>> from bloomberg world had orders in new york, i'm mark crumpton. this is "bottom line." we dissect the numbers from the latest global crop outlook. hunt's interview with jack lew. a roundtable discussion on the power players. ♪ >> to our viewers in the u.s. and those of us joining from around the world, welcome. we have full coverage of these stocks and stories making headlines today. alix steel with the economic power of flowers day as mother's day approaches.

the numbers and the latest crop report out of washington. phil mattingly is at the white house as president obama goes to california to push for energy efficiency. phil, good afternoon. >> good afternoon. president obama capped off what has been a week of pushing against climate change at an event at a walmart in california. today, asint he made well as unveiling executive actions to combat climate change, was close ties to business. you listen. more and more companies like walmart are realizing the wasting less energy is not just good for the planet, it's good for business. it's good for the bottom line. announcedsident today a bonds with as many as 300 businesses and public entities to try and combat climate change

as well as initiatives that included 2 billion dollars and retrofitting for federal buildings, in a series of initiatives that if they work could be the equivalent of taking 80 million cars off the road when it comes to pollution. >> phil mattingly joining us this afternoon. bloomberg exclusive, the european union is preparing to expand its sanctions over to include some russian companies. that is including -- according to officials. what is the timetable for the sanctions and is the u.s. planning sanctions as well? >> the european union foreign ministers are going to be meeting on monday. that is when they will have the chance to debate and make the final decision on this new list of names its we understand is

going to include a lot of new individuals, crimean mostly, and at least for now on the list, we have got some russian companies. the european union has a much stricter legal standard for issuing sanctions than the u.s. treasury. at this point, they're just looking at russian companies accused of expropriating assets in crimea. really big name players who have been accused of expropriating crimean assets. to see think were going any of those names on that list on monday. it was hard enough to get this compromise. as for the u.s., at this point they're not planning any new sanctions for monday itself. officials are constantly telling us that everything depends on putin's move. furtheres something to escalate the situation, they will react at that point. >> today we saw president putin. he was putting his military on display for victory day in moscow. he's making an unannounced visit to crimea. what is the read from the u.s.

and european officials about president clinton's shifting tone this week? >> it has been hot and cold, sometimes within the same day. this is the same russian leader who in the middle of the week said, i support elections, and i'm calling on the separatists to not go ahead with their vote for this sunday for independence. the next day he was testing nuclear ballistic missiles. the way the u.s. and european leaders that i have really a see it is cynical ploy on his part to try to divide the alliance and try to ward off sanctions, have plausible deniability to say, i was not involved in those separatist votes, and a way to affect markets. the sanctions have been hitting hard. this is a way to put out positive talk. we saw some russian markets were up.

>> does this mean that sanctions are working? what else are the u.s. and europe trying to do to keep president putin's ambitions in ukraine at bay? government the u.s. and certain european countries who support sanctions say this is a perfect example of how not just the beginning of sanctions, but the threat of further sanctions is working. it's forcing him to change his rhetoric, too, with some softer words in an attempt to affect markets. this is an economy that was already on the downward spiral that is heavily dependent on extractive industries, heavily dependent on energy. that all thissay adventurism into ukraine is partly an attempt by putin to raise his ratings at home by an outside adventure and take attention away from an economy that was going down the tubes

already. >> indira joining us from washington. thank you. more on russia coming up. al hunt will join me with a preview of his sit down with jack lew. that is coming up in about 15 minutes on "bottom line." u.s. department of agriculture released its comprehensive forecast of supply and demand from major u.s. and global crops today. alan, thanks so much for your time. this was the first month where the usda forecast inventories for 2015. any surprises? >> you are seeing markets for corn going down the most in a week right now. inventories for that crop are much more than what analysts were expecting. u.s. farmers are putting their crops in the ground. there was pessimism about corn earlier this year. now that folks are more on pins and needles about the international situation, you have seen overall demand staying

pretty strong. farmers are going back to that crop. showedy's usda report record crops for both corn and soybeans. corn was a surprise. how are farmers keeping up the pace? >> you are seeing better weather. so far planting is so far, so good. soybeans are also going to be a record crop. there's a lot of acreage going into that. farmers are risk on than -- more risk-on than they were a few years ago. seeing declines in wheat acreage. as corn and soybeans expand, wheat production keeps going down, tightening supplies. >> stay with us for just a moment. the chief economist at ag resource company joins me from chicago. he has over 32 years of experience as an agricultural economist. ask for your time today -- thanks for your time today.

