mark: from bloomberg world headquarters in new york, i'm mark crumpton. this is "bottom line." to our viewers in the united states and those of you joining us from around the world welcome. we have full coverage of the stocks and stories making headlines on this friday. lisa abramowitz tells us why the jefferies group ceo is turning to california in search of an edge. peter cook examines the political fallout from senate minority leader harry reid's

decision not to seek reelection next year. but first, let's get you to the top stories we are following today. lufthansa may face unlimited liability payments. the germanwings copilot intentionally flew the plane into a mountain. a specialist says that would mean no caps on awards to victims families. 150 people were killed. authorities found medical documents indicating that andreas lubitz was unfit to fly but he had that from his employer. officials said they want to know about the copilot posse motional state -- copilot's emotional state. >> five investigators searched the apartment for clues. mark: yesterday, the ceo says the pilot had recently been found when hundred percent fit to fly.

that's 100% fit to fly. an invasion of yemen is in the planning stages. they are bombing shiite rebels in yemen. the rebels are backed by iran. egypt and saudi arabia want to send in troops. their plan is expected to get the ok of the arab league tomorrow. the fighting risks turning into a wider war in the region as it turns into a proxy fight between iran and saudi arabia. the clock is ticking in switzerland, just four days to go before the self-imposed deadline for a nuclear deal between iran and the west. the united states wants the islamic republic to prove it is not developing nuclear weapons. iran wants to end crippling sanctions. two people still unaccounted for after yesterday's collapse of three buildings in new york's east village. 19 people were injured, four critically after a powerful blast sent flames soaring into the air. the luminary evidence suggests a gas leak.

utility inspectors decided work being done there was faulty. firefighters worked through the night to put out pockets of fire. an american astronaut and two russians are to blast off today, beginning a year away from earth. scott kelly is tuesday at the international space station until march of 2016 -- twoo stay at the iss until march of 2016. as we mentioned, the seismic shift is underway on capitol hill. harry reid announced today that he will not seek reelection. the decision has major political implications from washington to nevada. peter cook has more on the fallout. was this a surprise?

peter: not a total surprise. anyone up on capitol hill who hasn't seen harry reid up close knows the injuries he suffered back in january were very serious. they have taken a toll on him. up until now, he has been insisting that he planned to run for reelection, so this announcement did come as somewhat of a surprise. the 75-year-old is an amateur boxer who grew up in a nevada shack with no running hot water made it official with a video message this morning that said the injuries were not the deciding factors. >> we have to make sure the democrats take control of the senate again. i feel it is inappropriate for me to soak up all those resources when i can be devoting those resources to the caucus. that's what i intend to do. peter: he insists he has plenty of work to do in his remaining months.

his decision already has a ripple effect as people are asking, who was the replacement? we got a statement from mitch mcconnell who said harry reid was often underestimated and a formidable opponent, wishing him well. mark: we are also learning today that senator reid has already anointed chuck schumer as his successor. is that causing any ripple effects? especially for dick durbin of illinois. peter: it is sort of a surprise that he has already spoken out. he thought schumer should be able to succeed him. schumer has been eyeing his job for years. he is currently the number three democrat behind dick durbin. read says durbin will not seek this job. these two men are friends former roommates, potentially

vying for the same job. there could be an outside challenger. there is some concern about his wall street ties, that he will not represent the democratic party. mark: peter cook, thank you so much. the u.s. economy grew 2.2% in the fourth quarter of 2014 fueled by strong consumer spending. the chief u.s. economist for bloomberg intelligence joins me here in studio. thanks for your time. winter weather gets part of the blame for this but talk to us about the impacts of that west coast ports dispute. karl: it did have an impact. it is hard to understand that how severe the impact was. how much recovery we see now that the situation has been resolved. that is what lengths some insight.

