> we certainly are. >> when we come back, we will share bloomberg's interview with bob iger. >> ceo of the walt disney company. stick around. lots more from the milken conference. ♪

>> live from the milken conference, this is a special edition of ""market makers." >> welcome back. i'm erik schatzker at the milken global conference in beverly hills. >> and i'm stephanie ruhle. a lot more to cover. >> we are going to continue with an old friend. haven't seen him for quite some time. the professor of economic history at harvard university. great to see you. i should remind everybody that you've written all kinds of the selling books. >> that's why i have not been on television. i've been writing books. >> what does the world look like

these days? you have written a book called "greathe generation -- degeneration." >> start with the easy ones. there are one of two things going on, one of which has to do with the way western economies are grappling with institutional problems that are slowing down recovery. i think the more active story right now is the geopolitical taper. i did a piece a couple months ago in the journal saying the problem is not the fed's taper, thewhite house's taper and tapering of american foreign policy is having all kinds of consequences around the world, the middle east, eastern europe, but also east asia. i think we are dealing with the profound crisis of american foreign-policy. >> a lack of willingness to engage? >> the president was giving himself a baseball like

assessment yesterday. even he must know it is not going well. in january, he said in an yorker," in "the new don't need a george kennan right now. he was the strategist -- it turns out that mr. obama did need a george kennan. he is paying the price of not having a coherent foreign-policy strategy, a point i've been making for quite some time. >> what you make of the situation in russia? >> mr. putin is salvaging a failure. he lost control of ukraine in the revolution that overthrew viktor yanukovych. crimea was a consolation prize. now what he is trying to do is by intimidating and disrupting the political process in ukraine, to loosen kiev's control over the country.

what he is trying to do right now is to destabilize the political process so that you end up with such a decentralized ukraine that russia can control it in a way that he controls the whole -- controlled the whole of it after the revolution. >> ariel roubini thinks things will get worse and -- before they get better. you agree? 10,n a scale of one to ukraine is at seven and getting higher as far as the chance of what he termed a hot war is. >> that would be a very risky option for putin. the squeeze of economic sanctions in energy and financial sectors has not been put on yet. i don't think he needs to do more than he is doing. disruption, acting as provocateur -- it would be a

very risky option for him to mount a full-blown invasion. i think that would force the germans into backing tougher sanctions. ways, is on many course to unilaterally ramp up sanctions. it doesn't have unit -- european support for backing of meaningful sanctions. it is not enough to stop food and. -- stop fooputin. if he crosses the line by sending troops into ukraine, i think the germans will have to accept tougher sanctions. >> you criticized the president for failing to recognize the need to at least pay attention to and perhaps anticipate such actions by vladimir putin. what about the europeans? they seemed to be just as surprised by the taking of crimea. >> i was in crimea in september.

one has to travel the world to learn what is going on. i don't know how often you been there yourself. there has been a shift in the eulic in terms of membership. stepign that was a first in the direction of du membership. -- of eu membership. it fell through in november. that was the moment when things began to spin out of control. we shouldn't just focus on ukraine. more people died in syria yesterday than in ukraine. the crisis in syria is devastating. say nothing of the breakdown in talks between israelis and palestinians. and east asia -- it is an

unconvincing strategy by the u.s. to contain a rising china. i don't think it is convincing many people in beijing. i think he may ultimately look back and -- not figuring out china could be this president's biggest mistake. >> can we go back to ukraine for a moment? could the sanctions backfire on the european economy? >> yes. in the sense that if they went further and impose the kind of sanctions that would hit not just one bank but multiple russian banks, it would certainly have your -- have implications for the europeans. but this is a good time to exert economic rusher on russia -- to exert economic pressure on russia. >> are they strong enough to do that? >> the worst estimates right now