were you surprised by today's report? inventories for both corn and soybeans are larger than expected. that is because the usda had lower demand projections than expected. there was also some surprise on the size of the increase of global soybean stocks. any stocks of soybeans next year projected to be up 25%. >> exports continue to be robust. how is the global commodity affecting prices? >> generally, the economy doesn't have that much of an impact. basically food is pricing elastic and income inelastic. growthariations in gdp of china and southeast asia or some other emerging markets really does not have an impact.

what has an impact is population growth and the relative prices between u.s. wheat and black seaweed. that is something that is likely to have an impact on our what exports -- wheat exports. bill, you are mentioning the black sea. you take a look at the usda forecast. they cut ukraine's wheat crop i 10%. -- by 10%. this is one of the first science we have seen from the u.s. day of expectations of change in ukraine. why would currency affect wheat production in ukraine? the logic is that a lot of the inputs that enhance yield, such as fertilizer, farm case ofs -- in the corn, actual seed, a lot of that is purchased or imported. down, therency goes purchasing power to purchase those inputs goes down as well. they have to either use less or

turn to less effective farm inputs. >> if you are a consumer, what do today's numbers mean to you? do larger corn inventories mean there's going to be relief from the high meat prices we have seen? what are we seeing in livestock markets? >> anytime you see corn prices trending down and soy meal prices trending down, in the long run, that's good for increased livestock production. what happens is there's a significant lag between a lower feed costs and when you start seeing beef supplies go up. or when you start seeing pork supplies go up. the sector that has the fastest ability to react to lower feed cost is poultry. 18 months, anywhere from 12 to 18 months from now, lower feed costs are likely to bring about increased meat production and lowered meat prices. looking at some of the global weather situation we have been seeing in the

economy, we are seeing concern about south america. what is the situation for 2015? >> most of the weather analysis 30ave seen the goes back 25, years, there seems to be an association between el nino and above trend yield for crops in brazil and argentina. even though there has been a spin that el nino affects crops, and in some part of the world, associated with crop problems, that's not the case in south america. if we get an el niño, it probably would be appropriate to pencil in above trend yields for soybeans and corn. , florida is on pace for its smallest orange juice crop since 1985. what does that mean for consumers? i don't know anything at all about orange juice. >> [laughter] simply put.

except that it tastes good in the morning. thank you so much for your time today and your bluntness. bill tierney, chief economist at ag resource company. our colleague joins us from washington. thank you so much. we will bring up al hunt to preview his sit down interview with jack lew. on the agenda, russian sanctions, budget talks, and more. ♪

>> welcome back. this is "bottom line." one big ticket item in the defense department budget is a new aircraft carrier being built in virginia. it is nearly $13 billion. peter cook went aboard to find out what taxpayers are getting for their money. ford, namederald

for the 38th president, is taking shape. it is america's newest super carrier. it is still a work in progress. >> welcome to the bridge. >> the first commanding officer took me on a tour. >> i like the view. >> he will be responsible for sailors who served on the most expensive warship in history. >> virtually every system on board this ship is dramatically improved or wholesale, completely brand-new to this class of ship. >> all the innovation meant to boost productivity while at sea. >> our primary objective to start with was to increase the capability of the platform and decrease manning on the ship. >> the biggest change is a redesigned flight deck. there are three air cap elevators -- aircraft elevators instead of four, and a first of its kind electromed i get it