this is a hot button issue among economists. they are looking at these transitory factors like weather, the west coast port disruption. we see the slowdown. maybe it is all due to that or maybe there is other, bigger problems in the economy, such as the stronger dollar weighing on industrial activity. mark: we did see a pickup and purchases. was it reflected in companies bottom lines? carl: the report really provides a template for what to look for at least in the first half of this year. the major points of that report dramatic strengthening of the dollar, that hurt corporate profits, it weighed heavily on the export sector, we saw a surge of imports as a result. all of these themes will be all the more present in q1 and q2

because the dollar has just begun to move in the fourth quarter. we have just seen a hint of the impact. mark: is the u.s. consumer sliding over to the driver seat? carl: that is the hope here. we have this mixed shift. the export sector looks like it is pretty much stalled out at this point. business spending cannot carry the load on its own. what is hopefully happening here is a baton shift given the strong job growth we are seeing supporting consumer spending, it looked decent in q4 we saw a soft patch in q1, but if job growth was up, consumer growth will hold up and we can sound the all clear. if we see a stumble in the jobs figure a week from today, that is the monkeywrench that could upend the medium-term outlook.

mark: does that continue to be the worst important data release -- most important data released? carl: what this dollar impact -- next week, there could be some economic reports that rival payrolls in terms of significance. the manufacturing isn on wednesday the fed is trying to understand the full impact of the dollar. we are not so sure what the impact is on domestic industry. the manufacturing isn will include important clues. it has been decelerating. it is still in expansionary territory but is losing ground each month. mark: janet yellen will be speaking at the san francisco fed. we will have coverage of that this afternoon. what kind of clues are investors

traders and economists looking for today? carl: the real question here is the strength in the labor market , back to this dollar story. what will the dollar impact be? we have heard a spectrum of answers from bowls who say it is not that significant -- her understanding of how the dollar is going on overall -- mark: the atlantic that president said that the u.s. economy is on a solid track and can handle higher interest rates but the stronger dollar could be "a slight headwind for growth." how much? carl: he is a saying something more substantial. that he isn't saying slight and

others are saying more substantial. -- he is saying slight and others are saying more substantial. a lot of related industries are very closely tied to manufacturing activity and we are seeing increasing evidence the stronger dollar really is taking a toll. mark: good to see you, carl. stay with bloomberg as we bring you live coverage of janet yellen's speech on monetary policy in san francisco on "street smart." up next, another check of the top stories on this friday and later, we will track the drop in oil as we had to the close of floor trading. right now, down 3.3%. ♪

mark: all come back. let's get you the top stories we are following on this friday. lufthansa changing its cockpit rules after the deliberate crash of the jet in the french alps. that might have prevented the tragedy in france. the copilot locked the commander out before beginning the jet's sent into the mountains. a big pay raise for the ford ceo. his compensation was boosted 82% . he made $10.2 billion -- $10.2

million in 2014. tesla showing signs of weakness in china. registrations of its model s fell by 50% last month. tesla imported 63 of the electric cars to china in february. down from hundreds per month during last year's fourth quarter. jurors in the third day of deliberation in the gender discrimination lawsuit against the prestigious venture capital firm. she says she was wrongly to ride -- do not a promotion -- denied a promotion. lawyers say she is a failed investor looking for a big payout. coming up at 2:30, the close of

oil trading and the numbers are the week. at 2:40, we will go to mexico for the friday edition of the latin america report. at 2:45, we wrap up a busy week with "encore!" tonight, his career has spanned many decades. he is currently on broadway and stars in the film "the second-best marigold hotel." he will speak with tim gunn. that is at 7:00 and 10:00 p.m. new york time right here on bloomberg. still ahead while many banks are consolidating, u.s. operations outside of new york one for ms. heading west to gain an edge. -- one firm is heading west to gain an edge. ♪

mark: welcome back. this is "bottom line" on bloomberg television. not all bond trading is equal on wall street. banks are increasingly being forced to focus on the most profitable businesses and this has led to some diverging bets. jeffries is hiring in california while deutsche bank is shrinking its u.s. units outside of new york. we saw bromwich joins me now with more -- we saw bromwich joins me with more -- lisa: people are taking different approaches. mark: why are the banks being forced to choose more? lisa: things have been forced to

take stock of what they are holding and deciding what it's worth for them to keep those businesses that do involve riskier assets or that are involved in less risky assets where the margins have shrunk to almost nothing. think about the yields on government bonds. they have gone to negative in europe. they are hovering near record lows. traders typically derive their compensation from differentials between their buys and their cells. if you have less margins in the beginning, it translates to less profit. mark: what is pushing it? lisa: proprietary trading which is what. frank was going after yes, that does have some effect. you have curb the amount of riskier debt you are holding.

