alix: welcome to the most important hour of the session. 60 minutes until the closing bell. i am alix steel. this is "street smart." we are seeing the dollar weakened while oil rises. the german chancellor, angela merkel welcoming greases prime minister. -- greece's prime minister. "street smart" starts now. ♪ alix: here are the top stories that you are watching ahead of the closing bell. in new york, stanley fischer

said that raising interest rates may happen by the end of the year. >> the interest rate is expected to lift off by the end of this year. the normalization of monetary policy gets underway. the extraordinary monetary policy accommodation that the fed has undertaken in response to the isis has contributed importantly to the economic recovery. although the economic recovery has taken longer than we expected. alix: deutsche bank is weighing three options to raise the firm's prosody -- profitability that would see it security units scaled back. one option would shrink the investment bank by almost 1/5. the bank is also considering shrinking its interest rate finance business and hedge funds in order to lift returns. the nfl suspending its controversial television blackout policy for the 2015 season.

the announcement means that all games will be televised in their local markets, even if they do not sell out. the decision comes after the sec eliminated a 40-year-old rule enforcing blackouts. we have got less than one hour to go until the close of trading. let's go to where scarlet fu is looking at all the at chin -- all the action. scarlet: the s&p 500 and the dow are attempting their first back-to-back advance in about a month. the nasdaq in the meantime is bouncing between losses and right now little is changed, not making much progress in pushing past the record -- record close. arming a late rally it does not look like we will get a new record today. we will wait until tomorrow. the dollars the big story here extending last week's decline. stanley fischer says that it will not be a fluid upward path for interest rate, even as it

may be needed before the end of 2015. it is all about forward guidance from the fed or any kind of guidance from the fed as to what will happen with interest rates. we know that the strong dollar took down a lot of prices and now that the dollar is backtracking, oil is getting a boost. you can see nymex crude turning positive in the middle of the session, even though saudi arabia indicated that they are pumping oil at a record pace. alix: thank you so much scarlet. the big story, greases tipping point, building trust seems to be the thing that the greek prime minister and the german chancellor agreed upon today in berlin. she told reporters that they had been working on building trust but that they want greece to be economically strong. meanwhile telling reporters that the greek bailout program was a success story and he did not go

to germany to ask for financial assistance. joining me now to discuss is the global head of fx strategy and author of "soul of the euro." joining us on the phone, the chief fx strategist at goldman sachs. like a dream team. thank you both for being here. what happens now? what happens tomorrow? >> the deal that was apparently struck that day apparently went back and forth and the deal that was made has not really materialized. so, we still have this situation where there is something written down on a per but in reality we are not seeing the reform needed to unleash the money that greece needs. in a few weeks there were literally not be any cash left. alix: you think that they actually only have a few weeks? >> it really depends on how you calculate it, right?

but it is a matter of weeks now. alix: robin, do you agree? what is the end date for greece when they cannot pay those workers? robin: first of all, thank you for having me on. i would say the following -- having watched the press conference, one thing that stood out was cyprus being asked about the progress on negotiations. he said, verbatim "it is important to honor agreements but it is also important to honor the democratic process in greece." the big flash point is whether they can come to a compromise on the big kinds of reforms that need to be done that will release funds. i did not see anything in the press conference that signal on either side progress on that. now, in the market there is a

debate as to whether greece, if they run out of money, so the scenario that was being painted, if they run out of money can they go to a semi-hibernation state and stay in the euro for the whole thing to be kind of market neutral? i personally do not believe that, but i think that there are people in the market who think that greece is at this point kind of a sideshow. alix: so, let's talk about that. what do you think when you hear a core person familiar with the matter saying that as many as 450 million euros were withdrawn on one day. that was happening over billions , as we saw last week. what is your take? >> we have a strange situation where we had deposit flight. the banks are getting more squeezed and they are staying afloat because they are being given liquidity and this is where it is uncomfortable because it is a kind of political decision, how much

liquidity to give. and they are giving a little bit extra every two weeks, just enough to keep the banks afloat. ultimately, if there is no political agreement, the ecb does not have a good reason to provide liquidity. if that runs out, if the greek government cannot pay its own bills in two or three weeks then the ecb will be in a tough situation. if they cut that line, we will have to have a bank holiday. alix: do you think that happens? robin, do you think we will see capital controls, like in cyprus? robin: i think that the type of scenario we are discussing, if in fact it comes to that, i think that anything is fair game. i do want to emphasize one thing, which is the market here is sort of, a, i think, being a

little bit complacent on the risks around greece. be, what the market is trading at the moment is cyclical rebound in europe and some of the data recently being better. think about what is happening in greece, it is basically an economy that has been struggling for many years. the structure of reforms are obviously painful to do, but now with the deposit flight that jens: quite accurately talked about, that is a huge shock. the banking system is now basically taking it on the nose, which is tightening financial conditions and effectively acting like a big rate hike. so, the economic situation in greece, while we were all focused on will they or will they not get the money, the economic situation is deteriorating.