, maybe a 4% contraction. even if the russian economy shrank by 9%, it would still have a very small effect on the core european economy. there is interdependence here. it is russia that will feel much more pain than germany. in that sense, the west still has some real cards to play. >> do they have the guts to play them? >> that's an excellent question. >> by renouncing the use of military force, i think the president has undermined his own diplomacy. sanctions are a powerful weapon but russia is a lot bigger than russia -- then i ran -- is a lot bigger than iran. >> there is an institutional

malaise, governments are too large and spend too much money. there are people who disagree with you. in your opinion, who is the most dangerous economic thinker writing today? >> i'm going to be extremely careful about answering that. >> you've never been extremely careful to date, why start now? are you kidding me? >> it is important not to personalized debate. the economics profession has a lot to answer for. there have been flawed models that led us into a financial crisis that hardly any professional economists foresaw. they tend to think the world is some kind of machine they can model. that has led us into all kinds of policy errors and wrong diagnoses. i won't name any in particular who have predicted that policies of fiscal consolidation which they label austerity would result in catastrophe in countries like thomas say, the

united kingdom -- like, say, the united kingdom. which economy is growing fastest right now? it is the u.k. u.k. is a focus on the about austerity, for example, arguments that the eurozone was going to break up, which ought to have made the public more skeptical about economists as a group. i think we need to recognize this isn't just one economist. it is economics as a discipline. is not just paul krugman. it is paul krugman and his peers and followers. >> there are many who agree with paul krugman and his analysis him of the keynesian -- analysis, the keynesian line. krugman is not the only keynesian. the surprising thing is how many people subscribe to these createts that protect --

doom and disaster for any countries that try to do fiscal stabilization. that's why you don't want to person out. >> let's turn the question inside out. who should we be paying more attention to question mark -- more attention to? attentionld pay more to people who don't just talk about economics. the biggest writing force -- >> you mean people who actually put money at risk. >> very few economists -- i don't think the economists i mentioned have any experience of running businesses or managing money. my point is a more profound one than that. to a large extent what is driving economic volatility is not economics. it is politics. it is international relations, domestic all addicts. politics.c

there are those who see a crisis of foreign policy. it is a sad indictment of our intellectual world that henry kissinger, aged 91 this year, is still the man writing the most authoritative things on these subjects. >> we have to end it there. >> thank you so much. awesome. when we come back, the head honcho tom of the chief at the headob iger -- honcho, the chief at disney, bob iger. ♪

>> you are watching "market makers." i am julie hyman with breaking news. general electric had bid for -- now siemens says it wants to make an alstom offer, plans to make an alstom offer. the prerequisite is that alstom gives it access to the company more information.

it wants to do some due diligence. if it is allowed to do due diligence, it will proceed with the bid. these are the conditions it is talking about. remember that general electric's bid was accepted by alstom. executives had met with government officials in france. it seems like they were open to that bid, but there were some encouraging a bid from siemens as well. this is a developing situation. siemens says it has submitted a letter on these conditions to alstom. we will i not if it does get access to that information -- we will find out if it doe get in from -- if it does get it access to that information. we will keep you posted. back to steph in los angeles. >> thank you for covering our breaking news.

continuing our coverage in beverly hills at the milken global conference, we are joined by our west coast colleague, jon erlichman. you sat down with disney head bob iger yesterday. he took a world tour, talking sney. -- shanghai di i don't think i'm headed to shanghai soon. >> there's always a lot you can discuss with a company like disney. on top of the fact that bob iger is a clippers fan and everybody is talking about that. it is not everyday they introduce a new park and resort. billions of dollars already invested. they will invest even more. this one plays into the potential ceo changes. tom may be a frontrunner. he is running the parks division. and for iger's legacy. we talked about what this park means for him and the future of disney. i am very interested in not

just disney today but disney long-term, well beyond my tenure as ceo. and one of the things i think any ceo needs to do is not just manage a business successfully in the moment or for the quarter or the year or the tenure, but to manage the business for success long-term. decisions that we've made collectively as a management team was to invest in china and to not just plant seeds, but to plant a big trees that will hopefully fuel enormous growth for the company long-term well beyond my tenure. it means a lot to me. when i think about carrying out my responsibilities, my legacy, shanghai disneyland looms large, china looms large. >> you've talked about things at that park and resort that are unique to china. what are some examples of that? >> we've talked about --

