buy time warner, but is the price right? erik: the creative force behind apple gets a new title. johnny ive's name the chief of creative operations. olivia: and the $100 million home. what does that by you? plans for this record-breaking piece of california real estate. good morning and welcome to the bloomberg market day. erik: we have breaking news on the economy. sales and consumer confidence. julie hyman has those numbers. julie: it looks like we have a 34. -- threefer.

6.8% lastales up month to an annualized pace of 517,000. 484,000, month, according to the commerce department. analysts have been estimating a slightly slower pace. month over month, the gain of 6.8%. consumer confidence coming in at 95.4. 95 is what economists had been predicting on that front. someve been seeing negative reaction this morning to the better than estimated durable goods numbers. you may expect, par for the course with the latest numbers on the perception that we are going to see the fed potentially be more aggressive on these better economic numbers. we have seen yields on the tenure pushing up this morning. olivia: thank you.

itie hyman on this better than expected economic data. erik: let show you where markets are trading. of a littlee midst bit of a selloff, some concern that the cpi number we had on friday, durable goods this morning, case-shiller, and no consumer confidence, and home sales suggest the economy is a bit firmer, and if that is the case, the fed may be inclined to hike sooner, certainly not the summer, but september, is it on the table or off the table? as we have been hearing all morning long, it still matters to people. not if you are investing in the long-term, but if you are position taking, it certainly does. let's not forget the big deal. time warneris what cable is being acquired for. the purchaser this time around

is charter. ,hey could about them in 2014 but did not make a big enough bed. -- bid. you can see, time warner cable trading up at 6.56. we should show you where charter is trading as well so you get a sense. also up on the deal. noteworthy because charter is paying more than some anticipated. not this weekend. our reporter alex sherman has been leading the way on the reporting, whether it is comcast, or charter. we knew what charter was going to pay, the market did not. olivia: great work with alex sherman. he will have an interview with the ceo of charter tom rutledge.

m&a has been a big driver of the equity rally here. let's look at what is making news on the bloomberg terminal this morning. charter hoping to succeed where comcast failed. they have agreed to by time warner cable for $55 billion in cash and stock. it allows time warner to quadruple its number of subscribers. last year, the deal between comcast and time warner fell apart because of me from regulators. twitter has engaged in talks to buy the company clipboard. sources, therecode tops are currently stalled. greece may be running out of money. thefinance minister says country will not accept a cure that is worse than the disease. ofer orszag, former director

the office of management which it, says in a not have long to bring those kinds of declarations. he spoke this morning. thing that is most clear about greece is either the government will fail or will find a new coalition. your way, there will be a new finance minister within two months. european lenders want greece to come up with more reforms on budget targets, pensions, and sales tax rates. the two sides are meeting today in brussels. olivia: taco bell is going natural to appeal to millenial's. by the end of the year, they colors,e artificial trans fats, and high fructose corn syrup from almost all of its items. they say the change will not result in higher prices. lawmakers in oregon are aiming to block plans of a new nestle water bottling plant. the company says it wants to

bottle water in the town of cascade locks along the columbia river. to do that, they would need signoff from the department of fish and one that services. lawmakers are asking to scuttle the deal saying that a transfer of water rights to a for-profit company is not in the public's interest. erik: the trial of an american ran will go on but behind closed doors. for "therking washington post" when he was arrested. his wife and mother were denied access to the proceedings. the trial is expected to last a few days. dual citizenship in the united states and iran. new defensea's paper calls for the navy to add open seas protection as one of its core mission. that is likely to make other asian countries where he that they will be using the navy to

back up disputed territorial claims. erik: it was a first for men's college across. denver beats maryland to win the into the championship. it is the first title for a school that does not touch the atlantic ocean. sixcoach of denver had one national titles previously at princeton. olivia: i cannot believe that made the headlines. i was actually the captain of my diversity lacrosse team. erik: i'm surprised. more in the next hour. including a look at the latest talks between greece and europe. it looks like officials are playing down a possible greek default. the markets are not buying it this time as they euro slipped to a one-month low. and we look at the law enforcement reforms in