what it means for the institutions negotiating this package the size of the package needed is constantly going up. the underlying whole is growing. alix: robin you made an excellent point, especially when you take a look at the yield of the three year and 10 year they have to deal with. do you agree that this is not reflected in the interest rate market right now for greece? jens: greek assets have obviously declined tremendously in value. quantitative easing is there instead of putting a backstop on yields in italy or spain what we really need to watch there is -- how does the political process in those countries develop? if something goes on there that mimics what is going on in greece? that is more stable and could determine whether we get the contagion a lot -- or not. alix: very interesting to see if

the austerity party can get any traction. i am making these gentlemen stay with me for a while. coming up on "street smart," the floodgates are open, investors are pulling their cash in search of higher return. where is all that money going? plus, could we see a fifth reserve currency? we will talk a little jargon for you and why it matters. ♪

alix: welcome back to "street smartalix:." suspending the campaign for the white house, according to a person familiar with the matter, heidi crews worked in the george w. bush administration and work for goldman sachs in 2005. high voter turnout in france denied marie le pen first place, as had been suggested. falling short of the 47 seats

won by the socialist, the parties are hoping to watt -- were hoping to ride a wave of antiestablishment sentiment in europe. mario draghi rejecting the blackmailing of greece, responding to a question that drew a waiver for the you -- for the ecb to accept junk rate bonds as collateral saying they will reintroduce the waiver at some point but that several conditions have to be satisfied. the euro floodgates are open, investors rushed to the exit putting their cash to work elsewhere in search of returns. where, exactly, are they putting that money to work? is the search for yields riding them to take risks that they should not? here on the set with me, the head of currency strategy and fixed income research at [indiscernible] and the author of the book "the fall of the euro." robin, what is your call on the euro? robin: we think that the

euro is in a big weakening trend. we have a year-end forecast of .95, we envision going through parity sometime in the middle of the year. than we actually see the trough of the euro coming around .8 in the future years. we have a prolonged weakening cycle. alix: what do you think? alix: i believe that the capital -- jens: i believe that the capital outflows is very important. it has been very forceful in the last six to nine months. i am a bit more cautious going into the second quarter. the dollar trend also matters. what the fed told us last week is that they are perhaps getting more concerned about the economic outlook on the back of the pronounced dollar strength that we have seen. i am getting more cautious on the direction right here, just because the dollar amount it

really does not mean that much for the two-year trend but for the next three months or so i think it is tricky because of the dollar. alix: would you be shorting the dollar, then? jens: we actually made changes to our recommendations over the number of emerging-market currencies. that is a big change for us, we had not had that kind of exposure in over one year. alix: let's talk about the flood of negative yields. $1.4 trillion debt carrying negative yield with germany one of the largest and unbelievable amount in negative yields with france there as well as the netherlands, look 2.1 dollar trillion all across europe, and unbelievable number. how long can this go on for? is this sustainable? jens: it is an extraordinary situation, but obviously an extraordinary situation that has happened in response to an

economic model that is also really unprecedented. the risks of a couple of months ago forced them to buy bonds at these low levels, right? i think that lower yields will stay for a. of time. while the data is a bit better in the euro, it is not going to come sufficiently to make a big dent in the need for very easy monetary policy for a while. alix: which kind of leads us to the next question, where is this money going? we have seen some interesting bets. norway's sovereign wealth fund is adding bets to nigeria. the highest since 2006. that is a lot of risk. ollie on's -- alliance it is an interesting and risky bet. what do you think, robin, is this a negative?

robin: think back to not that long ago, a few years ago when the fed was on full swing with its quantitative easing programs and you used to get drawn u.s. data and what did the dollar do on a strong payroll at the time? it weaken. strong u.s. data meant a weaker u.s. dollar. we think that what is happening now is that cbt we -- ecb qe is going to give us better rates on the dollar. the reason for that is that the market here sees strong data and is looking at that as something cyclically that will draw the euro higher and our opinion is that it is angering yields and forcing money out and at the risk that appetite grows you will get similar behavior now for the euro, where it begins on the rebounding of good data. so for core european asset managers in particular this is

obviously a very new landscape. the yield environment has changed very significantly. if you look at the official ecb data, the net outflows from the eurozone abroad have picked up, basically, to unprecedented levels on a 15 year horizon. we see a lot of those flows in the official data going to the united states. so, obviously the growth story here is appealing and it is a little bit of a repeat of what you saw back in 2000, 2001, when the u.s. was having strong influence from europe during the i.t. bubble. alix: and we are way past shorting euros. we have seen a flood coming out. also we are seeing u.s. companies taking advantage of this, issuing a huge amount of that in euros as well, over 25 billion euros in deals, if you take a look at this chart.

different question, what kind of risk is something like this creating longer-term? alix: -- jens: it depends a little bit on who is doing it. it could be companies that have an asset that they are hedging attempting to balance what is going on, the balance sheet. you have to look at a company where they have taken risks or if they have produced risks. it could be both. this is an interesting trend that you are seeing and certainly it is something new the change in the capital flow underpins the change. no doubt about it. the question is, is this going to leave these companies vulnerable or not? you have to dig in to find out. alix: gentlemen, thank you very much. you're all sticking with me. coming up next on "street smart," china may be becoming the world's fifth reserve her

and see. why does that matter for the globe and for china? coming up next. ♪

alix: the yuan may be one step closer to becoming the world's fifth reserve currency seeing the chinese currency joining the greenback, euro, yen, and british pound as part of the special drawing right. the idea was pitched to christine lagarde and up panel this weekend and it may have worked. with me to discuss more, the head of currency strategy and robin brooks from goldman sachs. robin, what is this and why does china care? robin: fdr is an accounting unit the china uses that is composed