my charge to the team of great imagine years -- great i magineers was, let's make it authentically disney and chinese. we are bringing a disneyland park to china. our strong instinct and the research we've done supports this, that people want a disney experience. but we also know like any other place in the world, there are cultural interests and tastes and pride. it is essential for this park to succeed to reflect the taste and culture of china. there are numerous elements of the park that will do that. we have not been specific about them. other than mentioning a couple of attractions, we've said very little about what will be in the park. i will give you one example. in all of our parks, there is a significant amount of entertainment, most in the form of shows.

they typically take place indoors or in front of castles or under fireworks. the creators of the shows for shanghai disneyland, those who are not just conceding the shows but choreographing them and directing them, were largely chinese. the performers will mostly be chinese. there will be a very strong chinese element throughout the entertainment in these parks. another example is use of language. it would be easy to say everything would be in mandarin, but we are starting in mandarin. all the storytelling, all the navigation and wayfinding, all of the menus, any of the will startmenclature in mandarin and be translated into english, instead of starting in english and being translated into mandarin. -- an just a number of example. >> you acquired a company called

maker studios. >> 70% of makers' traffic comes from outside of the united dates. we have not only a great desire but a great need to continue to grow outside of the united states. we been extremely aware of and impressed with huge growth and media digitally, in particular short form media. maker has done a great job. they are the number one supplier of short form videos to youtube. not only identifying creators of short form video but distributing it very effectively to using algorithms and data enhance distribution and consumption. bringing that kind of expertise into our company when the world is changing so rapidly before our eyes in terms of media creation, distribution, and consumption we thought was very interesting and attractive. >> your chief financial officer

-- the maker team will report to him. how come? >> there are a couple reasons. not to get into too many details. there is an earn-out. the sellers have an opportunity success.ore with i wanted to keep it close to home and be careful that it was managed in a way that could maximize the ability for the acquisition to succeed. i also believe the cousin didn't fit neatly into one bucket, but -- believe because it didn't fit neatly into one bucket, that will require a cross-sectional approach, that there was benefit to keeping it out of one business and using jay rasulo, our cfo, to facilitate not just the integration of the acquisition or of the asset into the company, but to facilitate it being successful. , it was we last spoke

announced and sweeney, one of your longtime executives -- weeney, one of s your longtime executives, would be leaving the company. what is the process for looking for a successor? >> it is a process. the only thing i can say is the board has been engaged in a very active and aggressive succession process. interestingly enough, google for -- enough, before the decision was made, we in developing and discussing people and talking about a variety of different things, including what attributes the ceo of walt disney company should have. they've been observing people very closely. i'm confident that our board will make a decision that is not only the right decision to make for the company long-term, but it will be made on a timely enough basis to create a smooth transition. >> is there any possibility you could remain as ceo before it --

beyond the june 2016 deadline? >> it is hard to say. >> this company is focused on diverse city. on diversity. one court -- story being covered through espn, which is disney property -- >> i was appalled. we live in a world where i believe there is no room whatsoever for racial intolerance or racism, whether you are a public figure or not. there is just no room for it. i know there are questions as to the validity of the recording. my take is that it was donald sterling. my belief is that is something that shouldn't be tolerated. action needs to be taken swiftly. i believe the nba will do that.

i don't know what they are going to do. i have a strong sense they will do the right thing. >> magic johnson said he wouldn't go to anymore clippers games as long as donald sterling is the owner. as a clippers fan, would you continue to go to games? >> here is my feeling on this. i think that the players are playing for themselves, their families, friends, and the fans. that is who they are playing for. have i thought about it, yes. i want to go to support the coach, who i think is a great coach, and those players that are out there on the court. as long as they are playing, i am there for them. that is my feeling. >> some interesting comments from bob iger of disney. i want to talk about the maker studio stuff. the clippers are fascinating. we did talk about it probably for the rest of the hour -- we could talk about it probably for

