♪ >> live from bloomberg headquarters in new york, this is "market makers," with erik schatzker and stephanie ruhle. >> ipo loser. wall street celebrates the boom in public offerings, but how much longer can the good times last? we will ask morgan stanley's capital market king. >> a good time ahead. the biggest magazine publisher spins off from time warner today, we will ask the ceo why investors want this. >> the tech boom created new tech valley -- silicon valley millionaires, but that means

less housing for other residents. good morning, i'm erik schatzker. >> i'm stephanie ruhle. i have been out of the loop. it is time for me to get to the news, i have to get up to speed. i love talking 7.7t the story, they spent billion dollars to buy the maker of jimmy dean sausages and ballpark hotdogs. it is another move by tyson to expand into high-margin branded show -- packaged foods. merck will officially by the pharmaceutical company for nearly $4 billion. the valuation is three times higher than its current price on friday. they are working on a new treatment for hepatitis c.

and craft raise the prices of coffee products. the increase was about 10%, citing gains in the green coffee market. the price of coffee has surged more than 55% this year, as brazil's worst drought in five decades throws losses on the coffee crop. >> don't believe every story you hear about how bad businesses on wall street. down, it is hard to generate a handsome return. but investment inking is on time -- banking is on fire. welcome back, it is been a while since we saw you. >> it is good to see you. [laughter] >> how long can these good times last? think about it for a moment. ,he's financing, healthy equity

you have the recipe for a strong capital market. >> is a fair question. we have only recently had an environment where the debt markets will provide the look liquidity.es takingency around advantage of this environment is really peaking now. we think that this environment can be here for a while now. >> like, what is a while? >> we are not in the business of predicting exactly how long -- >> quarters? backlog,k at our ipo we look at our clients engagement metrics, how many meetings and the type of dialogue -- it feels like we would say for the next couple of quarters, things will be ready

good. justmpare that to 1999, before the bubble popped. >> sure. the markets have changed tremendously. i think companies that go public today are more mature, they have been through private rounds. when they go public, they are very different. they are more developed. they are more seasoned. i think the credit markets are very different. if you go back in stages, today, we have interest rates around rates were interest higher. these are much deeper credit markets, and i think volatility in the equity markets is lower. >> from an ipo perspective, as an underwriter, i take it that you think a deal like $17 billion valuation, some people can hardly believe it.

it's a healthy thing because that company, 15 years ago, might have been tempted to go public too soon? >> i can't comment on specific transactions or companies, but the company is are better positioned today when they go public. we find it the dynamics have changed. the deals are larger, expectations are higher. this is an environment where for of four or a period five weeks, activity may subside. we have 110 ipos in a backlog tech and health care will play an important role. >> bankers and capital markers -- market officers are so busy with such a big deal backlog, when you look at secondary trading, it is lighter than it was just a few years ago. when you walk across morgan

stanley, is it like two different companies? -- crestfallen traders and bankers with their chest puffed out? our'm responsible for business, it's integrated seamlessly across banking and trading. the partnership and level of activity we do on a primary platform is very correlated, very dependent on a very robust sales and trading activity. we feel pretty good about what we have seen so far. >> investment banking is more important to morgan stanley that it is to other financial institutions. banks want big pieces of that market, but they have huge lending businesses. an even more meaningful revenue line. the reason i make the point is, i wonder how important -- when you are trying to build number one market share, in all the

businesses you are responsible for, how important a strategy? >> strategy is crucial. i think a firm has to be global, and it has to have scaled. i think it has to have experience and content, and i think the firm has to be focused on the client. >> every bank would say that. >> sure, they would. but historically, we have had a practice that ranks top one or gainedecm, and we had significant share of dcm, as that has become more active in our clients needs. >> what is the global picture look like? >> it's a great question. the story in europe is a big part of the recovery in capital markets. our ecm activity is up almost 40%. we did one of the largest acquisition financings ever. a mediae and financed conglomerate.

equity, int and europe, the market has come roaring back this year. we will do another eight ipos in the next four or five weeks. we will be busy right through the summer. >> think about this, eight ipos out of europe in 2014. what do those numbers look like in 2013, 2012? >> we have done three times we did a year ago, the breadth is quite impressive. >> how quickly can the debt capital market evolved in europe? they don't historically have the same kind of deep liquid corporate market, certainly not in high yield. the asset-backed market in europe isn't nearly -- it's a fraction of what it is here. forakes it so much harder people to exercise the monetary policy to bring europe out of its hole. is that going to be a catalyst for development in these markets?

