>> live from bloomberg headquarters in new york. this is "market makers," with erik schatzker and stephanie ruhle. matt: dick costolo has nothing to tweet home about. at the twitter ceo feels the heat at the revenue misses estimates and the company ups the forecast. olivia: the company says they are considering strategic alternatives to boost shareholder value. matt: life in the fast lane. people that are trying to revive the superbike racing culture in the u.s. new -- join us on "market makers." i matt miller. olivia: i'm olivia.

we are in for eric and stephanie and they will be back with you tomorrow morning. we have breaking news coming up on housing. let's get to julie hyman who was in the newsroom. julie: the pending home sales for the month this shows some progress for the housing recovery, especially after we did not have a strong number. again we were estimating that 1% gain and that was the average of the economist we surveyed. the advance in february with about 3.1 percent, so it doesn't really slow down from february but it had a worse than estimated number. remember in terms of economic data this morning, this adding to the gdp figure that we got earlier that showed only a 2.10 -- a point to gain in the first quarter. revision downward and coming in worse than economists had predicted. it seems a most economists are looking forward at the balance

of the year and this pending home sales might give them a little more optimism. back to you guys. matt: thank you. time for the bulletin and the top business stories of the morning. the u.s. economy stalled in the first quarter, gdp rose at an annual rate of 2/10 of 1%. economists had forecast of 1% gain. business investment and export trials after oil prices launched and the dollar got stronger. all of this may lead to fed officials, who are wrapping up their meeting today, to signal that they are in no hurry to raise interest rates. cheers of lumbar died this morning. the company reported an unexpected loss and the cfo is stepping down as well. the cbs program "60 minutes," said that the floors are made in china and contain high levels of formaldahyde. walmart plans to expand in china

by more than 25%. the world's largest retailer will add 115 stores, creating 300,000 -- 30,000 jobs. they will renovate 50 of the older stores and the company is trying to win back customers in china after shutting down unprofitable stores there last year. asia's largest internet company is imposing hiring freeze. the cofounder -- the cofounder of alibaba says the company is expanding to quickly and he says the current level of 30,000 employees at should be enough to maintain operations. alibaba faces slowing growth in china. plus, they are spending more to develop their business overseas. shares of hotels and resorts are of this money. they are exploring strategic and financial alternatives to increase shareholder falla at star one. they are talking about the sale. starwood has hired bizarre to help. the ceo quit in february and

starwood said they needed new leadership to speed up growth. overnight in baltimore, 2000 national guard troops and 1000 police officers cap to the streets calm for the most part after widespread looting and violence. police did use tear gas to break up a crowd of about 200 and they had ignored the 10:00 curfew. read well president obama said he may visit baltimore soon. the president was interviewed on the steve harvey radio show. >> i think a lot of assets out of where they need to be, which is white -- which is why these disturbances or national disasters, i usually try to let law enforcement or emergency responders do their work. once things have cleared up i think there is going to be a time where i go back to baltimore city. it is close by and i am familiar with it. matt: this afternoon, a safety measure the orioles will play

the white sox in an empty stadium. major league baseball says they believe this will be the first game ever played without any fans. we ask why bother? it seems as if things really, is down in baltimore overnight. i heard reverend bryant giving some of the eulogy for the boy who was only 25 years old. olivia: freddie gray. matt: freddie gray and he was saying he was so impressed by how peacefully people got together and demonstrated the second day after the riots. it seems like they could just as easily go to an orioles game, so i see the fans go or don't bother. it is just a regular season game, why do they have to play? olivia: and he wants to see the orioles? everybody was believed to see that things were more common overnight in baltimore. i still don't have a clear sense of how many people were out on the street. yes, we had live pictures of a few dozen people stomping on

police cars, lighting them on fire, -- matt: then i before. it seemed like it -- the night before. it seemed like individual incidents. olivia: a bloodbath for twitter yesterday after the bell, first quarter results out showing that user growth and revenue slowed once again and the company cut or sales were cast for the air. everything fell short of analysts estimates and the numbers came out earlier before the closing bell because they were accidentally posted on twitter's website. shares immediately crashed. let's bring in terra far, she covers twitter out of our office in san francisco. sarah this has happened before. it's winter has disappointed investors and we have seen shares tank in the aftermath. at this point, some of us are wondering how secure is dick costolo's job? sara: today, it is more about the company itself. it is not just stick, it is --

it is not just dick revenue. revenue was a problem last year. it was almost doubling every quarter last year and this year, the first quarter people are starting to see actual >>. not just in user growth model but business growth model. that is the question that is coming today. as for dick, there are questions about his reliability. he said last quarter that the user growth with uptake and the revenue business was healthy so this is a concern for twitter. matt: in the people you have been talking to, and i'm sure you have been talking about nothing else for the past 18 hours, how many people are indicating that this might be a dangerous time for dick's job? sarah: i think people are saying that this is shocking to them. i haven't heard the calls for

his head. i have heard people say that they feel duped somehow. twitter has over the past few quarters had a few too many surprises for wall street. they have changed their metrics a couple of times, they have added new metrics. they said, oh this ring we said was important, actually, think about it this way. people are very unsettled about how to measure and valued the company and they are concerned that the executives of twitter may not have clear insight into how their business is growing given that they did not warn people that these things were coming. olivia: given it is not growing as fast as they promised it was going to. i am wondering for the amateur how would you explain -- what is facebook doing so right that twitter is getting wrong? sarah: facebook is a different kind of tool. one that can connect you with friends and you add a lot of demographic interest to it.

twitter is perfect for live event coverage, for people finding out what is going on in the moment. that does not always give you the right information about users so one of the things i heard from an analyst yesterday is that twitter might just have a targeting problem. one of the things they changed last quarter is that they upped with engagements in advertisement and maybe they are not seeing the click-through because they cannot target people based on their demographic information. what you tell twitter, you tell people what you are interested in. that sounds like a would be great for advertising, but maybe your interest in it is for a different reason and not because you want to buy cheerios. it does get tricky when you come down to how does this site make money? matt: do analysts think there is a solution? maybe it is not fair at these evaluations.