of four currencies, currently. the eligibility or being part of the sdr is basically that the currency going in is widely traded, so it has to be liquid and reflect an economy that is open so that people can buy and sell the currency freely. as you said, the euro, the yen the british pound, the u.s. dollar are in that. alix: is this something that china could actually accomplish? is this realistic? what would trading have to be for that to happen? jens: part of that criteria would have to be a freely traded currency. there is no doubt that the way it has been traded has gotten more free over time, but it is still difficult for you to buy a chinese government bond if you want to, there are restrictions on that, so we have a little more work to do on that. the 1.i will make is that if you think about how global central banks manage reserves, we are

talking about the core money in the region, $10 trillion if there is just a couple of a percent that go into chinese instruments, we are talking about easily $200 billion worth of chips, we are talking about large amounts here. alix: to that point, standard charter that over 60% of central banks are invested in the yuan. what could it enough we get a reserve status? robin: if we get reserve status, then obviously that number is going to rise. you know, one of the things the central banks are looking for in this age of devaluation and unconventional easing is a currency with depreciation potential. i think that it would be very

attractive and obviously china is a growing economy with lots of potential, so people would like it. alix: i'm sorry, we have to leave it there. i could go on for a while. thank you both for joining me. we will be right back. ♪

just because i'm away from my desk doesn't mean i'm not working. comcast business understands that. their wifi isn't just fast near the router. it's fast in the break room. fast in the conference room. fast in tom's office. fast in other tom's office. fast in the foyer [pronounced foy-yer] or is it foyer [pronounced foy-yay]? fast in the hallway. i feel like i've been here before. switch now and get the fastest wifi everywhere. comcast business. built for business.

alix: here are the top stories that you are watching ahead of the closing bell. saudi arabia's gold partners will take necessary measures to support stability in yemen. they are asking riyadh to impose a no-fly zone to stop rebels from advancing. fighting threatens to escalate into a fold blown civil war. a louisville slugger the wilson brand, the slugger hit a revenue of 35 million dollars last year selling the official wooden bat of major league baseball. seaworld is unveiling a $10

million advocacy campaign intended to blunt criticism of their whale shows and reserve -- reversed the drought in attendance, explaining how they care for their killer whales while also going against the claims from animal rights activists. let's go back to the breaking news desk, where scarlet fu is looking at all the big movers. scarlett: pfizer, trading at an 11 year high after jefferies added it to its hit list, saying that they see a significant appreciation the share price because of the better than expected launch of its breast-cancer drug. that is if you get in on pfizer. another interesting one, a twofer, raymond james recommending that investors purchase jen worth for an experimental alzheimer's drug. analysts they're called it a free option on the drug because about half of their long-term care insurance claims are

alzheimer's or other forms of dementia. finally, gilead scientists having the worst day in two weeks after they issued a drug warning to health providers. apparently health -- nine patients developed abnormally slow heart beats and one patient died. the concern is that the warning could limit use of their drugs. analysts said that this would have a negligible commercial effect in terms of being a weakness as a buying opportunity. alix: all right, thank you so much. gerry fisher this year reaffirming what they said last year that a rate hike is likely before the end of the year but that the following increases will not be as protectable. >> beginning the normalization of policy will be a significant step towards the restoration of the economy's normal dynamics

allowing monetary policy to respond to shocks without recourse to unconventional tools. alix: they also commented on the role of strengthen the dollar. mike mckee joins me now, along with lisa abramowitz. what did fisher say that we did not already know? mike. mike: nothing. [laughter] alix: we will be right back. mike: george carlin used to do a bit about catholic school students speaking to a priest asking him metaphor -- metaphysical questions about religion in the's answer to everything was -- it's a mystery. today his relate -- his answer to everything is -- look at the data. it will determine how far and how fast we raise rates and that is the message they have been sending all along. lisa: i think it is important for the fed to diminish any hysteria that there might so

that when they do hike rates it is in an orderly fashion. you do not want a disorderly beginning to the tightening of policy. the fact that all fed officials will be repeating the same message, perhaps not so much focusing on it as the results are much to see here, folks. alix: although that was not the case from the cleveland fed president today saying that june was a viable option. mike: there is a group of fed officials who think that we should move sooner. they have gone from saying that we could move early but that fisher is in the center with janet yellen and bill dudley saying june or september could be sometime this year, that is kind of the modeled message. alix: realistically -- lisa: realistically, let's say that they hike and then do not increase rates again for year what does that effectively do?

it does absolutely nothing in the markets and i think that basically they are communicating that it could go that way saying -- look, we want a symbolic departure over the succession from when we have lift off, do it without doing anything else. mike: he said that when they raised rates they would go from altra accommodative to extremely accommodative. alix: right, a rate hike will not actually affect the economy one thing that he wound up saying. but you could say that nothing happened but i am looking at the dollar index and for no good reason it seems to be at the low of the session right now and i cannot come up with a headline to tell me why. mike: basically the dollar moved very quickly and, for various reasons, investors are taking a bit of a break particularly as they see what is going on in europe.

