ball game or kids soccer, it is under armour and i think that will continue to evolve. >> thank you, sam poser >> live from bloomberg headquarters in new york, this is "market makers," with erik schatzker and stephanie ruhle. clicks of court player. this is the largest public utility at a big burner of fossil fuels, we will ask the ceo what he thinks of the president's plan to crack down on coal. a new ceo, the incoming and outgoing chief tells us what is next. war and remembrance, leaders gather in normandie to remember turning point.

good morning. schatzker, stephanie ruhle is on assignment. she will be back on monday. we will begin with the newsfeed, the top business stories from around the world. has few if any surprises. the u.s. economy added 270,000 erasemore than enough to the desecrated by the financial crisis. thanca now has more jobs pre-recession. and limit remained steady at 6.3%. talksf america it is in with the government over mortgage backed securities. that will be used for relief to homers -- relief for homeowners. benjamin lost he wants heads to roll. an insider says he is pushing to

have the bank's chief operating officer and others dismissed. this has to do with companies dealing with countries who are sanctioned. authorities are looking for a $10 billion fine. to bring sunshine to the shady world of high frequency trading. proprietary traders who use computers would have to register, and operators would have to open there black boxes to regulators. now, terry geithner. curious to see what the responses been. >> mary jo got lucky on this. the response has been pretty warm up. the proposal she set out seemed to be pretty market friendly, especially for this world. >> she is not trying to get rid of them.

>> she pointed out a lot of things, including prices coming down and better liquidity. they can provide some benefit to the market. unlike when schneiderman opened he is the topion, cop -- >> and there is pressure on the fcc to act. and now we have them coming out with some very broad suggestions on how they can rein in this market. the big theme yesterday was transparency. how to bring more transparency to a very shady markets. >> is it possible to please everybody? it seems like the opinions around high-frequency trading are so polarized, it is either great because it reduces training costs about word is terrible because it disadvantages certain investors

and makes it impossible to know what is really going on in the markets. >> i think there is a way to do it. it will be hard to make everyone happy, but these are incremental steps. she didn't come out of the gates suggesting wide sweeping changes. she didn't want to shut down dark pools or anything like that. these are small steps that i think will make the regulators happy, the markets seem pretty comfortable with them. whatare in line with government bodies have criticized as what is wrong with the market, and how we can fix it. >> the fcc faces a further government hearings over this issue. >> they are responding to questions over this, they have a pretty short deadline. they really do have to figure out how they are to deliver, and how it is going to bring what the market can stand and stomach. and what is expected as a regulator. >> i think it is worth pointing out that to the degree that problems exist, their problems

s ownare of the sec -- fcc' making. this sort of created a new market landscape that hypergrowth the traders and dark pool operators are taking advantage of. >> this is a market that has been allowed to thrive under the rules and regulations that they have previously set forth. morebly one of the interesting parts that is going to happen is, will they start backtracking and figuring out what parts of those rules may be led to some of the problems in this market. how much will they be admitting or denying that. >> gary, thank you very much. , thank you very much. markets, onal to these issues are we looking at the big picture? can markets be fair when the biggest actors are the central bank?

, ak rieder is one investor chief investor at blackrock where he sees $700 billion of assets. also with us, jonathan ferro. gettleman, good to have you. i think the obvious place to begin is what we heard yesterday at the ecb. much of what they announced was priced into the market, but banks are distorting the way finance operates. today thandistorted it was two days ago. >> i think the expectations were -- it had been leaked in the press for a week prior about where the ecb was going. infulfilled all the dreams terms of people who are looking for an aggressive policy that would allow for cheaper funding

in the markets, as well as in the banking system. there was some relief over the last couple of days about -- i'm sure there was pressure on both sides about how aggressive could you be. go,ent as far as he could quantitative easing being the next step. he achieved the near term objectives. >> i would have to say that yellen, they are the only folks active when it comes to central banking. >> the mexican central bank cut the pesos basis points. it is a surprise, it wasn't expected. you have a lot of essential banks there in an easing sisal. -- cycle. they almost cannot fight them. you cannot fight the fed, even if you are the ecb. now, is fors right

the fed to hide. turning this massive tide, look at what happened to the euro-dollar. it has done nothing. in ecbe a seismic shift policy, the euro did nothing? what is going on? >> if there is anyone who thinks that the world -- the fed will have to raise rates, it's you. >> they are running at a three-month average of payroll, you have a window with a fed can start to move and start to snub the tire. it's not a natural state of the financial system. i understand we are in unusual times going back a few years ago, these are not unusual times when you're running these numbers when you have non-weather-related gdp. can you start moving the front end of the curve up to a one percent rate? >> what about those people who would point to this unemployment

six and a in the 6.3, half percent -- 6.5% area? out, you canject have a fine handle to this by the end of the year. certainly bigger the beginning of next year. incredible bifurcation in the system, long-term unemployed versus short-term unemployed. underok at over 55 versus 25, these are structural impediments that a blunt instrument of zero percent funding doesn't get. >> structural impediments, europe would love to have. >> they would love to have them. everything the month i'm looking at this from london, looking a participation, wages, to get the headline numbers. janet yellen talks about this cyclical system, the federal reserve can do something about it. the fed is not changing tax, in

fact they seem to be on autopilot. what is changing? what janet yellen says is one thing, but when she does something else. >> the concept of it being cyclical -- there is no doubt if you increase aggregate demand, you create an improvement in unemployment. how much are you actually increasing aggregate demand from what are excessively low rates, versus just extremely low rates. i think base case is you have a federal reserve that would continue to stay through this next meeting. i think they could move faster on this. as long as this unemployment number process, they could move the fans -- move the funds up. i think he will talk about lower long-term funds rate. that's a big deal, to make sure the curve doesn't shift. the back of the curve holds them, that has a huge of packed -- impact on the housing market. when you look at the dynamics between europe and the u.s., the u.s. is a runway to start to move.