cincinnati that have made it a modern -- model of modern policing. testing a new system to replace its gas tax. should you have to pay more to drive more? i say yes. olivia: charter communications has agreed to buy time warner cable. alex sherman has been breaking news on this story for about two years, and he is joined by the charter ceo tom rutledge. >> thank you. of ad by tom rutledge, ceo now much larger company, assuming the deal goes through. i want to start with the question of the day, which is what is the public benefit, specifically, that this deal offers, that the comcast deal did not offer? think it offers a company a pure play cable company that is committed to the

development of the cable business, no matter where it is efficient and oriented.and customer we think we can hire a lot of people because of our operating model. we think we can provide excellent customer service. as a result of that, generate greater customer satisfaction, which turns into positive margins. because our customers stay with us longer and are happier, and as a result, they cost less to serve. we are quality-based, growth oriented company investing in new technologies. we have developed an open platform downloadable security system. we have developed open user toerfaces that allow us

integrate what was traditionally cable tv with over the top providers in a seamless presentation. we are in sourcing jobs from overseas. we are investing in plant expansion in both the wi-fi and commercial areas, in a way that not only our to employees, customers, but also the country, in a sense that it will have a better telecommunications infrastructure as a result of this transaction. >> you spoke with fcc chairman tom wheeler. without getting into specifics, did he give you any guidance on what you would need to offer so that the deal passes through regulatory approval? >> the chairman's comments that he has made in public are guidance. i would not characterize or confirm any kind of report about my personal conversations with him. i think his public conversations

are consistent with everything i know about him. i think you should take those and look at us. .e are a different transaction we are not vertically integrated, we have a different history, and we bring an alternative source of development to this space that may not have existed in the comcast-time warner deal. >> should we expect future asset deals or are you content to hold all of time warner? >> we have no plans to sell any of it. >> how big of a piece is wi-fi development with this deal? that seems like a concrete public benefit. something we have talked about before, the combination of wireless and wi-fi. is that an essential piece of the deal? >> it is. in the long run, when you look at who our competitors are and

what our scale is, we are a much smaller company, even today with this deal being completed, then comcast or verizon, at&t, directv. even the two other big cellular companies have as many customers as this company will have. when you look at where competition is moving, going forward, the wi-fi that we are putting out, the ability to use high-capacity wi-fi and have roaming capabilities across the cable industry on those platforms and ultimately integrating those into cellular businesses, i think, is in our destiny. we don't have a current business plan to get all that done but our initial plan is to build out wi-fi in not only the home, but in the public space where people work and play, and to make our service essentially available in a lot more places.

>> last question. in january 2014, time warner throughout a price of $160 a share. in hindsight, do you wish you would have bought them in january? >> remember, we did not have the ability then to do the cash component of that request. then, time warner has realized that our business plan works. we presented that plan to time warner in this process. they have seen how we have succeeded. our currency is therefore more valuable. time warner is more valuable today because they have been successful in this process. onir team has kept their eye the ball, they have grown our business, we have grown our business. we are comfortable with where we are today. their behavior and our behavior is different. i am pleased with all of it. >> tom rutledge, ceo of charter

communications. that wesurprising day have you here, almost two years after the negotiations started. erik: thank you very much. tom rutledge with alex sherman. looka: let's take another at the markets. investors digesting economic data here at home as well as news that greece could default on its debt as talks with creditors all. -- fall.