catapult system. -- electronic catapult system. >> the ability to get the aircraft back in the air, that makes all the difference in the world. >> big changes below the flight deck as well. >> next summer we will have sailors packing this place. >> new nuclear reactors and other upgrades will produce 250% more power. million feet of fiber-optic cable. >> this is designed for aircraft that are not even on the drawing board yet. >> the forge crew will be smaller. they will enjoy more air-conditioning than ever before. all of this comes with a steep price tag. the ship is 22% over budget and six months behind schedule. >> what are taxpayers getting for their $13 billion? in 2065, this ship will still be doing the things that

taxpayers of 2065 needed to do. >> do american taxpayers really need 11 carriers? that is a question congress will have to answer. >> everybody wants one. why would we even think about having less? >> peter cook, bloomberg, newport news, virginia. >> coming up later on "bottom line" -- a roundtable discussions about exclusive interviews with the power players of gambling. we will hear from steve wynn and sheldon adelson, coming up in about 12 minutes at 2:30 p.m. new york time right here on "bottom line." ♪

>> vladimir putin plans to open

the door to chinese money as u.s. and european sanctions over ukraine threatened to tip the economy into recession. treasury secretary jack lew is going to china on sunday. how will relations be impacted? al hunt is sitting down with secretary lu this afternoon to ask him that question, and he joins us from washington. heads to china on sunday. what are you planning to ask him about his trip? >> what you just mentioned about the russians -- any time the finance heads of the two largest economies of the world get together, it's important. we will talk about the chinese economy and relations and currency. there's a whole host of issues. >> he's heading to china on the weekend. a storyg news broke saying that president putin plans to open his door to chinese money. how could that impact our relations with china? >> it depends on what the chinese reaction is. i'm sure that secretary lew will

discuss that with the chinese leaders. i think china probably has an ambivalent attitude towards putin right now. they don't think his behavior is rational. on the other hand, china loves to play. -- play russia off the u.s. we have a lot of controversies were involved in with china and asia. geithner plans to release his book next week. is the white house concerned? >> a little bit. there will be a few things they would just as soon not hear. i one point, he apparently says rail againstm to the bonuses that wall street banks were giving top executives after the taxpayers bailed them out. he chose not to do it. he watched obama do it. sure that will make tim

geithner popular on wall street. to there inching closer november midterms. what is the feeling in washington? do republicans get a boost this week? >> they sure did. they avoided some of the problems they had in primaries in indiana, missouri, delaware, and alaska over the last three or four years. they feel confident that the real tea party right wingers are not going to win. certainly in kentucky and probably in georgia. they think that gives some stronger candidates. the general expectation is republicans will increase their majority, and they have at least a 50/50. >> was a lesson learned from a few years ago? you remember tea party candidates challenged some of the incumbent republicans in primaries and won. in the general elections, they

found out they were not electable. is that something that still stings with the gop establishment? >> absolutely. that's why you saw a huge effort in the primaries this time. karl rove's group. other organizations came in and spend tons of money. on behalf of -- i don't want to say the more moderate candidates. they just were not tea party right wingers. just because that the results turned out this way over the course of the past week, it by no means is suggested that the tea party is dead and buried. >> i don't think so. the tea party republicans are a major part of the gop base. satisfys to be a way to them. nominating --me, i hate that term -- nominating less right wing candidates for the general election. but they cannot ignore that tea

party and i don't think they will. >> al hunt joining us from washington. thanks for your time. you can catch more of al's interview with jack lew airing today on "street smart at 4:00 p.m. new york time, and tonight on "political capital at 9:00 p.m. new york time and throughout the weekend. bloomberg is on the markets. matt miller has the details. get everyone caught up with what stocks are doing here. we have seen a little bit of fluctuation today. we are seeing them back down, with the s&p 500 off about three points. the dow falling just 15 points. the nasdaq just barely off. the tech stocks have been pushing the indexes around a lot. we have seen red and green, but not a huge movement as far as volatility.

rocket fuel, those shares falling to an all-time low. the digital advertising firm gave a downbeat outlook. goldman sachs downgraded the shares to neutral from buy and lowered the price target to 25 from 69. ♪