especially in a world where everybody is in an easing policy around the world. there was a better arena to modernizingh -- rate. >> let's talk about the german bank. the bank has bowed to pressure, they have allowed this to happen, some big shifts in policy. a plan announced, it was to prepare some sort of asset purchase program. will the bank allow this to be executed, or will it just remain a plan? >> i don't think anyone really knows the answer to that. what he is executing on is -- you have two sides of the equation that want more policy, germans and others who want -- who are pushing back on how much you need to do, as opposed to true fiscal reform. i think he went as far as probably you could go today, especially given the dynamics in

terms of a legal perspective. he certainly kept the door open to go into that next step. i think it will be hashed out over the next few months, alongside with the data shows. >> when you take a quick commercial break, rick, we would back with you in a couple of minutes. a plea fore, with normalization of monetary policy. jonathan ferro from london. it started as a part-time ,ackage letter, -- loader today, ups is taking over. normandy tois in remember d-day. you are watching market makers on bloomberg television, streaming on your smart phone, wilbur.com -- bloomberg.com.

>> you're watching market

makers, i'm erik schatzker. i'm here with rick rieder, from blackrock. he oversees some $700 billion in assets. rick, we were talking about market conditions, the impact in monetary policy. let's talk a bit about strategy. you made the point that the fed has to be concerned about keeping the long end of the yield curve a 30 year bond, more yes -- more or less where it is. they don't want the market to be to disrupting the house letting. -- housing. was that save you -- what does that say to you? and doesn't make sense today, but if you go out for the next 10 years, that growth is going to be -- a lower birth weight and we were 10 years ago. the long-term growth rate could be a three not for. if you can keep the backend of

the curve more stable, let -- if you it should look at the reason -- recent housing data, it's disappointing. you have to give the mortgage rate down, you have to keep housing moving because of the influence of over inflationary expectations. if you don't keep housing moving, you can't truly fix structural unemployment. >> what happened this year? we had a surprise rally in the bond market, the curve really hasn't reshaped itself. >> the curve flattened a lot. yield curve has done surprisingly well, frankly, i'm impressed. -- you look at where trade is relative to where compression of spread aspect is, relative to european professional -- peripherals. treasuries,10 year 10 year treasuries are not that bad today.

the u.s. treasury market has benefited from some of that risk, and the rest of the market is doing better. >> when does this trade start to pay off? we get rewarded for this point of view, for favoring the long end of the curve? the people who like shorter duration get punched. >> the backend has done well. you haven't backed up the belly is much as i think it will. i think over the next couple of months, the data continues to be solid. the impression that the fed can start normalizing the front end, and the anticipation of where they are going to be and 15 -- in 2015, 2016, you will get the belly pushed back further. on,he jobs report is spot as long as expectations augur for a sooner than expected rate hike. >> i think the data --

>> how soon? >> the consensus is the fed starts moving second or third quarter of 2015. i don't see why you couldn't start moving at the beginning of the year, within the first quarter of 2015. it is not a question of the whatmy, it's a question of is the transmission mechanism of excessively low in an environment where the economy is doing reasonably well. what is the impact you're having -- i would argue that is negligible to bring it up moderately. i don't believe you crush financial markets, don't believe it negatively affects the unemployment rate in terms of doing that. and you create other costs. you move markets to excessive levels, you make it more difficult for people to retire, which creates -- you don't get the same velocity in the

workforce to you have had. it also gives financing cost extremely low, without companies being a will to buy back stock. i have a strong view, as long as you keep that deck -- debt equity marginalized. >> all of your views are strong. with blackrock. when come back on market makers, a new ceo at the driver seat in ups. you'll hear from them next. ♪

>> there is a change of the guard in ups. replacingy will be the ceo.

both he and davis are with us in atlanta. carol massar has spent much time covering ups, she is here as well. why this change? to do withe anything the christmas shopping debacle that is still in many shoppers recent memories? >> thanks for the complement, not being too old. it has nothing to do with last christmas season. has been signing successions since the day i got the job. for have been planning david already, i have been a ceo for seven years. the company is planning for the future right now, we have a contested leadership team. we will be led by david going forward. it is a perfect time to hand it over. >> does it make sense to have david abney takeover as ceo? there has been a lot of names

talked about as your successor. who oversaw operations, you had problems in december. spending money to fix it doesn't make sense if david is the logical choice. >> clearly it make sense. blessed to have a talented leadership team, we have several candidates who are capable of being ceo. david's track record is exemplary. he did the u.s. package business, he lettered international package business, had successful years. he is been coo for the last eight years. he has been extreme was successful in all of those positions. he is the right person at the right time. uys ared, you g spending a lot of money. try to make sure what happened in december won't happen again. -- how farng and you

along are you in the process to make sure it doesn't happen again? planningrted our december 26, right after peak season. we put a team together, analyzed the actions that we needed to focus on -- which we have. we invested the capital and , wedings, in the vehicles feel very comfortable. and also come in systems, to get the information about our customer's packages. we feel comfortable that we will provide the great service that we do year-round to our customers. >> david, we have about 30 seconds. your view on drones, and whether there is a future with driverless cars for ups. >> i am not going to say that there isn't a future for any technology that may be rolling out over the next few years. i don't think drones is going to be something you will see in the next few months, or anything like that.

