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 500 lower

points. the nasdaq down 1%. this is all after earnings. olivia: and the big story i found in the currency markets -- the dollar jumping this morning, jumping against an eight-year high in the yen. we also see the strengthen oil, putting a little pressure on the price of oil. you see new york crude trading down at about $58.45. at $1.08?dollar/euro it will be less expensive to go to europe. olivia: always good. charter as made an offer to buy time warner cable, allowing chartered to the most quadruple its number of cable subscribers. year fell apart due

to scrutiny from regulators. pure playoffers a cable company that is committed to the development of the cable business no matter where it goes and is efficient and expansive and customer facing and customer oriented. olivia: charter is expected to have fewer regulatory issues than the deal with comcast. one big deal -- comcast was a content provider with nbc universal. charter does not have any content assets. u.s.ome prices in 20 big cities grew faster than expected. the case-shiller housing index increased 5% in the year ending in march.

economists say that reflects a limited number of properties on the market. and orders for capital equipment rose for a strike in -- second straight month in april. the total demand for durable goods actually fell -- that's after a 5% jump last summer. and greece may be running out of money. finance minister yanis forest yanis fo ourafakis -- our guest says he may not have that long to make a decision. fail: greece is going to or make a new coalition. either way there will be new finance minister in two months. that is the single best bet to make on grace. deals onleaders want

budget targets and sales tax rates. the two sides are meeting again today in brussels. and money managers at goldman sachs cannot resist the 10% yield on puerto rico's bonds. goldman sachs has almost bondspled its stake in since the island's credit rating was downgraded last year. had $1.4 billion of puerto rico bonds as of the first week of may. and snapchat's chief executive to turnegel has a plan his company into a real business. he has come up with a new pitch to attract advertising. have 100claims to million users and claims that its audience is bigger, younger, and more excessive than anything advertisers could get with television. evan spiegel is 24 years old and snapchat is valued at more than

$15 billion. youra: you are so lucky daughter is not big enough to be on snapchat. pimm: i'm not even going to touch that one. olivia: still to come -- apple's johnny ive is moving up . what does this mean for apple's future? pimm: and california's drought createting new ways to clean drinking water. and a new least on life. this is cool. let's turn to our main economic story -- that are than expected economic data. home sales in april rose 6.8% to an annual rate of 500 17,000 units. j.p. morgan securities chief u.s. economist michael joins us

to explain how this. all right, michael, tell us, how -- theu.s. it coming u.s. economy performing? michael: everything performs slightly better than expectations. this probably does reinforce most people's expectations of the second quarter will be better than the first. the first quarter, honestly, point 02%, that's not a high hurdle. drags,saw some of the whether that hit housing, the dollar, some of those things turned and will fade a bit in the midyear. reinforces think it as janet yellen, head of the fed said, the slowdown in the first quarter was in fact transitory? michael: i think that is right. if you look at the housing numbers, particularly new-home sales and housing starts, it looks as weather conditions normalize, those will bounce back. similarly with durable goods,

those up and looking pretty awful for six months or so. and now we have seen the good shipment orders up, which is pretty reassuring, and maybe takes a hit from the stronger dollar. there is also the added issue of whether there are forced quarter -- a numbers that can be adjusted by seasonal issues. i think this is supportive of yellen's thesis that the weakness was transitory. away michael, if you take the automobile industry, then how is the u.s. economy doing? michael: the auto industry has been a pretty good support for really much of the recovery, the outside the automotive industry, we think the economy looks pretty decent. housing demand it has been holding an ok. and the service sector actually

has been doing pretty well. so, i think outside the auto industry, things are looking like they are getting a little better. michael, the dollar -- that seems to be one of the big market moving stories, the dollar hitting a seven-year high against the yen, the dollar against a broad basket of currencies. at what point is the dollar strength they had went against the u.s. economy? you do notviously want to change economic forecast based on one day's dollar move. theas a 15% or so move in broad trade weight of the dollar from the middle of last year to the last quarter. if we see something like that again, obviously we have to start to question second half growth, but one day or -- euro-dollarabout

parity? it's good for all of us trying to plan our vacations in august france, but it might not be so good for others? michael: what we've seen since march is really -- obviously the dollar looks a little stronger the last week, but we are going to have to keep an eye on it, and the lesson of the first quarter as well learn that we have to be sensitive in thinking about the outlook. oli, lookhael fer ahead to thursday and even next monday. what economic reports were you be focused on? michael: after friday reports slow down. gdp, andxpect the again, some issues with the data quality there, but that's what were looking for. and then, next week, the real number is next friday with the may jobs report, which given what we are seeing in the

