>> from bloomberg world headquarters in new york, i'm mark crumpton. this is "bottom line." general motors fires 15 employees following is the call investigation. g7 leaders meet with russian president putin in paris. and how harry potter is helping florida's labor market. >> to our viewers in the u.s. and those of you around the world, welcome. we have full coverage of the stocks and stories making headlines today. the economic magic of harry

potter. in normandy ass the specter of ukraine hangs over the g7 meetings and the d-day anniversary. we begin with matt miller and mary barra planning internal incompetence and negligence for the delayed recall. addressingra today gm's 200,000 employees in a town hall style meeting, public rebroadcast as well, saying she and her team had read the 300-page report from an independent investigator hired by the company, the same one that help to deal with the bankruptcy of lehman brothers. as a result, she and her executive team have either fired or forced into retirement 15 workers either directly or indirectly responsible for the ignition switch failure and really the failure to report it to hire up executives of the company.

five employees are still with the company that have received some sort of disciplinary action. she was not very specific, did not give us names, but we know that at least one senior lawyer for general motors has been let go, as well as a couple of engineers who were unpaid leave. the interesting thing from this morning's meeting was that mary barra's message to her employees was that this is now a company where we want to know of any problems immediately and those problems should be elevated to the very top. she asked employees, if they saw anything that was not working correctly, they should report it to their supervisors, and if it was not fixed at that level, that they should come directly to her. listen to mary barra this morning. of a you are aware potential problem affecting safety or quality and do not speak up, you are part of the problem, and that is not acceptable. if you see a problem that you don't think is being handled

properly, elevate it to your supervisor. if you still don't believe it's being handled properly, contact me directly. i want an environment at gm where the customer is at the center of every action and decision we make. after all, we exist to serve their needs, not ours. switch issue has been linked to at least 13 deaths. mary barra has said time and aain she feels almost personal responsibility for that and because it cost the company a lot of money already and general motors said recall costs will rise in the second half as these continue. they have already recalled 14 mean -- million vehicle so far. >> what does the report conclude about what she said in the past, that she was previously unaware of the faulty switch? >> it appears to clear not only

mary barra but other key members of the team, executives on the legal side, which was interesting. people were watching closely to see if the leader of the legal team would be involved in the cover-up. i hesitate to use that word because it sounds like a problematic term, a loaded term, that general motors has avoided, but we will hear it surely in the coming weeks as more and more people go over the report. >> thank you. q members of congress say the board does not answer all of their questions about gm's handling of the ignition issue and is calling on mary barra to testify again and provide more answers. peter cook is on capitol hill. it does not sound that congress is very satisfied. right now, most members have been active on the investigation. they say they want to reread the poor in full before rendering any judgment as to whether it

provides any conclusive evidence as to what took place at general motors. lawmakers,ertainly led by richard blumenthal of connecticut, who are still critical of gm, critical of the report as well. he calls it underwhelming and described it as the best report money could buy. he went on to say in a statement excepting -- he is calling for a vigorous investigation here by the justice department, but the senate majority leader, harry reid, a more measured tone. he was asked about it today. >> they were fired. you want me to put them in jail? let's have some hearings and then determine if anything illegal was done. those 15referring to people fired as a result of the investigation. meanwhile, in the house of representatives, the republican

leading the investigation, fred upton, said he had unanswered questions after learning of the report today. he said in his own statement it will take time to scrutinize the report. arethe initial findings deeply disturbing, suggesting communications and management failures ran deep and wide. he calls the failure to report the safety flaw on acceptable and is calling on -- on acceptable and is calling on mary barra to speak again. -- expect mary barra will make a return to the senate side as well. she ismccaskill says planning her own gm hearing sometime in the summer. >> peter cook from capitol hill, thank you. rusheragreed to spare from new sanctions during did summit in brussels. now the leaders of the world's seven most advanced economies are in france for the d-day commemoration. ryan chilcote is with me from normandy.