not that twitter would ever go away, but maybe it is not the same investment vehicle that facebook is? sarah: analysts are trying to wrap their heads around about how big this can get. the castella tries to tell them that this is something everyone in the world can use. -- dick costolo tries to tell them that this is something everyone in the world can use. they want to make sure that people who are interested in certain events or celebrities and find that information in you ways. they have made a lot of adjustments to their products. the fact that that has not translated into more rapid user growth or higher revenue is concerning for analysts because they are wondering, ok, does this phenomenon have a limited the potential? olivia: last question, what about new products? we recently added periscope, trying out this live video streaming, could that saved the day at twitter?

sarah: those things are very young in revenue models, but one thing that dick said is that they are trying to work with people who have become a sort of famous on line or periscope or one of these new apps and translate that into a creative team for their advertisers. they bought nitch earlier this year and that will help people who are popular in this platform and make money to brand. it could become a new business model for them. certainly, a different route. olivia: the thing gets, twitter has planted the seeds for its future. they have told wall street exactly where they are going to go. we are at the show me the money points of it were analysts are saying, i believe you. i think actually, i'm not sure if i believe you now, but this -- the things that you promise can happen and they should have to happen soon. olivia: thank you to sarah frier. our colleague in san francisco.

thank you for waking up particularly early to join us this morning. dick costolo will be on bloomberg tv for a live interview at the :00 p.m. this afternoon. matt: coming up next on "market makers," starwood considers the sale that has hotel stocks jumping today. will they even make a purchase? we will take a closer look at the health of the industry. olivia: not as excited about the return of the scooter bike. we will talk to one of the top executives at moto america who wants to bring back a major motorcycle racing league nascar. ♪

olivia: time to be up-to-date. we start with time warner. they are breaking more fees and advertising and they posted earnings that beat analysts estimates for 25th straight quarter. time warner unit which includes cnn and tbs had record income of

-- after cutting him percent of workforce. the quarter profit jumping 22% thanks to north american sales, in particular, u.s. demand for the ram pickup truck. sales in north america have arisen for 60 months in a row. the chrysler european business showed a profit for the second straight quarter. hulu has announce one of the biggest program acquisitions. they have struck a deal to show reruns of "seinfeld." it is called by disney, comcast, and 21st century fox. there are reports that amazon and hulu bid for "seinfeld." they are. -- they are paying about $1 million per episode and that will be split. those are your top stories. still to come on "market makers." shinzo abe will be the first

japanese leader to speak to a joint session of congress. he has got to wall street to the friendly skies, meet the former bank executives who are helping launch of the commercial drone business in the u.s. get your motors running, we will take you out on a superbike. matt: the big hotel chains are reporting earnings today. headlights so far come from starwood hotels and resorts. profit and revenue both felt that shares are surging anyway. the company's exploit strategic alternatives. in other words, a sale or purchase. meantime, hilton raised their outlook for the year. we will see marriott yearnings after -- marriott areas after the bill. he focuses on lodging companies and we will start with starwood. what is going wrong? here i feel like this is one of the highfliers and all of a sudden, everything is falling apart and they need to find a buyer? >> the company started to fall apart much before the ceo left.

there are two things that they got wrong, too much focus on international growth. it growth until it didn't. if you look at starwood almost two thirds international it comes to earnings versus marriott which is only about a part of international or lower. i think that was one part they got wrong into the strategy. the second part i think they got wrong was that they did not really have the grant and -- in the fastest growing area of our industry, which is typically the upscale segment or the economy segment. that is where really the rooms are growing and that is where marriott is going and that is where a lot of other companies are growing. starwood did not have a good platform to go in that segment. sheraton hotels and can put in any city center and eventually you need to have smaller brands that you can sit around edges. they do not have that,

unfortunately. it became the slowest even growth company when you compare them with industries. olivia: shares of intercontinental hotels are surging in london, up by about 6% and trading at a record high. the news that starwood is considering strategic options would it make sense for them to buy into intercontinental? nikhil: i don't think so. there has been a lot of talk about public companies including marriott hilton, or when done -- wyndham. i don't think that is the best way to realize shareholder value for starwood. any of these companies would have to offer a pretty high offer to buy a starwood. starwood is a slow going company, so if you acquire it, your own growth will slow down. the other thing is that most companies are really trying to become more of managers rather than owners of hotels. intercontinental has stopped

owning hotels, so has marriott. when temp doesn't own any, and if you buy starwood you will be stuck with a chunk of hotels they own and you will have to figure out what to do with that. in my opinion, i don't think public -- any other public company are the ones that are big for it. i think it is more than likely a fund buyer or wealthy investor. they want to own the brand not for monetary reasons but other reasons. matt: we heard yesterday, a look, if you are a sovereign wealth fund and say it you will invest $10 million in the business, i will go back and run the business for you. i guess that was not an unserious offer. nikhil: you are right. i think at the end of the day what you really want to see is someone who can pay top dollar for the company. in my mind, that has to be a sovereign wealth fund. i don't think any of the other

public companies can afford that. if that is the case, you can have the last ceo coming back and run the company. frankly, my own opinion is i don't think anybody has run this company as well as he did. olivia: what about the stronger dollar? we were saying perhaps starwood took the wrong turn by not suspending sufficiently internationally, but now you look at marriott and hilton and they're getting bit from the business abroad because of the strength of the greenback. matt: starwood it too much international expansion? is that the problem? nikhil: exactly. for marriott you are right. both of these companies are expanding internationally in the big way, but they are not abandoning their u.s. base. if you look at marriott, more than half of that pipeline for the future isn't the u.s. and less than half his outside. it is a very balanced approach. unfortunately, starwood left that pass and most of their pipeline went internationally.