jobless claims data, we think it will probably be pretty decent. ask youmichael, can i one final question on productivity? i saw a couple articles over the long weekend about how global productivity is at its lowest level since 2000 and that is potentially -- this is the elephant in the room of the global economy. no one is talking about it. are you worried about a slowdown in u.s. productivity? michael: absolutely. it's good to see that people are starting to sit up and take notice. it has been going on arguably for several years now. it is in the long run probably the most important factor of .ell-being it is something we worry about. we do not see a whole lot of other reasons why it would accelerate meaningfully. it's definitely up there. olivia: all right, michael , joining us from the jpm offices in new york. on the marketead

day -- apple promotes jony ive to the sea suite. that's next. ♪

back to alcome beautiful sunny day in new york city. this is bloomberg market day. i'm olivia sterns. pimm: and i'm pimm fox. let's go to julie hyman with what is going on in the markets. julie? julie: first off the worst performer in the s&p 500, first solar. he worst performance since november, that was after it was

now graded by rbc to underperform. the price target is $500. pricempany for all advantages versus competitors are diminishing. falling,l stocks are and that's after credit squeeze said the outlook for coal is -- credit squeeze said the outlook for coal is dire. we are also seeing colsol energy ol energy selloff. we need to see discipline or bankruptcies to "emerge from the other end of the connell" for coal. and assets for drillers were downgraded at csa, basically saying that these companies are recycling an old playbook -- a downgrade at clsa.

we have been talking a lot about the energy stocks here today. bloombergook in my terminal to see how they have done in terms of the s&p 500 groups. using the percentage performance for the year to date -- that's the white line -- they are down nearly 2%, but they are actually not the worst performers in the s&p 500. that honor goes to utility stocks, which are down nearly -- as we see rates thrive utility groups are usually the ones hit hardest. the energy stocks a big weight in the s&p 500, a big downward weight that is. pimm: a downward weight. thank you, julie hyman. look at headlines. 10 inches of rain have turned the city of houston into a lake. freeways are closed. of the transit shut down. thousands have lost power. storms across texas and oklahoma

killed eight over the weekend and 12 more people are still missing. and there has been a surprising increase in consumer confidence. the sentiment rose from a four-month low. it has been bolstered by higher home values, a stronger labor market, and record stock prices. plus, taco bell going natural. by the end of this year, it will remove artificial flavors, colors, trans fats, and high fruit does towards her up from menu. all items on the the only exceptions, beverages and co-branded items. you will not see any differences ritosthe read oh -- do the cap'n crunch desserts. pimm: they are not going to take

them off the menu, so you are good. man behind the look and feel of apple's most important products -- he will thete his time to touring apple stores and working on the headquarters in cupertino, california. olivia: what sort of effect will this have, cory johnson? cory: he has been the guy at the heart of the design process for decades now. the design process that created things like the ipod, the iphone, the macbook air, the apple watch. those are functions of a design team that has been led by jony of his peculiar these, has led this company to create some of the most loved products ever. stepping away are

stepping up to be a leader in design, but not actually a practitioner of said design, it will certainly mean some changes in apple products of the future. y, i wonder if you can tell us more about jony ive. he loves the design -- he likes is aston martin db9 so much he wrapped it around a tree at one point. what does he do it apple? is the guy that when steve jobs came back to the theyny, with jony ive, designed these products around the principles jobs at talked about for years. these ideas about simplicity, personality, people knowing how a product works before they have ever used it. and that really matches well with his own design concept of simplicity and beauty. one of my favorite things about jony ive is not an apple product or the bit.ly he rides -- or the

on the he rides around campus -- pixar. when steve jobs did not like the images for "wall-e," jony ive got involved in created a new robot that was the heart of that movie. to me, he has encapsulated a lot of the design ideas we see in apple products, the beautiful applelike robot -- .livia: yes, we all love wall-e 1992. been there since what was his relationship with steve jobs? they were veryy close. jobs, he could be a difficult guide to work with. but for the longest time, they talked about apple, even in the early days, they talked about how the software should be simple, how the icons should be

simple, you should understand what things were and know intuitively how to use those things, but really in jony ive, you found someone who was not able to just design those things himself, but lead a team to create products that could do incredible things. --'s not forget the eiffel the apple iphone now has the power of a supercomputer in the 1980's. it has an elegance that allows people to command it without a lot of education on how to do so and that really -- of the yes, the facility design is something that really sets all of jony ive's designs apart. i just think it's beautifully ironic we are taking this segment to talk about the elegance of jony ive's design when you are standing there in a pale gray jacket with pinstripes. cory: it's kind of pale blue. olivia: yeah. thank you so much, cory johnson,