we are focused on technology, we lead the way. we are rolling out orion, which is our optimized -- >> gentlemen, we have to end there. david abney, thanks. ♪

>> live from bloomberg headquarters in new york, this is "market makers," with erik schatzker and stephanie ruhle. >> you are watching market makers here on bloomberg television. friday, i'm erik schatzker, stephanie ruhle will be back after the weekend. the u.s. labor market continued its recovery in may. new jobs andeated erasing the last losses before the recession. we need to talk about the role government plays in job creation, what it should be doing from here going forward. with us from atlanta, matt ferguson. he is the ceo of career builder. i'm delighted to welcome karen

mills, former dennis rader of -- administrator with the harvard business school. it is a question i must pose as somebody who has served in government. with the u.s. economy creating an average of two and 30,000 jobs, what is0 the role of government going forward? >> we saw a really solid jobs report, but the economy is stuck in second gear. it is the job of business and government together to get it moving so that we can get to the growth rates that we want. gotten toys, we have the end of this cyclical recovery, or made good progress on the cyclical side. you see people going back to work in main street businesses, that was a slow process. we are in a solid place.

the question is, how we get the structural recovery? how do we turn our economy so we are created jobs, getting a skilled workforce in the right place to match up with those jobs, and that the kind of gdp growth we want? there is a role for government and a role for business. we have a playbook for jobs. it is a question of investment, both from the government and from private sector. when we talk about government spending, we have to make sure we are talking about government investment spending. thatcularly in the things small businesses need like workforce training, like innovation and research and entrepreneurship development. and access to capital. >> matt, karen talks about the things that small business needs. the national independent survey says that small businesses having a hard time

finding people. job earnings are back to their long-term average, small businesses really weren't hiring so there weren't any openings to be filled. in your research matt, what do you find? do you see this struggle to find qualified people to build the jobs they want higher for? that see a lot of research says small businesses and midsize businesses are having a hard time finding skilled labor today. skilled labor is increasing in the united states, the supply is relatively flat. wages will start going up, you will see a lot more pressure there. a lot of businesses can hire amid wage or low-wage jobs until they hire the skilled workers. -- can't hire amid wage workers. >> matt is right. i travelinesses, when

around the country, i would say what is your busiest problem -- biggest problem? they would say i can't find skilled workforce. what do we do about it? this is where big business, small business, community college and the government really have a role to play. we're in the process of thinking about -- how do we get the information asymmetry out of this marketplace? how do you make sure that someone was getting a certificate actually get the job afterwards? that's a problem we should be able to solve. >> we should. my question to you is, what that problem solve itself? just are toight, we rise, people can see the prospect of earning more if they get certain qualifications, or it aompanies that need skilled labor force will start to subsidize them education -- over time, that is how the

market as opposed to work right? >> but why not accelerate the process? if we can come in an efficient way, why not promote technology? why not make sure that everyone sitting at the table ash if you --to a local economy, if you businesses not talking to community colleges. kids are coming out of high school, they don't know which way to turn. >> you can educate someone overnight. >> we do know some things that work. thatwe do to make sure government plays a role, that big business plays a role in its training program. take supply chains, for existence -- for instance. use to train people, they would go work in the supply chain. now big business goes in, steals the best people out of the supply chain. what is the small business going

to do? add, i thinki will she is right. we have to have a better partnership between the educational institutions, government, and business. i think we could accelerate things. one thing we can do quickly is bv visas. number of h1 there was a study that came out that in areas where foreign workers came in, american workers'wages rose around 20%. in areas where they saw foreign workers drop, which is actually declined -- wages actually declined for american-born workers. we have a way to do those long-term things you were talking about. there are some short-term things we could do that would immediately provide a supply of skilled labor that would allow for the creation of higher wage jobs. >> we all know immigration reform is not going to be easy amid increasing these visas.

differenthave a question i want to propose. how do you see these changes that are taking place, in seattle tom original minimum ways -- wage? >> it looks like small business is actually in a pretty good place. up, they are back beginning to invest in their businesses. -- i actually thought we might even see a higher number this morning. i actually thought that the momentum we were seeing in the indicators of sentiments were pretty powerful. we are on a good track in the economy. the question is, is it just a cyclical track? are we just getting people back to work on main street? you can't grow the economy by creating more restaurants. jobs in got to created

the traded economy, and in the past, what you would do is call up bowling -- boeing. now is the supply chain, now the small businesses. >> karen, great to have you. ferguson, the ceo of career builder with us from atlanta. stay with us on market makers, we will talk to be top utility ceo about what clean coal regular should mean for america's biggest power player. ♪

>> president obama's plan to cut greenhouse gas emissions won't just affect private power the tba is the largest public utility. it generates a lot of electricity with coal. we have the ceo here with us. they give are coming.