almost 80% of what they are going to add to their hotels over the next two years or three years is outside the u.s. and that is a problem. clearly, when you have the greenback that is so much stronger. matt: in the meantime, what does it star would have to do? will they be able -- what does star would have to do? some of them need renovation, more water pressure, are they going to do anything to build a business mother look for a buyer? nikhil: in my view i think that is a harder thing to do. for couple of reasons -- i think the time for reinvestment in this company is probably gone in a little way. the reason behind that is that investors tend to think of it as it textbooks cyclical industry. we maybe a little too late in the cycle to take on those kind of projects. i think but they have announced is -- i actually uploaded their board to be able to say this they are ready to explore

options and in my mind, that makes perfect sense. it makes perfect sense for this company. that is the fastest way to realize value. matt: thank you. vp of equity research, covering hotels at sbr capital markets. olivia: we will be back in a moment. an in-depth conversation about matt miller's love for motorcycles. matt: we will go to bass pro shop also. ♪

julie: breaking news, second gig at the senior adviser in just the past several weeks. he will be joining pimm fox -- he'll be joining pimco and it is the second job he is gotten

recently. earlier this month, he joined fitted up as a senior advisor. a fun fact alan greenspan had formally acted as a senior advisor at pimco as well. this developing story and we will bring you more details. ♪

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. >> live from bloomberg headquarters in new york. this is "market makers," with erik schatzker and stephanie ruhle. matt: welcome to "market makers pickup by matt miller. olivia: i am olivia sterns and we are in for erik schatzker and stephanie ruhle. they will be back from the milliken conference. matt: julie hyman is in the newsroom on weekly inventories. julie: the smaller bill of inventories. the build of about 1.9 million barrels last week and analysts were in looking for 2.7 million barrels.

and a smaller building gasoline inventories. we saw a drop of about 66 thousand. i just want to get some insight into what is going on with the oil reaction behind me. you can see on the screen pretty clearly, inept taken oil prices in the wake of this. -- and uptake of oil prices in the wake of this. again that headline is number 1.9 million barrels being added to supplies 2.8 million barrels had been predicted. with that, you would expect to see oil higher and that is what you are seeing on the screen behind me. olivia: thank you. in a few minutes, the prime minister of japan should all they will be speaking on capitol hill. he becomes the first japanese leader to address a joint session of congress. he would talk about trade and security issues. especially 10 -- tensions with china. let's bring in asia analyst scott. thank you for joining us.

yesterday, we heard of these new joint defense guidelines, can you explain exactly what those are and what difference they will make? scott: basically, the two countries have been talking or many, many years about the trading their defense cooperation based on changes in the region and also domestically. this has been a longer process and we now have a prime minister in japan who has really taken this issue as one of his priority issues. he has moved it forward and the guidelines basically expand cooperation and provide a larger role for japan in providing not only for its own defense, but also some obligations to come to the defense of the united states. olivia: doesn't this mean japanese boats will be helping u.s. ships police the south china sea? scott: no, in fact, the leaders yesterday were very hesitant to

discuss any details, certainly, they are not at the point where they are able to talk about particular operations that will be a part of these new guidelines. obama did give a very strong endorsement of a long-standing policy of the u.s. that the u.s. considers the islands to be administered by japan and therefore, they are covered by the security alliance. these leaders spent a lot of time talking about the china sea and what the new guidelines would be for that. matt: did japan have a constitution that prohibits forming a military for aggressive warfare, right? will they be able to build up the military? did you get the sense that we are giving them passive allowance to do so? scott: no. even if the u.s. were to want to japan to expand its military in terms of ships and planes and things like that, domestically that is just not a place that abe is able to go.

i think the strategy on both sides is to enhance the alliance and leverage the existing cooperation and make best use out of the resources that both sides already have rather than looking to have japan really build up a small millet -- bill. their military. olivia: i know everybody thought it was significant that president obama called it -- president obama called that see by that name and tensions rise and fall between japan and china about this territorial dispute. how tense is the relationship right now? scott: i view is that it is much better than it was. certainly when all they a -- when abe and the president were able to meet at the apex -- the opec meeting last fall, i think both sides are really wanting to dial down tensions and when i talk to people in japan and elsewhere, people feel that the relationship is on a much

different track right now. improvements are going to be slow but i think both sides have had a keen interest that things don't get out of control. matt: well that improve trade? rbc, that would be a key trade relationship in the region and they have a little bit of a cold war going on. we always note that failure of japanese brands and products to make huge gains in china. scott: chinese -- or japanese business rather, obviously is pushing abe''s administration very hard to ensure the relationship with china stays on even keel. we have seen a lot of japanese investments start shifting to other parts of asia specifically, southeast asia. a lot of that is driven not only by political tensions, but some of the economic realities of the chinese rocket. -- chinese market. definitely the japanese business and market have a very strong

interest in ensuring trade is a strong part of the relationship. olivia: i have a quote from the bloomberg news right up from an expert at the carnegie endowment say that these new guidelines and he says -- quote it is almost like buying a new pair of big pants that you expect to go into. to think that analogy makes sense with what we are seeing and the newfound french a between the u.s. and japan? scott: i think so. -- the newfound relationship between the u.s. and japan? scott: i think so. abe now has to go back to japan and pass implementing registration that will allow them to continue to build out this collective self-defense program that they have initiated. i think there is some use to having them keep what they are going to do rather ambiguous. they want to talk about the new pants and how big they are, but they are not actually going to

tell everything about how they are going to wear them. olivia: that is something women never want to talk about. you and bigger pants. matt: i don't think week on the mend, speaking for us as an entire agenda, appreciate talking about it either, but it is something that happens, olympia you got to prepare for the future. olivia: thank you. matt: coming up, he thinks the potential for this business is sky high. we will talk to the former ubs executive who is now getting into the commercial drone industry. ♪

olivia: time to bring you up-to-date on the top business stories of the morning. shares and twitter are falling again after a big punch yesterday afternoon. first quarter earnings were accidentally released early and they showed user growth and revenue growth slowing more than expected. twitter also cut their forecast for the entire year. digg costolo says he is

disappointed in the performance of his sales team. it has been a rough few days for the greek finance ministry. pacing and attacked him and his wife at a restaurant in athens last night, making threats and throwing objects. their pockets says no one was hurt and they called him a time waster and an amateur. -- varoufakis says it no one was hurt and they called him a time waster and an amateur. turning against german debt they may make a big get back and german bonds spoke with erik schatzker at the milliken global conference. >> i wonder why people don't leverage up making deals because it seems to me there was almost no way to lose. i will say about leveraging up the german, let's say be leveraged 100 times, we get a 20% return, what is the downside? if you can hold it for the two years -- olivia: they have called german