our editor at large. still to come on the bloomberg market day -- when bad banking becomes a catalyst for good causes. criminals helping to save lives. ♪

thomas savestrader courtmas hayes arrived in to answer charges he manipulated libor. he donated millions to a good cause. the london air ambulance has saved 200,000 lives. it relies on donations. , that meansor fine another helicopter can soon

become a reality area -- a reality. >> [indiscernible] this air ambulance goes to injured patients and our philosophy is essentially to bring the hospital to the patient. the interventions we provide a really time critical to the patient. with the ambulance, we are able to get to the airport eight times faster, and we are able to undertake a range of procedures including blood transfusion and emergency amputation. we are a charity. we are not supported by central government other than the libor fund, so the irony is not lost problems with the

financial markets has led to london's air ambulance. but covering people is not simple good enough for all of london. you million pounds in the libor fund was a starting point for us really. we raised a lot of money from other individuals in the city, but we still have much to go. some of our patients needing emergency anesthesia, surgery. those extra minutes can be the difference between them surviving or not surviving. olivia: that's incredible. is.: it i thought it was incredible that there is currently only one helicopter news for all of london. olivia: we should point out in the u.s., some of these in norma's finds do go toward these causes. but they also go to -- pimm: the treasury and some goes to the general fund, so that helps fund educational programs

for for eventual literacy. olivia: i did not know that. i did know that they went toward paying -- compensating financial victims -- pimm: and the district attorney of new york decide some of the things -- olivia: pimm fox, i learn something every time. a footnote.ust but you're not a footnote. but you are taking off. olivia: i am. pimm: we will see you tomorrow. we will look at how the drought may be turning you into a trash or treasure hunter. ♪

welcome back to the bloomberg market day. i am pimm fox. let's get a quick look at how the markets are doing. let's look and look what sucks

-- let's look and see what stocks are doing. the s&p 500 is down 19. the nasdaq falling about one and a quarter percent after all of those economic reports this morning. the deal charter communications hoped for 15 months ago. they have made a bid to buy time warner cable at $55 billion. last year time warner rejected charter and what with comcast's $45 billion bid. of course that deal fell apart. >> time warner is more valuable today because they have been successful during this process. robin and his team have kept their eye on the ball, grown their business. we have grown our business. we are comfortable where we are today. it's a different circumstance than it was then. both their behavior in our

behavior is different and i'm pleased the way it all came out. pimm: thomas rutledge, charter's chief executive. the time warner, comcast deal regulatorydue to issues. charter not expected to have that kind of trouble. assigned a business and investment management picked up in the second half of the year and new home sales also picking up. sales rose almost 7% and that beat forecasts. the case schiller housing index says that housing prices in 20 major u.s. cities rose 5%. nestlé wants to bottle water alongside then columbia river. to do that, the town would need .o sign off nine legislators want to scuttle

the deal. they say transferring water --hts to a four moffett for-profit company is not in the public interest. and american tourists, well, they are flocking to europe. visits to the island are up 30 6% since january. officials say many are flying from mexico or third countries to sidestep there is u.s. travel rules and those are your top stories this morning. coming up here on the bloomberg oldet day -- you can say tubes are getting new tricks. belowground real estate getting its day in the sun. and a $500 million home. what makes a california property the priciest ever in the night states. in the aereo founder weighs on the big deal between charter communications and time warner cable. man'sn's trash is another

treasure. representatives from 20 different countries are gathering in russia to discuss management and environmental responsibilities. you may remember not long ago billionaire bill gates showed recycledrt for wastewater by drinking a cup of recycled wastewater. and he's not the only one. with me now, our own willem marx. turning us from washington, d.c., marty adams who heads the water system for the los angeles department of water. what is the disposition of the drought conditions in california now. the state has been going through several years of drought. while the aquifers are drying it is soow that

critical to the states agriculture, as well as the folks who live there, 40 million californians rely on water. we just do not have the snowpack this year. ilem, you spent time recently in california. do you get the sense anecdotally that people are changing their habits using water? willem: everyone there is aware of the drought and one of the covers -- stories i was covering in thee is a program l.a. area, incentivize five mass water. they were tearing up lawns, they were replacing them with gravel. this is something people are seeing is a problem. they realize the cost are increasing and this includes farmers of worse, as well. willem mentioned