>> delighted to be here. >> if the proposal goes through on schedule, how does it affect you? >> we have already been on a significant carbon reduction program. we reduced about 32%. by the end of this decade, we will have reduced 40%. we are off to a good start. it is a complex and intricate rule. we are still reviewing it. >> what are the implications for the way you run your business? when the applications for what people will have to pay for electricity? >> we have the most reliable least cost system in the world for literacy. we had to change our focus to make sure we are emitting less a mind picking the right sources and right efficiencies to make sure we're doing less to the environment. more nuclear, more hydro -- >> hydro takes a long time.

>> we are finishing a new nuclear plants. we hope that will help us read these regular should. >> what else will you have to do? we have to convert your plans to gas? are in the process of reducing or coal fleet. we will of gone from about 60% to 20% over a 15 year. period. >> you already had a plan to do this, what changes will result from the new guidelines? >> the rule comes out as a 2005 baseline goal, but in 2012, emissions continued with the standard. that is the part we are studying. i think we're off to a good start, but i think we will have more work to do. >> i realize the discussion of coal needs to be nuanced. about how america has the lowest cost energy supply system in the world. that is on the basis of what

people pay on a monthly basis when they get their bills. you can't really look at costs that way can you? don't you have to look at the cost of all and the cost, the incredible capital intensity of the coal business? the cost of transportation ultimately involves the railroad have to be maintained, the cost of knocking mountaintops off and dumping them into river basins. >> many of those costs are included in that final all inbuilt. transportation fuel costs, environmental cleanup. historically we have not taken into account externalities, -- >> i'm not even talking about the impact on climate. >> other externalities. i think this is a move towards focusing on what to the externalities costs, how do we deal with them, what is the impact on society. >> are you in favor of this rule? >> i don't have the luxury of

being in favor were opposed to it. my job is to serve the 9 million people that live in the tennessee valley, with the lowest cost cleanest way. my opinions are my field. greenhouse change in gas emissions and the effect it has on power producers drive the tba and other utilities to invest more in renewals? might we see the capital flowing into renewal bowl -- renewable investment? gas,r options are more more renewables, more efficiency. the other thing we have to do is keep the lowest cost possible. the economy runs on electricity as a fuel. low-cost will continue to be important. it will bring us more renewables , but that price point of the resource has to be low. >> are we at a point where wind is cheaper than coal?

country --on the where we are in the country, we have to import it from the midwest or the planes. the south is not the best place for wind. >> if they were to install it there? >> if you could make the wind blow harder in the south -- [laughter] how about the cost of the technology itself? the cost of the turbines, regardless of how fast the wind blows, isn't low enough? or the battery technology isn't good enough, or the price of the sewer -- solar panels isn't good enough yet? >> wind efficiency has gone up, there has been considerable improvement in both technology and price in renewals. they are moving towards conventional's. this moves the price of that up, but it will make renewables more competitive.

>> the other issue people don't talk about a lot is fly ash. how much of a problem is that? >> everyone who burns coal has storage of ash. you have to make sure it is safe, your ponds are safe. we have been doing this a long time, we know how to deal with coal ash and fly ash. fly ash is actually come -- a helpful commercial product. it is in cosmetics. there is a lot of beneficial uses for that. >> what do you feel you are positioned to do that goes beyond what the president is asking for? >> we actually have environmental stewardship, we tend to be ahead of these things anyways. we will drive down our carbon emissions, we have reduced nitrogen and sulfur additions already. we moved to more efficient

sources, we will do more energy efficiency. we will continue to be a leader. >> will come at a cost of the consumers? >> and considering we have the lowest cost system today, i would expect it would be a price increase. we have a number of years to do this. i think it will be a premium, how well can utilities plan, how well can we execute? l johnson is the ceo of the tennessee valley authority of the nations largest publicly -- public utility. coming up next, bitcoin is getting real. how american companies and venture capital are taking the crypto currency out of the shadows. ♪

>> president obama is visiting normandy on the 70th anniversary of the d-day invasion. ryan, the white house says the

president had an informal meeting with his russian counterpart, vladimir putin. did anything come out of it? >> it does appear that something came out of it. if you look at the seating arrangement at lunch, it was very clear that the two presidents'entourages did their best to make sure they weren't sitting next to each other. they had acute crowd between them. the president -- a huge crowd between them. if they wanted to make small chats during the lunch, they would've had to shout. there was real tension. you saw them before the the lunch pass within a couple of feet of each other without acknowledging it. to trynt obama appearing and make some small chat with the queen of england. we saw him speaking quite attentively to the german chancellor. but they did have this informal chat. we don't have too many details from the white house about it, other than it was an informal

conversation that went on from 10 to 15 minutes. we know they would've talked about ukraine, and these are their very first face-to-face talks since the ukraine crisis began. obviously, it is helpful in moving those talks forward. >> speaking of ukraine, what about the other meeting that wooten had -- putin had with petro poroshenko? is a breakthrough, coupled with president obama's meeting with putin. a short while ago, the kremlin wouldn't acknowledge the legitimacy of president poroshenko's election. this was their first direct talk. it was brokered by the french president, they agreed to hold more talks in the coming days on a possible cease-fire. that is obviously a massive accomplishment if it indeed does happen. the russian president says he is

