>> from bloomberg world headquarters in new york, i am mark crumpton. this is "bottom line," the intersection of business and economics with a mainstream perspective. the president's recess appointment power is curtailed by the u.s. supreme court. we go inside the fbi's supersecret lab for improvised explosive devices. and owning a piece of the derek .eter legacy to our viewers here in the united states and to those of you joining us from around the world, welcome. we have full coverage of these

stocks and the stories making headlines on this thursday. alix steel follows the latest earnings report from conagra. we begin with our senior markets correspondent julie hyman, and alibaba announcing plans to list its shares on the new york stock exchange. julie, good afternoon. >> good afternoon. there has been a heated battle between the nasdaq and nyse to win this prestigious listing which might be the largest ipo ever and certainly would be one of the largest tech listings on either of these exchanges. click the new york stock exchange has indeed won this. it is now owned by intercontinentalexchange, or ice. at $160e is estimated billion. it would be behind ipm and oracle among tech companies listed on the nyse. there is a lot of talk about the importance to either of these exchanges in winning this listing. it is more of a wrist each idea here. if you look at actual revenue it isisting fees to ice,

a relatively small part of its overall revenue. so it is more of a question of bragging rights. it is also a question of, can they then market other of their services, data services, other kinds of dusting services, to alibaba? also remember that the listing fee for the company is based on the number of shares itself. with alibaba, it is going to be relatively large. if you look at how the two exchanges,the two have done in their competition of the years, nasdaq really faltered when it came to the facebook ipo, which did not go exactly as planned. the nyse has gained some steam since then. nasdaq has gotten google and apple, large ipo's. have beene, there more recent ipo's like twitter. in 21 through 2011, it illustrates what we have seen in a switchgear the nasdaq won 122

at the tech and internet listings. the nyse got 42. since the facebook ipo, the nasdaq got a fewer number, 25, that raised more, a can, because it is the facebook ipo, but the nyse has been winning more in numbers. of course, that number will go up exponentially with the alibaba ipo here it on one other note, it is being listed under baba. there is some speculation that because of the chinese meeting ba, the never eight, it has applications with good fortune attached to that word. but there is speculation that august 8 could essentially be the ipo. >> looking between the lines. is there still blowback from the facebook ipo? is that why they went with the nyse? >> we do not know conclusively, but that could certainly be one of the reasons that contributed to this. in addition to that, the nyse,

even though there are probably very few differences materially between the services that the two exchanges offer, the nyse is a more traditional exchange and has history on its side in winning this listing. >> what does it mean for reputation? >> huge news for the nyse in terms of her beautician, given the size of the ali baba ipo. also, even the recent trends that the nyse has been winning these big tech ipo's, that is definitely even more of a win that it is keeping up that momentum. >> julie, thank you so much. the other big story on this thursday, the u.s. supreme court has curbed the president's power to make temporary appointments. the justices ruled unanimously that president obama exceeded his constitutional authority when he appointed three members of the national labor relations board act in 2012. let's get more from the steps of the supreme court.

greg, what does this all mean westerner >> as a practical matter, it means it will be very unlikely that in the near future a president can put appointees into high positions without senate approval. the supreme court essentially said the senate has the power to block the president from making recess appointments, and as long as the other party, other than the white house, has control of one body of the house or at least significant numbers in congress, it should be able to block the president from doing that. ifthis is not a mechanism, you will, that is new to the united states, new to the executive branch. presidents as long as i can remember have been making recess appointments. is this all about the definition of what is and is not a recess? >> yes, it is. in fact, much longer than either you or i can remember.