>> it has been a catalyst for activity. ecb in europe has wanted their banks and corporate broadly to have more permanent long-term financing. situationed to this where the client base, financials and corporate, are issuing longer tenor bonds. anticipated ae year ago, financial institutions in particular were going to be -- were going to have greater needs in the debt markets. this is his whole plan. almost $160 billion in debt financials in europe. there will be a continued move theurope, which will mirror case in u.s.. clients raise money rate -- in the market, and don't rely on bank financing. >> are the market strong enough right now? >> emerging markets have been an

evolving story. of europe, southern europe where you wouldn't have thought that you would have the tremendous demand a year ago or so -- we have had some notable deals. we did a common stock deal for the national bank of greece on the heels of raising debt for them thomas and on the heels of doing a sovereign issue for the government. the emerging markets activity is still a bit light, but in parts of asia, it is coming back. you saw elections in india are helping the markets there. china, growth is probably bottomed in the low sevens. raj, can -- capital markets are a competitive business. were number one last year, or the year before, doesn't mean you will be number one now. or next year. attribute morgan

stanley's resilience -- if there was one thing they did to earn the spot they had now, what would it be? ofit has been a core focus the firm. it our platform is organized, it's how are bankers and traders organize their time. as you said, it is very competitive. achievedings we have are a reflection of the past. everyday we come in thinking about the next deal, and how to win that transaction. our competitors are incredibly focused on hysteria, as you said. it has a multiplier. >> you have been added since 1989, with morgan stanley. 1989, that's another level. >> would you attribute it to the retail business? nobody else has the brokerage -- i wouldn't say nobody else, bank of america has. but they are a big commercial bank.

is the fact that you at morgan stanley have -- is that the difference? recent changest to our platform that has taken us to another level. we have real scale there. we also have a strategic partner in mitsubishi that allows us to show scale. there are a few factors that. >> that's quite a relationship. you've been taken to see c&c music factory. >> for having me. >> raj dhanda is with morgan stanley. markets,s the public we will be speaking to the ceo joseph ripp. >> the biggest name in politics to promote her new book, and maybe something else. questions about 2016. >> this is market makers on bloomberg tv, streaming on your phone, tablet, bloomberg.com,

less live on amazon fire and apple. ♪

>> first, bloomberg. >> you are watching market makers on bloomberg television, i'm erik schatzker with stephanie ruhle. time, inc. has been an independent company for two decades, but they have spun off from time warner and is trading on its own. the stock is falling this way, investors appear to be concerned about declining advertising and circulation. let's bring in their ceo, joseph ripp. good to have you. you have a big job on your hands. as ae view time, inc. legacy magazine publisher operating in a time of social media. there is so much change in the digital world, what is your biggest challenge? biggestk at the challenge is getting this to focus on what we need to do to

be successful in the future. has a legacy company but it -- you are looking at companies with great assets,. it has been around for 40 years, in cash flow, we can speak to every ceo in america, we have great direct marketing. more portly, we have the best content producers working for us. >> does brand awareness translate into profits? you do have the best brands. how is the direct translation -- how does that directly translate to profitability? -- --you look at catch conversion, we have been very profitable over the years. , andcus on margin reinvesting back in the business. this is the company that started hbo many years ago. since the merger, most of the cash flow has been going back to

time warner. now that we are free, we can keep that cash and invest in our business. >> how difficult is it to cut costs? you have the reputation of an operating efficiency kind of guy. in anu cut costs editorial organization, and still maintain the quality and distinctiveness that created those brands in the first place? >> i have said that anybody can cut costs. but you have to do it wisely. what you have to do is work with the entire organization and say, how can we do things differently? i have cut costs or my entire career, but it's more than just cutting costs. it's about investing for the future. about every dollar we spend, does it provide for the future or support the past? , we move forward. induced do you want to

-- invest in the future? do you want to create video, go with live events? magazines, one in the u.s. and one in the u k. as a toof myself magazine company, but if i think applications, and collect data about you, but think of wine videos and wine to words. geoact, think of what nat did taking their company from a magazine company to a multimedia powerhouse. we have the opportunity to serve our customers in ways we haven't done before, because with time warner, we were stuck in a paper box. you, ord that either the executives who work for you, told all of your editorial properties that they need to cut editorial costs by 25%. is that true? >> we looking at costs across

the board. we are asking hard questions about everything we say, -- everything we spend, and can we invest that somewhere else? we have multiple magazines with test kitchens. we can consolidate. washe past, time, inc. operated as a series of individual brands. , we announcedts we are moving downtown. we save $50 million a year on by moving to an environment that is more fun to work in. >> you have 7700 employees right now correct? >> correct. >> where we you be in two years? >> i have reinvested in this business, i think we have the opportunity to deliver. >> do have an opinion on advertising? from a revenue standpoint, it is great for the magazine. -- from and tutorial

editorial standpoint, it has to be hard. >> we have been producing content for lots of people. the reality is, content is becoming an important component in the message. we are one of the best content producers in the united states. going tover ever violate the trust of our consumers. the ways you can do that with native that do not do that. as long as it is clearly marked, as long as the consumer knows the difference is when what is editorial and what is native, i don't see any conflict of all. >> you pointed out that your company has great cash flow, and it does generate a lot of cash. but at the same time, you have a fairly substantial debt load. you haven't earned and investment-grade rating. would it have helped if time warner had made you left -- less leveraged? >> i spent a lot of time for i took the job about what the leverage ratio would be.

i wanted to make sure we had a proper debt ratio, that we are properly structured. it is important to have some level of debt. good investments for this organization. i think getting the cash flow right, getting the leverage ratios right, and making sure we have the money to invest back in this business will be a big part of what i did for i showed up. we have had the right spot for this organization. i don't think we have too much debt problems are now. >> you sound very confident. i wish you luck. ,hat is joseph ripp, time, inc. spinning off from time warner. >> coming back, the other silicon valley. tech boom has forced low income residents out, now they are fighting back. we have that and more when we come back. you're watching bloomberg television. ♪