wastewater. turning wastewater into potable water. give us your assessment. there's 100,000 gallons every day, water that is cleaned up from the sewer system, and is actually cheaper to clean up wastewater than ocean water. it's a cleaner source water, so, we know we can clean up water for just up the same price, cheaper than the cost of bringing water down through the aqueducts from northern california. so, we really have the opportunity to grow a local water supply and capture what is released to the ocean for the same price or little bit cheaper. marty, where is that water currently used, the recycled water? we do treatment that is called tertiary treatment. courses,r is on golf irrigation, sometimes industrial uses. it cannot be consumed. with a little more treatment, we know it is good enough to be put back into the drinking water system, and we hope in the near

future to be able to put it back into the same aqueducts that come into our filter plans and treated as part of the regular ranking water supply. the regulations are not there yet, but were working hard to get to that point. talk about the industrial and commercial uses and how that has changed because of the drought. huge, hugeis a industry in california. they have seen costs increased are medically. that's the same with cooling plants, power plants all over the state. hydropower has been heavily affected. they have seen their levels lower and lower over the last four years. they're very worried about supplies. any: marty, are there specific challenges to getting the public to accept recycled water? marty: i think the perception issue is the big part. technically we know we can clean it up and introduce it back into the system.

but the challenge is to give the public to accept that, and i think what we have seen today is very different than what we saw a decade or two double decades ago. resources realizes are limited. the public is more educated. we are trying to grow that and get people to understand this water is perfectly good to drink. there's no new water anywhere in the world. it's all recycled somewhere. we can do it just as good as nature does it. marty, how about getting people to pay for it? i know you have a budget of about $1 billion at the los angeles water system. is this going to cost more? marty: we are spending about a theion dollars on challenges facing everyone in this country, but really trying to get a water supply that is local and not subject to earthquakes or droughts and other things. this is part of our budget we have currently.

we are certainly looking for any opportunities for state and federal funding. there is a new water bond in california that would help pay for this. we are looking for all of these funds together. we know if we do not have water, we do not have an economy. we will have to invest in these resources and really set ourselves up for a much better future than we have right now. and higher prices for produce because of the increased prices? see it atthink you the chain, but for these small wholesaler, they need these tools in their jewel boxes. this happens to be one of the cheaper ones. as marty said, it is cheaper than desalination. week, andted last made a mistake and i said california exports 80% of its almonds overseas. it produces 80% of the almonds and the united states. willem: absolutely. pimm: thanks very much, willem

marx from bloomberg news and marty adams from the los angeles department of water and power. getting a face lift -- what will these ghost nations become? you will find out, next. ♪

back to thee bloomberg market day. in pimm fox. i won a look at some of the top stories crossing the terminal right now. amtrak taking more safety steps in the wake of that fatal crash in philadelphia. the railroad will install video cameras to record the actions of train engineers. the engineer in that fatal accident suffered a head injury.

he has told investigators he cannot remember what happened. and the broken pipeline that cause an oil spill in southern california might be removed today. it's owner wants to find out why the pipe ruptured. the spill last week released 100,000 gallons of oil and caused a 10-mile slick in the pacific ocean. and a gtmo free version of free --s top -- gtmo america'sersion of top baby formula is headed to stores. they may make others raised on the response of consumers. those are your top stories. markets just close in london. let's go to france when loquat in london. lacqua francine: it's really all about greece. been no convergence

would increase in creditors. time is running out. downou have a lot of these -- germany throwbacks and of the biggest losers, but also the ftse. down some 1.2, 1.3%. we do realize that the greek officials plan to hold a conference call today. this was initially meant to be a meeting between the finance ministers and the creditors face-to-face. we will see if anything comes back. we also had comments from the federal reserve. i know julie hyman has been talking about that all day. that is having an impact on the european markets. the ftse here in the u k, also .k., also, ahe u low-cost carrier adding 5% after reporting an annual earnings jumped and it has a very bright outlook for the rest of the

year. the rest is leak. ryanair is gaining. thank you very much, francine joining us from london. speaking of london, there are dozens of underground stations no longer being used. life.ay see a new lee sun transports london is looking to repurpose these ghost stations with transport mayfair. bloomberg went to find out more. in a station under the streets of mayfair that has not been used since 1932. opened up in 1907. it was never particularly popular. it was closed in 1932. during the war, this is where the executive committee who ran

britain's railways were based. most famously this was a station in the early days of the war, before we have the war rooms, this is where churchill's cabinet met. >> prime minister winston churchill goes to see for himself -- this is a great location in london. great location, great history. we are looking to put it back into use. a, we have set out competition, looking for people to come forward with ideas. disused stations we could bring back into use in some form. we want to apply those learnings. this is not all about making money. we have many more valuable assets elsewhere. for us, this is bringing a location with great history,

great location back in use. there much more focused on quality of bids than the value of the extraction we would expect to make. probably over five or 10 years -- this is really about a long-term payback for the rider. [indiscernible] -- >> you could have many potentially. you could have restaurants, and art gallery, you can have conferences, public performances. if it could work anywhere, it could work here. ian anderson, the senior director of planning. still ahead -- all ofgoing to find out the amenities in this half-billion dollar property, next. ♪

pimm: one of the biggest homes in the united states in history rising on a los angeles held up and the developer hopes to sell it for a record $500 million. the compound will have a's heavy 4000 square foot main residence and smaller homes. the project, which will take 20 more months to complete, will in-depth with 100,000 square including a 30-car garage and a monaco-style casino.