the central bank all think that we will start to see the dollar again going lower, the stanley fischer was predicting, the u.s. economy has performed well with a stronger dollar in the past and likely will again. the percentage changes will be transitory without as much of an effect on inflation as time goes on. lisa: in europe you also have a better mood. it is really lovely, they are trying to make sure that they do move forward without a run on banks in greece, making this happen sooner rather than later. alix: one thing that stood out to me was that policymakers cannot influence the labor participation rate. is that new? mike: not new, but why is it

going down as much as it has? we have seen labor force participation going down for quite a long time and it is just a question of -- did the crisis add to it? probably, but it is mostly a question of demographics, people leaving the labor force for age reasons and monetary policy cannot do anything about that. janet yellen has suggested that maybe it can without putting specifics on it so an interesting debate between those two. alix: you're the smartest person i know pretty much all the time what is the number one thing you will be looking for tomorrow? mike: you want to look at core cpi. the fed's goal is an index that is pretty similar but it is one where we are seeing the effect of the dollar and oil leading to other inflation. if not, you can look at those two in say it is transitory and inflation may start to rise again later in the year when the

dollar stops strengthening. alix: thank you for joining me. lisa, as always i will see you later in the program. time to think small, we have got a look at what is behind the recent rally. home prices are rising by the most in the year last month good news for sellers, but what about the buyers? we will be right back. ♪

alix: rallying at more than 5% this year, outperforming the broader market, small-cap stocks are raising the dividends at a vigorous space and joining me to discuss this is steve wood russell investments chief market strategist. typically they do well with a risk on activity. is this something else? steve: the risk here has been earnings in the first quarter with the oil and dollar -- oil

and dollar affect being multinational. also i say that the environment of the united states and the federal reserve made it somewhat clear last week that while they will probably go to 50 basis points in september, there will not be an aggressive tightening cycle, meeting that credit conditions do not have to be overly prohibitive in the near future. alix: also striking to me is the increasing dividends. is it traditional for the small caps to be so aggressive? steve: there have not been a lot of options in today's environment this is something that we have seen proceed apace in mid-cap spaces down to the russell 2000, another way for businesses to make it through. alix: to be specific, over half offer a yield of 2.2 5%, but

does that not say something negative about the u.s. economy if they find nowhere else to put their cash? steve: they are taking away the safe option and looking for a way to generate value in this environment with the economy doing better, but it is somewhat sluggish so in the absence of a really strong demand in the near future, looking for ways to use that technology. alix: how sticky are these dividends? steve: that is one of the things that history can show you small-cap spaces by definition are more volatile than large-cap space so i would say to understand the nature of the asset class you are in if you look at the russell 2000 all-time high, the strength of the euro is the underlying fundamental. alix: if the fed raises rates and it becomes more prudent to

invest in r&d, will dividends be completely scrapped? steve: the historical dividend for these would not be there as well, so there would be less of a data set. alix: do these dividends do anything to make a small caps less volatile? steve: i think that you see them trading and adding a bit to it so that there is less of a price movement on total return assets so there is a competition for scarce resources out there. fixed income is extremely expensive right now so there is a competition for that marginal investment dollar. alix: i guess the flip question is -- will they have to raise the dividend even more in order to continue to attract the yield surging investors? alix: -- steve: i think that the fed is going to extend that runway and there will be a long interest rate path that they pursue so i do not think it

will be anything overly aggressive with companies having enough time to anticipate this. alix: 600 companies, average yield, s&p 1.3%, very interesting in comparison, thank you so much, steve would for helping us break it down. coming up next, what is the real deal on the housing market? we will hear from industry insiders. ♪

alix: here are the top stories you are watching ahead of the closing bell, the royal bank of scotland continuing to reduce its faith in the citizens financial group, planning to sell as many as 130 2 million shares to institutional investors, hoping to raise as much as 3.2 billion from the sale. vivendi, rejecting a sale to spin off its music business the world's largest music company with annual sales of about 5 billion, saying that they will examine a proposal by the

activist who paid a higher dividend. starbucks employees will no longer right race together on coffee cups in the first phase of their efforts to further negotiations on race relations. howard schultz said the negotiate -- that it was only intended to last a week the next phase includes dialogue with community leaders and a commitment to expanding stores in urban areas. how would you categorize the housing market? sales of previously owned homes are rising less than estimated, so what is the real deal? joining me to discuss hassam. give me one word to describe the housing market. >> sustainable recovery. alix: that's two words. >> sorry about that. [laughter] alix: what gives you the confidence? hessam:" interest rates are

still attractive in a sustainable low. last but not least, the transition away from investors has distressed the dominated marketplaces with the fundamental market where actual homeowners getting jobs and wanting to own homes are buying homes. alix: something that plagued the housing market for a few years, investors purchasing a lot of property and cash transactions last month cash transactions were down 26% compared to 35% a year before and in 2013. what does that tell you? hessam: that there is still a fair amount of speculation going on in the marketplace. for most consumers financing is very important and i would not be surprised if a lot of those