that is the driver of picking and choosing. mark: which banks have been the most successful? lisa: greenwich associates looked at the data, who is the top profiting firm for debt trading? they found it was jpmorgan, even if you just look at the rankings on a volume basis, they were not ranked number one. when you look at profitability, they were lower down on the scale. this shows, not all bond trading is the same. i know deutsche bank is much more heavily concentrated in government debt trading, which is less profitable, whereas jpmorgan has a bigger presence on a per capita basis. mark: we talked about the approach.

some banks are consolidating teams in new york city, leaving places like chicago in california. lisa: deutsche bank have cut staff in california and chicago to concentrate on the new york office. jeffries recently hired a couple of high yield bond fund are's for their los angeles office -- high-yield bond traders for their los angeles office. that is the ceo's roots. he founded the high-yield bond trading unit at jefferies and that was in l.a. can some ways, they are going back to this place the home to oak tree and tcw and pimco. there are a lot of big, big asset managers on the west coast. mark: jefferies, it seems they want to be out in the pool with these guys.

lisa: on the flipside you have other firms saying we are living in the era of technology, why can i pick up the phone and talk to somebody on the west coast? do we have to be there? mark: his present everything? -- is present everything? -- presence everything? lisa: is it better to have the year to the ground with investors or bankers? mark: does it really matter to financial markets or is this a cfo thing? lisa: i went to a panel this week and somebody asked the panelist what is your number one concern in the debt markets? they said liquidity or the ability to trade. this is the number one concern for some of the biggest people as banks and asset managers. people are wondering, what is the new landscape going to look

like and how will it make a difference when the tide does turn in bond markets? the federal reserve might hike interest rate as soon as this year. it is unclear how fast yields will rise. how would a sudden shift work is trading is not to the same level as some of these big banks? this is a big concern for a lot of people. to translate this into a practical scenario, let's say you want to sell something and you bought it for 100 cents -- a lot of other people want to sell it you will have to take a much lower price than you otherwise might be marking. mark: lisa, thank you so much. coming up, nigeria at a crossroads. why the country's elections this weekend could have an impact not only on the region but on the global economy as well. stay with us. "bottom line" continues in a

moment. ♪

mark: welcome back to the second half hour of "bottom line." i'm mark crumpton in new york. thank you bursting with us. -- thank you for staying with us. as you can see on the screen crude is down 4.96%. the close of floor trading up nearly 5%. the most powerful democrat in congress is set to retire. harry says he will not seek reelection in 2016.

he has been the democratic leader for 10 years. he says his demotion was not the reason nor was the eye injury he sustained in january. harry: we have to make sure the democrats take control of the senate again. i feel it is inappropriate for me to soak up all those resources when i can be devoting them to the congress. mark: he was injured while he was exercising at home. his most likely successors are dick durbin and chuck schumer. we did receive word today that he has said he will back senator schumer as the next minority leader. it appears the pilot of the doomed to germanwings flight heat and illness from his employers. andreas lubitz deliberately crashed the jet into the french alps. in his home was a doctors note is skewed and him this excusing

him from -- a doctors note excusing him from work that day. >> we have secured personal belongings, documents, etc. two boxes and a bag. these seized items are being scrutinized on their relevance regarding this case. we are hoping for clues regarding this man's motives. mark: there has been no evidence of a political or religious motivation. that is a look at the top stories we are following on this friday. yemen has been embroiled in fighting for months and the turmoil is quickly reaching a tipping point. yemen is home to several warring factions, all with different goals. david explains the reason fighting the. re david -- fighting t. here -- fighting there.

david: who are the groups fighting for control of yemen and why? yemen is perched on the edge of their arabian peninsula, a narrow waterway through which most of the oil passes. fighting in yemen is mainly between forces loyal to the sunni president, a group of rebels from the north. they are a minority shia will militia group. they now control most of the military. they captured the capital in september and forced the president to flee. they kept moving south and are now closing in -- what happened in yemen is seen as a proxy war between neighbors, iran and saudi arabia. iran is backing the rebels and saudi arabia are backing the

president. further, getting all this is another entirely separate militant group operating in yemen. extremists who pledge allegiance to al qaeda fighting their own war against the government and the rebels taking control of large parts of the country. it is a couple to fight the rest of the world and the oil markets are watching closely. mark: nigeria is another country across -- at a crossroads. the presidential elections could determine whether the largest economy on the african continent achieves its potential or descends into violence and corruption. here is a look at what is at stake. >> nigeria is that a real crossroads at the moment. a country that had the fastest growth has become the biggest