-- we will hear more from jeffrey gundlach on "market makers." if you are saving for retirement, there is no sense in trying to beat the market. that is according to a global poll of the financial investors. 42% say you should put your money in an index and only 80% stake actively managed funds where the way to go. 70 -- 70% advise individual stocks and bonds and 20% with real estate. -- 14% with real estate. still to come, will motoamerica become the next nascar? we will talk with the labor policy professor from stamford. saturday night and the fight. matt: here is a wall street -- playing golf with president obama. the former president of ubs americas unit and one of the president's most valuable interested wall street friends. he has a new passion, -- helping

launch the commercial drone industry. he has here -- he is here, max and robert. let's talk about, first of all, the drone business. it seems like one of those technologies that is in habitable out in the future -- that is inevitable out in the future but as far as right now and commercial uses, i don't feel like drones are getting a lot of traction. robert: i'd say we are behind the eight ball although we manufacture incredible capability. we are not using them to our fullest you to where we are in the regulatory environments. the faa has put out a piece that we and others have written comments to that regulation. if you look at the commercial and industrial use of drones, it is everywhere. whether it is precision agriculture, public safety, mining power, energy, pipelines -- matt: explain what kind of don't you are talking about.

i am picking up his road controlled helicopters. how could a drone do mining? olivia: mac is thinking of getting a domino's pizza. matt: how can you don't do something for mining? robert: we are not talking about joystick drones. these are for commercial use and they can be as wide as four feet to 10 feet and 55 plus pounds. they can go in a different terrain, they have radar capability they have infrared capability. take for example a pipeline that has mandatory inspections. much easier throughout the day and nighttime to have a drone go up and down to seek leakage or whatever it may be. we are working on a project right now in sub-saharan africa matt says it is more not sub-saharan but we are working on a utility that has complete vegetative state and often gets

hacked. instead of them sending groups out every day, much better, we did a study for them showing how a drone can go up and down the utility line. much greater imaging of where the fault is. we can continue onward. olivia: robert, it sounds like regulation is the biggest risk. matt introduced the segments a new play golf with president obama. how do you get washington to warm up? robert: it has nothing to do with the president. matt: he played golf with the most powerful men -- olivia: that is a great use for drone. find the ball. robert: believe me, i could use that. the faa is trying to move forward as quickly as they can. we think there has to be a risk-based approach. for example, in the current first phase, we disagree and we'd think there is actual use for drones for nighttime inspections. matt: the best time actually.

robert: whether you look at having it within your site only. when we think of precision agriculture and there is tens of thousands of acres throughout iowa and indiana, we think a drunk should be able to go throughout that entire front. -- we think of drone that should be able to go throughout the entire front. we are working on drones for precision agriculture and looking to return on investment calculations. matt: the drone usage is fascinating. max, your center is on attempts to use connections to help push the business forward. you all interviewed a number of executives at the company, how are they doing with that? max: it turns one year old in a couple of weeks and i think that even if you knew every government official in washington and every other capital of the world, you probably would not be able to drones in the area it. the truth of the matter is drawn to crash all the time, so the technology is going and has not been perfected yet.

one cool thing about getting to know robert is that most wall street bankers, as i am sure both of you know, are incredibly angry about the president and even thinkers who supported him in 2008, you know, ended up feeling betrayed. they talk about fat cat remarks which i know robert jokes about and he says he is indeed a fact cap. matt: more of a football physique. robert: i do have those extra size pants, by the way. max: robert states incredibly loyal to the president and you seem proud. matt: so the two of you get along great. max: the truth is your connections in washington but also in other countries where you have met presidents. i think at the end of the day, it can't hurt. olivia: it is a big risk, but that chinese seem to be in front of us and taking a light touch to regulation. i have read that jeff bezos has

a facility and even canada is ahead. robert: the ceo was just in canada meeting with a bunch of pipeline and companies that will probably sign up more quickly than the u.s. giants who we are closer to. -- the u.s. clients we are closer to. they just finished with the american red cross and we announced last week, and i think max was at the conference, using drones for public safety. if you look at this incredible travesty in nepal, they keep talking about they can't get to remote locations to deliver things. well what is interesting is that ups was part of our public safety plan with the conference and this is ways to look at it. not just for pictures, delivery. we have insurance companies using it for risk assessment. everything that "market makers" talks about. matt: you can read max's profile of robert and a story of measure on the web. i tweeted it out as well. if you follow me.

robert, you tweeted it out. robert: i have to give my wife credit, game of drones. matt: thank you for joining us. we will take a quick break. stay with us and we will talk about maybe america's next date sport going mainstream with motorcycles. ♪

matt: meet the man who is trying to make motorcycle racing mainstream. richard pryor is the ceo of motoamerica spearheading that revival of the superbike sport. >> motorcycling is an activity. it is a more than getting on a bike. it is a lifestyle, getting out in the open. you are much more involved in a motorcycle event in a car. as a result, people want to get more engaged. i think that is probably the hook we have. what a cyclist needs to go someplace and they can come to a race and enjoy and see a lot of what they are about. matt: do you go toward the

nascar model where it is about the circus? do go toward the superstock model where it is more about the actual manufacturers and competition? richard: it is a little bit of everything. in the first year, we are hoping to stabilize. we are hoping to reorient the rolls to become more consistent with the international rules. we also thought that would have the ability to attract the original manufacturers back to the sport because we lost honda, kawasaki, and ducati from the u.s. seeing is fading. but now we have several that are excellent in the series so i think that was successful. i think we have evolved from one of the models before to more promote type that we are hoping to be successful on. it is going to be probably more about the event as we go forward. matt: you are also writing on the coattails hoping that they get more popular and you will

come with them. richard: we feel that we will get some of the shirttail effort there. i think also that they -- their markets and the united states are not as large as they would want and they haven't been in the u.s. -- and they have been in the u.s. for almost a decade and i think they would really appreciate anything we can do to build up the u.s. following because it is going to translate to a better business for them. matt: when you look to distribute your content, i have heard you talk on social media about the new ways and the new media. how are you doing that? richard: the push has been twofold, went to the motorcycle fans and we are working with corporations through that. they are handling -- very direct access to that market. we are working with agency media right now on sort of the social side.