going to send his ambassador back to kiev. if there's going to be peace in the ukraine, the russian president and ukrainian president have to have those talks that they had today to move forward. >> signs of progress in normandy. thanks for the report. that's ryan on the beach of normandy. it seems that bitcoin has gotten a second wind. it is surged in value in recent weeks, why? partly to do with corporate. are embracing the currency. matt miller is here. --ouldn't say that bitcoin look at that tie. gave me this time, when he gives you a gift, you put it on. >> bitcoin coming out of the shadows. >> bitcoin has gotten the second window. when you look at the price

action over the last two months, it is up 75%. a pretty decent rally. can it hold, and what is behind it? question,er the first -- i can't answer the first question. there has been a lot of big venture capital money and big regulation that you can use to justify this move. for example, apple has said it cap --low coin bases app. it's a bitcoin wallah, and if you try to use bitcoin with your iphone, it was problematic. i had to shift over to an android system to be able to use it better. >> is it over simple if i do say this is all about the virtual currency itself? so much of the venture capital investment is going into the block chain, the underlying technology. let's be honest, dish excepting

bitcoin -- we don't yet know if that is going to drive bitcoin adoption, it just makes it easier for subscribers to pay their bills with that currency. puntersnk hunters -- are betting another big name will accept bitcoin as well. that would be a way to move the stock. the protocol is what is important about bitcoin, not just the fact you can use it as a currency. there is a great beason deal book a month ago, a lot of people have read. money hase capital been huge. if you look at the last few years, in 2012, $2000 came in. this year, we're only halfway through, $113,000 came in. >> can you define it in bitcoin turns -- terms? >> we will take a quick commercial break, that is matt miller.

we will head over to the belmont for this week's race. ♪ >> live from bloomberg

headquarters in new york, this is "market makers" with erik schatzker and stephanie ruhle. >> wal-mart is hosting its investor conference in arkansas. they'll mount bound, california chrome heads to bell mount -- belmont. to rio is just days until the world heads to brazil for the world cup. i will give you a preview of my exclusive report. you're watching "market makers."

is a beautiful friday morning in new york city. stephanie ruhle is on assignment. these the top news stories of the hour. ups is named new ceo. he was the co-chief operating officer. he will be the 11th person to lead them. ups shares have dropped in value this year after a christmastime shopping debacle. is investing $100 million for next christmas. britain's top financial regulator is going to levy a $17 million fine against a former deutsche bank trader. that would be the biggest fine ever against an individual from misconduct. .is buying into milk

he is putting money into a dairy company. he bought a stake in a soccer team yesterday. merchants, the contractors who lisa those rigs. deep her eyes and that exploded in the gulf of mexico. steve took over before the disaster. now he faces a different kind of challenge. too many rigs and none of drilling hairy he is with us this morning. they give are spending some time with bloomberg television. talk to me about the economics of your industry. there are a lot more rigs coming online that will be available for drilling by companies like exxon, for example.

those companies don't want to do the drilling. what happens? >> i remind our people that this is a simple business. this is a supply and demand business. there is no question we are increase in the number of rigs. objective as a management team is to position the company to compete effectively regardless of what the market conditions are. we are taking actions to improve our operating results. we are improving our capital structure and the strength of our balance sheet. we are taking actions to improve the quality and efficiency of the performance of a wrigley. >> the turnaround from start to finish on a rig is what, three years? >> the construction process from the time you sign a contract with a shipyard until the time you take delivery of the rig is

about three years. >> the rigs are coming on line were planned at least three years ago. and what do you think today? you are trying to increase the financial results. if you look into the future three years from now, what kind of environment do you think you'll be operating in and what are you doing to plan for? >> we believe in the long-term strength of our business. we believe in the world's need for energy. we believe the vast majority of givennergy is going to be by hydrocarbons. we believe that will be given by harsh environments. our objective is to position ourselves as a leading operator of ultradeep water equipment. in the long run, we will be a premium provider of services to our customers.

>> the glut that we see will disappear because oil companies are going to start more aggressive drilling them they are right now? >> i think over time and oil company focuses on two key operating metrics. they went to increase production and replace their reserves. the only way you can do that by -- is by drilling oil wells. there are deep water environments. offer our customers tremendous opportunities. >> as you plot your strategy for the years ahead, what are you anticipating in terms of policy change? do you think we will have a president and a congress amenable to offshore drilling? >> it is difficult for me to predict the direction that the

administration might take. tot of our approach is position ourselves in markets around the world. as a global drilling contractor, we operate in the gulf of mexico and south america and africa and the north sea and the far east. that is one way to you position your self to compete effectively , regardless of what might happen in any one particular market in the world. >> i know you cannot bet your company on it. i am curious if you think it will happen. energy drives the economy. whether you're talking about the u.s. economy or any other economy around the world. energy is a key component to any nation's economy. i think the administration acknowledges that and realizes that. they will continue to utilize

the resources that the united states as to benefit the u.s. economy. >> we began this with you telling me about the steps you're taking to improve the financial performance of your company. you were encouraged to do some of that by well-known investor carl icahn. what it was like dealing with him and the relationship you have with them now. he invests in other companies and makes life difficult for other ceos. think it is important to talk about the things where we are in violent agreement. we agreed that it is important to improve the operating performance of transocean and whilenancial results creating value for our owners and shareholders. the actions we take our

perfectly in line with that. execute theto transocean strategy in pursuit of that. we have enjoyed a good support from mr. icon. -- carl icahn. >> are you a better company because of the steps carl icahn urged you to take? >> i welcome carl icahn's perspective. shareholders don't have two seats on your board. the representatives in our boardroom that are employed by carl icahn bring a helpful perspective. bring a new perspective and some fresh ideas and some valuable contributions to the deliberations and development of strategy that the board engages in. >> we thank you for your time this morning.