olivia: good morning and welcome back to the bloomberg market day. i'm olivia sterns. erik: i'm erik schatzker. let's get a check on the

markets with julie hyman. >> i am on ipo watch. , the start with etsy online marketplace for makers. journal" street reporting that amazon is exploring creating an artisan workplace and has sent out some invitations to betsy sellers. we are also looking at party city today. initiated of stores with a bunch of different recommendations. usually you have a lockup until after a company goes public and then you have a flood of analysts initiating coverage. shares are up .6%. shack watching shake after the gain more than 30% last week. they are pulling back today, down by 7%. to take a longer-term

perspective on these ipos. shake shack is really the outlier in a big way. i you look at my terminal, have a chart of the three ipos we just talked about since their inception. the one that went public first was shake shack, back in january. this is a percentage gain. shake shack is so much higher and reflects the lack -- fact that their shares are of more than 300 shares -- percent since their arqule. party city is up about 20% since the ipo. , a lot of people have been talking about overvaluation. that chart shows you what shares have been doing versus other ipos. olivia: thank you. here are some of the top stories this morning. faulty general motors ignition switches are being blamed for 107 deaths. families of the victims are being offered $1 million from

the compensation fund. prosecutors may bring criminal charges against the automaker. 12 people are missing after a flooded texas river washed away their vacation home. the structure was carried off of its foundation and slammed into a bridge downstream. official do not expect to find survivors. four deaths have already been blamed on the weather over the weekend. he is the man responsible for the look and feel of apple's most important products. now johnny i've will get up-to-date managerial duties and will be the first chief design officer. he worked closely with steve jobs. we will have more on him later on this hour. of the hour, we found a new home sales rose by 6.8% in the month of april and consumer confidence went upward as well. more ammunition for the fed as a there's for liftoff later this year.

erik: maybe that is why stocks are selling off. to talk about it is jonathan gullible of rbc capital. you are able. bul we are withinl. >> 1% all-time highs of the market. today is market saying, the likelihood of the fed moving early rather than later incrementally went up today. here is the bottom line. is on solidmy footing and the fed raises rates, it will be fine for the markets. olivia: a lot of bears say the market is being driven by vivax, people doing that instead of spending cash. you have a note out today that says that is wrong. >> a couple of reasons why we take the market has gotten the story wrong.

the first thing it says is that there is no earnings and it is all buyback. in reality, underlying earnings growth is what is driving eps. companies may be issuing debt, but the overall level of indebtedness in companies has been flat for about five years. they are not borrowing to buy that their shares. there is no problem for companies to cover these vivax and expand over the next several years if they want. olivia: maybe that was not the case with apple. you are staying with us. we will be back after the break. don't go away. ♪

olivia: welcome back to the bloomberg market day. back with us is jonathan golub from rbc capital. he was telling us that buybacks are not artificially inflating

earnings. you say companies are spending their cash. these mountains of cash that we hear company sitting on. and they are not doing what apple did, which is to buy -- borrow money to buy back shares. >> if you have money overseas and you have to pay a tax to bring it back, borrowing in order to buy that is not irresponsible and create shareholder value. when you see is buybacks are being covered by cash flows. it is the company's underlying business that is returning capital, not simply issuing debt and buying back their shares. erik: what about a separate but related issue, the argument made by larry fink and others, that buybacks are symptomatic of a disease that afflicts ceos and corporate america called short-termism. >> the underlying problem is we

have a slow-growing economy. erik: because companies are not investing enough, driving demand. i think that is a partially correct argument. if you have an economy growing slowly and businesses feeling the need to hit 7% eps and they do not make as big capital investment, return more to shareholders, they deliver a good eps number on slower revenues. they are robbing from the future by not investing in tomorrow's growth. to that point, he is correct. i would love to see companies invest in their future, but they will only do that if they see demand out there. right now, they are reluctant to do that. olivia: we have a six-year bull run. it is the market that nobody wants to love. there is no topline growth. why are you still a bull? >> the most important question

is what kills bulls. recessions do. we have slowed topline growth, not no topline growth. the question is are we nearing our next recession? the answer is no. typically, when the fed makes marketirst move, the will continue for a couple years before you have a pickup in the risk that they mark the end of this. may be reason for some doubt, but i think we are far away from that precipice. olivia: jonathan golub, thank you for your time. olivia, i will say goodbye to you and see you tomorrow. olivia: much more coming up on the bloomberg market day. ♪

olivia: welcome back to the bloomberg market day.