most of that is through facebook and instagram and normal avenues. thus, trying to get our video out there and are content out there that we think makes the difference. this has been a whole new side of it the business on the end it is fascinating. -- business side and it is fascinating. matt: how are we looking? richard: it is pretty awe-inspiring to watch these young writers go 170 miles to our 180 miles per hour in the rain and water fine up everywhere and writing was to each other. -- and riding close to each other. it defies belief. it is something to see. matt: it defies physics. richard: we are used to seeing in car cameras and there is not a lot of movement. when you watch a rider on a bike, he is much of a

performance as much as the motorcycle. it is a lot more visual and visceral than car racing from the fan standpoint. matt: that was richard barner of motoamerica. really was already kind of a famous dude in the voter had champion motorcycles. he developed a lot of flat tracker customs and develop is pretty sweet yamaha that everybody fell in love with. olivia: that is my favorite. matt: and hangs out with moto champs. there is only one american racing in moto gp right now and the ideas that this could be a feeder league so we could develop american superstars and get them onto the world scene. olivia: odyssey, this would be -- how big his motor racing? matt: 300 million people watched moto gp outside of america. 300 million. olivia: i am not one of them. much more with matt miller.

"market makers" will be back. two rivals against each other. we are talking about mayweather and pacquiao. ♪

announcer: live from bloomberg headquarters in new york. this is "market makers," with erik schatzker in stephanie ruhle. olivia: minimum wage jobs are costing someone a fortune and it is not the employers. we will talk to a professor that says that you are pick picking up the tab. matt: but truce so they can clean up with a big boxing match in biggest. olivia: how will junk bonds respond to a fed rate hike? welcome to "market makers." i'm olivia sterns.

matt: i'm matt miller. we are in for eric in stephanie today. -- we are in for eric and stephanie today. eric is probably working furiously on his laptop. olivia: stephanie isn't? matt: she is more of a networker. olivia: the u.s. economy came to an almost complete halt in the first quarter. gdp rose at a rate of 2/10 of 1%. forecasters predicted it will -- a 1% gain. fed officials are wrapping up their meeting today and new data may lead them to signal a are in no hurry to raise interest rates. time warner is raking in more fees and advertising at its cable channels. the company posted earnings that the analyst estimates for a 25th straight quarter. time warner cost turner unit had

record income of $1.1 billion. that was helped by a decision to cut 10% of its workforce. hbo profits fell more than 1% next to higher programming and distribution costs. shares of lumber liquidators are taking a dive. the company reporting an unexpected loss and saying its cfo is stepping down. seat -- 50 minutes said some of lumber liquidator's floors in china contain high levels of from aldehyde. -- formaldehyde. ben bernanke he has a new job. bernanke will be a senior advisor to pimco, the bond fund manager. he signed on to advise city dell -- citadel. for the first time since that nuclear deal was reached, john kerry met with his iranian counterpart. kerry held -- failing to

complete treaty would be a missed opportunity. >> the people of iran went to the polls a year and a half ago and chose a president who was calling for engagement based on ritual respect. -- mutual respect. now we have this opportunity that had been given to us and the iranian government by the people of iran to engage. olivia: you can watch that interview tonight right here on bloomberg tv on charlie rose 7:00 p.m. eastern time. shed a tear for wall street. according to a new global poll almost half of those in the financial industry say their pay is less or much less than they had hoped for when they began their careers. only 14% say their pay currently exceeds expectations. matt: three hours from now the fed will be out with its rate decision and follow -- in policy

statement. no one is expecting a rate hike but we could get clues as to whether one is coming in june or later this year. whenever rates start rising it will have an effect on the bond market. no one knows that market better than jeff good lot -- he spoke yesterday with erik schatzker at the milton conference. >> have you ever talked about when the fed is going to start normalizing? those people are so dedicated to the idea that rates are about to rise that they are basically willing to earn nothing or lose money on unconstrained -- hoping that when rates rise it will bear them out -- bail them out. he will do not fully understand the historical fact of the fed raising interest rates.

it is very common to hear people in financial media guests like i am on the show say things like when the fed raises rates it is fine to own high yield bonds. they feel the economy is probably doing ok. there is some logic to that that is seductive. the problem is they disrespect history. if you go back to the last eight periods of the fed either raising interest rates or else taking away stimulus by qe's this takes us back to the mid-80's and the jump pocket -- the jump bond market every single time if you sold high-yield bonds and bought treasury bonds, the day of the first fed hike you were able to buy them back cheaper relative to treasuries during the hiking cycle or at the end of the cycle, every single time. sometimes it was small, like the first hike in the mid-80's -- in the mid-1980's.

sometimes it was enormous like in 2004. the amount of money you saved was monumental. when they stop qe1, high-yield bonds under foreign treasuries by a lot. thousand 2011. when they stop qe3, a taper down. eric kohler -- >> i totally counterintuitive transistor -- strategy? jeff: the truism in the market's thinking is flat. they look at the data during the fate -- the fed hiking cycle. when they first started raising rates to the next time. he dropped inclusions on that. what they are missing is that during the rate rise. period, junk bonds tend to underperform. maybe the cause and effect is

that when the fed raises rates they tend to do it too much and when they start raising rates, high-yield bonds will be tight. i have becoming interested interested in what happens when fed rights rise. five yield -- high-yield bonds are worse investments based on history. another wrinkle i find concerning, the high-yield bond market's entire length is during rising interest rates. there is no one that has experienced high-yield bond investing during a long period of interest rates because it does not -- it did not exist in the 1960's inside 1970's. -- and 1970's. companies have almost oh's been able to roll them over at lower rates or better yet as rates were dropping they were able to call them because the call features and roll over the debt at lower rates. what if this historical pattern

holds true and when rates rise, high-yield bonds underperform treasuries? i believe that one of the reasons high-yield bonds are trading where there are is yield starvation. people looking for income. i have to believe that that starvation diminishes. but the demand for income can be partially satisfied by the higher treasury yields. right away you will have higher demand for low euro bonds. desperate low -- for low yield bonds. what if interest rates rise to the extent that people are thinking about normalized back to six -- 6% or 8% on 10 year treasuries? what will high-yield bonds yield? a lot more than 10%. it is anybody's guess.