>> welcome back to market makers. >> it is 26 past the hour, which means bloomberg is "on the markets." let's start with my favorite brand, family dollar. stake,ve amassed a 9.4% they adopted a poison pill that will limit from investors to acquire more than 10% of the stock. >> i would like to talk about apple. we are drawing everyone's attention to the stock, because it is no longer one of the most expensive stocks in america. they are trading at $92 and eight cents. the company is still valued at about $525 billion. this removes a potential

obstacle to apple's inclusion in the dow. the dow is that it equated price weighted index, and now apple might be in the club. >> we will be back with more in a few, you are watching market makers. ♪

>> 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, i'm erik schatzker. >> and i'm stephanie ruhle. >> it has been a wild ride for investors in emerging markets. is next guest means lush, he martin gilbert, the largest u k asset manager. what is the case right now for emerging markets? is it that they have been so badly beaten up, there is nowhere to go but up? >> a bit of that. the beating up was that a macro level, we never really sought at

the company level. it was very much a currency and a growth story, really, a lot of story -- a lot of people taking out your thought. they have made a lot of money on it, and we are seeing some of that reversing. >> when you see -- when you say not in the company level, even though we were getting massive headlines for some of these, the biggest companies were doing ok? >> we didn't see any real slowdown and company earnings. in fact, quite the reverse. we saw 2013 being a better year for companies than the previous years. >> are your clients looking for more emerging markets exposure at this point? are you seeing an inflow -- >> we saw massive outflows through february, especially through wealth managers and private clients. but institutions did not sell. we saw them putting a small amount of money in. we are still seeing interest from that area of the business.

>> how long until private money comes back? >> is difficult to come back too quickly when they have taken it out. i think it will come back towards the second half of this year. i think we will see money coming in. >> positive all around, but what are you concerned about? >> i have a vested interest in being positive. what gets me down -- i think we are more worried about the u.s., the company's here -- the valuations here make emerging markets look more attractive, relative to the u.s. apart from that, i don't think we are overly concerned. obviously, government bonds concern us as an asset cost. but a don't think they will do that badly. a lot of people have to hold them for liability reasons. >> you think u.s. companies are overvalued right now? >> i think they are, especially relative to emerging markets. two or three years ago, you could play emerging markets by

investing in the unilever's of this world. now, the opposite is the case. trade, that sort of probably the reverse now is the case. >> the s&p 500, a pretty good proxy for the american stock market -- it's trading at about 18 times earnings. what you think is a reasonable evaluation? >> the emerging markets are between 13 and 15, i always think that is a reasonable valuation. say 15, 16. >> as a buyer, and a holder? >> probably. i am looking at relative to emerging markets, where you can get better growth in the company's at a lower volume -- lower valuation. >> are you concerned with how tight spreads are, you have unsophisticated investors searching for yields pushing into high-yield in emerging

markets? those that don't have the iron guts to stand it? >> the real worry is what to buy now in the world. you are quite right, they are going into a specially high yield, we are seeing enormous amounts of yields for everywhere. if you are going into emerging markets, you have to do it by a fund. emerging markets, especially in equities, we much prefer the active approach to index. in the index approach, or the ucf approach, you are getting a spread of all markets that some you don't want to be in. russia and china for the moment, for instance. in russiary little the moment. in fact, i don't have anything. valuations there are ridiculously low. china, it's so difficult to make money. we have struggled over the years because of corporate governance, reasons to make -- to find investments we like in china.

>> you made the point earlier that you can't look at all investors as a monolith. money wasate stampeding out of emerging markets, institutions were putting money in. how else are institutional and private investors behaving differently right now? >> i think it's that more than anything else. the private investor is definitely more wary of risk trade -- more wary of risk. at any sign of risk, they take their money off the table. they haven't really recovered from 2008, 2009. preservationent -- is their major concern. >> how much of the upside that we have seen play out having missed? >> i think a lot of them did stay in. i'm not speaking about emerging markets, i'm talking about markets generally. they did stay in, and then when they got their money back, we coming out.

>> how is regulatory scrutiny affecting your firm? >> is much tougher than it was. the regulators have shifted the risk off bank balance sheets on to asset managers. we don't have it on our balance sheet, we manage the money -- someone else's capital. but asset managers are now very important within the world capital flow. much more important than they were a few years ago. >> do you think some asset managers are too big? >> i think blackrock is too big. you should be they ship you know? >> are you watching? martin says you are too big? >> they are controlling vast sums of money, but not on their balance sheets. >> they do so much for joining us. ofmartin gilbert is the ceo written's largest money manager. >> get ready for a lot of

hillary clinton. she is making the television rounds to promote her new book, hard choices amah and answering questions about the hard choice ahead of her -- whether to run for president in 2016? ♪

>> welcome back to market makers, i'm stephanie ruhle, with my partner erik schatzker. hillary clinton is back thomas though some may say she never left. the former first lady, senator, presidential candidate and secretary of state is promoting her memoir, hard choices. it comes out tomorrow. she is planning a major media tour, starting tonight with diane sawyer. here, she is answering the big question, will she run in 2016. >> i just want to get through the year, go around country, signed books, help in the elections in the fall, and take a deep breath.

go through my plus and minuses. >> take a deep breath, i don't know. let's bring in al hunt, he joins us now from washington. al, come on now. let be honest. is the timing of this book and massive media tour just a drumroll for hillary to announce she is running? >> sure it is. it's time to launch. i think the odds are great, 90% maybe that she is going to run. this book is a chance to go out there and meet people, get lists, get names. i have not read the book, i have read so many excerpts i feel like i have read it. it does not appear to be very controversial. there are very few criticisms of people that would come back to haunt her in a political campaign. she does a mea culpa for her iraq war vote. it's a very politically directed book, director, and launch.