cash transactions actually wind up with loans put on the houses after the transactions closed. the most important trend is that we are moving away from a troubled asset class in residential real estate and moving more towards a normalized marketplace. we are seeing the same thing in commercial real estate far ahead in terms of recovery and fundamentals. alix: what does the threat of a rate hike due to the housing market? it --? -- housing market? hessam: i think that from a signaling perspective they have to make sure that expectations are managed. but even if we had a moderate increase sometime before the end of 2015, the long term rates are the most important indicator. futures really show us that because of the low-inflation environment because the u.s. is really the gold standard globally, there is not much pressure on long-term interest

rates and we have seen those increase before. alix: does that kind of put off any kind of pent-up demand? there is no rush to the exit to buy a house? hessam: we are seeing enough in -- enough of an acknowledgment in which it is not as imminent threat, so it is a more gradual force in the marketplace. rather than a spark. alix: a spark of sustainable recovery. thank you so much for joining me. coming up next, "the close." stay with us. ♪

alix: welcome to our viewers around the globe. we are just moments away from the closing bell. all day we have been seeing gains in consumer shares offsetting the drop in transportation companies. let's get right to scarlet fu at the breaking news desk with all the details. scarlett: the details here are post-fomc and pre-earnings announcement, the path of least resistance is to kind of drift higher. the dow jones and the s&p are on track for their first

back-to-back advance in about one month, but there is not necessarily much conviction. if you look at the volume in stocks they are about 10% lower than the 10 day average right now. investors are waiting for guidance from the federal reserve and from companies. the federal vice chair provided a little bit of something in his speech today, saying that a rate rise is probably warranted but that there is a smooth path upwards that will not be realized because inevitably the economy will encounter shocks and in other words investors should not extrapolate the first interest rate increased to be the start of the study cycle or expect that it should be one and done, it depends on the data. alix: thank you so much, scarlet fu. i am here with lisa abramowitz the head of global growth equities, dean nick off, and alpine portfolio manager mark furman -- mark [indiscernible]

where is the conviction? anyone? market: right now we are in a holding pattern. i have been saying that the date to circle is april 3. that is when we get new wage inflation data and new employment data. we heard what janet yellen had to say. we know what the pieces of the puzzle are in we are waiting for the next data points. april 3 in the morning and then on the following monday. alix: you will be up, watching the numbers. why'd you think? >> we still do not have companies with pricing power and we cannot tell you where the nominal growth will come from which is why the lower rates longer makes sense, you don't help them raise the power with

wage growth being i think the single most critical issue, the reason it's going up is a reason that it's difficult to explain low labor participation rates. although a lot of people should be looking for jobs, they are not. alix: i think that people feel like this is not a normal environment so that when things become normal they want the flexibility to move into something that seems more fundamentally like a good investment rather than a momentum trade. i think that right now what i hear from people i talk to is -- how do you remain flexible in assets that you can move into and out of quickly? in junk bonds there has been tepid interest in u.s. junk bonds which makes no sense if you look at low interest rates longer with generally improving growth being good for junk bonds without people wanting to commit. >> i think they may be seeing what is going on in the energy sector and realizing that their bonds could go down a lot and that they might be having an

issue. treasuries is an interesting thing, like you were seven -- saying. on a relative value basis, they look and -- they look extremely intact. there you heard the closing bell and he see the slide into negative territory as we grind to a closing bell here. the dow is down by 10 points. the s&p off by three and the nasdaq off by about 15. we just couldn't hold it as we had this wishy-washy trading day. as get to scarlet fu at the breaking desk. gimme some of the skylight -- highlights here. scarlet: one highlight or low light is kansas city southern giving a profit warning. the rail company is a worse performer in the s&p 500 and drag the dow jones transportation down by 2%.

versus the earlier forecast of mid-single-digit. a 20% drop in: revenue. stronger dollar headwind and fuel surcharges are to blame as well. i am talking about union pacific, csx, and canadian pacific railway. unp is actually the most vulnerable to ks you's announcement -- ksu's an nouncement. perhaps this is a canary in the coal mine. alix? alix: i'm here with bloomberg bonds reporter and head of growth equities. and portfolio manager. the big sector movers of the day. you have consumer shares rising the most of any group.

tiffany's jumping. energy shares also rising along with oil. transportation shares dropping after kansas city southern dropping revenue growth. that's what pharmaceuticals said. the therapies help patients breathing less. speaking in new york a few hours ago. a rate increase is warranted by the end of the year. but is june still on the table? >> we are going to assess the data as it comes in, evaluate challenges and changes. it gives us more optionality. alix: is the global economy ready? what do you think? is it ready for a higher u.s. interest rate?

>> if you look at the asset classes, those that do well are among the cheapest they've been in history. alix: utilities do better in a low-inflation environment. right. >> on the reflation air he setting, you have a wide range. if there is any hint of reflation. alix: how does that help reallocate what you have been interested in?