companies are borrowing at 5.5 today my have to roll over their dead at double digits -- roll over their debt at double digits. systemwide there would be more income and free cash flow but it will not be uniform. matt: i was erik schatzker's interview with jet -- jeff good undlach. olivia: we have breaking news on some m&a. julie hyman is in the newsroom. julie: another development in mylan's quests to buy perrigo. this morning, mylan said it was now offering a higher price for perrigo, $75 per share in cash and 2.3 mylan shares for every perrigo share. perrigo is now rejecting that offer saying it is not higher

and there is a little bit of dissent between the companies among the value of the offers because mylan shares have risen in the wake of teva's did for that company. perrigo says because of that inflation in shares, it is not actually worth what mylan is saying it is worth. mylan had rejected that teva bid trying to acquire perrigo to make it a tougher target for teva. you can keep track of all of that. you win the prize. this is an ongoing situation. this is not the less we will hear about it. olivia: investors excited for mylan to do the deal. thank you so much. julie hyman from our breaking news desk. ben bernanke. a new job. where is he going? matt: he is going to make even more money now. olivia: with pimco as a green --

with pimco as an analyst. matt: this guy, you can say what you want about his policies he worked his tail off. olivia: i thought you said -- i but you're going to say he's a sassy blogger. matt: the big money behind the big fight. two cable giants put aside differences to make it happen as they are going to get paid more money than ben bernanke will ever see in a lifetime. olivia: central bank and boxing. ♪

matt: time to bring you up-to-date on the top stories of the morning. prime minister shinzo abe is the first japanese leader to it dress a joint meeting of congress. aid is expected to echo president obama --abe is

expected to echo the bomb -- president obama. a big quarter for the chrysler. first-quarter profit jumped 22% thanks to north american sales. sales in north america have risen for 60 months in a row. european business showed a profit for the second straight quarter. julio --hluulu is looking for a hit. who is co-owned by disney, comcast and 30th century -- 20th century fox. participants in the show. coming up, first he was unemployed, now been bernanke

has two jobs. we will tell you about his new gig. it is the fight of the century, at least for now and maybe that will stick for the next 85 years. it would not have happened if two other rivals had not joined forces. olivia: been bernanke has a new job. pimco has hired him as a senior advisor. the second finance job he has taken this week. he took a similar role at citadel, the hedge fund run by can griffin. terry childs broke the story for us. we are joined by peter cook who joins us from our offices in d.c. why pimco? mary: greenspan went into the seven when he retired. i think pimco was also want to pony up the cash. they've been working with bernanke for two quarters.

they have been having come into their secular forum to talk about strategy. i think pimco is in a transition right now. they lost their does -- they lost their two cios. matt: i can't imagine he will have an office and go out five days a week and the a regular worker bee. does he occasionally call off? is he on conference calls? does he get paid to have his name on the letterhead? mary: i think you are on the nose. he is going to engage with clients to some extent and it's it on -- and sit on investment committees and try to help them understand where he sees it going. it is like phone a friend. you have a superhero on the line. they are paying for that access. matt: how much do we think they are paying? mary: he makes 250,000 per speaking engagement. you have at least three secular

forums. plus you have this access with clients. that is worth seven figures at least. olivia: we have peter cook with us. how much is been bernanke making at the fed? peter: just under $200,000 as fed chairman. his job previous to that as head of the princeton economics department, he was a school board member in new jersey briefly. this is someone who has not had a giant payday. he does make some money from textbooks as well and he has a book coming in october which describes his experience during the financial crisis could bring in some cash. clearly this is going to be an opportunity for him to make some money that he was not able to make when he was serving in the public so -- the public sector. olivia: it is hard to hold a grudge against temperature high to cash out after a long public of academia and public service. matt: some people will find a way. olivia: it is just rhetorical.

move with it. i have been seeing the stats -- the sassy blog arguments he is gotten into about secular stagnation. what else have we seen? peter: we have seen even with these advising jobs with pimco and citadel that been bernanke he made this case in an interview with warders -- with reuters, he is advising them. he has a full-time job with brookings. participating in panel discussions, economic assessments, trying to avoid second-guessing his successor trying to avoid that policy directly. he has been involved in the economic debate. he is on twitter now. he is staying present in the economic debate without intruding too much into fed policy. his book may change that, coming out in a few months. then bernanke is here in -- then

bernanke is here in bc -- washington, d.c. matt: he has a long runway in front of him. he just got a pay day at citadel and 1 at pimco. he is going to be pulling in double-digit millions in a matter of years. peter: roomba the trouble he had when he tried to refinance his home -- remember the trouble he had when he tried to refinance his home. matt: he will advise -- mary: as pimco for his advice on home buying. olivia: this sort of revolving door washington? mary: cozying up with d.c., they like to be an advisor and have them advise them back.

they kind of admire themselves for that. that is part of their branding. on the other side -- matt: it is smart. mary: on the put side of that they have been hiring economists trying to get a face and name and someone who can get out and talk. they do not really -- dan iversen does not love getting on tv and talking. they do not do it as much. they need somebody out there to talk and having these economists to deploy into the public spear is helpful. olivia: wouldn't that be great if we could start booking ben bernanke for job day? matt: that is probably what will happen. i would bet you $10 we could book ben bernanke. peter: you're going to have to wait for the book to come out. matt: what you think the book is going to be about? we have seen so many on the

financial crisis area hank paulson probably most famously. what does ben bernanke you have to add? peter: you can make the case that bernanke was the person most at the center of the crisis. we have seen tim geithner's book come out. there is a risk that bernanke has waited too long for this book. that he waited to deliver this book. i think there will be a lot of interest in what he has to say. personal experiences, tough moments. it comes out in october. we have been knocking on his door, asking for an interview. the message we have gotten is wait for the book. matt: maybe he will come for jobs they annual only 10 bucks. -- in you will only 10 bucks. peter cook, always a pleasure. we will take a quick blake on --

a quick break on market makers. i spoke with a billionaire on monday. olivia: about guns and hunting. matt: i bought a compound bow while i was there. we'll show you that interview. ♪