in justice breyer's opinion, he talked about recess appointment going back to the beginning of the republic, talking about recess appointment made by james madison. said whenon is, you the senate is in recess -- what happened here is that the senate, trying to block -- republicans in congress were trying to block the president from making recess appointees, so they started holding these pro forma sessions in the senate every three days or so so there would not be a big enough gap for the president to make an appointment. obama said i think that is a big enough gap, that is a recess. today the supreme court said, no, that is not enough. it needs to be longer than that. the court stopped short of putting broader restraints on the president power, but still, it is a very big step, at least as a practical matter. >> what does this mean for the national labor relations board and for some of the recess appointments, some of those men and women who were members of the board and some of the decisions in which they have

participated? >> there are several hundred decisions that are now in question. they are perhaps avoid as we speak or will be void. the board will have to go back and reconsider those cases. in many cases, they may reimpose the same order that they imposed previously. it is differently constituted, there are two republican members on the board, and because they hear cases as three had a member panels, you may get some panels with two up -- republican appointees and one democratic appointee, and they may come out very differently than the nlrd did previously. >> thank you for joining us from outside the u.s. supreme court. u.s. senator howard baker has died, and he served 18 years in the senate. he earned the respect of her publicans and democrats alike and rose to the post of majority leader. he -- his question at the watergate hearings, what did the president know and when did he

know it, became famous. it instantly focused the nation's attention on the watergate cover-up, more than in itself and eventually brought down president nixon's presidency. he was 88 years old. next, conagra is out with earnings. we will look at the numbers and tie them into the ever changing eating habits of americans. "bottom line" will continue in just a moment. ♪

conagragiant preannounced fourth-quarter results leslie, and the official results came out today. after a $681 million write-down, some analysts are calling for activist investors to break up the company. onx steel joins me with more the story. what is conagra's biggest problem? >> conagra seems optimistic, saying we will see growth in earnings this year, and it will to 2017, but16 that is mostly due to cost-cutting, not necessarily underlying growth. that is were the biggest issue is. back in 2013, conagra bought a private label business. it has been trying to integrate these two koreans appeared on the one hand, you have a private label business that has less shelf space and stores, lower margins. on the flipside, you have the name that conagra has, the brand names. they have better shelf space and

can charge more. they tend to have a better relationship with the consumer. because of this lack of integration, analysts say 2015 is a make it or break it year for the company. >> ok, so how does this reflect and is in what we eat? >> quite a bit, actually. surprisingly, we are not eating that much. we are not going to the grocery store and buying a lot. spending on fisheries has risen less than 1% a year since 2008 -- spending on groceries. you have a population gain and retailers getting to the mix. you people going out to eat. like $1ardee brands is billion in sales for conagra, so it hurts them in particular. cells should only grow by 21 billion dollars by 2018. >> so what are we eating? >> what are you eating? >> salads. >> oh, a healthy man. but that is a good point. a point out the health craze. gluten-free is doing really well . snacks are doing well.

gluten-free should grow 39% by 2018. you also have snack sales that should grow to about $42 billion by 2018. that is like potato chips. they can also be pita chips. protein has been pretty popular. yogurt sales should increase about 10%, almost $9 billion for 2018. >> where does it leave on aggregate to the next stop for activist investors? >> that is what analysts are saying. one expert says if the companies cannot integrate, this will be right before an activist investor. p'slooks back at ralcor acquisition the post foods. it did not do very well in three years and sold itself to conagra because of pressure from an activist investor. that could serve as a roadmap for how to break up conagra right now another option from is that selling some of the underperforming brands might actually be a good

option considering the stock is not really done anything. it is trading right around where it was when they bought ralcorp. in someabout investing brands? >> the company mentioned that today. they would be open to investing in some brands to create value. recent food sales have been big and protein. remember, conagra has names like hebrew national hot dogs and wolves chilly, which you do not -- and wolf chili. >> thanks. coming up, how investors are strategizing in anticipation of a rise in interest rates. ♪

st. louis fed president james

bullard predicts the federal reserve will raise rates starting in the first quarter of 2015. that is sooner than most of his colleagues have said. the committee is debating how much it should keep rates near zero after completing its bond purchase program that is set to end late this year. joining me now is the chairman of cumberland advisors and the chief monetary economist of cumberland advisors. gentlemen, thanks for your time. the treasury is on the rise for the third straight day. yields declining, even as the fed's preferred measure of inflation gains, it rose to the highest since october of 2012. david, is this in anticipation that the fed may keep interest rates lower longer than expected? >> we were just talking about that. we don't know. the game is a changing game every single minute. now you have bullard out today