walmart shareholders meeting is in full swing. we are headed to arkansas to can out if the new guy soothe growing concerns over the company's future. will california chrome take home the triple crown this weekend? we will discuss his odds. makers"watching "market on bloomberg television. we are streaming on apple is on -- ♪ apple tv.

>> time for some top tech media headlines. twitter is trying to bolster its and reach. the acquisition was announced in a blog posting. be ceo of t-mobile might growing out of his pink t-shirt. john leger is said to be the top

ceo candidate for the combined companies. the war of words between netflix and comcast is escalating. -- verizon is escalating. netflix ifeatened legal action yesterday if they did not stop siding when shows or movies were slow. is holding its annual meeting in arkansas. this is a regular extravaganza of celebrity employers -- performers. the biggest retailer continues to struggle. sales have fallen and questions of its governance. julie hyman is outside the arena. how much of this has come up during the annual meeting?

are these questions shareholders are asking? >> very little. it is a discussion around it. one thing that has come up is leadership and corporate governance. there is a measure on the ballot that does not have a chance of going through because of the walton family control. it would make the chairman of the board and independent position. you have all this fanfare inside and some of the talk about the sales slowing down. when it comes to that extravaganza, walmart does pull out all the stops. we had for a williams reforming. it has definitely been a big hearty. the shareholders have been very enthusiastic. you enjoyed for al -- pharell.

what do you think the biggest thing that walmart needs to fix? >> some of it is macro. they need to get the traffic going again in the event it states. some of the international markets like brazil and china are having some struggles with traffic as well. those are some big issues. some of this is just a tough economy. and in they are doing it my conversations so far as part of this meeting is the small stores like neighborhood market , they arego store going to be very aggressive by going after market share. >> we heard from bill simons. about the expansion.

i want you to hear what he said. bill were at our peak and 390 supercenters in a year. i don't think that is going to happen anymore. we are headed in the direction of a more balanced approach. for this year, this is the first year we have built more stores. i would expect that to continue. >> it is fascinating. we think of walmart as walmart, this monolithic company with the use of monolithic stores. they have been aggressive about going smaller. >> each market they are looking at gaining market share. the supercenter can only be in one place. there are only sony parts of the market they can be in. the neighborhood market can be in denser areas. opportunity and they will capitalize himself to some degree. they would rather do that than

have a competitor come and. the dollar stores have had walmart. about the you think potential for growth? >> they could double that number next year. that could get big. both of those could be thousands of locations. theirre drawing on experience in other countries like brazil or mexico. they have the bodegas. they have the supercenters. costa rica is one where they dominate the market. stores of4000 bodegas. they have seen how it works in other countries. they have seen it in the u.k.. >> you mentioned the bribery situation. that is been a big topic as well. some of the executives who have

left recently have had direct results of that. looking at it is from an investment perspective, how is important is the corporate governance issue mark --? >> i think there are a lot of outside factors. are there things that could improve? yes. as the corrupt practices, in my opinion it going back to when it first broke, there was probably some monetary issue that would come at some point. they managed to get rid of some of the key people. -- that was a normal transition. that is not a big issue from a shareholder standpoint. there will be some monetary fee when it is all said and done. i think that is the bigger

issue. how are they going to get business up and running? we are outside the bottle walton arena in fayetteville, arkansas. >> julie hyman is down there for the annual meeting. "market makers" will be back in a minute. stick around.

>> i'm erik schatzker. definition of that term. this is a financial statement.

today we're going to take a look at the balance sheets of two central banks and the stories they tell. and jonathan ferro join us. there is some confusion over which bank the fed or the ecb is actually stimulating the economy. you are to resolve the confusion. come up to usbody yesterday and say now the fed has stopped stimulating and his cat and contracting -- contracting, that is not true. the fed is still stimulating the economy. not as much because they are tapering. the ecb is not. >> the perception of this is driving the markets. aople are making calls for weaker euro and a stronger dollar. you see it playing out. , they are alllds

falling below yes -- u.s. yields. that is hard to believe where they were a couple of years ago. >> i will have a look at this touchscreen and hopefully it works. this is the ecb versus the federal reserve. hoping that this does what i wanted to and it does not. i am going to talk you through perception versus reality. what is going on with the it keepsheet, expanding. are buyings they more and more every single month. that keeps it from getting higher. if you look at the ecb balance sheet, it is contracting. it was expanding at one point. the problem is they started painted back.

what you get yesterday it was a comprehensive step. the two big ones were an asset approach which is a plan and the other was cheap funding that would come later this year. the two questions you must ask is how much funding will they take on and will it beast -- say a plan. it won't be as emphatic as you think. inthe ecb isn't engaged quantitative easing. there must be another explanation for why italian bond yields are lower than american on yields. >> people are believing that it is ledger straits -- inter-slates -- interest rates low for a. of time. people are willing to believe that it is going to happen somehow. it is forward guidance at its best.