>> welcome back to the second half-hour of "bottom line" on bloomberg television. i'm mark crumpton. wynn resorts chairman and ceo steve wynn, gary leben, chief executive on caesars entertainment, and las vegas sands chairman sheldon adelson. joining me now are stephanie , and trishy liu regan. thank you so much. let's start with steve wynn. he talked about the chinese government. his concern was it is more

business friendly compared to the u.s. government. let's take a listen. >> the government is more predictable in china than it is in the united states. the government in nevada is very easy to work with because we are the industry in the town. gaming and tourism is everything in the state of nevada. the political environment is extremely friendly and understanding of that industry. the federal government in the u.s. is much more unpredictable and unfriendly to business than the government in china is to business in china. be, asic as that may counterintuitive as it may be, it's absolutely true. you can ask any american businessman that is in both places. >> you talk to steve win. he does believe that businessmen are at a disadvantage. why? >> a gaming analyst said this morning that mr. wynn may be talking his book.

he has a $3.5 billion project he's building in the region now. it's no surprise he's buttering up the chinese government. when you think of a businessman, gaming giant, this major saying the chinese government is more protectable than the u.s. government, it makes sense when he's making 70% of his dollars over there. >> at least for now. sheldon adelson is in the same boat. he wants to take credit for the fact that he saw that vision in china, that he was [indiscernible] there. -- 70% ofkes about 70 his profit there. you're hearing some red flags, some warnings there that it might be getting to be too much. there's too much money being made, and the chinese government wants to monitor that and make sure there's no money laundering going on. >> there is some concern about that. every gaming ceo would love to be there. and you need to know the right

people. despite what steve wynn is trying to tell us, you need to be able to grease the wheels if you're going to operate there. without the necessary licenses and connections, you will not be able to do business. , you spoke to sheldon adelson. he has some concerns about online gambling. let's take a listen. >> i'm saying coming from the business, i want to make money for those who can afford it. i cannot tell over the internet who is underage. i cannot tell who has financial difficulties. i cannot tell who is gaming responsibly. i cannot tell if money is being laundered. i can in the casino. >> how much are you willing to spend to stop online gaming? >> is this a morality play? wynn was doing,

talking his book here and he wants people to go into his physical casinos. hypocritical.y for him to say that gaming is not very good online, how is that any different from someone who is actually physically gaming in person? >> he might have a little bit more of a leg to stand on. is madehis money overseas. even if that market grows big, it's not as if it's going to hurt his business. balance, the first casino who went online, he says that's not true. i get people's security numbers. i know how old they are. what sheldon is saying is untrue. >> sheldon just does not want it hurting his business. if people are gaming online, they do not need to go to the casino. >> most of his business is overseas. i'm not sure if it will hurt his

business. arere you really saying you concerned, are people wealthy and secure enough to be gambling? if you see who is sitting at those slot machines, #give me a break. [laughter] trish, what is the controversy with the ferris wheel? what is that all about? >> it's not a controversy. caesars is trying to bring people back to the middle of the strip. you have mgm dominating one end, steve wynn dominating the other. how do you get people into the middle? they came up with an idea for a 550 foot tall ferris wheel, the largest one on the world. i did go on it. >> let's take a listen. >> we try to solve a specific problem. we are asking our guests to come 1200 feet.

to get people to walk 1200 feet to something, you've got to have an attraction. it has to move a lot of people, it has to be open every day, and be attractive all hours of the day. it cannot just be a nightclub or shopping destination. it has to be something to get a lot of people interested, 24/7. we started looking around at the world of this type of attraction. we looked at the roller coaster down here at the stratosphere. vegas, i'm not going there to ride a ferris wheel. i'm going there to gamble. >> there are families that are going. area where the ferris wheel is, known as the highroller, it is called the link, and there's a number of different restaurants and shops. the whole goal is to bring people there and offer them something accessible. it's about $30 and you can ride

the ferris wheel. you can have drinks and food on the ferris wheel. inside onee a party of the containers on the ferris wheel. >> i think we have a bite from sheldon. >> i don't think the ferris wheel is going to do very much. there's ferris wheels all over the world. >> have you been on that? >> no. it's for kids. kids like to go around the ferris wheel. i'm still a kid, but i'm a little bit older. >> he really kind of dissed the wheel. >> of course he doesn't want to go on it. in macau, they are building similar things. you want to get people's attention. if you look up anywhere in vegas right now, you see the ferris wheel. that's the whole goal. >> will the attention translate into dollars spent?

i'm with betty. >> we need to go. >> ladies, thank you so much. coming up, the mother's day clock is ticking down to zero. happy mother's day, ladies. flowers in the country, deliveries are in overdrive.