-- just announced it, saying we may start raising rates in the first quarter of next year. you have others, and we were talking about forward guidance and what forward guidance we have -- we don't know. this is all a guessing game. >> any chance we might figure out sooner rather than later? >> it depends on what the real gdp is going to be and ultimately what the inflation numbers are. i do not see the inflation numbers waking up at quite the same speed that has been talked about. certainly come in his guidance and what he has talked about today does not reflect a majority of the views of the fomc. i cannot imagine them changing and such a short amount of time since the meeting. >> janet yellen said last week that accommodative monetary policy, rising property and equity prices, and improving global economy should lead to above trend growth. we saw that number revised

downward for the first quarter gp -- gdp, 2.9%. that is not insignificant. was it an aberration or is it a harbinger? >> a lot of people think it was due to the weather, but it is hard to believe that all of it was due to the weather. i think what we take away from it is not necessarily that the an threat ofddenly going into recession or something like that. what it is is that it is still fragile. i think it is the fragility issued that janet yellen is concerned about. >> and it is also about how profits decline. and till we get to the second quarter, if we had a v and go down like this and then go back like this -- what if we only go halfway back? what is that saying? this was not just the weather, there was more going on. we have a huge uncertainty now, more than i think we have had in a while. >> is something still structural doing this? >> maybe, maybe so. i hate to be evasive, but it is true.

>> corporate profits were on a trend, exponential almost, and then they dropped off 30% in the quarter. that is an even bigger drop than gdp in some sense. . think david is right what kind of rebound will we get in the second quarter? it will be a while before we get those numbers. >> today we learn consumer spending rose less than forecast in may. fewer americans filed applications for unemployment benefits last week. taken together, what shall we make of that? >> i think it applies slow growth. and improving gradual economy, slow growth -- i do not see much risk at all of a downside. but on the other hand, we are 2.5%, something in that vicinity, for growth for a while. >> how long, through the end of this year, 2015? >> again, we have a high uncertainty. we did create plus 200,000 jobs

a couple months in a row. it is getting better. on the other hand, it is getting better slowly. what we have not had, and we have talked about this, hell you see it ahead of time. we have not had an inflation shock. if we got an inflation uptick that was serious, this becomes a whole game-changer. >> define serious. 2% + and rising. we are not there yet. if we get closer to that, this gets -- >> i am speaking with david and robert of cumberland advisors. ,he richmond fed president jeffrey lacher, spoke today, saying the central bank should follow the exit strategy outlined back in 2011. a question for both of you -- is its exitinning strategy on the repo market and rate? >> it is clear that that is

where they are putting it. >> is it risky? >> a very risky. because they do not know what the elasticity of the demand is. the experiment is based on a few hundred billion p at we have $2 trillion we want to liquefy in that market. we do not own the market will take that or not. and we do not know what the rate would be. we have an experiment that ends basisuary with a five point rate. we have 100 new players directly coming to the fed. once this is then flushed out and operating, we have no idea how this is going to multiply or work. it is a whole new game in military -- monetary policy. it may work well, but we do not know. >> freddie and fannie and the wome loan banks are no counterparties in this reverse repo market. they are able to hold to posits

at the fed but not able to earn interest on those deposits. around a backdoor way that restriction. >> we have a minute left. the governor of puerto rico is proposing legislation that would let certain public corporations restructure their debt. puerto rico has more than $70 billion in public debt. the unemployment rate is nearly 14% on the island. what does puerto rico need to do to reduce its debt? >> they have to restructure. they cannot sustain the debt load that they have. they are essentially downgraded to junk status by every rating agency. uninsured puerto rico paper is not in any of our portfolios. what worries me is there are holdings in a lot of mutual funds. people are putting money into those funds as tax refunds, and those funds have holdings of puerto rico debt, and the fund-buyer may not know it. >> we have to leave it there. always a pleasure to have both of you on.

thank you for joining us for what seems to be an every other month roundtable. thank you. >> thanks for having us. >> 26 minutes past the hour. bloomberg is on the markets. where stocks are trading currently. they are still in decline. the us of the off by about 4.5 points. was at one point down by about .5%. within the s&p, most sectors are in the red. financials, consumer staples, and tech. the only sector slightly in the green would be the utilities and energy. a couple stocks to highlight -- bed bath and beyond, shares of the retail chain are trading at a 52-week low. the company operates home goods and baby product stores. also check out neighbors industries. willndustry services

inquire -- acquire their hydraulic fracking business in cash and stocks. newes are soaring to a 52-week high on that news. back on the markets in 30 minutes. ♪

>> welcome back to the second half-hour of "bottom line," on bloomberg television. thanks for staying with us. when the u.s. military or law enforcement finds an improvised explosive device, it sends it to a lab outside washington. there it is analyzed, catalog, and archived. the idea is to study the techniques of bomb makers overseas in order to stop terrorist attacks in america. we visited the lab and spoke to its director.