>> we do groups like financials where there is asset sensitive and expanding net interest margin. a name like discover financial would be very inexpensive at this point in time. it would benefit from a better consumer going forward. we like that name. alix: the fed vice chairman fisher speaking about the strong dollar. >> they appeared to be putting downward pressure on the longer-term interest rates in the u.s.. these policies should increase growth in europe which would be beneficial for u.s. exports. some of these benefits may be offset by the recent depreciation of the dollar.

it likely reflects other factors, certainly including the relatively strong performance of the united states economy. alix: at what point is the dollar to strong? >> and the decline recently is because of leveraged bets. people borrowing money to go along the dollar. alix: is that fundamental? >> is a hike rates sooner, the dollar will probably be more valuable. people were looking at that dynamic. i don't even want to say this but you have potentially resolution in greece. if that happens the economic

growth there might be as well. >> one to two-year, the decline in oil prices actually creates more demand for the dollars. alix: why is that? >> you have fewer dollars going to saudi arabia. they have borrowed a fair bit in dollars. for refinancing we have a fairly strong demand for dollars as part of the program. >> how much is fundamental and how much is under circumstances that we are talking about? >> short-term, it is more technical. the backdrop for the dollar is higher.

alix: we have to look at the bond market. it they're worried about a bond bubble. >> if you hear european banking you can borrow very low rates, you can invest in u.s. treasuries. does it concern me that we can

take extreme measures and building up huge, unintended consequences? yes. this is what it has designed to do. the relaxation of capital requirements, that has not happened. alix: we are wondering into uncharted territory subject to uncertainty and mistakes. >> you talk about the german yield. alix: it is a little concerning. how do you model that? >> sometimes it gets down to a flow of funds. non-us governments, non-us entities have no other choice. i don't see a treasury yield because there's just going to be hundreds of billions of dollars coming into the u.s. treasury market. alix: there is nowhere else to

go. what does the housing market say? existing u.s. homes fell short of last year but is there a silver lining? distressed sales were down by as much as 11%. so were all cash transactions. we get new home sales for february. less homes being bought in cash and looking at less distressed homes. tell me what that means. >> the kids that have stayed home the last four years are getting some money and getting embarrassed. i know it sounds cliche but there's a pickup in rental properties and those indicated that you just mentioned will be consistent with lower cash

sales. >> i think the second derivative is coincidental with that. again, i stress the u.s. concentric consumer is probably where it's going to be the most positive news from in the next couple years. alix: germany extending an olive branch? wanting to build trust despite the looming economic state. later in the program, snoop dogg blames president for gang violence. -- president reagan for gang violence. ♪

alix: here are the top stories

we are watching after the closing bell. russia sending denmark a big warning. commenting it editorial on sunday that a danish warship could become targets for russian nuclear missiles. the comments have sparked outreach in copenhagen. he will speak to investors and executives about investing in u.s. companies to push for a corporate tax overhaul. many robert wallace to lead the $21.4 billion endowment fund. german chancellor on the low merkel in berlin today saying that they have been working on building trust. they wanted to be economically strong.

hans, you were just in greece. hans: depending on who you talk to, the deadline was april 9. there are always little pockets. it there is definitely a sense of pressure at this point. they will have to start putting things in order with the technocrats, that they call them. alix: did we hear anything significant? >> nothing of real

significance. they want to stay in the eurozone. alix: you creditors outline a very specific plan? >> my striking time in athens last week was how the people in the government were pointing to these meetings. if you are a setback setting the stage for us to be given the profile is the guy who solves the problem.

in general, more than 80% want to stay in the euro. if he can prove to be the guy this all the problem, it will booster his popularity. it is interesting to see. it could be in athens last week. alix: they say they wouldn't mind. >> merkel stepped in. they were both difficult.

over 50% is not such a big deal. if you look at the rhetoric they are putting out there, it's very pro-europe. i don't think she's really risking electoral problems taking the tactics she has been. she is insisting on the real implementation of reforms. alix: at what point would you describe the tipping point for greece? what would that look like? >> there may not be much time left before they need cash.

early april is what many of the estimates are. alix: how much more money is left in greek banks? >> i don't know if we can quantify it. i don't know the exact numbers. it but they have the l.a. funding. what i've heard from the banks last week, the money was staying in the system. it doesn't run on banks at this point but deposits are falling. they are tired of fatigue from constant crisis but there doesn't seem to be a real panic. it's clear that the banks themselves are in very close touch with the guys in frankfurt.

the political problems have to be solved. the bank should be ok. alix: we appreciate you joining us from colorado. ask for joining us. what happens if human falls to shiite extremist? and what if the terrorists gain even more ground their? we will be right back. ♪]

alix: the conflict in yemen is escalating. the leader of the shiite rebels

calling for volunteers and money for a bigger offensive against forces loyal to the president. along with several northern provinces. over the weekend, they captured the third-largest city and are now advancing to the gulf of aden. an adviser on middle eastern affairs, thank you for joining us. what do they want? >> an offshoot of mainstream shia-ism. they are more closer to the cities than they are to the shiites. that said, they are aligned with iran and fighting against al qaeda. alix: when you look at the security at what point do you start categorizing it as a civil war?