>> one criticism is that the liberal media wants to say this is justto her -- tour the media helping her? >> the clinton people complain about the media. they are still complaining about some of the press they got today. both of those views are exaggerated. is such aen someone prohibitive front-runner as she is, we have never seen a nonincumbent who has been a formidable a front-runner as hillary clinton is today. she writes a book, it is naturally going to create a lot of media attention. there will be some kind of big tour. my guess is it won't matter as much as people think right now. >> a formidable front-runner perhaps, but she was a for mobile front-runner in 2008, and didn't get that nomination. what is the downside to a woman like hillary clinton, to a candidate like hillary clinton, in making clear her intentions at this point? who does it hurt?

she iscould say that affecting the rest of the field, but she has already crowded out the rest of the field. elizabeth warren will not run as hillary clinton runs. i don't think joe biden will run. she is already cleared the field, in that sense. the downside is, she is yesterday. tend totial elections be about the future. they tend to be about tomorrow. claim toow has to make what you think about her good points with her husband services president, and hers as president -- secretary of state. that is not easy. >> would that be any different with thate to say interview, yes, i am wanting -- running for the white house in 2016? >> a little bit. she doesn't have to do it now. she's not being coy, people aren't saying are you going to run, are you not going to run?

-- i hate too disagree with karl rove, but she appears to be in good standing. i think she's going to run. there's no reason to do it now, she can easily do it next january. >> would they vote for hillary? >> i think wall street likes hillary, that is not the problem. the problem is hillary doesn't want to be too linked to wall street, as far as the rest of the country is concerned. the rest of the country hates wall street. she has to to walk a very delicate line here. she will love their money, she is not going to want to be terribly visible within the. >> how does she thread that needle? allowing bill to continue with justnitiatives, which is full of wall street people and money? >> i think there will be some issues that have to be resolved. there were when they -- when she became secretary of state. fore were rules written

what he did, as a presidential candidate, that will have to be revisited. but there will be a delicate line here. she will have to take some positions -- would you like to eagles,eenact last which was a repeal in her husbands administration. what is your view on a bank tax? there are a lot of issues she will have to address. elizabeth warren 11 against her her, it run against won't threaten her nomination but threatening her intensity. >> al, this is a triple win for me. having you on tv, and maybe a wanting -- a woman running for president. ask for giving us your view -- thank you for giving us your view. >> willem marx access to east , low incomelifornia residents are being pushed out. ♪

>> welcome back. what does the future of design and technology look like? we head out to california where cory johnson is gathering for bloomberg's next big thing summit. what's the buzz out there? >> we are doing this interesting conference call the next big thing. we are gathering the biggest name in technology, ceos, venture capitalists and startups to explore these ideas behind these companies. try to get a sense of what it is that makes the next big thing possible. the big changes in technology, and a little around financing. also there are cool ideas. we have this group of executives sausalito to california. it's right across the bridge from san francisco.

wefeels kind of secluded, can exchange these ideas and explore notions about what makes technology so important. >> what is the coolest thing we will see? is it in the hardware space the software space, what we expect? >> one of the interesting things that happened this cross-pollination of ideas. the idea that someone can look at software as a service and start a real estate business they surround that same idea. that someone can look at opentable and say if i could do that for cars, i could have an uber. and if that's not exciting enough, we will have a drone war. we will call it the game of thrones. -- game of drones. -- if you think you have seen you before, wait to use the drone geeks. >> in the name -- give me a name?

>> i will be talking to the owner of the sacramento kings, and how coaching his daughter's basketball team changed his career. founders withpal a bunch of startups since then, he will talk about how his life in endurance sports -- it makes them kind of the superman of venture capital investors. we will look at the other side of these will note and -- well known people. a guy that we really get to talk to, he will talk about some of his big companies in the payment space and how that is changing. it is a full couple of days here, interesting stuff. and, we have drones. >> who doesn't like thrones? -- who doesn't like drones. i know i'll be watching. how about you? >> i will.