>> the bomb is the terrorists weapon of choice. any time a bomb happens in the united states, i personally feel it is a failure on all part -- on our part. we want to disrupt this attack from taking place. i currently serve as the director of the terrorist explosive device analytics center. do here is we leverage the capabilities of the traditional forensic scientist -- sciences that have been used for decades. some of the things that we can learn are the tactics that were used to employ the device or the material. since the inception over 10 years ago we have received over 100,000 submissions of ied's from around the world. inside each box there is a different submission from each incident. the boston marathon bombing. the northwest 250 three, when the airline was flying into detroit with the so-called

underwear bomber. during the heart of iraq and afghanistan, this place was pretty crazy. we were getting over 800 submissions each month coming through the doors here. by biometric we exploiting these prevent it allows us to these individuals from coming to the united states. their fingerprints have been on ied's from other parts of the world. we have identified over one thousand individuals with potential ties to terrorism and nominated over 100 people to the national terrorist watch list. our biggest challenge is to stay far left of them as possible. i don't care how our information is used as long as it is used for the better protection of the homeland and the united states. >> here with more on the fbi bomb lab, clinton wilber. he wrote about it in this week's issue of business week, he joins me from washington.

thank you for your time. what did they learn from these bombs? >> a tremendous amount. one, how they work. to figurected them out the radiofrequency and materials that were used. they also learned, more interestingly, who made the bombs, how they made the bombs. 44 of them were leaked -- linked to a single bomb maker at one point. that information was passed on to the military. it can be used to disrupt the thosek, capture them, kinds of things. it was a two-tiered process on how to help troops, protect them, and get the bomb maker. >> doesn't the defense department already investigate ied posse -- ied the? -- ied's? >> the best way of getting these clues out of them is not the military, it is the fbi.

they have had years of experience in doing that. the first world trade center, the 9/11 attacks, they have the expertise. in 2003 they were working on a case out of saudi arabia that had nothing to do with the war in iraq and afghanistan. they said that this was going to be there issue, to help the military. they are pumping up this intelligence not just to arrest people, but to give it to the military to disrupt networks by killing people. >> joining us from washington, dell, thanks so much. today marks the first year anniversary of the supreme court's historic anniversary on the definition of marriage, invalidating a portion of the defense of marriage act that had defined marriage as being only between a man and a woman for purposes of federal benefits. for more on how the landscape has evolved since the decision, i am joined from san francisco by ninette miller, the head of

the lgbt and nontraditional family practice. welcome back to bottom line -- "bottom line." good to see you again. >> good to be back. >> it has been one year. what are the new and untapped benefits afforded to same-sex couples? >> they are allowed to file a joint return. they have the benefit of group reduction. they can do estate planning. the transfer of wealth between spouses is now much easier. there are medical benefits, housing benefits, retirement benefits -- benefits that traditionally married couples have gotten, same-sex married couples have been allowed to get. >> were these couples aware of this? have they been doing their homework? were they surprised when they found out they had these benefits coming to them? couples anden a few the question they always ask is -- what does it mean to be

married? it was never in the realm of consciousness. you go through what it means in terms of a joint return, estate planning, your death benefits. cerealas been a lot of out there, but it is also a. of learning. >> to you find that perhaps some of the stuff they did know is that at the very least the struggle for them was not about finances, joint accounts, or anything like that, it was more emotional, that they felt that these were rights they were due as americans. you are lot of people, right, it was an emotional decision. after that emotional decision was made after they were married , what does it mean? your estate plan will change now that you're married. we tell people to look at your 401(k) plan. if you don't change it to married, you could have a taxable event upon your death. a lot of them it was for after the event and allowing them to plan.