>> we wanted to let you know that bloomberg is the only business news service being offered on amazon fire tv. if you missed any of our interviews, you can watch them on bloomberg on apple tv. it features live streaming and on-demand videos. it is time for today's latin america report. resilient president dilma rousseff's lead over her main contender for the october elections has narrowed. that's an indication she may not have enough support to win in a first-round vote. a new poll shows that rousseff's

support was little changed at 37%. two win in the first round a candidate needs to have 50% and more votes than the other candidates combined. it could mean the central bank will keep rates unchanged. inflation was measured by the benchmark index at 67 hundredths of a percent. it was 92 hundredths of a percent in march. that is your latin america report for this friday. friday's big number, $3 billion, how much we will spend on flowers this mother's day. alix steel has been digging into the business of flowers. >> did you not by your mother flowers? >> and taking her to dinner. >> and buying her flowers? >> sometimes i think dinner is enough, but you are right. >> there you go. your mom can thank me later.

it's a huge day for florists, one of the biggest. expecting sales to rise six percent this year versus last year. consumers are recovering from the recession, making it easier for us to spend on discretionary items. demand is seasonal, so these are huge moneymaker days. retailers get about nine percent of sales on mother's day weekend. they bid out valentine's day. here is what jim mccann had to say today on "market makers." >> it's a much bigger holiday for us in the flower business. people think valentine's day is the largest. there are a lot more moms and sweethearts. logistics are easier. there is plenty of demand but plenty of product. >> you are laughing. you agree. one 800 flowers is looking to sell one million flowers and over 1500 plants. who knew? >> where did the flowers come

from? >> they come from colombia, a huge amount. half of our flowers into the u.s. come from there. if you look at u.s. flower imports in the first quarter of the year, we basically exported over $300 million to feed our flower craving. u.s. and colombia engaged in a free-trade agreement to get some of their commodities without taxes. do grow some flowers here, like in california and oregon and hawaii. they cannot compete with those cheap flowers coming in from overseas. >> what is the industry impact? >> it is twofold. first you look at the actual flower producers. they have really been struggling. it is basically putting these guys out of business.

the retailers are loving it because they get to buy cheaper flowers from other places. they get to maximize the cost that way. aower retailers do have quite bit of challenges. it is an enormously saturated market, and you have big guys like walmart getting in, and they can push the retail prices lower. >> alix steel with the mother's day outlook. flowers for mom. >> you are doing it. >> lots of flowers for mom. , your guide to the biggest newsmakers of the week when "bottom line" continues. ♪

>> we bring you encore, a look back at the most notable newsmakers from this past week on "bottom line." >> they need to nominate their best possible candidates and make no rhetorical mistakes, have all their ducks in a row, and get a wave behind their backs. they're ahead.

there really is very little room for error. that's why there is nervousness going into this primary. >> there's a lot of goodwill out there, but there isn't that coordination aspect. jpmorgan being the largest corporate institution to sign million, pledge, $20 it's a drop in the bucket when you look at the overall issues that servicemembers and their families are facing when they come back. >> the cinematic treatment of superheroes lends itself to crossing all borders. when you look at these films on the big screen, they are bigger than life. these characters translate into all languages. this is music to the ears of hollywood, who does not just see this as a north american business, but a global business. our numbers definitely reflect that in a major way. >> 178 homes are viewed every second on zillow on mobile now. when we went public three years