it is a deal that will reshape the cable tv industry. charter communications has agreed to by time warner cable for about $55 billion in cash and stock. aboveice is a 14% premium time warner's closing price on friday. the biggest shareholder is john malone. is it time for a new page at clipboard -- flipboard? twitter is in talks to buy the company. they were in talks at the beginning of the year and they say talks are currently stalled. lipboard currently has 300 million users. stanley fischer says the fed is playing a waiting game when it comes to raising interest rates.

he was speaking in israel and said if the fed raises rates to quickly, it will be harder to cut them if the economy slows down. >> we have another phrase. our processes are not date-determined, they are data-determined. we will wait to see what happens. we don't have to announce that we are going to do it in september if the economy is growing slowly. we will wait. olivia: he says putting too much importance on the fence move is misleading. in pro basketball, houston is staying alive in the western conference finals. scored 45 points to lead them to the wind over the golden state warriors. the more years have led 3-1. curry took a nasty fall in the fourth quarter but returned. he ended up with 23 points for

the night. still to come here on the bloomberg market day. much more including big banks funding the london area ambulance, and it is not so much an act of goodwill but a penalty for their bad behavior. turning waste into water. how the california drought has brought him the need to recycle our nation's water supply. and this home can be yours for a cool $500 million. what you can get for that record price. european bankers and official seeking to minimize the wider risk from a possible greek default after talks over the future of the country remain in deadlocks. they are in talks with the european commission and imf. spoke with our team this morning and offered his best yet on greece. >> either the government will fail or it will find a new

coalition. either way, there will be a new finance minister within two months. that is the single best bet to make on greece. it is hard to translate from academia to government, and some people do it well, others do not. admittedly, he is in a trying situation. much harder to make that transition. out.ere was a headline varoufakis seals the deal with creditors by june 6. i think we have seen that a few times. >> i have never seen a date before. whether it is june 5 or six, it is right at the threshold of when the deal would die. >> the greek side of the negotiations have been consistently more confident than the broader european side. the nut of this disagreement them is about the

primary surplus. how much they are allowed to hold onto. greeceeasonable to ask to hold 3% primary surplus over time? >> it is very painful. the irony here is that the new greek government may be on the brink of the implementation of all the atmospherics, which distracted from their case and up to -- under them a bit. >> what does austerity mean to you? >> it means contraction on the economy from raising taxes, or cutting spending. that was. or formally the director of the office of management and budget. peter or zach, formally the director of office of management and budget. paying for the miles you drive rather than the gas you drive. a new program being introduced

in the pacific northwest and why it has some drivers all charged up. ♪

olivia: we are one hour into the trading day here in the u.s. let's get a look at how the markets are trading. u.s. benchmark indexes broadly lower, this as we had better than expected economic data, adding fuel to the argument that janet yellen may raise rates in september. let's show you what is happening around the rest of the world. let's go to europe with francine lacqua. european indices are falling

for a third straight day. the italian and french markets, both on the most. germany is worse off, down 1.5%. the euro is weaker against the dollar. the german 10-year bond years are falling. it is all about greece. it is worrying investors. comments by federal reserve officials that you just mentioned. also fueling concern that rates will rise this year. that is having an impact on european indices. in terms of yields in greece, the 10-year borrowing costs jumping 50 basis points on worries that athens will not reach an agreement with its creditors. investors are trying to wait for these developments, but as every day goes by, they know they have this imf repayment coming up in a few weeks. greeceance minister in blaming creditors, insisting on

more austerity. let's go over to julie hyman in new york for when u.s. markets are doing. julie: thank you. let's take a look at what is going on in the treasury markets. yields go higher today, and that has been something that has been a reaction to the better than expected economic data. we have a look at the various yield curves here. we have seen the move higher to some extent. not the same reaction in the two-year. as i looked behind me, looking we keep onear, pushing it higher and higher as perception shifts about when the fed will be raising rates. if you look at my terminal, we are looking at the 10-year yield -- now we are looking at the e