same rights come the same headaches. how our personal finances influencing marital decisions within the lgbt community today? >> just like a traditional paying couple, will i be more? less? what does it mean for my financial future now that you can combine assets in a tax-free manner? >> what are the challenges that clients have told you they are facing at this point? particularly those members of the lgbt community who are in their 60's or older? >> they might say that it is too late for them to do any kind of joint financial planning. the answer is no, it is never too late to plan. there are a lot of things that you can do, the medical power of attorney, things that can still be done regardless of your age when you are married. >> this is the 11th anniversary

of the supreme court's lawrence versus texas ruling in which states could not enforce laws prohibiting same-sex adults having intimate relations. how have the lawrence and windsor cases not only shaped public opinion, but the political bylaw? as of thisnow now, morning there are 20 states where it is legal to have same-sex marriage. i think that what happened with this particular case is that within a year we have 20 states that allow same-sex marriage and in every other state there is a lawsuit that is in process to answer that question. we have six or seven states where the state court said it was unconstitutional and it has gone up the appeal. i think that what everyone was surprised about was how quickly this has become the norm and a nonissue. miller, joining us from san francisco. his miller, always a pleasure to

get your perspective. thank you for your time. coming up, some of the rarer items belonging to new york yankee legends that are going on the auction block. we will have them right here on set, when "bottom line" continues in a moment. ♪

it is time for today's latin america report. a federal judge has the mott -- denied argentina's request to extend deadlines to repay a debt to bondholders that the country claims to lead it into a catastrophic default. in the meantime, argentina deposited $1 billion to make a june 30 interest payment on structured bonds, setting up a conflict with the court order that prohibits the nation from paying the notes without also surfacing its defaulted debt. has banned one player for biting an opponent at the world cup.

it illuminates suarez from the upcoming premier league season. they also find him 112 thousand dollars. that is your latin america report for this -- for this thursday. that is what you get for biting someone. as you probably know, the u.s. advances despite a loss to germany, in fact both teams go through. portugal and ghana are both out. you may be paying more attention to the world cup, but it is a big day for baseball fans. is 40re -- derek jeter years old today. to mark the occasion we are going to show you some rarer items from his career that are up for auction. ken goldman is the founder and president of goldman auctions. he is currently auctioning yankee memorabilia that stems their entire history, going all the way back to -- all the way back to babe ruth.

i'm smiling all the way through this -- i have got to ask you what i asked you during the commercial break, do you ever get tired of touching history? >> absolutely not. especially when dealing with legends like babe ruth and derek jeter. >> why auction these now? with a not be worth more after they retire? >> it is the 100th anniversary of the babe ruth auction, our first live event, we think all the yankee fans are going to be involved in the auction process. we will do something after the season, but you don't want to have everything in one auction, it is too many items. the funny thing is that even though this is the 100th anniversary, we have close to 100 derek jeter items in this live auction. >> show is a bit of what you have brought today. >> this is going to be one of the most popular derek jeter items. a bat from his rookie of the year 1996 season.

it has got tremendous use. it is signed by derek jeter. this is the exact bat that he used when he won his first ever world series. on a scale of one to 10 it has been graded as a 10. >> we put a jersey here in the chair, it has even got some of the dirt from the infield on it. >> exactly, this is his last opening-day jersey from old yankee stadium. the collectors love photo matching. they like to know that this is the exact item that was worn -- besides the fact that it was authenticated, but you get something like this, final opening day at yankee stadium and a tremendous piece like that that shows he was active that day. >> what do we think that will go for? >> in the 25,000 dollar range. >> the rookie bat?