economy, overtaking south africa. if you and projections are to be believed, this will become the third biggest nation on the planet overtaking america by 2015. all this gives it the credentials to become the next india. this is pitting north against south. you have the incumbent president . the north candidate is an and dictator from back in the 1980's and he has become the voice of anticorruption and the strong arm of tackling bok haram. the road started out when the party split cost because the leader did not hand over leadership of the party to the

north. nigeria is a country where there is a delicate balance between north and south. roles are switched between the north and south and the leadership is no different from that. the second point is when the former central banker challenged the government over corruption. the third point was oil's collapse, which had a major effect on nigeria which relies on oil for 90% of its export revenue. the worsening situation with boko haram. to an extent, we are already seeing the risks before our eyes. there has been a master in -- massive investor exodus from nigeria. it was one of the favorites of emerging markets a few years ago and now you are seeing investors another money this pulling out their money because -- seeing investors pulling out their money.

mark: coming up, petrobras makes its first asset sale following management overhaul. that story in the latin america report when "bottom line" continues in just a moment. ♪

mark: welcome back. it is time for today's latin america report. let's go to our partner in mexico city joining us live. good afternoon. jose: good to see you again. another big day here in latin america. let's kick things off in brazil. gdp numbers released this morning about three hours ago show the country grew and expect early fourth quarter of 2014. -- unexpectedly in the fourth quarter of 2014. big surprise because brazil's president is at struggling with

above target inflation at 7% seeking currency at a record budget deficit -- petrobras has agreed to sell oil and natural gas fields in southern argentina the company controlled by -- it's the first divestment sensince management overhaul at petrobras. the fields are in the southern patagonia region of argentina. here in mexico, the world's biggest money manager is buying a 45% stake into pipelines -- industrial pipelines. the investment of hundred million dollars -- in two

pipelines. the investment of $900 million. these are the top stories in latin america. mark: thank you so much. that is your latin america report for this friday. up next, encore, your guide to the biggest members of the week -- biggest newsmakers of the week. ♪

mark: welcome back. let's get you the top stories we are following on this friday. the u.s. economy grew at a cheaper 2.2% pace. the report showed corporate profits falling in the last three months of 2014. capping the worst anyone performance since the recession. consumer confidence declined less than forecast in march. it still fell to 93. the first quarter was the best consumer sentiment since 2014.

the vice chairman says more work is needed to protect the financial system. speaking today during a conference on financial stability in germany stanley fischer pointed to risks he sees in short-term -- >> regulation is a cat and mouse game. the regulators job is never done. you do something and the other guys are not going to sit still. they will figure what is little left to do and do more of that. mark: he says things are looking up for the non-bank industry. stay with bloomberg as we review live coverage of janet yellen's speech on monetary policy in san francisco, that's coming up on "street smart." in sports, the undefeated wildcats go wild trouncing west virginia by 39 points last night to advance to the elite eight.

kentucky is undefeated at 37 games this season. they will be joined by wisconsin, arizona and notre dame. the ncaa sweet 16 continuing -- are bloomberg bracket has the biggest names in business and finance playing for their favorite charities. john donahoe is still in the lead with 107 points. in second, jimmy dunne. tied for third and fourth dwight anderson and tillman for ertita. you can follow online at bloomberg.com/charitybracket. scarlet fu takes is off the charts with the status report on an midday activity this year. -- on m&a activity this year.

janet yellen speaks on monetary policy and takes questions at an event at the san francisco fed. it is friday, so we bring you "encore." the most notable newsmakers from this week. >> the situation is much better. the prime minister -- we had a good meeting, they found common ground. it went quite well. >> there is a difference in terms of personality and outlook and the way the current president is pursuing policies as opposed to what mr. karzai was doing. they both have a common problem which is there are a limited number of options they can choose from. it's not like he can wave a magic wand and turn things around dramatically.