they lost a little of that in the markets. right now they are accepting. even though the risk is greater with italian aper and spanish paper, you can borrow it for five years at a cheaper rate than you can in the united states. that is why we are seeing bonds go down in the united states in general. it has widened overall. same kind ofhe higher yield in the united states. it is risk free. why not put your money into it? >> we are talking about two economies in different stages of recovery. thehen you look at much biggerou get a real yield in europe because of inflation. you get a smaller yield in the united states because inflation is lower. you have to figure that in. >> all right.

thank you. back, he was in the film swingers. ♪

>> that was the team celebrating the second-place finish at the kentucky derby last month. the three-year-old colt is run in the belmont stakes in new york. -1. odds are 15 he is here with me. thank you. it is great to see you. you set your horse out of the preakness.

i have to believe that you think that gives you a better chance of winning the belmont. >> we think it does. >> how much precedent is there for that? eight courses have skipped the preakness and one form or another. -- in one form or another. you work so hard to get to the kentucky derby. to have that extra two weeks is a big help. >> how much training you help for that extra length. they will probably never raced that link again. do too much. they can't go out of the gate and go to quickly. it is a fine balance. i leave it up to her trainers. if the horse wants to go a mile and a half, their pedigree is going to come out. that is a we count on. we cap that pedigree jumping up.

>> had it we find ourselves in the era of cheap course rated. >> it is a great thing. it has to be that way. if it wasn't, all the rich guys would own all the best courses. that is the draw of our business. it gives people a chance if you work in a machine shop area you can own 50% of of course it is now worth $50 million. >> what are the odds of that is going to happen again next 10 years? >> we live in a world of chance. the racing business is the chance of a lifetime. >> how much of it is based on breeding and genetics versus the training that happens after the fact? you are paying for breeding and to get the training later. >> pedigree experts will say it is the pedigree.

trainers will say after it is -- you get the horse in the barn. over the course of your career, the lifetime of your company, where are you? you have had horses that have generated lots of winnings. i am sure you spent money on horses that went nowhere. >> we have. clients are in command and curve. peopled at the faces of in the kentucky derby. that they fairly and more. now we want to get back to the kentucky derby. we have a big race tomorrow afternoon. >> the excitement level is to the roof. we are proud of our partners. >> have you spent more money than you have made?

>> we are down a little bit on the financial side. the experience is through the roof. i will never forget for about eight seconds i thought we were going to win the kentucky derby. i get choked up now. you just can't replicate that. >> you either have to have a day job or some family money to fall back on. >> or partners. that is a we have done. >> there is a small cost for everybody involved. every eddie goes a little bit in the red a much you can win the kentucky derby or get a cheap course. backat is why people come to get to the kentucky derby and have a shot in the belmont stakes like we have tomorrow. there anything in your experience with command and that will change the way

you do business in the future? >> i would say no. we go to the horse sales and we try to buy good athletes. we try to get value for our partners. each year we build up our institutional knowledge. i think we are getting better and better. our competition is stiff. that is the key to our success. everyday, we try to get better. . everybodyet better tries to do that in business. in your experience, what is the secret to picking winning ponies. >> a great team. we use more and more data every year. >> everybody is doing it. >> there are some old-school people that go by gut feel. i used to. now use data more and more. biomechanical data, hard analysis, stratton analysis. is this like moneyball?

is this the same approach that billy beane took with the oakland a's? >> when did this shift happen to mark --? >> it was about four years ago. some good horses in some they can't run. using the data is really starting to help us. >> you've seen a lot of these cheaper horses. >> i want to wish you luck. the owner of is west point thoroughbreds. they own command and curve. i need to turn back to you. the belmont stakes may produce the first triple crown winner cents 1978. california chrome is the favorite. they call it the race of the

champion. picking the favorite is not always the best bet. the odds are the lowest. they over bet. california chrome is going to be way over bet. they process thousands of bats across the country. people do a lot of irrational things. we will see that tomorrow. a lot of casual fans put in money and they don't know what they are doing. >> can we bring up some of those mistakes that people often make? >> people think seven is a lucky number so they bet on post position seven regardless of how good it is. if you're smart, you want to avoid that mistake. that is not good enough. >> biggest longshot. >> everybody wants to get a lottery type of when. >> >> >> it happens now and then.

over time, you are paying too much. heyou think about his horse, found the middle part of the curve. taking a horse like command and curve and adding on it to place or show? >> you should not bet on a horse like that to win. the odds are so extreme. to get a free option for it finish in the top two. >> california chrome is such an extreme favorite, the payoffs are just as good as the payoffs are winning. you can get the same payout and a bigger chance of making it happen. that is where the smart money could go. >> that is a good backup plan. you can still make some money. some of the other betting strategies? >> avoid any of the great

horses. people notice the gray horses visually. they stand out. they are not faster. >> seriously? >> these the type of things that people do. they focus on looking for free options. those are the types of trades were you can make money. >> i knew there was a lot of unscientific stuff. i had no idea there was so much nonsense. >> there is a lot of nonsense. he will be watching the belmont stakes this weekend. i am going to as well. and even bigger sport event will be upon us, the world cup kicks off in brazil. we will show you the big business of soccer. ♪