the rest of the hour. the maker thing is interesting. i've heard from some pretty well-informed and wealthy people in the media industry who dumped on the purchase of maker, saying it makes no sense. maker is a platform, not a creative sense. what is disney doing? what is bob iger doing? >> i think you get into this buy or build. if there is a change happening in the business that you are in, in the case of disney, the media business, people are watching stuff in new ways. they are discovering lots of content through youtube. these businesses are curating all this stuff on youtube. that is not disney's expertise. do you go out and acquire expertise? i think people were surprised by the price. when it comes to things like interactive, that part for disney has been a sore spot in recent years. >> is the price hike? it depends on who you are -- is

the price high question mark it depends on who you are. even if they don't entirely believe it, they buy maker, they are protected. >> why is this business unit reporting directly to the cfo of the company? i think they will keep a close eye on how much gets spent on the business. >> we spoke to someone yesterday who thinks it is a disastrous deal, a huge mistake for maker. >> for disney. >> for both. excuse me. i am struggling today. >> it is an interesting world. >> when we come back from the milken global conference, we will be talking about china. stay with us. ♪

>> live from the milken global conference in los angeles, this is a special edition of market makers" with erik schatzker and stephanie ruhle. liveis is "market makers" in beverly hills. i'm erik schatzker. >> and i'm stephanie ruhle. >> it is time to talk about china. with us is the vice chairman for china and the chief investment strategist for goldman sachs. would you say the outlook for chinese economy is improving or deteriorating? >> there are a lot of uncertainties around the chinese economy. one thing that is sure is the

economy is slowing. gdp growth is 7.4%, the slowest in recent years. investment growth is at a decade low level. we are going to see further weakening in the chinese economy. i think if the chinese government is serious about rebalancing the economy, growth should be below 7%. the reality is the government needs to strike a balance between short-term growth and long-term performance objectives. i think we will still be around 7%. >> what does the government need to do? >> first, there is a need to switch the economy from investment-driven to -- the key gdp components are weird compared to other countries.

if you check the numbers, the 1958time it was 40% was during the great leap forward. that was followed by three years of economic disaster. i think one thing to do is to rebalance the economy. >> how would you rate the government efforts thus far to stimulate demand? >> i think the stimulation is only short-lived. in the past three years, the government launched at least three times as many stimulus -- three times stimulus. that the reach of the stimulus is getting shorter, the effect is getting smaller. effectides short-term that of operates very soon. >> can we talk about a criticism we see with regard to data coming out of china? investors like jim chanos say

you cannot depend on the theability or accuracy of data. what do you think? >> there are problems in china's data. the quality of data varies from time to time. the economy is slowing quite significantly. adapt local government gdp reported numbers would last quarter in comparison to first quarter, growth slowed by 1.5 percentage points. ede central government report nationwide data -- level.own at the micro maybe the economy is growing at even a slower rate. >> doesn't it make it even more useless if sometimes the data is very good and sometimes actually host -- hopeless?

>> it makes my job more difficult. it makes your job more difficult. >> is it idiosyncratic or intentional? >> oh. >> there are some factors, pretty complicated factors there . for example, when the chinese renminbi appreciates steadily, there are people who try to over -- invoice their export -- over-invoice their export in order to bring in hot money into the country. it is difficult to catch that kind of overreporting. is overreported is not intentional by the government. it is the market that over reports data. >> alarms are being sounded about the vulnerability of china's banking system, particularly the shadow banking system. how worried should we be?