the which is trading at lowest level since the dollar since 2007. let's take a look at the long-term chart of the 10-year. are seeing a significant bounce in yields from the lows from january and february. as perceptions have shifted over the longer term, we are seeing a different story. by historical levels, going back to the 1960's in the treasury market, you can see we are still very low in terms of yield in the bond market. olivia: i was actually impressed with that third and final chart. we are trying something new here on bloomberg tv. apparently a few kinks to work out. dollar yen is a big story today. the dollar trading against an eight-year high against the yen. one big story out of the region,

shanghai composite has soared 140 points over the past year. david engel discussed how analysts were so wrong when it came to the chinese stock market. >> the rally has been so good that even the most bullish forecasts are looking foolish they pessimistic. then, the most bullish rally was 28 basis points. now the index is pushing 140 basis points. now the focus is on fundamentals, the market is moving based on the charts. if you dare, put out a call on the chinese market. in the past several months, they have been very wrong. to our top let's get stories crossing the bloomberg terminal. home prices in 20 u.s. cities are rising faster than expected. the case shiller housing index rose 5% from the end of the year.

that reflects a limited number of available properties. postedncisco and denver about 10% increases each. american tourists are flocking to cuba. flights to the island nation are up 36% since january. officials there say many are flying in from mexico or other third countries so they can sidestep u.s. rules. hollywood is licking its wounds after its worst memorial day weekend since 2001. " led the way with just $42 million in box office sales, significantly less than expected. it is the first time in three years there has not been an opening of at least $100 million. would you rather pay for the miles you drive, or or the gas you buy? oregon is the first date to test that would allow

drivers to sign up for a program that would track the miles they drive on oregon roads and charge them accordingly. joining me now from portland, oregon is the product manager tom fuller. what is the reason for testing the paper mail program? why do anything that makes it more expensive to buy an electric car? >> we are looking at how to maintain the roads and bridges that everyone depends on. oregon pioneer the gas tax in 1990 -- olivia: tom, are you still there? go ahead. keepingas tax is not up with electric cars, fuel-efficient vehicles, and we are looking at ways to keep up with the maintenance on our roads and bridges. the task force over the past

year looked at 28 different options and came up with the idea of why not pay fairly for the miles you drive, rather than paying for the amount of gas you cars gete are seeing better and better mileage? why not raise the gasoline tax and penalize those that have not yet switched over to more fuel-efficient cars? >> we think that exacerbates the idea of unfairness, that everybody who is driving up to share in the cost of maintaining the roads. it makes sense. we know the federal cafe standards are rising. soon, those lower efficient models will disappear off the roads. what we are looking for with our program is a test drive. we won 5000 people to test out the concept, try it out for a few months, and tells what they think. does it feel fair, does it feel easy? we have private sector partners

who provide the devices. they have all kinds of cool .ncentives we want this to be an adventure for people. we also want to find out if this is the right system. all this information will he put together and given to the oregon legislature. they will be the ones to make the decision. olivia: certainly an interesting experiment. everyone trying to figure out how to get more money into the nations highly copper funds as they are badly in need of renovations. thank you for joining us. is the first state to test a paper while program, last year, california created a committee to look into an alternative to the gas tax. washington state also set aside money to develop a similar program. in 2001, a white cincinnati police officer shot and killed

an unarmed 18-year-old gentleman named timothy thomas, setting up three days of unrest. he was the 15th black man to be killed by cincinnati police in six years. after a class action lawsuit and years of reform, cincinnati is now being held up as a model of modern policing. bloomberg took a ride and spoke to the city's reformers to find changed.she -- ♪ >> people who had been abused by the police decided to take to the streets. there was a problem. the cincinnati police department needed to be worth armed. -- reformed.