i am erik schatzker. jon favreau has been a big name in hollywood since he wrote and starred in swingers. he is the writer and director of yuriko --, "chef he spent some time at the wall street firm bear stearns. that has been swallowed by jpmorgan. jon erlichman sat down with the actor. what does john favreau have to say about his time on the street? >> it is a great story. he has a lot of storage because of his career in hollywood. this predates his hollywood career -- career. he spent some time at bear stearns. he was there during the transition from a downtown-based firm to the location they moved

to on park. he was focused on derivatives or fixed income. here is his explanation of what he was doing. >> i was facilities planning. i was not running around with my yellow tie yelling by buy, sell sell. if your air conditioner wasn't working i would come over and tell everybody it is going to get fixed immediately. >> i will say that he was there for the 87 crash. he said it was weird to be on the set of the wolf of wall street. he was reliving that whole experience after his stint at bears stearns. >> did he remember at all what it was like being around jimmy ace or a screen burn -- green burn? >> i don't think he was there

long enough to fully soak in all .f the he could have had a career on wall street. he learned as he went. not really a director by training, he used the talents of his writing ability to break into hollywood. he learned from the directors he was working with onset over the years. for thisthe stage relationship he had with marvel and directing the first couple of "iron man" films. they were huge hits. it is not always easy to go out and write and direct and star in your own flick. he was able to do that. one of the things we will islore on "bloomberg west" the power of social media. you can take advantage of what

twitter and facebook offer. that is happening to films. this weekend it is going to open on more than 1000 screens. it will be an interesting box office story. any interest in doing more superhero movies? a lot of people are curious about how long the trend can keep chugging along. his next project is "the jungle book." he likes doing the big stuff in the small stuff. that makes him a fairly unique player. >> thanks for much. jon erlichman will be bringing more of this interview with john favreau to all of us later this afternoon. back, the start of the world cup is less than one week away. the first match is june 12.

it is a highly anticipated and almost religiously followed twice a decade event. look at thek took a wine the numbers. we will bring that to you in a moment. ♪

>> six days from now is the start of the world cup. this is the main event for billions of soccer fans around the globe. brendan greeley took a look at the world cup by the numbers. >> the world cup is the most viewed sporting event in the world. was shown ind cup every country and territory on earth. 3.2 billion people watched. that is 46% of the world's population. more than 34 million people attended 700 matches.

average attendance is 44,000 people per game. this will be held in 12 stadiums across brazil. teamsrld cup national will get eight billion dollars to compete. brazilian player rinaldo holds the record for most world cup goals. this is the site of the final game. it is the largest stadium in brazil. it has a seating capacity of 73,000. appearancesade more at the world cup than any others. they have won five times. all you fans will be watching

bloomberg television. we have coverage of this global event and we will show you how business uses the soccer pitch as a way to influence commerce. way to theakes its road to real. we'll be back in two minutes. ♪

>> that is going to do it for us today and this week. have a great weekend. join us on monday.

we will be talking to the ceo of time inc.. right now it is 56 minutes past the hour. we are on the markets. here is scarlet fu. >> it is another new high for u.s. stocks. they are extending their records after the main jobs report came in with estimates. we are going to check in with mark sebastian. he is chief operating officer at.com. goes lower. a lot of complacency out there. >> a lot of people are going to claim there is complacency in the market. we have got some eminent selloff. it doesn't really tell us much on its own. i want to put something in

historical frame. vixeptember 2006, the crossed 13. it did not break back above 13 until the end of february 2007. we can see a. of five to six months where the vix never breaks 13. if we continue to have these slow ground hires, i would not be shocked to see. >> at 10 handle would take us all the way back to the early 2000's. >> that would take us back to 2006 when the vix closed below 10. it points toward typically some sort of turning point. you see some form of long-term volatility. this rally has been incredible. are we at the back half of it? yes.

is there an eminent selloff? absolute out. >> how do you play the s&p 500 options on that? >> argan makers are having all kinds of problems. makers having all kinds of problems. 1945 for $52.ly if you consider how much we have moved in the last week, we are trading 1915 last week. now we have moved a $30. if you let the market momentum move, it can give you the opportunity to trade direction without a lot of risk. you have to be able to let the straddle to move. anlet's talk about individual stock the event focused on as well. that would be cost go. they are trading at $117.

what is your thought there? >> one of the things i like to finden the vix is low is stocks that have week lows. costco hit both of those on my filter. calls for a buck. that plays directional momentum. i think oscar looks like it is heading toward 120 or 121. i think that dollar could turn into two dollars relatively easily. >> why so short term? 40 days is where volatility is extremely cheap. stock isagainst $117 almost nothing. you are taking this position. this is cheap directional

exposure. july is the cheapest way to get that exposure. >> thank you so much. we want to bring you some breaking news. it has objected to the creditor notice. we do see an immediate reaction in the share price. a notice oflen default. we'll be right back on boomer television. ♪

.. >> welcome to money clip, where we tied together the best stories come interviews, and video on business news. here is what is on the run down for this friday. we have walmart woes. plan toof walmart has a try to boost sales. theech we are going around world to try to find the best stories outside of silicon valley, including this one about a man who is shaking up north korea. jobs butis creating what about higher wages? the ceo of dunkin donuts is going to hash out a plan