olivia: still to come, who has a bigger -- the network that put together saturday's big fight. matt: not just another store for

hunters and fishermen. who else but bass pro shops opens up a store in the sixth business -- biggest pyramid in the world? i spent 24 hours there but i couldn't spent a week -- but i could have spent a week. ♪

arket makers," with erik schatzker in stephanie ruhle. olivia: welcome to "market makers." i'm olivia sterns. matt: and i matt miller. today markets in europe are closing. we want to go to the breaking news desk where julie hyman has a breakdown of all the action. julie: checking the latest as we head toward the lows of the session. european markets close-out. we are setting out for the

biggest decline since january 5. and looks like that is true not only of the euro stock 600 but also the dax and the cat. commodities producers pulling down. they're looking at the gdp data in the u.s. and extrapolating what that could mean for the european economy. in the latest bloomberg poll, europe was chosen as the favorite place to invest for the first time we have seen that since at least 2009. this is a survey of financial professionals. 35% said the eurozone would be among one or two markets offering the best opportunities. analysts at citigroup say it could go higher. that is the caveat as we look at today's declines. i mention that commodities producers are among the worst performers in europe today. a couple of minoerers.

quarterly copper output slumped. that is pulling though shares down. her performance forearm as and next. quarterly sales increased so both of those stocks trading higher. a quick check on the british pound. it is rising for the seventh straight session in a row. his longest winning streak in three years time. its highest level in 2 -- in 12 months. investors are looking at the bank of england as raising rates sooner than the federal reserve in the united states. that has been pushing the pound up. matt: thanks very much for that. olivia and i are going to take a look at some of the most read stories on the bloomberg terminal today. at number two, the u.s. economy gdp came in 80 basis points under wall street's estimates.

mainly because it's note in the first quarter. olivia: that is what we saw in 2014. i take away comes from carl rick a donna who says this morning's gdp rating is the nail in the coffin for a june rate hike. anybody who did think that possibility was on the table -- matt: no more nails were needed. he could've buried the box already. you saw consumer spending rise 1.9%. obviously some crazy snow is going to hold back -- i joke about how it snows every winter. it is going to hold back housing and the purchasing of homes. consumers went out and spent more than economists forecast and they still had money left over from the drop in prices at the pump to spend in the second quarter. olivia: if you take this with the disappointing march jobs report, it starts to weigh on janet yellen's mind. plus you have a stronger dollar.

matt: janet yellen is looking for things to weigh on her mind. she is going to manipulate -- i should not use the minute -- use the word minute late -- manipulate. she will look at any data from the perspective is -- olivia: everyone has been worried the price of oil has collapsed. you did see that this morning. matt: that was not unexpected. what was unexpected was the gain in consumer spending. it is a glass half-full, ladies and gentlemen. olivia: coming up, one of the few things showtime and hbo have ever agreed on. they are both going to make a killing from saturday night us big fight -- saturday night's big fight. matt: you got a route for manny.

♪

olivia: it is a toxic match for the ages. manny pacquiao -- a boxing match for the ages. manny pacquiao and floyd mayweather jr.. tickets are sold out. they sold out in less than a minute. a fight that will bring together two other rivals, hbo and showtime. more of the numbers. mayweather is going to make $300 million for getting beat up? rami: a lot of people would do a lot of things. the beginning range both mayweather and pacquiao might split. it could be as much as $400 million according to some. i will be split 6040 -- 60/40.

looking at the top end, mayweather could get as much as $240 million and packed yet could get as much as $160 million. most either of them have been paid out. matt: manny is likely going to get beaten badly right and he is only going to take 40%? i would want 6%. -- i would want 60%. john: the odds ramy: -- the odds are in favor for mayweather. we still have a couple days left. with filipino blood in me, i have to go with pacquiao. matt: me too. it is not going to be as big as the boxers. it is really not huge. ramy: hbo and showtime are going to get 7.5% out of all the revenue. you think it is going to be this huge jackpot but let's say the top end of the range is reached

they only get to split $30 million between them. $15 million to each of the cable operators. what it does boil down to our bragging rights and branding in saying we got the winner. olivia: is this the last big boxing payday for the cable companies? what other boxers out there are there? ramy: you hit it right on the head. there is no other athlete out there in the pipeline for the next several years or more. i've spoken with experts and they all say they cannot name a single person because of the infrastructure that boxing has had over the past few decades. they do not have the infrastructure to train up youth athletes and say you're going to go to the next level into the mouth -- into the limelight. olivia: you can spend $99 to get it on hd. a lot of people are going to want to watch it who cannot afford it. how do you combat illegal streaming? ramy: in terms of combating

illegal streaming, i have this in my hands. this just dropped in the past few hours. this is a lawsuit filed by showtime/home box office against several streaming sites that say we are going to do this for free for all of you guys. showtime in hbo said i don't think so. it filed copyright infringements . they are asking for the district court to say we're going to want to shut these down from 8:00 fourth best from it clock 45 -- 8:45 on. olivia: you think pacquiao is going to win? ramy: it is a matter between the heart and the mind. matt: i wish many the best and i am going to throw down to watch the fight.

i'm sure you could see it on -- what is the thing the kids use? periscope would be a good way to see it. olivia: a lot of things going on. matt: kentucky derby. olivia:coming up, they actually pay me to do this. a special tour of the bass pro shop in memphis, tennessee. it was amazing. the sixth against pyramid in the world. -- sixth biggest pyramid in the world. my host was john morris. john: what brings you to new

olivia: time to bring you up-to-date on the top business stories of the morning. shares in twitter are falling after a plunge yesterday afternoon. its first-quarter earnings were accidentally released earnings. twitter also cut its forecast for the entire year. ceo disk -- dick costolo says he

is disappointed in the performance of his sales team. the biggest increase in more than four years. march sales were up 1% and the national association of realtors revised february's increase to 3.6%. the biggest gain since october 2010. housing sales are being boosted by record low mortgage rates. experts say if you're saving for retirement, don't think about trying to beat the market according to a new bloomberg markets global poll of financial professionals. he too responded say -- 42 of those who responded say you should put your money in an index fund. 17% advised individual stocks and bonds. 14% a bird real estate -- favored real estate. erik and stephanie will be back with the man who practically invented the art, founder jeff bogle s john bogle. jay-z will perform songs he has