>> i think it has been for quite some time. the ongoing civil war has been ongoing even since before the toppling to his president of the country for many years. alix: you mentioned iran being behind the rise, do you subscribe to this? >> there are limits to how much a ran can help. they are too far away from yemen geographically to play a major role. iran has essentially overstretched the bandwidth to provide everything they need. this is a very poor country with

very few economic resources. they are hard-pressed for cash which frankly, the iranians cannot provide at this time. alix: is there any relationship with al qaeda and islamic state militants? >> they are enemies of one another. last friday, three mosques were attacked. they have claimed responsibility for it. nonetheless it's helpful are a part these are. compared to i.s. and al qaeda, i don't think they are on that scale.

they have intelligence links in an effort to fight -- alix: sorry, we have to leave it there. thank you for joining us. ♪

alix: here are the top stories we are watching after the closing bell. china is said to be considering sweeping changes to it securities industry. it may also be able to do full control. rising for a six day with the shanghai composite. this $870 billion fund says it has narrowed it search to singapore and tokyo.

let's go back to where scarlet fu is looking at one of the notable movers of the day. scarlet: the hedge fund manager says that mcdonald's could unlock at least $20 million of value. if mcdonald's includes a reconversion. moving on to staples that had its biggest rally they upgraded to a buy.

it cites potential synergies and earnings growth from that deal. management recently said is not seeing that given the pc industry still accounts for the bulk majority of the operating profits. alix: when he came to power in 1959, the gdp per capita was just over $500. it is $55,000. the sleepy backwater into economic power they long admired. he died yesterday at the age of 91. director of u.s. china relations at the age of -- asia society.

>> he was the last of that generation when every country, out of a big signature leader -- and so this really represents the end of an era where leaders who were larger-than-life branded their countries. alix: how did he open up his country in such a way? a totally different option to the west, right? >> it was really a city state. after an ill-fated alliance, they really had nothing. we don't even have water.

and it was out of that nothingness that he wrote this amazing fabric of this cross -- prosperous together state with a good deal of control. adopting the political system and values to bend that task. remember that he himself initially did not speak mandarin. he had to get an organ transplant for all of this chinese culture and language. alix: do you think that signature still lives on today? we see the party he represented sorted being challenged. is it time for a new model shift? >> probably. singapore is prosperous, better developed, and less challenged by outside events like the communist party. indonesia once was very opposed

to it. i think it can make this transition. and, i should say fairly and squarely. this was not nepotism at work. alix: when you look at u.s. china relations, they can be contentious at best. what part did we play helping to change that and frame the debate between these two countries? guest: i think he was an utter realist. albeit one that three or four generations ago had migrated and took a certain pride in seeing china regained this stature. he wanted to become more chinese after growing up in the british

colonial experience. he had many disagreements with china, too. of all the asian leaders, he was sympathetic to china while keeping a certain critical distance. alix: that tension between china and the u.s., the obama administration is proposing to co-finance projects with the new asian infrastructure investment bank after several key european allies revolted against the u.s. and said they would become founding members. what did you make of this potential shift? >> i don't think it was the white house toss finest hour. caught with their pants down when all of our allies went off to join the bank. i think it would been much better when china announced it to say a very interesting idea. let's work with our allies to

see how we can make this a win-win situation. and kind of having to run late in the game. alix: it seems like they agree to attack each other in a cyber war all the time. they want to be partners but not at the same time. what is the solution? guest: i don't think there is one. we will be in a state of contention and competition. like china or not, if you view the tremendous amounts of convergence we have no choice but to work with them. to find ways to collaborate. alix: this china feel the same way? guest: they do but they see us as much more powerful than weeks aryans ourselves. they feel threatened. and this kind of interaction over the bank confirms their suspicions that in our heart of

hearts, we don't fully support their rise. alix: if we look at global leaders, you have to look at great britain and power migrating to the united states. guest: i think the united states has tremendous vigor and flexibility and we're not going to disappear. but we do have to be prepared particularly in asia, to have a multipolar world where we are not the only big dog on the block. i think we can do that but it will take some adjustments. >> we had european countries wanting to be part of it. where did they migrate to? >> they migrated practically speaking to where they thought their interest was. they usually run along behind the united states and this time they didn't. it can be viewed as on toward

the united states, but also suggest that there is a certain healthy parity between western countries. alix: thank you so much for this great conversation of the asia society. coming up, outspoken tech senator ted cruz makes it official and during the 20 10 presidential race. what are his chances of getting the republican nomination? ronald reagan costs economic -- ronald reagan c's economic policies coming under attack from a very unlikely source. ♪

alix: we are 20 months away from the 2016 presidential election and the first candidate is in. ted cruz kicking off his presidential campaign today. joining me to talk about his

chances in a very crowded field is john allen. arguably he is best known for his unsuccessful 21 hour filibuster against the health care law. can he win iowa? guest: it will not hurt him at all with the iowa caucus. the republican side. it's a mark in his column. today is the fifth anniversary of president obama signing the health care law. ted cruz is aiming to be the proven conservative. i think he will get a little bit of a burst in this. alix: what is his signature issue? he's against a lot of things. what is his signature policy? guest: it's a huge challenge for him. and i think this is a challenge for conservatives in general who want to reduce the size of government. a lot of what they are talking about is repealing things and getting rid of things. you heard ted cruz try to transition himself talking about

shining city on a hill transition himself into a reagan like candidate. talking about taking things away including abolishing the irs which i'm sure sounds good to a lot of taxpayers but is probably bad for revenue. alix: the fundraising goal is pretty large, $40 million to $50 million. what is the difference between grassroots and big checks? guest: ted cruz is going to have to hit the grassroots hard for some of that funding. there will be people that step forward. this is the super pac era where you can make unlimited contributions. if he captures the imagination of a few wealthy donors, $30 million that he thinks he needs to be competitive early on for the $40 million to $50 million target is attainable. alix: what his plan b? it will be a crowded field.