is part's observance memorial, part politics. what can we expect? >> that's exactly right. we are miles away from places like omaha beach where the u.s. military did its part in the invasion of normandy, the largest invasion the world had seen at the time. of course, all the leaders are coming for that event. president obama will be here, the british prime minister, german chancellor, russian president, and president-elect of ukraine, just to name a few who will be here to commemorate d-day which begins tomorrow. all of these leaders have been meeting in various configurations already. we have had the second day and this morning in brussels. now we have a flurry of diplomatic activity in paris itself. as you put it, becoming a flurry of diplomatic activity to try to find a way out of the crisis in ukraine. the g7 punished vladimir

putin but excluding him from the brussels summit and they moved it. it was a boast be in sochi. now some of those leaders will be meeting with president clinton while he is in france. who is the president going to be speaking to? that's correct. it all starts with the u.s. secretary of state meeting with russian foreign minister. and the russian president will sit down with the british prime minister. then the russian president separately wasn't done with the president of france. the g7 early in the day said president putin must change course on ukraine and work with the new ukrainian president-elect. president obama said president two to four weeks before the u.s. poses additional cost on russia. one big meeting that has yet to happen this week is president obama sitting down with president aland. one thing that is clear, there is something short of complete

unity between the united states and france, not just when it comes to the issue of russia but on a whole host of issues. >> there has been tension between the u.s. and france as you mentioned, first over the sale of warships to russia, and now the bnp paribas case. how does this set the tone for president obama's meeting with president hollande? a very tense tone. the french are very upset, live video might say, about the prospect of a $10 billion fine being posed by u.s. prosecutors on france's largest bank bnp paribas. they say it is disproportionate, it's unfair. president hollande has promised when he meets with president obama this evening to bring up the issue. president obama earlier in the day said it's not his role to get in the way of the investigation. meanwhile, president obama expressed his disappointment

that the french decided to go ahead with the sale of warships he put it, just as the international community is trying to isolate russia. two meetings that we are not sure will happen but would obviously be important if there was any sort of de-escalation in ukraine, that is president obama and president putin. they will be at a lunch together here in normandy. both sides have said they would talk but no formal meetings organized. of course, the russians want shouldlation in ukraine, sit down with the president-elect of ukraine. there's a possible meeting scheduled for that as well in normandy tomorrow. >> ryan chilcote reporting from normandy, thank you. up next, harry potter is known for his bravery but apparently he can also help to rescue an economy. we are in orlando. after the financial crisis, florida needed an economic

boost, and it seems to have founded in harry potter. i will have the details when returns.ine" ♪

>> florida's employment picture has improved faster than any other state insipid crisis. some floridians say that is because harry potter has been working his wizardry in his state. yang yang reports from orlando. >> well done, harry. >> harry potter save the world and some say he may have saved florida from the worst effects of the financial crisis. when u.s. tourism slumped in 2010 along with the rest of the economy, universal orlando resort placed an estimated 255 million dollars bet on the world of harry potter. since then, visits have reached record levels and more tourists mean more jobs. >> the recovery was stronger

because not only did harry potter exhibit the need for employees but also new hires that were at surrounding resorts and hotels. >> among the hardest hit by the foreclosure crisis, florida's unemployment rate peaked at 11.4% in 2010. now is dropped below the national average. today the state leads the country in job growth the on low-wage amusement park jobs. >> by getting those jobs to the market, we are increasing the demand for housing and for other services and trades. of the the expansion park slated to open in a few weeks, fans of the franchise have new reason to travel to orlando by plane, or by broom. theysk local officials and will tell you harry is not the only one waving a wand for the economy. there was already a magic

kingdom in orlando. we reported 59 million visitors last year, more than any other destination in the u.s. you do not accomplish that on the backs of any one reason. you have to take everything combined. >> not to be outdone, disney world unveiled parts of its new fantasyland in its park. also, seaworld, legoland, and the orlando eye all recently broke ground. but whether you are a fan of harry potter or mickey mouse, the real winner in the story is the florida economy. yang yang is with us from orlando. what does disney world think about this? they are still number one by a long shot, right? >> that's right. i spoke to people at disney and they remind me that they claim that nine out of the top 10 spots for the world's most visited amusement parks, so they do not want their investments and expansion and their jobs to

go overlooked. they tell me that they have a lot going on, have expanded themselves, the fantasyland, and new cruise ships, but certainly, thee the financial crisis, biggest park we have seen, the biggest star power in orlando has been harry potter. that is why we are here telling the story, but disney, in a few years, is opening an avatar -themed park in its animal kingdom park, so we could be telling a different story then. >> thank you. coming up, it is getting tougher for bond dealers to make money. we will look at how the ecb's historic rate cut affects bond sale profits. that story when "bottom line" continues in just a moment. ♪

>> the associated press is reporting president obama's choice to be a top health official at the veterans affairs department has withdrawn his nomination. jeffrey murawski says he fears trying to win a senate confirmation could start a prolonged battle. the white house said they accepted the withdrawal and will move quickly to find a replacement. sylvia mathews burwell has been confirmed to be the next secretary of the department of health and human services. the full senate vote came in at 78-17. she replaces kathleen sebelius who resigned in april after the botched healthcare.gov rollout. it's getting less profitable to underwrite bonds these days. we have been tracking this trend. lisa, good to see you. why hasn't been so tough? >> there isn't a lot of money to go around as far as profits for these dealers.

comingld on bonds are down, volatility, you are not seeing the trading volumes or revenues coming in. banks are turning to underwriting, which is the one bright spot. the low rate and policies of central banks oblique have spurred companies all over the world to sell record volumes of debt. are nots, at the least, profiting from the trading, but they can profit from the managing of these sales, helping these companies to shepherd trillions of dollars into the market every year. >> will be see that pick up after the ecb's actions today? >> it will lower rates, but how much can you borrow? at a certain point, unless they do more mergers or acquisitions, frankly, less friendly actions for debtholders, more friendly for shareholders, unless they start engaging in a kind of behavior, why would they even sell debt? >> who are the up-and-coming dealers, who's making an impact?

>> as the profits go down all around, banks are getting more and more interested in underwriting, and it is not just the biggest banks. you have regional dealers like u.s. bancorp, steve nicholas, coming into the capital markets as well. they are all trying to get a piece of the profits managing these deals and see an opportunity right now. >> why now? what is the climate? with frankk fiorentino about small banks in a bit, but talk about small banks and why they had more of an opportunity, it seems, in the past two years that historically? >> revenues have been done with trading, because of new regulations, a lot of the biggest wall street banks have been cutting back their fixed income staff. in out of money they commit to the fixed income businesses, they have been losing shares as

a result. a lot of smaller banks, those that have not traditionally been in the space, see an opportunity. now is our chance. they are not able to engage in the business that they always have, so we will come in and maybe grab share. especially some of the smaller firms can commit more balance sheet to these businesses than they have traditionally. they do not fall under the same regulations. >> what will look like, going forward, for some of wall street's biggest banks, less profit and more work? it sound like a beautiful idea. >> it all depends on the central banks. if they continue what they are doing, and ecb today came out and said we are making it expensive, cost you money to keep money in the bank where this is unprecedented. they went negative. they are saying, look, go to risk, go lend to those companies. it remains this way, volatility will stay fairly low, you would think.

yields will stay low, and it will be a painful environment from a trading perspective. on the banking side, companies will continue to borrow. it's a great time to borrow for them. >> what about the banks that are sent on their bond business, going forward? what does the ecb's action mean for them today? >> you have deutsche bank doubling down on its fixed income into it, raised a lot of -- unit, raise a lot of capital. nomura has been bolstering it u.s. capitol market debt unit. they are wagering on an increase in volatility. so there's a question of whether the ecb action actually makes them wait longer for the profitability to come back in a major way. on the flip side, you have the banking, you have more people borrowing. that is why people have been emphasizing the underwriting. the fees from their have to support the lack of these, the waning these on the trading sales side. >> to be continued.

lisa abramowitz, you can see her reporting on bloomberg.com. thank you. she was talking about banking, in a few minutes, frank sorrentino, the president of connect one bank about m&a activity in the community bank space. boomer television is on the markets. jonathan has the details. >> let's get you caught up on the action. gains across the board. the s&p 500 is at a record high. a comprehensive package from the ecb. rate cuts. more cheap funding for banks. an asset purchase program is being prepared. it it all priced in, was really, or does this accelerate the flow into the eurozone and to support the euro? in the u.s., the sec is planning to increase oversight on high-frequency trading.

i will be back on the markets in 30 minutes. it's been a busy one for the markets in the u.s. and europe. ♪

>> welcome back. i'm mark crumpton. let's check some of the top stories we are following at this hour. a man's expected of killing three royal canadian mounted police officers was spotted multiple times today but so far has eluded capture. a massive manhunt is underway in the normally tranquil east coast city. investigators have not determined a motive for the shooting. the three officers were killed and two officers wounded. the nation's job situation continues to improve. a government report showed new and implement claims of fellow

was level in seven years. the average for claims fell to 310,000 last week. we get the may jobs report tomorrow morning, live coverage at 8:30 a.m. game one of took the stanley cup finals last night defeating the new york rangers 3-2 in overtime. game two of the best-of-seven series is set for friday in los angeles. for the first time since 1998, the nba finals features a rematch with defending champs miami visiting san antonio in the series opener. game one is tonight in san antonio. the heat try to become the first team since the lakers in 2003 to win three straight titles. that's a look at our top stories in the news. we focus to community banking. fitch ratings says it expects u.s. banks with assets of less than $10 million to step up m&a activity this year as they face weak growth and rising regulatory cost. frank sorrentino is chairman and

ceo of connect one bank, formally north jersey community bank. he joins me with his perspective. great to see you. our community bankers actively looking to make deals right now? talk about the environment for this. >> i think you know, connect one bank is in the midst of a merger. we are about to merge with union center back him and making us a $3 billion institution in the northern new jersey market. activity goingis on, and emphasis towards m&a activity but i would not characterize it as a wave of new m&a activity. if we look at markets, community banks over the last 20 years, it's been about 250 banks that have been merged or acquired in that period per year. that has not changed. what has changed, there are no applications. while banks are being merged or acquired, no new banks being formed. >> what about the competitive pressure that small banks are

under right now to make deals? is it about increasing stock price or building up capital? >> a lot of things. regulatory pressure on banks today. they had to spend more money as it relates to compliance functions. to do that over a larger asset base is certainly much more economical. the entire model of banking is changing today. you do not need a huge branch infrastructure to run an institution today. there is generating a return on capital which has been week over the past number of years to the financial crisis. for all of these reasons, banks are looking to get together and reduce their efficiency ratio and give back more capital to their shareholders. >> speaking about the regulatory environment, how is it impacting the ability of small things to survive? >> it is the smallest of the thes that are involved in m&a activity. clearly, that the large and of the stick you are not seeing the largest institutions urging or doing acquisitions.

it is in the middle and small space. so banks that have been involved in m&a activity are some of the smaller community banks in the country. the entire lot of banks is shrinking. competition among small banks that we spoke about a moment ago, how is that affecting loan growth, what do you hear around the nation? >> this is another reason why m&a activity is occurring. the economy is growing at only two percent a year. there are banks that are chasing after loans trying to grow their anditutions 10, 15% a year, the only way they can do that is through market share gain. that's another reason why m&a activity is coming. if you cannot grow organically, you will grow by acquiring another institution. theirmunity banks make mark by becoming the fabric of the community, you have that personal relationship between the bank and the customer. but the customers say they do not like -- get that kind of

attention from the larger institutions. now you have mobile banking and online banking. how is that impacting your bottom line? >> technology has clearly changed the playing field to the better for community bankers. >> do you recognize the playing field anymore? >> it is very different even from five or 10 years ago. when we opened up in 2005, 1 of the big decisions we had to make was whether we would offer online banking. it has clearly changed the playing field. i think it allows for these mergers and acquisitions to take place where we can still have a decent sized bank in a community and still have it be a community bank. and your you colleagues adapt to the changing technology and environment? it seems like now it is always moving. connect one has always been invested in technology. those that are investing in technology and continue to will be able to play on that playing

field. those that have chosen not to or are choosing to wait, i think, are making a mistake. you talked about the merger that you are involved in. was that basically what you are telling us, that you saw an opportunity? >> all of those reasons that we talked about including geographic expansion, large capital base, ability to serve clients better, all of that played into why we decided to merge our institution and now become a $3 billion is to show that will have greater kit alluded to service the client we have in our market area. >> frank sorrentino, chairman and ceo of connectone, thank you. up next, the world cup and market trading. which market will slow the most when the world cup kicks off next week. continues in a moment. ♪

on charlie rose, the

anniversary of the tiananmen square uprising. coverage includes a roundtable discussion including one of the student leaders in the square weiner,ojournalist jeff who took the picture of the lone man facing down a column of tanks. the iconic photograph that came to symbolize the tiananmen square uprising. it's time for today's latin american report. it happened during march madness and now we can expect it over the world cup. we are talking about a drop in workplace productivity. a european central bank study showed trading drops in markets with dissipating national teams. .e are following the story surprise surprise. how big of an impact is this on trading? followed study which 15 countries, on average, trading volumes fell 40%. europeans are the least of the 30% ins, falling about spain, they were the winners in