>> the role of the monitor is to come in and oversee police reform, such as how the police department used force, highly trained its officers, how it disciplined its officers. ♪ each contact with a citizen, whether a traffic stop, whether it is a field interrogation stop, you have to fill of this contact card. name, age, race, why you are making the stop.

the cry was more paperwork, more work for the police. but in the end, complaints started going down. those cards helped to change the mindset of this interaction. >> and we still do them. >> absolutely. >> 341. copy. >> the default stance that most police agencies have is big me, little you. we tell you what we will do to make your community safer, and we will tell you how we are going to do it. ♪ i think problem-oriented policing is just the opposite. it is problems that are organically driven up from the

community. workhat you strategically to improve that situation, with input from community members. >> i do see some change. , fore not utopia yet african-americans and the police department, we are not there yet, but i'm glad we started in 2001. i'm glad of where we are today. still ahead, an in-depth look at will. we break down how billionaires are making their money, next. ♪

back to theome bloomberg market day. what are the stories that finance pros are interested in this morning? we lived at the most read stories from the bloomberg terminal. the one that really caught our eye was the third one about a ubs study forecasting billion

euros burgeoning growth in will will start to taper off. according to the study, the rapid rate of wealth created by billion years will taper off over the next two decades. collins.e now is peggy thank you for joining us. of there the conclusions report, how has this new weapon created? >> one of the main ways is through financial services. people in financial services and hedge funds are leading the way in terms of self-made billionaires. tech entrepreneurs are rising fast, which is not too surprising. it is consumer products and real estate that is driving the jump in will. in europe, consumer products as well. olivia: whenever you look at the bloomberg rank of billionaires, i'm amazed at how many were built on retail empires. handbags,r goods like

the conglomerate that comes out of that, beverage companies, carmakers in asia, it's incredible. why is the report saying that this enormous wealth creation will start slowing? >> they think it is possible it will start to slow down because of a few things. taxeslicy changes, wealth to try to alleviate income inequality, but also the potential for emerging markets too slow in terms of growth. we have seen china and india sore in terms of their development, but as they start to build middle classes in their countries, growth could taper off. one of the other findings of the report that surprised me and perhaps should about all thek wealth being created in the new markets. 70's in christie's talk about all of these auctions and we think it is billion euros from asia, but actually the largest number of billionaires was in the u.s. >> the u.s. is still an

incredible engine of growth around the world and we are still leading in terms of financial markets, in terms of private equity, hedge fund , and you look at bill gates and warren buffett. they are the top of the list every year. madea: certainly, they their money themselves. did the reports say anything about the secret sauce? do these entrepreneurs have anything in common? >> one of the myths they debunked was that lots of doing your dropped out of college. 80% of self-made billionaires have a college degree. some of their characteristics that appear to be common, they were good at taking risks, and took a lot of them. half of them started working at a large company and then broke out on their own. many of them launched their first business on their own before the age of the. olivia: interesting.

debunking the myth that you should go to college and it is not just people who created companies in their garage. they actually did work at big companies. any other essential personality traits to hit the 10 figure mark? >> certainly driven people and they highlighted the risk-taking. these were people that were willing to fail in order to have ultimate success and many of them tried more than once to make their success. is doinghis eerie, ubs this in part because it is an enormous business opportunity for them. how are all of the big banks responding with their wealth management divisions to try to top this? over the years, i have seen a tremendous uptick in terms of resources private banks are putting behind reaching out to new customers, keeping the old ones, particularly as women are amassing more will. also trying to be conscious of millenials. there about to have greatest wealth transfer the world has seen in the next

couple of decades as the self-made billionaires transfer their wealth. that is one thing they have tried to do, reaching out to your customers. -- collins,y custom thank you for being here. a lot more to come in the next hour. including from your toilet to your tent. the california water crisis may be pushing them to recycle water in ways that may be hard to swallow. how california is coping with the drought, next. ♪

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good morning. it is 11:00 a.m. a new york.

welcome to the bloomberg market day. buyter munication is was to time warner. is the price right? million home. what does all of that money actually by you? how about 100,000 square feet and a 30-car garage? we will show you the plans for this record raking feet in california real estate. -- record-breaking feat in california real estate. olivia: good morning. i'm olivia sterns. pimm: and i am pimm fox. we are 90 minutes into the trading day. there we are, the dow jones lower by 1%, the s&p