>> $50,000 plus. flex during the commercial break i asked ken, respectfully -- this is a babe ruth that right here, i was almost afraid to touch it. i asked if i could pick it up and he said you have got to hold the handle. who did he sign this to? >> this is an amazing story. he found out that he was sold to the yankees. he took his favorite that from heton, the first bat that used in new york, and that and he met buck weaver during the game and buck weaver was acquiring a collection for an individual, one of his former owners, so he signed and inscribed the bat to one of the owners of the minor league teams and it was in his estate for 60 years. it is the only dated and certified bat from his rookie season. >> of the black sox. >> exactly, just to show everyone.

the autograph is a little hard to see, it is underneath there, but this is a 40 ounce babe ruth bat. it has been called the most important bat in the hobby. ever want to own one of these on a scale of one to 10? it is graded as a 10. between its use in the yankees and it's gift status, it is extraordinary. >> this contract? >> his last one, from 1918. it is signed by babe ruth. this is the great auction catalog that comes with it. >> real quickly, 20 seconds, still emotional reactions 100 years later? >> he is the king. the catalog is full of history. his first year with the yankees? in the majors?

19. that is how much better he was than everyone else in baseball. heren goldman, joining us in the studio with the rare memorabilia. thank you so much. stay with us, "bottom line" will continue in a moment. ♪

in detroit, and extensive hearing on the city's historic $18 billion bankruptcy case will be held. they are prepared for an epic trial set to start on august 14. betty liu was there this week stevehe revolution ceo, case, using detroit to kick off his rise of the rest to her, with 68 more silicon valley's in middle america. gilbert,s a with dan the majority owner of the cleveland cavaliers. as a native he has a vested

interest in seeing the city bounceback. >> we have over $1 billion in investment in real estate, in technology and existing buildings, new construction. there is 100% residential occupancy. the young people coming here can't find a place. >> for more on the exclusive be sure to watch bloomberg television all day tomorrow starting at 8 a.m. new york time on "in the loop," with betty liu. ony with us, another check "market movers" is on the other side of the break. ♪

latest headlines on your tablet, bloomberg radio, and bloomberg.com. that does it for this edition of "autumn line." alix steel will be in the chair tomorrow. i will see you again on monday. "on the markets" is next. >> 56 past the hour, i am alix

steel. stocks are continuing to pare their earlier losses. the s&p was down by as many as 10 points earlier in the day. one stock we want to pay attention to, conagra foods. they reported a fourth-quarter a 680 $1 million write-down. conagra is now valued at a 36% discount to its peer group and has been the worst performing product maker this year. food companies that are considered staples are the focus of this sector report. joining me for another look at this group, can shape. ken, conagra's worries are not just about conagra, it is the whole group. we even saw that with general mills. what is the biggest problem? quite that is exactly right. as we learned yesterday from general mills, the u.s. food package group is growing very

slowly, if at all. that is setting up a zero sum game where the gains of one are coming at the expense of another. conagra compounded the problem by having a difficulty in acquisitions. >> in terms of the broader industry, are we just shopping less? shopping differently? what are we doing that is so drastically different from 10 years ago? >> that is an interesting question. general mills address that had on yesterday saying that what defines the health and wealth of consumers is changing and changing fast. the playbook of the past is that if a company came out with low-salt, low-fat foods, it would be a differentiator, but that is yesterday's model. today consumers are looking for more, looking for gluten-free and non-gm oh foods, artificial preservative free. they are upping the bar on what they expect from packaged food

companies. >> like you mentioned for conagra specifically, which has been dealt a bad hand on its own, they had to integrate the private label brand with its own retail brand. why are they having such a hard time doing that? >> they explained it by saying that when they bought it, they referred to it as a rollup, which was an interesting term. basically you are buying an asset that was not fully integrated when you bought it. they probably understood that but did not appreciate just how difficult it would be to assimilate its own assets and how it goes to market as one firm rather than 10. >> many analysts have called 2015 a make it or break it year. i have heard of many strategies, like selling it off altogether with activist investors getting involved. and your research, what is the most likely possibility for conagra?

>> a few times today they stated that they were committed to their decision to go full force into the private label arena. i think that analysts are basically saying that that was yesterday's playbook. are anropositions important benefit to consumers, but so are the items i mentioned before. gluten-free and so on. consumers have shown that they are willing to pay a premium for those benefits. >> a great point. gluten-free products did grow 40%. thank you so much. "street smart" comes up next. ♪

>> the market is paring losses after the dow fell earlier in the day. a lot of single stock stories out there to watch today. alibaba, go pro. "street smart" is on every angle for you. "street smart" starts now. welcome, everyone, to the most important hour, we have 59 minutes ago. new doubts about american apparel's finances.