the underlying geopolitical realities are hardwired into the system. he has to navigate them just as mr. karzai faced them as well. >> we are swimming in crude in the u.s. there's a lot of dynamics today. a very volatile market. some things have caused prices to bounce rather than react. we have a weaker dollar, gasoline is strong, the crude grades on the gulf coast are strong. you have things like yemen. anytime you see headlines, the saudi's are massing troops on the border, something like that -- that gets the market twitchy. >> there are winners and losers. the countries that depend a lot

on oil revenue and political issues like russia and venezuela. there are a lot of countries in latin america, there tend to be big commodity exporters. there is a lot of political issues in several countries. you are seeing capital outflow from latin america. that area is not doing well. mark: in the past two days, we saw oil climb 7%. the southern tip of yemen is a chokepoint in international shipping. alix steel joins me with more on this story. this is getting more and more concerning. >> it is, for many different reasons. leaving the geopolitics aside, there are two components. how much oil does yemen produce? 2/10 of 1% of the entire world

production. relatively nothing when compared to saudi arabia come almost 10 million barrels a day. they she winds up being shipping. 7% of all maritime trade goes through that straight. 3.8 million barrels a day. -- the issue ends up being shipping. the issue is not -- if fighting continues and ends up spreading will it wind up disrupting that kind of flow? mark: what if the straights close? >> second 2000 to come al qaeda attacked a french tanker there. it is rare that issues surrounding that area. -- back in 2002 come al qaeda

attack a french tanker there. they have been operating in those waters for many years. they have a lot of weapons and are armed against those pirates. it would add about three dollars of transport cost to get that oil to the north. mark: why the selloff today? >> it is very confusing. you could blame it on the oil rig number that came down. the oil slide started earlier in the morning. due to those geopolitical issues seeing the price rebounding. we will be talking about all these issues with one of the senior analysts at oppenheimer. lots of issues concerning big oil companies. chevron sold a 50% stake in an australian refineries today. mark: stay with us. scarlet fu will have another

edition of "off the charts." ♪

mark: you are this week, some billionaires from nebraska and brazil teamed up to create a package food giant. the bull market turns six years old in today's segment -- scarlet fu joins me to show us the current state of m&a. scarlet: we all know who they are.

some guy from brazil and some guy from omaha. with that $55 billion deal there have been a lot of big deals lately. i decide to go in-house and use our function on the bloomberg terminal. the number of deals per quarter -- it goes back 12 years. two days ago, we had just under 7900 yields announced. a drop off in the fourth quarter of last year when we had 9600 deals. the fourth quarter of last year was the peak because it surpassed the top in the second quarter of 2007. mark: i like that line around 2009 when you can see the recession. the volatility is unbelievable. scarlet: it is quarter by quarter, so there will be some movement there. in terms of the drop off if there is any confusion over

whether it's the fed driving this no, capital is still cheap. it doesn't matter if we go to a 25 basis point funds rate. bounce sheets are still strong and never one is cash-rich. the drop off is probably linked to sentiment coming maybe europe, greece, the rest of the world. the fourth quarter tends to be busy because companies are trying to get in everything at the end of the year. mark: what are they expecting to hear from janet yellen? she will be talking at the san francisco fed. as far as the mn&a space is concerned -- scarlet: janet yellen probably is not point to go out on a limb and say too much about interest rates. -- going to go out on a limb. they are keeping their powder dry and choosing to stay

flexible. we want to also look at the value of deals announced too. in terms of that chart, we are nowhere near the last cycle. from the fourth quarter of 2006 to the third quarter of 2007 -- this time around, the high was in the second quarter of 2014. the difference between now and then is that private equity was so much more active back then. their activity was triple the normal rate. they work out these mammoth deals. mark: the kraft food deal, they went boutique. scarlet: you see that in the way it shows up. for the year-to-date, you still have the big three banks --

jpmorgan, morgan stanley and goldman sachs making up half of all the deals announced. you see center view partners and lazard. it is notable that they made a big appearance. mark: thank you so much. get the latest headlines at the top of the hour on bloomberg radio and streaming on your tablet and number.com. that does it for this edition of "bottom line." -- on your tablet and bloomberg.com. "street smart" is next. ♪

/. . . alix: welcome to the most important hour of the session. 60 minutes left until the closing bell. i am alix steel and this is "street smart." janet yellen will be speaking at a fed conference in san francisco within an hour. we will bring that to you live. the rally takes a positive suite. we will look at what investors are most worried about. "street smart" starts right now. here are the top stories we are watching ahead of the closing bell. startling to convince