>> did his basketball team have a good name? were they the bad news bears? >> affordable housing in silicon valley is under siege. in, giants are flooding meaning low-income residents may no longer be able to call it home. east palo alto, just three miles from stanford university, to tell us why these residents are struggling to hold on. valley is famously home to tech giants and billionaires. to at is also home childcare worker at stanford university. >> did you take a nap today? >> together with her husband and kids, she had been living in palo alto for six years. until an unexpected eviction order arrived. >> for homelessness to be a reality for your family -- i have no choice.

was against equity residential, america's largest publicly traded landlord. it was founded by billionaire sam zell. paidte 111, the company $130 million for her apartment public. they twice tried and failed to evict her for late rent payments, then settled after she could prove that required home repairs had not been completed. a were not available for an interview with bloomberg television. landlord you think the the vix people like yourself? -- victs people like yourself? >> anymore money. >> this is the last low income rough road -- refuge. alto's between east palo and palo alto.

thank's to the tech boom, that housing may not refrain -- remain affordable for much longer. price has jumped in the last couple of years. young workers are pushed out to places like east palo alto, and rents there are pushed up. >>, 40 law allows the landlord -- california law allows the landlord to raise the rent to market rate for a new tenant. that is a perverse incentive that exists. >> it was illegal incentive to evict. in the first half of 2012, soon after they purchase woodlyn park, eviction notices served against tenant secures stored. from 14 in a single month to 211. they tried to evict a tenant that was $.75 short. >> what is unusual is the aggressive and rapid nature of

it. most landlords are not going to take steps to evict a tenant on the second day of the month. >> many tenants are unaware of their rights under california and city law. in this largely hispanic community, some residents fear retaliation based on their immigration status. >> the effect you are seeing is mass replacements, the entire fabric of this community is changing overnight. >> the last affordable community in this entire region. >> yes. nobrega hasn reuben been resident here in -- four years. >> it is part of our history, part of who we are. we have made a commitment. our city government will look after the most moral people in this community. when it comes to housing. >> he told me the city council had recently passed a new

housing ordinance. it's designed to prevent landlords from threatening behavior, delaying repairs, or harassing tenants in the small community that feels under siege to the rest of silicon valley. and that was willem marx, reporting from palo alto. if they did for $.75, that is just one of many kinds of incidents that results in these evictions. do you wonder why sam zell is a bucket rotation -- tough reputation? >> we will have a guest host from the world's six largest advertising term. >> stay with us, you are watching market makers on bloomberg television. we will be back in a few.

♪ >> live from bloomberg

headquarters in new york, this with erik makers" schatzker and stephanie ruhle. >> we have a big our up ahead. >> before we get into that, i need to talk business around the world. ofon foods has one control phil shiner brands. they will spend $7.7 billion. from.eats the rival offer

up by lesssales were than one percent in may. u.s. sales fell but gains in asia and africa made up for it. president obama is set to announce new measures to ease monthly student loan payments. they will expand the number of people who can take advantage of a capping payment system. come at 1:45 p.m. eastern time. one ofs time to bring in the biggest names of advertising. miles, we love having you here. coloring contest of what is happening in your world.

what is the most interesting thing happening in advertising? >> the world cup is interesting. it is very topical. it is a marketers dream in terms of the expense of advertising increasing. there is some controversy this morning. cutter is going to be named the next recipient of the world cup. there is an in cory as to whether they paid off some of the officials. ana result tom of there is specification. >> as a marketing guy, why is it interesting? interesting the extent that countries will go to to get it. economic growth in the domestic that, adin terms of

spending goes along with domestic and international. the world cup is one of the largest audiences ever for any sporting event globally. a 20% increase during that. of time in terms of global spend for that. event.s an exciting are mobile and social. that is very big growth. you are seeing streaming video as a huge area. google looks brilliant with youtube. youtube is contributing to google very profitably. you will see a lot of acquisitions by yahoo! and microsoft and aol in the streaming video area. in terms of media exchanges,

you can buy media in an online auction format. this reduces the costs significantly for buying unused inventory. >> is that how i end up with the ads about reducing my belly fat? >> direct response tv is a huge user. >> does that mean it is to regulate coming at me? those advertisements are everywhere. is this low cost bundling? >> they can make it cost effective to be able to use infomercials. >> do they still work? >> i can't talk about the efficacy of the product. the marketing definitely works. >> are we at a point where traditional advertising? is in decline >> no. it never will be.

you will just see a smaller share of market and the lowering of the growth rate. change of the rate of change will continue to slow. the greatest way to build a brand is not online advertising. greatest way to build a brand as traditional media. television is still the most effective means of getting to a mass audience. >> what about the 18-year-old who don't watch tv? >> they watch it on their pda. they watch another computer. they stream it onto other devices. >> when kids want to watch a video, they need to walk out of the ring. -- room. house watch.y >> are they watching the mtv awards?

like the super bowl. they are talking about $4 million for a 32nd spot. they reach 130 million people. tv forcing of mainstream special events continues to grow because it is still the most effective means of reaching mainstream large body answers. >> what about a traditional print company like time magazine? they are trading today. they're not doing very well. >> the challenge with rent and lesser to radio is a business model that is really in decline. is online activity cannibalizing the value of the especially on magazines and newspapers.

local not so much. they are growing their online business, but the climate -- isline and cost structure not effective in order to keep up with the acceleration. i am not a big believer in print. i think it will continue to have its challenges. i think it has been an ongoing basis. it will probably accelerate its decline in the last five to eight years. if you think about how facebook, others,some of the , social media platforms have grown dramatically. that growth has, a lot of the expense of print and other mainstream traditional medias. >> there is going to be a shakeout in social media at some

point. not all of them are equally as good as the other in terms of advertising. >> myspace was the hottest thing and now it doesn't exist. that is the law of the jungle. only the fittest will survive. >> the model still exists. it was the first version. --you think >> i wonder how that works. they served a different purposes. >> i don't know the answer. >> which is a better place to advertise? >> the reality is that what we have told our marketers is you have to place multiple best -- bets. -- don't the consumer willis will respond. >> that is expensive to have a chip on all the different squares. >> i love that.

itis it expensive or is making your risk over a wider platform? you have a diversification because you don't know what is going to happen. >> are the millennial's getting the last laugh? if you look at marketing officers out there, do they have any idea which social media platform is most valuable or are they just putting money everywhere? intelligent very question. they are playing offense by taking multiple bets. a marketing of officer is now 15 months. this is the lowest in history. they are under more pressure than ever before to drive tangible in -- returns on investment. they have ideas of what is working at the time. to invest propensity behind your winners and star of your losers. you look at the empirical

information as to what is working and put more dollars toward that. you put less toward the things that are less sufficient. when you look at great marketers like nike, they keep throwing ideas and new products and new channels to see what works. that is the critical thing. you have to be nimble and agile on an ongoing basis. social media is here to stay. >> we will continue this conversation in a couple of minutes. >> changing the way millenials get their news, we will get the scoop from the founders. this is "market makers" on bloomberg television. we are now on apple tv as well as amazon fire. ♪

>> welcome back. i am stephanie ruhle. our guest host for the hour is miles nadal.

the news media knows that it is hard to get the attention of the millennial's. we're looking at new ways to get young people to read the news. formertalking to two news staffers. this breakdowns the biggest stories of the day. cofounders of the skin. >> this is your secret weapon to get through your morning. we are former nbc news producers. we saw of -- whole of the market for an e-mail newsletter the breaks down the news. it gives you everything you need to know in five minutes so you can get on with your day. there is ak,

silhouette of a skinny woman with a phone? >> we don't believe that news is gender specific. we knew we couldn't be everything to everyone. we knew what our friends were not getting in their day. this was a valuable market. we went after a market opportunity. , when you read our product there is a sense of humor behind it. our logo.lly love it is meant to be somebody who is stylish and on the go and has a sense of humor. >> 30% of our audience is male. >> had you decide what the news is? who is making a decision? >> we make that decision every day. we have a pitch meeting with our staff. it is very easy. what would we talk about the next day? -- whatiends talk about would our friends talk about?

the beauty of our product is we don't have a certain amount of real estate or airtime to fill. some days it is shorter than others. >> talk about the business strategy. is it advertiser driven? what is a model going forward? >> we wanted to focus on user acquisition. we are a startup. we have a small team. we choose to focus on just increasing our subscriber base. we have brought in revenue. we worked with the nba, turner sports, there is some great integration into the newsletter. >> we read it every day. we are able to hire. we have a team now for the first time. we write every day.

in oure in the couch office. it is meant to look like our living room. >> how many subscribers do you have? >> we don't reveal exact numbers. we are growing so quickly i couldn't tell you. we are the fastest growing e-mail on the market. and engaging. >> when you are able to release real information, you should talk to me about it. we spend $12 billion a year. >> do you want to create video? >> yes and no. we came from tv and video. no one respects it more than the two of us. that is why we have not done it yet. we believe that you need wonderful resources that cost a lot of money to do it. it is on our radar. >> that raises an important cost

-- point. it costs a lot. ,hen some he reads the skimm if they don't click through the news items, those people don't get paid. >> we do link on every story. we read acrossat 12 articles a day. we link to the best one. we don't have any deals with who we are linking to. based on to link content. we are providing news on the go. we do love the people ride in all the time and say we have never connected with the news like this. they do read those longer stories. they might not have looked through the new york times to read the whole piece. i think it is driving people without a deal to their sites.

>> how hard was to start your own business and leave a secure job? how much money did you fund this deduced? >> it was the hardest thing we have ever done. i would say neither of us are risk takers. it was the scariest thing of the world to quit our jobs. we loved our old careers. we believed in the so strongly we had no choice but to do it. roomd this on her living couch every day for over a year and a half. a formal fundraiser at the end of last year. we raised over $1 million. that was the hardest thing for us to do. not only is a hard to be an entrepreneur and raise money, doing it for the first time is the hardest thing in the world. >> daily candy was much less -- what the site.

it got acquired and then it died. >> it was a great model in a lot of ways. the founder is one of our advisors. we have seen the ups and downs firsthand. >> what did they do wrong? >> there's is a certain ceiling with e-mail. we want to work around that. this is an interesting model. i am not saying we will follow it, but we need diversification. learningggest experience you have found so far in your experience of starting this business? >> fundraising. >> i think trusting your gut. this was all our gut instinct from day one. >> thank you so much. >> best of luck. >> i do read the skimm.

they are cofounders of the skimm. >> is brazil ready? i went there to check it out. we will see what i found. . ♪

>> netflix fans binged on "orange is the new black." it is expected to be one of the talking points at the shareholders meeting today. i want to bring in jon erlichman from los angeles. what are they going to be talking about? >> i think this is a great talking point.

there was so much conversation around "house of cards" with good reasons. you had david fincher and kevin spacey. black" is the new just as bold. it is from the creator of "weeds." she said she wanted to do a story based on a book about life inside a women's prison. they said go for it. the price tag associated with about $4 million per episode. they have already re-upped for a third season as well. that is $52 million. this is not small money. a lot of people will ask about the spending on originals and how they offset that. they have said they are going to raise prices in some cases. >> i think it has been a brilliant strategy. you have taken it from a

distributor of content to being an originator of content. it has created huge shareholder value. since they did house of cards, it has been an enormous value added for the shareholders. i think they are becoming a competitor to all of the mainstream content producers in the world. it is a great idea. >> can netflix afford to spend these high prices? you can see the big networks do it. does netflix have the dough to do that? >> they raised a lot of dough to be able to do this. if they can use this as the main weapon towards getting to 90 million subscribers in the united states, that is the goal for the company. our west coast correspondent, jon erlichman. >> is brazil ready for the world

cup? the kickoff is on thursday. that is what i saw when i went down there. you're going to find out in just a minute. ♪

>> in the world of sports there is nothing bigger than the world cup. that is why brazil is under so much pressure to brazil -- deliver. heard aboutbably unfinished stadiums. i went to brazil to see for myself. are they ready or not? let's say you're going to brazil for the world cup. this is what you will see as you step off the plane. a expect some traffic on your way to the game. aen you finally get there, hardhat might come in handy. take the $365 million stadium.

it has been a scramble to get it finished in time for the opening kickoff on june 12. with just weeks to go, entire sections had no seats and much of the roof was not installed. this was supposed to be a huge parking lot designed to hold dozens. the inaugural match was barely able to accommodate a half sized crowd. aagine what will happen when crowd of twice as many people shows up. it could be a security nightmare. some of the challenges of stadiums and parking and the uncertainty of where it is we will be able to go or not go. this is an uphill battle for all of us that have a responsibility of protecting these people. >> the world cup is the biggest sporting event on the planet. why aren't they ready? are deep in the

situation. $3.6 billion to build or remodel stadiums. only three were delivered on time. earmarked toas bolster the infrastructure. will not beminal completed until after the world cup is over. is months behind schedule. did little to fix the problems that lead to epic traffic jams. way up north in the amazon, there is a city closer to being ready.

this is a jungle boomtown. three weeks from the beginning of the world cup, how much work you have left? they will host one of the biggest matches of the world cup, england versus italy. we need to prove >> that is what is really at stake. not if they will come for the world cup, but whether they will come back. will they come back? colors. -- i see your

colors. you loved going. it was a great experience. what do you think is going to go down? >> people are going to the world cup. it's not like people hear us they are canceling their tickets and their flights and not going. they have made a bet on the future of tourism. the idea behind hosting the event is the 12 cities will be a showcase for the city. then people will come back. >> the london olympics were a huge success. was it a success for the city of london when you think about the amount of money they are spending? >> there is a difference between

the olympics and the world cup. the passion of the world cup fans is unlike anything. if you put them in a dumpster, nobody would care. they are so passionate about the national pride they have in 600r team and winning, million dollars is being spent by marketers on the tv contract alone. there is a huge interest. there is the passion that people feel for the sport. the actual environment and how the percent of the completion and the infrastructure is secondary to the actual event itself. i think it is going to be a great success. tragedy -- a global >> there are going to be domestic protests. those protests could get ugly. there is a group of anarchists

that infiltrate these protests. >> there is going to be a huge amount of police and other kinds of security. they had in london. paranoia was like what they had in london. they will ensure that there is not anarchy and things are safe. why doe end of the day people spend billions of dollars? why did london do that? are making a long-term investment in bringing tourism to the country for a generation. >> does brazil have the ability to make that that given the financial situation the country is him? >> they are going through great difficulty. ae economy -- this is not trillion dollars. in relation to their economy, it is a modest investment. >> this also says with the

countries priorities are. they want education. they went housing. they don't want new stadiums. >> this is like making investments in las vegas. you made them last year and then the world turned. the worldre awarded cup in 2007. seven years later you say it wasn't such a great idea in relation to what we saw seven years ago. blue azure color. >> and yellow as is. >> we will have more on the road to rio all week. , where wee back are going to talk about the flight of the under banks. stay here. a that was a clip from

documentary commission by american express. they are trying to create buzz. join us to talk about the campaign is a serial entrepreneur. he is a judge on "shark tank ." tell us about it. americanted with express in october of last year. -- to us with us this idea to create a social conversation around a major issue which is the concept that over 70 million americans are under banked. this is a major

issue. >> why would they care? i am guessing that if you are under banked you can't get a platinum card. >> we are trying to change the face of the brand. we are trying to move from being an exclusive brand to an inclusive brand. this is been a major issue for our country. half of americans live paycheck to paycheck. raise $2000 if they had an emergency in one month. there is a saying that is expensive to be poor. that could not be more true for the people who are on the margins of our system. the things many of us take for granted like paying a bill are incredibly time-consuming and very expensive to the underserved. billion in$89 unnecessary fees and interest in 2012 alone.