not sung in a decade or at all. you can win tickets to the concert by submitting a playlist on the music service called title. jay-z took to twitter to defend title. matt: bass pro shops are a retail hotspot for hunters and fishers. maybe jay-z has been there. johnny morris started the company out of his father's liquor store in the 1970's. now it has 92 locations across the u.s. and canada. bass stores do not just carry guns and fishing rods. they are also home to shooting ranges, bowling alleys and ponds full of live fish and alligators. i shot dead i sat down with johnny morris. john: we got an eight foot in diameter underwater gas storage tank and we cut a square foot

window in it and asked customers to bring in fish. they brought in bass. he beloved that. they loved coming into that shop and seeing those fish. trying to make people really happy or get them excited. to roll out the red carpet so to speak for catalog customers. investing not only for entertainment and also for a level of service that was having the facility so our people could -- you wanted to site in a new bow, we would have a facility and people could help you be properly fitted. matt: were you a great fisherman before you started the business? john: i think fishing has been imported to our company. eating a fisherman myself and being close to the sport that way has been -- eating a fisherman myself and being close to the sport that way has been

beneficial. all these things a passionate about doing these things in their spare time themselves. matt: do you work with any of the pros on the fishing tour? john: absolutely. because they are so connected fishing pros not only help us promote products, they also give a lot of input on boats. they are not only endorsing the stuff but they are really using it. we have pro staffs for hunting, fishing, camping. we rely on them a great deal. matt: being a great fisherman probably has a lot to do with skill but also passion and determination. having the business acumen necessary to run an organization like this how do you build that? john: i give my dad credit. he was savvy on the importance of delivering value. he would say, john it is not worth more on the shelf than

your competitors. he was underscoring to me the importance if you can have some of your own proprietary brands that are not available everywhere so it is unique for your customers. that is really important to our company. i credit my father for that. the discipline of having a good mixture of national brands plus some of your own brands. we can give our customers really good value. matt: what gave you the idea to put this giant pyramid? john: when you look around for a retailer i think in this building it's like over 550,000 square feet of space and then the cubic square footage is like 26 million cubic feet. it is mind-boggling. for us it was not without challenge.

we do things unique more often than not. try to make our stores special. matt: you have alligators coming this afternoon area there are six foot fish swimming around. it is pretty amazing. what is next? are you expanding throughout the u.s.? looking to go international? i hope you put a store new york. john: we are coming up that way. we just opened up in atlantic city. another store in sayreville, new jersey before too long. maybe next year. matt: any plans for global domination? is this purely american? john: i hope you're onto something. there are people hunting and fishing all over the world. we have stores in canada. i would like to think -- i look back. we had unique features in our

first big store. it was a catalyst for our whole company and help build our reputation. a.b. someday there are other places like springfield missouri and different parts of the world where we can plant more seeds. matt: that was part of my interview with founder john morris. we have more of that to come. you will be able to see it on bloomberg.com. olivia: i'm so excited. matt: people will fly to memphis to shop there. they will even get a hotel room in the store and that will be a weekend experience. i spent an entire day just in the archery section alone. olivia: what is the coolest thing you found? matt: i bought a compound bow which was quite cool. i got to watch them put the alligators into the pond. the coolest thing i think is the ducks unlimited. the charity has a special space in the store to promote conservation, wildlife and to

try to raise money to get even more land at will never be used for anything else except wetlands. giant sign on the building as well. olivia: i don't know if we will see pyramid with alligators. matt: all you have to do is go to memphis. that is it for "market makers." ♪

julie: bloomberg television is on the markets.

let's take a look at how things are shaping up on the street. it is midway through trading day and we have major averages lower. they have been bouncing around but it looks like we're in lows for the session. fourth consecutive game we have seen not so strong performance. the longer -- the largest economy sprung to a near halt. gdp rose at just 2/10 of a percent annualized rate. joining me is jeremy woodard senior equities derivatives strategist at bgc partners. as we see stocks pull back, what do you think happened -- the caveat is that -- stocks are pulling back but we are still at a record high. what are we seeing in the options market in reaction to it? jared: implied volatility has been rising. very low levels on metrics. there have been extremes even before the selloff started in

terms of how inexpensive options are. that is true today. with the amount of economic data we have coming up in the next week or two it may be an interesting opportunity to take on more protection as markets look like they may be rolling over. julie: to put it another way, people are more concerned about more volatility and a potential drop than they have been but on a relative historical basis, still not terribly concerned? jared: maybe they should not be. the gdp this morning was i think not a surprise to people looking at the components of it with all the data that came out in the first few months of this year. i think the big question, the fed knows the first quarter was weak. they do not know how strong the recovery will be in the second quarter and that is what matters. julie: you fall in the camp of thinking volatility will pick up

and your trade for today has to do with that. jared: we are looking at weekly options in may. short-term oriented play to take advantage of movement in this market. we are looking at the may options expiring next friday. at 211 put. selling an option a couple weeks after that around 207 strike. you could buy this calendar spread for about $.35 as of this morning. it is going to give you a profit potential, not just on a price decline but if volatility does increase in trader start bidding up, we expect -- we expect the spread to do better than other kinds of trade. you're taking advantage of a price move and of the lows in volatility. julie: still remaining in that 207 to 211 range. i want to talk about one stock, wynn resorts. the stock is giving killed. it has seen trouble in macau.

it is after earnings so you tend to see a drop off in activity but when you see a drop like this, what are we seeing happen? jared: an encounter -- a counter intuitive result. on the downgrades you're seeing this may be capitulation on the equity analyst. options volume is twice the dailies. options traders are taking this seriously. it is on the bearish side. julie: they think it is still going to go down? thanks so much. "money clip" is next. ♪

pimm: welcome to "money clip" were we bring the best stories the best interviews, and the best video in business news. investor jeff good length turns short on german bunds. in tech, twitter calls short. shares tumble. in politics, a clinton cash. another headline raises questions for the clinton foundation. and the latest innova