ago, that was 21 houses a second. the ultimates mobile experience. when you are driving around, looking for homes in a neighborhood, that's when you want to have the power of zillow in your hand. audience.pelling our advertisers follow audience and that's why revenue and profits have followed. >> the first pick in a draft is getting x. it works on down to the last pick in the seventh round. linda is the agent for the quarterback of the baltimore ravens. let's get you the bottom line of what is happening next week. yang, what themes can we look forward to? , the open internet debate front and center. on the earnings front, things

are slowing down, but there are still some big names we are waiting to hear from. on monday, in-flight internet provider gogo will report first-quarter earnings. the stock has had a few rough weeks after at&t announced its plans to offer competing aircraft wi-fi services. investors will be looking for reassurances on how gogo plans to address that new threat. and macy's., wal-mart and nordstrom among those reporting on thursday. we will get new data on u.s. inail sales, likely higher april, according to bloomberg's survey of economists. similar gains expected in u.s. housing starts. the april budget statement will likely show a surplus, thanks to all those tax returns. national as part of small business week, federal reserve chair will speak to the u.s. chamber of commerce and

u.s. small business administration. a lot of recent public speaking for the fed chair. less so for federal communications chairman tom wheeler. we will hear from him on thursday. he will be more vocal when fcc commissioners plan to vote on whether to move forward with the chairman net neutrality open internet rules. his proposal would allow broadband copies to charge content providers for access to internet fast lanes, more than 100 tech companies including google, amazon, and facebook sent a letter to the fcc chairman opposing the proposed rules. we will be all over that one. nuclear talks in vienna. the possibility of more russian sanctions from the eu, and the global bitcoin summit in beijing. back to you. >> thank you. another check of the market movers is on the other side of this break.

♪

>> is sure to tune into bloomberg tonight at 9:30 p.m. new york time. we take a look at the next space race with an in-depth journey through the business of space exploration rate -- exploration. that does it for this edition of "bottom line." i'm mark crumpton.

thanks so much for joining us right -- us. on the markets is next. have a great weekend, and happy mother's day. >> lumbered television is on the markets. i matt miller. we will get you caught up. fairly volatile day, with markets changing direction multiple times per hour. not a huge swing. still seeing very little movement on all of the major indexes, with the s&p in the red and nasdaq in the green and dow jones unchanged. after a two-year party in the stock market which returned 53% , this yearup etf's is feeling a little bit of a hangover. this is the type of year the most boring etf's can really shine. with a guru joins us

hangover cures that investors are reaching for. us through why this would be a good year for etf's. >> every year is pretty much a good year, because you can use them for all sorts of things. what we have noticed is every third year in the past 10 years is one of these hangover years. like 2011.ooks a lot preceding that year, markets were up 45%. etf's the did the best are the ones that are doing the best this year. probably the most boring etf out there. in these kinds of years, people love it. >> i'm not sure if it's the most boring etf. >> long dated treasuries is very plain vanilla etf. it is underrated. this is a pure natural diversifier. this year it is up 11%. in 2011, it went up 33%.

these things really do shine. investors are very concerned about this year. >> boring is beautiful is your theme for today. 500, lowes, s&p volatility etf. that is pretty boring. it is definitely one of the ones for the faint of heart. it takes a 100 least volatile stocks in the s&p 500 and waits them inversely to the volatility. walmart, mcdonald's. in a year like this, it is up five percent. this is the kind of etf that will have limited upside. last year in the bull market it was only up 20%. for some investors, giving up that is worth the volatility in a market like this. people who have not invested in the etf's may be

wondering, we will talk about the spider select. people think of dividends when they think of utilities. do they get a dividend play with this? >> it is yielding 3.5%. it is the sector that is taken in the most money on a percentage basis. utilities did great in 2011. this was up 20%. back to 2011. these kinds of years where there is uncertainty, people want to get yield. >> thanks so much for joining us, eric balchunas, our resident etf expert. we will talk to him in an hour about bitcoin and a new etf for virtual currency. ♪

>> another sloppy day on wall street. to push stocking to a fresh record close. this is "street smart." welcome everyone to be most important hour of the session. are listedoday, under view with ja