>> i think you can look at -- loans accounted for about 140% of gdp, the highest in the world. and you need to look at the world conditions. these loans were extended in the past few years when the growth of the economy was like double-digit's. the real read on interest rates is almost zero because inflation is about the same. when you have such a good term, people borrow a lot. but now these variables are reversed. interest rates exceeded gdp growth. now you have problems repaying debt. >> what happens? >> i think in the future there will be more problems emerging from underperforming loans. >> when we look at ways to spark our economy, innovation is an important idea. what is the role of innovation in the chinese economy? >> the modern china is better at

emulating than innovating. >> and that remains the case today. we've been talking about this for several years already. >> if you look at the labor market, the market sends very good signals. china, skilled laborers find it difficult to get jobs. blue-collar jobs start to earn rising salaries. marketgregate the labor and it shows there is a lack of innovation among the educated, the skilled laborers. the problem in china is the education -- more people get educated, but probably they are not receiving the right type of education needed in the market. , thank you very much. jiming ha. >> when we come back, we are talking mining for asteroids.

this is "market makers" special edition live from the milken global conference. ♪

>> welcome back to "market makers," live in los angeles for the milken global conference. i'm stephanie ruhle. >> and i'm erik schatzker. with us now is a man who wants to mine asteroids. anderson.s eric >> larry page, james cameron, eric schmidt, they like your game. pitch it to us. >> the world that we have is a dot in the universe, literally. all the things we have and hold the value in earth are available in nearly infinite quantities in space. some of the most valuable things are available in quantities that are magnificent and not that far

away. we are going after a set of asteroids called the near earth asteroids. an asteroid the size of this more -- thanave all of earth. we will bring back rare earth minerals from them. >> put in dollars for us. >> our target for 2016 is worth about $500 billion. >> $500 billion with a b. >> i thought this was a multistage plan where you have to put satellites in orbit and -- >> our first launches in october of this year. minew much does it cost to for it? >> much less than $500 billion. between $5 million and $10 million. >> there is a risk you come up with nothing.

>> there is not really a risk we come up with nothing. we can see from earth what is on the asteroid through spectroscopy. onis easier to know what is an ore body 50 million miles away then it is to know what is below the earth. there is nothing in the way. we can see lannett in other solar systems, for crying out loud. these things are right next to us in space terms. business modelr work? >> we are a mining and development company we prospect -- finance prospecting missions with partners. then we put back financing to go and mine. >> asteroids, plain and simple. >> i can think of a few other names that have extraterrestrial ambitions, elon musk, jeff azores, richard branson -- jeff

bezos, richard branson. have you talked to them? will there be partnership? >> richard branson is one of our investors. elon is a great, fantastic engineer, one of the best ever, who is working on spacex, which we will use for transportation. this is a relatively small industry still for commercial spaceflight. we are all in it and pulling for each other. it is synergistic. >> you are talking commercial. do you have a response or reaction to the u.s. ending nasa's program? >> i'm a big fan of as much bass exploration as we can have. -- much space expiration as we can have. >> we didn't really and nasa's program -- we didn't really end nasa's program. we ended the shuttle program.

i'm in favor of that, but we should have had something else ready. >> elon musk has demonstrated that private industry can get into space more effectively than government have. >> can't private industry get everything done faster than government? >> space is everything but earth. in terms of setting the rules and the guidelines, there -- deep space exploration doesn't have a near-term profit -- those are the kinds of things that nasa should be focused on. >> the same with the national institutes of health research certain diseases that don't make commercial sense or a publicly traded pharma company -- make sense commercially for a publicly traded pharma company. >> exactly. >> what do you say in response to american leadership acting away from space exploration --

backing away from base exploration? >> we have the largest commercial space industry by far. i think leadership is transferring from the nasa bureaucrats -- and i don't mean to sound negative. are you competing with? do the chinese have plans to mine asteroids? >> they have talked about it. i'm sure they will. >> what could go wrong? >> lots of things could go wrong. in terms of the technology, there is risk all along the way. luckily, the guys who actually landed the last three spaceships on mars are on our team. these guys have put human built equipment -- >> your first mission is in october. explain exactly how it will go down. >> the first mission is a test flight.

we will be launching part of our spacecraft into low earth orbit. they will be churning out these vehicles that will be going to these asteroids. >> how cool is that, our asteroid spacecraft factories? delivering aetween flight and coming back to earth? >> it will be a while. we set up these massive propellant depots to refuel satellites and take people around and reduce the cost of space. once we do that, bringing back platinum is easy. >> what is the biggest risk right now? >> the biggest risk between now -- i don't know.

we have enough money for the next couple of years. some catastrophic event in space that turns everybody off to space, maybe. if an asteroid hits new york city, god for bid, or something like that. we don't have a lot of risk between now and october. further on, too much government involvement would be a problem, but we do need some to set the rules and things like that. >> congratulations. back to your asteroid spacecraft factory. i wish i could say that. >> you just did. >> thank you so much for joining us. >> eric anderson, the cochairman of planetary resources. we will return in just a few minutes. ♪\

>> so, what a show. where did the two hours go? >> guess what, we are not leaving you. we will be here live throughout

the day at the milken global conference. we've got some more big interviews coming up. >> the chief investment officer of -- >> so much talk about activism. he says there is no reason to attack these companies. what has he done all these years? worked with ceos that worked with companies he invested in. >> the former prime minister of italy will be with us, mario monti. >> thank you so much for watching "market makers." sending you back to new york.

>> it is approaching 56 past the hour. bloomberg television is "on the markets."

i am julie hyman. stocks are trading higher on corporate earnings as investors await tomorrow's fed his vision -- fed decision. an equity is derivatives strategist. i don't think we are expecting any kind of fireworks from the fomc. what are we seeing priced into the options market in terms of the vix? >> sort of an average expectation as far as the fomc goes. no signs that they would deviate from plan. tapering is on track. there might be some nuances. not a spectacular type of event as far as tomorrow's meeting goes. the job numbers on friday probably represent more of the catalyst as far as changing the .ed's game plan >> what are you seeing on

positioning? >> options volumes are hitting well. not seen the preponderance of hedging activity. there is not a lot of macro catalyst out there right now. there are sectors that are more hers, one of them being the higher dividend yield sectors like utilities, the reit's. these sectors have had tremendous runs. is upu, a utility etf, about 15% year to date and about 5% in the last week. other sectors like biotech -- .ech has gotten whipped around >> i want to mention bank of america. we have been watching them closely. there was some sort of mistake made on the fed stress test.

they said they would postpone plans to buy back stock to raise the dividend. now there are talks that maybe the buyback will go away but the dividend will stay. i'm curious how options folks are looking at that. itself was in significant in terms of the dividend going from five cents back to one sent or the buyback being canceled -- to one cent or the buyback being canceled. the gravity of the event was how do you make a mistake as far as what was put forth. we see it as a one-off. we don't see it as something that is likely to occur again. there are a lot of overhangs. since the financial crisis, it is still an underthrown group for the most part with not a lot of money flowing into the financial space, a lot of headwinds, and low volatility

for the most part based on a lack of interest. >> maybe a not -- maybe not a lot of opportunity options wise as well. i know this is a group you are looking at not only because of the run we have seen that you mentioned, because high dividend yields are still very much in demand, but also because we are going into the earnings period for that particular group. do you expect that to perpetuate the run we've seen? >> if you look at the momentum in the group, what we've seen so far, we got a handful of utilities report -- members of the s&p 500 that are also utility stocks. they have all been positive. all five of them have moved up in earnings. we are moving into a period where we have a lot of utilities reporting earnings. we have a few events that are particularly pertinent to yield -sensitive stocks like reits and utilities, being the fomc and the jobs numbers. >> let's get to your play.

i don't want to leave that out here >> -- out. >> we like playing on the upward trend in utilities. the weekly expiration captures about 82% of the earnings. the 43 half calls that looked to be expiring look to be pretty cheap buys. >> we will be watching. we will see how it does. thank you so much. we will be on the markets again in 30 minutes. ""lunch money" is next. ♪

>> welcome to "lunch money." take a look at today's menu. at the milken conference, the heads of lack stonehenge starwood share their expertise. in motors, we have the cars of the future from the google driverless to the ford ultralight and around the world, russia may not be on the vest speaking terms with the u.s. but north korea is a different story. the battle for content and media is told by media these -- disney ceo bob iger. we are going to kick it