2010. germany, 60%. .atin americans are the worst in brazil, it falls 70%. that are looking at graphic on the screen. 80% in argentina? >> i can vouch for that. i lived there during the last world cup and people would bring televisions into the office and just not work for two hours throughout the day. >> i guess you could say you showed up. which stock markets were affected the most? >> chile. almost 100%mes fell when the national team plays. when it is another team, it is still down 80%. they are not even a favorite. they have a 1-50 chance in winning. >> what's their obsession, why are they so religiously tied to these games if they have a snowballs chance? >> it's important to stress,

chileans are hard workers. they work 15% more on average than oecd countries. it is really a form of escapism. 20 years under a dictatorship under pinochet which they were not allowed to stay out after a certain time, could not assemble , people were tortured and disappeared for having views against the government. even now they are trying to regain their freedom and soccer is a release for them. >> we are only talking about four weeks every four years, so it's not like they do this every time. >> exactly. >> do the market then get a world cup boost? >> goldman sachs found on average, the winning team outperforms by about four percent for about one month, fleeting, and an overall for the year, they underperformed by four percent. >> have not talked to any coworkers here because when the world cup is on, i do not want to say that we stop work, but we watch the games as well.

has it become a u.s. obsession yet? sometimes you feel like you want to be a part of the world and engage. why is everyone engaged in this? is it like march madness? >> in the u.s., trading volumes fell 43% in 2010. i am hoping, i think soccer is a great sport. we should get more patriotic about it. >> absolutely. thank you so much. we appreciate it. that is today's latin american report. coming up, more on the g-7 summit. world leaders working on vladimir putin to get him to cut the support of pro-moscow rebels in ukraine. ♪

>> be sure to check out the latest edition of "bloomberg businessweek" which hits the newsstands and tablets today.

to g-7 nations are planning impose stiffer penalties a russian president vladimir putin does not switch course on ukraine. former first deputy managing director of the international a visitingnd, now scholar at the john hopkins cool of international studies is with me now from washington. mr. lipsky, thanks for joining us. >> happy to be here. they are7 leaders say in agreement that pressure must be caps on russia but so far they have stopped short of imposing broader curbs on russian investment and trade. are they concerned about a possible boomerang effect, could tougher measures actually backfire? >> i would imagine the issue of consequence is trying to modulate, get agreement first of all on specific measures, and secondly, to modulate that against xavier -- behavior of , a very complex situation.

first and foremost, the situation in ukraine itself needs to be stabilized. >> since march, russian policymakers have raised interest rates twice even as the country's economy nears the session. cap flight affected russia's ability to stabilize its economy? certainly, a combination of sanctions, plus uncertainty about the outlook itself, is undermining russia's economic situation. so far, however, the important energyor them is that supplies keep flowing out and the prices stayed table and high. altered, it to be would have quite dramatic effects on the russian economy. >> president obama told reporters today that ukraine and energy "dominated our discussion over the last two days." what do the u.s. and its allies need to do in order to ensure russia cannot use its oil and gas reserves as an economic weapon, particularly in light of

the fact that the european union relies on russia for 30% of its natural gas? >> this is a big of a complex and two sided issue we read first and foremost, -- issue. first and foremost, the russians need to maintain their markets. just as much as their clients in the short run need to purchase from them. the discussion about energy security and reliance on russia is rather more a medium-term issue, one that the g-7 economies, governments, and others need to look for alternative means of supply. those exist, and in the medium-term, they should be successful in changing the mix of sourcing for energy. john lipsky, an former managing director of the imf. russia has set a deadline for

june 10 for ukraine to start paying for gas in advance. what happens if ukraine misses the deadline? >> then there will be more negotiations. as has been an ongoing theme back and forth between russia, ,kraine, and ukraine supporters about what the price will be, how much will be supplied, how it will be before come etc. as i said, a very complex game with many facets. it is not subject to some very quick on the easy solution. >> many facets and implications. what might you do to world old markets -- oil markets, do you think? >> it's not likely to have any impact, unless there was a decision on either side, russian or its customers, to create some kind of significant disruption. but it does not seem like it is in anyone's interest for that to occur.