12% of their disposable income. we thought we could help with that issue and jumpstart a conversation. >> my role here is getting the message out. i started my business in 1989 on in -- and american express card. if i didn't have that card i wouldn't be here today. many of the people we invest in on "shark tank" were in the same situation. >> what is the message you are trying to get out? >> financial intelligence is something everybody can have. the technology you can get tools you need to reduce your expenditure. theyf millennial's say will never work for anybody ever. they need this knowledge. just want to start a business and they don't want to work for the man. they don't have the means to do it. there are two entrepreneurs in the movie.

it is on youtube. they have this issue. if they don't have enough credit to be able to take alone. there are no loans available for them. they rely on these nontraditional payday lenders and check cashing facilities. there is one woman in the documentary who owns a handbag company. she does everything in cash. it is almost impossible for her to get inventory to grow her business to sell. on "shark tank" they see that all the time. >> if a mama is the ceo of the house can't afford to put things on the table because the money is going out the door, you can't do what you need to do as somebody running a home. wille people some people have the concept as it doesn't sound in principle all that

different from the pitches that went to four and low income people in the lead up to the housing crisis. these people needed a home. who was there to make it possible? a bunch of unscrupulous under lenders. lehman brothers. congress. the blame can be assigned to any number of parties. people were trying to sell something attractive and appealing and something alluring to low income and poor people. if they ended up in a not a good place. how do you make this different? problems in so many our country that seem like they have no solution. financial exclusion is not one of those. there is a solution that is rooted in new technology. we are entering into an era of the non-bank. you can have all the power of what you used to be able to do

in a bank in the palm of your hand. with software platforms and mobile phones and mobile apps, you can substitute the things that you used to have to be able to do in bricks and mortar infrastructure. that is very expensive. you can do that now with software. be extendingwe credit to low income people? >> it is a banking product. it is cashing your check. >> that is totally different. >> this is not lending. >> if you want to cash a check outside the system, they will take two to four percent of your check just to give you cash. what do you do with cash? bills with cash. you have to stand in line at a money order place. you have to pay $11 to send a bill. $30 billion on

overdraft fees for checked. this isn't about x tending a credit. this is about taking the fees and interest rates that people on the margins of the system pay and reinvesting it in them. that people doubt consider those fees unnecessary. but citibank does not think of them as unnecessary. that is their business. had you compete with them and still make a profit? >> you have to reimagine the financial system and not take what was an extended. of you think about what could be. fundamentallyre changing the way we serve people. you can do it at a cost that is than what traditional

financial service providers have been able to do. if you can take some of that cost reduction and extend some of the back to consumers so they can start to save, you can still make money on that. there is nothing wrong with that. you can be a consumer champion. it isn't doing the same things trying to do them more efficiently but reimagining what could be. >> is this a time for all inclusion? exclusivity made american express special. the day and age of technology where it is all about transparency now and you need to be out there, this is an opportune time. when you have people who are making money off of this, we won't blame them at the moment. we are going to get useful people who can educate themselves.

-- don't have to fight them against these big advertising campaigns. people have access to the information. >> people want to learn about this and they care about it. week, wersday of last have had 6.5 million views of the film on youtube. >> thank you all so much. thank you for joining us. we'll be back with more in just a few. you're watching "market makers" on bloomberg television . ♪

>> we are back with miles nadal. we have the time for some final

fonts. what do you most care about right now? ,> i think as a result of the clients have looked at this as an opportunity to reevaluate the efficacy of the work that is being done for them and its impact on return on investment. it has been a boom for us in terms of bringing on new people and winning new business. our new business activity and the rate of acquisition of talent is at an all-time record. >> are we still looking at antiquated measures of success? like nielsen ratings? how impactful are they? >> data is getting better and more efficient. is exceedingly effective and very timely. it is measurable. some of the old measurement tools are less effective.

it is not nearly as efficient as what it is online. the online tools of measurement ,hat google uses for instance is very important. there is a famous expression that half of my advertising doesn't work and i don't know which half. 15 month lifespan of a chief marketing officer, >> you sound positively bullish about your industry and your company. you and i both know that you have been taking some heat for selling stock in your firm. stock was up 273% last

year. it is up 1700% in five years. it is ok. i still have $200 million invested in the company. it is ok to have some diversification. i am 56 years old. >> you have some bills to pay. give them a break. it is great to have you. >> i enjoyed it. >> that is going to do it for "market makers." we are on the markets. this is matt miller with more. >> i want to get straight to the apple story. we are going to do and options insight saying it. jim stricker is here to talk about what we are seeing. we were just talking about the options market. it really begs the volume --

brings the volume up. impact of option volume is interesting. 500,000de about contracts per day. we only trade about 16 million contracts in the u.s. per day. >> that is an amazing figure. apple is going to be 3.5 million. >> this is usually pretty good for a stock for the post-split. started trading today. it is hard to see what the impact will be. it looks like a trading vehicle. we saw what looked like a risk reversal. that theyt the view

will move higher. >> volatility gets a little bit of a boost. >> in the short term tom a you would expect it to be around historical levels for apple. >> thank you so much. he is a derivative specialist. that is on the markets. we're back in another 30 minutes. state tuned for "money clip." ♪

>> welcome to money clip. we tied together the best interviews. i am adam johnson. this is the rundown. for is setting a record start up valuation. is brazil ready to host the world cup? the business side of soccer is part of our series. what are hillary clinton's hard choices? divided, there is a silicon valley.