bloomberg's betty liu joins us. are you in the market? do you think this house comes with air-conditioning? to say theuld have air-conditioning bill is more than my mortgage every month. pimm: you're not in the market? isty: the master bedroom bigger than my house. it is a resort. pimm: is it a bubble? currency park. that's what it is. it is a park for someone with $500 million to burn. they want to park their money. pimm: for the time being and they will sell it off piece for peace? betty: you're a member of that documentary "queen of versailles"? pimm: yes. betty: that reminds me of this. that money.e you think this is for an overseas buyer coming to the united states?

betty: who else would it be? thesear about, pimm, billionaires from brazil and russia and china -- york and miami, also a currency park. it might be reasonable to think this could be the same thing. the 20 metropolitan they sellss where month on month? california? new york city? betty: new york city. pimm: but these are not those high-priced condominiums -- betty: true, but it's interesting compared to what you're seeing in california or san francisco or denver. we will talk of about that -- talk about that in the next hour. pimm: you still don't want that house? betty: do you want to buy it for me? pimm: no.

time now for the options in sight we will bring it in with julie hyman. julie: maybe there are options on the house. you can go in with 500,000 of your closest friends. thes take a quick look at action. we are seeing declines across the board. relatively big. by 1%. major indices off joining me, kevin kelly, chief investment officer at -- what is your firm? kevin: recon capital partners. julie: i should have remembered that. we seem to be in the good news is bad news area today with three economic reports this morning beating estimates, yields going up and the bond market, and stocks going down. is that pretty much the read here? kevin: everything is trading on the macro view. if you look at the options, it's really the s&p 500, the russell

2000, as well as a fix, and you see the investor demand for that, because it has been an asset sense 2008. and they just released weekly options on the vicks as well as two new -- weekly options on the options.ell as two new that is what is really happening in the marketplace. julie: there's also a case at you made that we should be watching capital flows in the market. explain what you mean by that. seeingwhat we mean is where all the capital is flowing macro wise. out of the united states, over to asia, to europe. it -- it's not macro economic use -- news. the liquidity is out there. matter whereust a

it is going. i want to talk about your individual trade today, because we see onchoppiness the macro level, you are looking google and why? kevin: they do not pay out a dividend to shareholders, but tech as such a strong space, it is something people can feel comfortable about the we are looking to sell 2% out of the money call option against google. especially since they have reported earnings, it's out there. you can go out and generate 1.3%, 1.4%, while you still get a 2% upside. and this trade is actually off bxy, which has outperformed the s&p 500.

it is a stable index. julie: ok, what do you get out of it in the end? it -- what you get out of you own a name you want to have exposure to. you want to own google. tech is one of the best spots for the market. the next two months, you do not think there will be as much news. what you want to do is why google, sell a call against it, bring in that 1.3%. so, you can turn google into a bond or dividend player -- gotcha, and which specifically are you buying and selling? kevin: we are buying google here at this price and we are looking to sell, the sell off at the 5.50 strike. julie: gotcha. and we are at about 531 right now. there,the news is out

what does it look like for the spot market? seeing them sell templates and buy some calls. it's a cheaper name. comcast is the big player. that is where the option activity is going to. interesting. ok, comcast, the underdog. that's not something you here too often. mention that charter has turned lower. kevin kelly, recon capital partners, thanks for joining us. good to talk to you as always. don't go anywhere. there's much more bloomberg market day coming up after this short break. stay tuned. ♪

pimm: good afternoon. 9:00 a.m. in san francisco. midnight inyork and hong kong. that he talked charter communications a great to buy

time warner cable for $55 billion in cash and stock, a government could reshape the tv industry. pimm: greek debt talks remain deadlocked with greek and eu officials waiting for the other side to blink. european officials playing down the risk of a possible greek default. betty: taco bell tells bloomberg the chain will remove artificial colors, trans fats and high fructose car and syrup from the rest of the menu. part of the push to appeal to .illenials pimm: good afternoon, i am pimm fox with betty liu. betty: let's begin with a look at how markets are trading at midday. down.