hence, this complex discussion and negotiation around the situation in ukraine. >> following the summit, the japanese prime minister shinzo abe told reporters "we would like russia to be engaged constructively in various international issues as a responsible nation." then doesd, what russia need from the international community? >> russia needs international markets and they would very much like to develop their economy and diversify their economy away from its current, dramatic dependence on energy and commodity exports. they need the rest of the world very much to achieve their ends. the goal here is not too hard and lines, but to try to seek accommodation that works for everybody the red it should be possible but these things are very uncertain. >> about 30 seconds, russian president putin will be in

attendance of the d-day commemoration's in normandy. in a tv interview in france he said i do not plan to avoid anyone. there will be other guest, i will talk with all of them. at this point, what could he possibly say? >> well, what are we going to do about ukraine? there is one thing that this whole g-7 meeting has shown, that it's impossible for the g-7 alone to meaningfully address issues of the global economy without a broader involvement of other economies, china and others, and hence, why the importance of the g-20 in the future. directoripsky, former of the imf, now visiting scholar at john hopkins. always a privilege to have you on, thanks for your time. >> happy to be here. coverage from normandy tomorrow, d-day commemorations from normandy, france on "bottom line" and also all day on

bloomberg television. ♪

>> get the latest headlines at a top of the hour on bloomberg radio and streaming on your tablet and bloomberg.com. that does it for this edition of "bottom line." i'm mark crumpton. markets" is next. see you tomorrow. is 56 minutes past the hour.

you know the drill. bloomberg tv is on the markets. are approaching the close. up across the board, one percent on the nasdaq. ecb induced rally. not just in the u.s., but europe as well. s&p 500 at a record high. cheap funding from the ecb, and negative deposit rate, preparing to have an asset purchase program. enough to drive stocks higher, they are the winners, not the euro. that has come up again. they cannot get the euro-dollar down. let's take a look at natural gas, move hiring -- moving higher. nymex contracts pretty flat right now. natural gas, a quick look. moving higher on the day, up over one percent right now. let's keep it on commodities. president obama called natural gas a bridge to a cleaner energy future. a key component of his plan to battle global warming. joining me on the sector report

for a look at utility sectors is isaac. natural gas was meant to solve all our problems. it is that simple, is it? ofno, it's a big component the plan to reduce greenhouse gas emissions from power plants, and it's true that compared with coal, when burned to make electricity, natural gas uses less are the backside. the problem is, natural gas itself is a greenhouse gas that is much more powerful than carbon dioxide, and that leaks on the way to the power plant thomas o there's concern among scientists that if those leaks are not taken under control, using more natural gas might not actually help as much as the epa things it will. >> the obvious question on the back of that, can they fix the leaks? >> a lot of studies have suggested they can do it pretty cheaply. of course, the question, why haven't they already? there isn't any regulation to make the industry do it on a federal level yet, something the epa is looking at, so those

rules could be forthcoming. >> what does the proposal mean for the industry? i was looking at an exchange traded fund that trades are in the u.s., should it be lower? >> the expectation that natural gas will be replacing coal in the utility market, in a lot of ways, is already afoot. aside, gas is cheaper. utilities have been shutting down coal plants and replacing them with gas. epa respond to the criticism and are there any regulators that can address the problem? -- theypa acknowledges use an estimate for what they think the natural gas leaks are. they acknowledge the data out there for the scientist who go out and measure saying they could be underestimating that, and that is one of the things they are evaluating, can those data points become representative estimates for the entire country? more on the down estimates. pretty optimistic. should they be revised? >> in terms of the measurements,

the scientists who are out there measuring emissions and collecting data tend to say that the epa is us or -- underestimating the leaks by 50%, sometimes as much as three times. >> i will keep an eye on that as well. natural gas, we have a load of it here. i wish we had a bit more in the u.k., then we would have cheaper energy bills. it is a busy market tomorrow as well. "street smart" is next. ♪ . .

>> hello, everyone. u.s. stocks rising. i am trish regan. "street smart" starts now. welcome, everyone, to the most important hour of the session. gm'sg up -- mary barra, ceo gives her report card. plus, steny hoyer. i will get his thoughts on