a lot of grassroots campaigns in the conservative area like rand paul. does he have a second plan here? guest: ted cruz his senate seat is not up for reelection in 2016. he is building a national fundraising base, building a national following. even if he doesn't end up winning the republican nomination or the presidency or getting himself on someone else's ticket, he's well-positioned to raise a lot of money for 2018. alix: is this the democratic party's best dream? guest: they are certainly acting that way. those aligned with hillary clinton today have been hitting him pretty hard on core democratic issues. the right of women to have abortions, for instance. and other issues where they say ted cruz is out of line with the mainstream. they look at him as a blessing

if he gets the republican nomination. be careful what you wish for. you might get it. alix: true. coming up, snoop dogg is attacking president ronald reagan and his economic policies. we will have the details. coming up next. ♪

alix: snoop dogg says president reagan is to blame for the demise of los angeles in the 1980's. the wrapper is developing a new show for hbo that will depict families struggling to the era of reaganomics. joining me is washington bureau chief john allen. what is the case here? why does he blame reaganomics for l.a.'s problems? john: certainly, rhetorically from president reagan that is what he is looking at. president reagan was governor reagan in the 1970's, the time when i think mr. dogg things

were better and l.a. and the reform act, the government services. the comparison of the 70's and 80's may not be a perfect one. alix: what was so difficult in the 80's? john: the cutback of government services is the reasoning from snoop dogg. and if you look at what was going on a nerve in the at that time. that epidemic, the rise of aids a lot of problem's -- not only in urban areas. but if you look at some of the decay at that time in american society those were things the president was not doing a lot to address. alix: you made the point that ronald reagan was governor of california during the golden age that snoop dogg was talking about. what is the influence on federal

policies? or is it the day-to-day management of the governor's office? john: it may be the state government where president reagan passed the federal reform bill that a lot of democrats in particular in california thought was unfair. too harsh. it was one that he was able to pass, but at the federal level was unable to do it. alix: should snoop dogg be blaming congress and not president reagan? john: we will have to see what the documentary says and what he is able to do with this. how he is able to make the argument to assess what his argument. alix: we were talking about this all day. it was the topic on the street smart panel today. is anyone in congress or d.c. talking about this? jon: i have not heard much about it but anything involving snoop dogg is popular fodder.

he has been around for this generation's -- he is a public icon. alix: is snoop dogg unique in this? have you heard other rumblings about big stars talking about how republicans have heard them in the past? john: absolutely. a lot of hollywood is very outspoken, very democratic. a big donations. this point about los angeles in the 80's is certainly not a new one. it is an argument for many years. also made by democrats elsewhere. alix: john allen, thank you for joining me to talk about snoop dogg and reaganomics. very interesting topics. how one twitter user convinced elon musk to share his spacex photos with everyone. it's a pretty incredible picture. we will talk about it. ♪

alix: this is "street smart your co i'm alix steel. this is what we are watching after the closing bill. investing in mexico, gm will assemble the chevy cruze there. ahead of the planned paypal spinoff, the company amounting that the go pro president and ceo of the american red cross will join its board. the 15 member board will have 13 independent directors following the annual meeting according to the company. a mickey mantle signature bat is going up for auction. it may be the first one used by the hall of famer in major league baseball expected to

sell for $200,000. among several of his items that will be on sale next month. mickey mantle died 20 years ago at age 63. space aficionados got a bit of a treat this weekend when elon musk announced that spacex photos are now available under a creative commons license. some people did not think it went far enough. one twitter user says, why not just public domain? what is there to lose? he did just that. joining me is pimm fox. some of these photos were incredible. what did you think? pimm: nobody denies that these photographs are great. you are 105 we are talking about. one of the critical point is it may not actually be within his rights to release these things. for the simple reason that he did not pay for this spacex launch. we paid for this spacex launch

because spacex is under contract by nasa. every photograph that nasa takes is already out there for people to use in any way shape, or form that they would like to do so. one of the interesting things they are mentioning about this announcement is he responded to a twitter question from various people and he changed the license under which he is going to release these things. whether he did or not is for the legal people to figure out. but he's very good at getting publicity because these photographs are ours to begin with. it just as the nasa photographs are. we paid for them. it's sort of like the ronald reagan thing about the microphone. alix: why wouldn't the government mention that before? pimm: they always mention it. the always -- the other thing about the creative common license by 2.0 is you can't put

something into this common usage. it has to happen by itself. it's not as if an individual or person gives up the copyright. it either expires or it has a life of its own. it's not necessarily for an individual to say we are going to put these out in the public domain. in copyright law, there are no words that describe public domain. i understand this is parsing the legality of it, but let's not take away from these wonderful photographs. alix: let's just take a moment. pim:mm: not so bad. this is part of the effort to have the reusable capsule. alix: you also have an awesome guest coming up on taking stock. pimm: jon hmam is -- hamm is the madmen actor.

i got a chance to speak to him yesterday. alix: i am jealous. it pimm fox, always great to have you on set. we will see you back here tomorrow. with all due respect is up next. ♪

>> this is a bloomberg politics special report. raphael edward ted cruz -- >> i am announcing i am running for president of the united states. >> is he on cruise control, or cruising for a bruising? is he singing the cruz blues? tonight, the breaking cruz news. you can't refuse. mark: