anchor: this is the bloomberg market day. traders save the federal reserve is being too optimistic when it comes to the u.s. economy. we will talk to one portfolio manager. anchor: a washington post reporter on trial in iran for espionage. we hear from his brother. scarlet: good afternoon. i'm scarlet fu here with joe weisenthal. we are pretty much at our session lows. joe: it is a fairly ugly day. no bounce at all and if you look at how the dollar is .oing, we have resumed

higher prices, lower yields in treasuries. that's following what we have seen in the european government bond market. there is the yield on the 10.4 percent.to of those good one news means bad news days. you see the dollar rally -- scarlet: and the remarks from janet yellen. joe: we have a lot to chew over. scarlet: a lot to chew over. john malone has been after time warner cable for two years and now he is getting it. charter is buying time warner for 50 $5 billion of cash

and stock. time warner rejected a takeover bid last year, and accepted a deal from comcast, but as you know, that deal fell apart in april. charter's ceo says he does not mind paying a higher price. john malone: time warner is more valuable. the have kept their eye on ball. we're comfortable with where we are today and the price today. it's a different circumstance than it was then. their behavior and our behavior is different and i'm pleased where it all came out. comcast's deal with time warner cable fell apart across regulatory issues. charter is not expected to have such problems. time warner ceo robert markets ifld get up to $85 million, he is terminated within two years of charter taking over.

a setback for the obama administration. president obama administration. president obama's bid to make overall in immigration policy a second term victory was dealt a serious blow. federal justices said the effort must remain on hold while 26 states deliberate to overturn with it. 30 people are missing in texas after floodwaters kept rising across the state. houston authorities recovered three more bodies from floodwaters, bringing the total number killed to 11 across oklahoma and texas this weekend. 2500 vehicles were abandoned. finance controversial minister may be a short timer. he says that the country will not accept a cure that is worse than the disease. the former white house budget director says that he may not have long to make these kinds of declarations.

he spoke on bloomberg surveillance earlier today. that is most clear about greece, either the government is what you fail or find a new coalition. either way there will be a new finance minister within two months. that is the single test bet to make on greece. european leaders what more reforms on budget targets, pensions, and tax rates. general motors will spend $1.2 million to upgrade the factory where it builds the chevrolet silverado and pickup trucks. bodyll go to an expanded shop near fort wayne. the plants employs about 3500 workers. itt week the government said plans to invest 4.4 million dollars in plants -- $4.4 billion in plants. what japan once it's workers to do to avoid death. has been promoted.

what that means for the company and his career. turning back to one --our top stories of the day shares of time warner cable and charter both higher after striking the $55 billion deal. aereo, cheteo of , spoke to betty liu and pimm fox. as you remember, aereo was a subscription service that allowed viewers to get over the air access to cable programming, unless -- until it lost its legal battle. i think they are a good operator. betty: are you troubled by it? with charter, no. they are good operators. i think the real question is what is going to happen from a

concessions perspective, because i do not think it will be a clean regulatory process. towardre is the move wireless and wi-fi and they'll of these various things. i think we are headed back towards a wobbly, basically, which is -- it's better than the current state, just because the current management was not doing much. case thatld it be the the duopoly is actually a good thing though? counterweight. a they need a duopoly just because -- from a technological investment perspective, the content, they need scale to be able to do that. it's inevitable that something happen. chet, and glad you mentioned technology. i wonder if you can give us a basic primer on there is wi-fi inside the home, outside the home, cell towers everywhere. what are the different

technologies, advantages, and its advantages? chet: i'm probably being a contrarian here, because you need to take a step back and think about the license. the fcc has very specific views about how much transmission power you can use in an unlicensed band. if everyone keeps saying wi-fi will be this panacea of connectivity outside the home, i think they are either spinning the story or -- pimm: point to people what that means. works, there wi-fi is a requirement for how much power you want to pump through the air. in certain bands, to reduce powertion, you reduce levels in the fcc regulates all that stuff. expended he has wi-fi in every city. if you ever tried to use it -- pimm: it's not usable. chet: they are using the 2.4 gig band. a half day -- up as long as it is restricted power, the consumers have access

to that as well at home, the experience will be terrible. the hubs, the transitions, none of those things have been worked out yet. significant andtrum challenges, everything has taken over at this point. there's plenty of spectrum, but a whole new set of technologies for that to happen. betty: we are a year on from the soreme court decision but much has changed in the last 12 months, the way people look at content and over the top content and we talked about mergers, right? thursday a a well-verizon deal a few weeks ago. i just wonder, given this piecemeal content, à la cart content, whether you think you might have had more of a fighting chance this year for aereo than you would have had last year? chet: absolutely.

i think the sentiment has completely shifted now and i think we sort of forced the issue a little bit. we could not control the timing and it is what it is. but certainly in the minds of consumers, the general acceptance is -- especially with sling tv and these things -- you can pick and choose and that's pretty good. if youink -- and i think are out there more and the word has mended -- that was the argument against us. leave theasters will broadcasting business, which frankly, might have been ok because the spectrum is better used in mobile technologies anyway. betty: right. pimm: using the over the digital transmission capabilities, is there any hope of that being a successful business? chet: that's where the antenna options comment, right? pimm: the quality is great. chet: absolutely.

and i think it works. for mass events, that's the only way to deal with it. scarlet: that was chet kanojia speaking to betty liu and pimm fox. coming up, the next steps to lighten the work force in japan. no more overtime. ♪

joe: welcome back to the

bloomberg market day. scarlet: let's get straight to julie hyman. jewels, you are starting with the worst performers. there's a lot to choose from with all of the red. first yes, there are, but solar, maker of solar panels -- the company down after being downgraded over it rbc. the new price target is $34 and it is rated underperform. advantage forost first solar over some of its competitors is diminishing and -- the earnings estimates for the company urges to eye. shares taking a big hit. --o more traditional energy csa is downgrading h frio of drillers. we're talking about patterson uti, neighbors, and weatherford, oilng they see shale

eroding the scarcity -- because we are seeing plentiful shale. if you are a driller, this is not good news in the stocks are all sharing -- these stocks are all falling in today's trade. and another analyst call. the outlook for the industry is they may seeays more bankruptcies or restructuring for these coal stocks to come out from the other end of the tunnel. the coal stocks have broadly been under pressure, specifically the u.s. coal miners have been under particular pressure. take a look. there is an index of home miners globally. if you look at the bloomberg terminal, it is actually called coal index, appropriately enough. in the u.s., one of the biggest pressures has been natural gas as natural gas prices have been falling. once again, that made it attractive for various utilities

to use net gas instead of coal to power power plants. of the reasons we have seen coal, under pressure. scarlet: thank you with the latest on the markets. let's look at some of the headlines crossing the bloomberg terminal. linked to 100h is seven deaths. families are being offered one million dollars from g.m.'s compensation fund. issues are still being hashed out, including whether gm will have to plead guilty and how big a fine it will have to pay. taking more safety steps following that fatal crash in philadelphia. they will use video cameras to record the actions of train engineers. the engineer in the philadelphia accident had an head injury. he told the ntsb he cannot remember what happened. scarlet: the all american pipeline still cleaning up the

mess. it released 100,000 gallons of oil, blackening beaches and 10-mile slick in the beaches near santa marta. those are your top stories. workaholics, a beware. japanese working themselves to an early grave and it so bad the government is stepping in. suicide is a big issue in japan. in 2013, work was listed as a suicides.r to you see that the purple line has been fairly stable while total suicides have come down. work suicides were the highest in 2011 with numbers just under 3000, and the issue of course, japanese people do not want to take time off. is a remarkable statistic. you have to wonder, in the u.s., people have a hard time taking off. for personal reasons, they work themselves crazy, do not take vacations, but obviously in japan, suicide is a much bigger

problem there in that number. chartt: let's pull that up again. tim, if you could pull that up -- you can see how japanese full-time workers been a lot of time working and they have the leave days. they just do not take them. of these things end up being about culture and expectation of workers. sure, you can allocate vacation days. whether they actually take them, whether they are like, ok, i have them, but will i be looked down upon if i don't have them, and the government has to step in and -- scarlet: mandate. joe: you have to work less, because otherwise people do not have the inclination to do so. people work too much. they are in the office until god knows what our. they stable home on the train. they go out tricking with her colleagues. less desirable

family life at home and that contributes to the low birth weight. -- low birth rates. in theis also exists u.s., and people imagine in the future, this current era, people will be working just a little bit. working from, even home, right? teleworking and flex working. there is no substitution for face time. in europe, they have a pretty healthy appreciation for vacation. seems like everything shuts down for a couple months every year. scarlet: it still surprises me -- i was in italy a few years back and i think we were walking 3:00, and2:00, everything was shut down. it was the midafternoon break. that was just helping's was. -- that was just how things were. facese come back -- a man espionage charges in iran. behind closed doors.

how that will play into u.s.-iranian relations, coming up. ♪

scarlet: the trial of the washington post reporter held in iran began today. jason rezaian has been held on accusations of espionage. this hearing is behind closed doors. the judges known for handing down harsh sentences. we are joined by mark halperin. he spoke to his brother. how did his brother sound? been doingrother has a lot of interview since the start of the trial. he has been remarkably resilient. his work to be a

spokesperson for his brother and a family and is pretty clear thathe is being optimistic justice will prevail and the reigning government will find a way out of this that does not involve continuing to hold his brother. but the secret trial is ominous, because they are not aware of all of the evidence for the charges. how thistalked about is a secret trial. what tools does jason have at his disposal to get a lawyer of his choosing, for example? mark: you've got people there to help them, but because we do not know the nature of the proceedings, it is hard to know. the brother, it was a two-hour preceding today. we've seen in other countries, particularly to diddle terrien --to tell a terrien regimes totalitarian regimes, it's just a matter of whether the government decides to change course. just ase that something

arbitrary will change the course. people have any sense of the timeline of the trial? do we know how long it is going to last? mark: the family only learned yesterday it was beginning today. usually not particularly long. they could go on for several days. the family hoping to get more information as the process resumes, presumably tomorrow. scarlet: mark, i wanted to ask you, how does this fold into u.s.-irani and relations are. president obama has spoken to jason's brother. mark: the president did speak out in a very prominent way at that dinner a couple weeks ago in front of the washington's community. it is never great when any journalist, american journalist in this case, is held on charges like this. but the administration obviously ,as lots of dealings with iran

most prominently nuclear negotiations that will continue. it rainy and's are motivated by trying to use this -- iranians are motivated by trying to use this as a bargaining chip. if the fate of their brother, their son is dependent upon a successful completion of negotiations, that could lead them to a bad place, so they are not interested in making that a merged process. and as is the case with so much that is going on with iran, they try to keep the nuclear negotiations on their own track and not get involved with what is going on in iraq or syria or anywhere else. scarlet: headline certainly do given the way. i know you have been doing interviews with republican primaries.l jeb bush is getting a house of his own at the family compound. is this a way of affecting that common man persona? mark: it is one of the famous

family bounce in america, kennebunkport. it is confirmed that the family is building a house for jeb bush. there are other houses on the property. jeb bush did not have one. this is by the standards of relatively modest house. it certainly does present an bush, certainly ties jeb to his family, which is something he is of course proud of an one-handed, on the other hand, it's still his biggest little problem. and it also separates himself from most americans who do not necessarily live on a family compound in an idyllic new england setting on the coast. mark, i feel it everyone probably knows jeb bush has a big rich family and they have a lot of land. ultimately is this going to move anything one way or another is this just an amusing little side story? mark: you see these things in

politics all the time. it could go either way. this could be a symbol for some voters and to the press of jeb bush's wealth and his ties to the bush family. he could be a two day story. john heilemann and i will kick that around. remember, romney was building a house for himself in california. thought it was just a personal family matter. and it had that famous car elevator. bech turned out to not there. that turned out to be a big problem. other candidates have not had problems at all. it's hard to tell politically where this may go. scarlet: absolutely, and make sure he does not have his picture taken sail boating and cause anyone to talk about flip-flopping. ♪

[baseball crowd noise] ♪ ♪ [x1 chime] ♪ ♪ [crowd cheers] oh! i can't believe it! [cheering] hi, grandma! ♪ back to thecome bloomberg market day. i'm scarlet fu. let's look at the headlines.

we begin with billionaire john malone finally get signing -- getting something he has been chasing for almost of years. cable being bought by charter. last year, time warner rejected charter's takeover bid and accepted a bid from comcast, but that deal fell apart in april. paying a higher price. >> time warner is a more valuable company today because they have been successful during process. rob and his team have kept their eye on the ball. they have grown their business. we have grown our business. we are comfortable where the prices today. it's a different circumstance. and ourir behavior behavior is different and i'm pleased the way it all came out. scarlet: the deal fell apart over regulatory issues and charter is not expected to have

similar problems. present obama is calling on the to of firm patriot act regulations. senator rand paul is encouraging an up or down vote on the collection of data. senator paul: what i am looking for now -- all i ask for our two amendments and a simple majority vote. i'm not being unreasonably. i am asking for two amendments and a simple majority vote. onould like to have a vote collection. scarlet: the program expires june 1 thomas congress renews it. and verizon bought aol earlier this month. details are trickling out that aol had talks with three other parties leading up to that deal. by a privatected

equity firm in march of this year. these details according to a background filing. revel resort will not reopen this summer. that's according to the new property owner. it is doubtful that the attraction will be reopened by labor day. the new owner has a literal power struggle, trying to get alternate energy while engaged in a standoff with acr energy. acr fears that it will be damaged if it looks up to an alternate source. an american tourists flocking to cuba. this is according to statistics divided to the associated press -- the u.s. began to normalize relations with cuba in december. americans are flying from other countries so they can sidestep

u.s. rules. those are your top stories. -- forget 2014, the real part -- the real play is 2016. of three point 50 from last year. and investment manager from randy one investment management in philadelphia. welcome to the program, jack. so, the market has been unconvinced the fed can move the way it says it has. janet yellen has made references to this in her various speeches, and yet it has had little impact. what could make the bond market believe again? : you have to remember that the fed is in a difficult position. this and ittling was not created to do that. im not sure that monetary policy

is the tool to bring back a lot of inflation. i think that is -- the treasury just stepping out, the selloff we saw during the month of may kind of made treasuries long in the curve look fairly attractive. you have been in their buying some, and how long do you intend to stay in there before it is too much? -- let: jack: i do not classify this is the home run trade. at i think down to the 30 year, maybe to the 250 area. if we get below that, the economy really us to slow down. i do not think that is going to happen. one thing i would add -- the bond market needs to focus on the dollar, because the dollar is strong. it just slows down. economy, we import some disinflation. bond investors like the strong dollar. you do not want the dollar to

strengthen too much. scarlet: right, we do see some strengthen the dollar today. do you think this is the beginning of the resumption of the dollar rally? jacqueline is a be. i do know what to sell my stanley fischer -- you've got to look at the data. better thancomes in expected, the fed is going to tighten and i think the long end of the treasury curve is still going to look fairly enticing. i think it should stay fairly -- the yield should stay fairly low as long as the dollar continues to strengthen. scarlet: part of this is data dependent. janet yellen has said or she said last week the first interest rate until employment and inflation reached the fed's objective. assuming you agree with the premise of her assertion, what parts of the economy would be most at risk of overheating? jack: i'm not sure i see a lot

of overheating going on in the u.s. economy. i think the fed -- two things, the fed would like to tighten to build ammunition for when the u.s. economy starts to slow down again. they also want to remind the markets that they want to tighten because they do not want a repeat of the taper tantrum they saw in june 2013. the laborot see -- market, sure, it's improving but i'm not in the camp that believes we will see wage pressures really start to take off here. i think the influences that have kept wages low for a long time been replaced by globalization technology. those have not been outlawed. there will be wages under control. labor is not in the position of strength from that standpoint. from that standpoint. we have a labor market that has gotten better. is this just a new paradigm we have now here and we just have

trouble accepting that? new: i do, i think it is a paradigm. when you have been in this business a long time, you tend to be biased towards the old teradyne. just a reminder, the global economy and the u.s. is in that does the rest of the world is in the position where the central banks want to add more liquidity to become more's stimulative, but we have had in the ballpark, somewhere in the neighborhood of $22 trillion fiscally monitor globally since the local financial crisis and we are still in a low growth environment. so there are structural headwinds. right, structural headwinds. and i want to remind everyone what stanley fischer said. if the u.s. economy is going very, very slowly, we will wait. if the economy is going fast, we will move quicker.

there a ceiling in your mind for how far the fed is ready to go when the rest of the world is easing? jack: yeah, again, not to keep the laboring, but it depends on the dollar. i think, it's probably more decides toin the fed do, not what the rate cap is going to look like. i will air on the side of being cautious. on the side of being cautious. you do not want the market to resist a series of tightening's. yeah, but vanguard is expecting increases of 1% as of 2016. forget the timeline, just the idea they will increase steadily , not one and done.

jack: they will look at the data. if the data gives them coverage to tighten, they are going to tighten. the fed needs to lift rates up so they have ammunition for the next slow down, which will not come for a couple years, but you need something to inject more stimulus when that happens. right, jack mcintyre, brandywine global management. thank you for joining us. coming up on the bloomberg market day -- the ceo of snapchat looking to turn his idea into a real business, one that makes money. plans to win advertisers over to his premise, or at least millennials. ♪

scarlet: welcome back to the bloomberg market day. i'm scarlet fu. 15 minutes to go before the closing bell. julie hyman has more. it looks like we at least extending our declines and her off the worst levels of the session. has beenvertheless, it the worst day, particularly for the s&p 500, sensed may 5. we have not seen a davis after almost a month now. bade have not seen a davis for almost a month now. come with me in the bloomberg terminal. i want to show you a little bit more about what we are seeing in action. what i have is an intraday charts.

the past few back days. this is a six-session chart of the s&p 500. what i wanted to show you -- it is how narrow the range had been in the s&p. until, oft all year course, today, when we saw that big drop in the breakout of it tight trading. something else i wanted to point we have to put it in perspective. this is the one year charts of the s&p 500. as you can see, it has mostly gone up and up and up. seeing only about one and a quarter percent below the record high. yes, the record, not to diminish that, i put it in perspective. iher notable moves today -- want to highlight been moves we have seen in the japanese yen, which is trading at its lowest burst against the dollar since

2000 seven. really the dollar rising against a number of currencies, but that worth noting. and also, this is going on in the bond market. the 10-year yield, we are seeing that go higher to some extent today, the selling in the bond market again. we also have seen a narrowing of the yield curve today, which has been interesting as well given that we got better than estimated economic data. scarlet: noteworthy, too, that the volume has picked up a little bit. versus the longer-term average, but certainly over what we have seen the past 10 days or so. right, julie hyman, thanks for those great charts. meantime, let's look at the top story crossing the bloomberg terminal at this hour. a setback for the obama administration on immigration. president obama's bid to make

immigration reform a second term victory dealt a serious blow today. federal judges remained that it until then on hold lawsuit is resolved. stanley fischer says the fed is playing a waiting game on it comes to interest rates. raises if the fed interest rates too quickly, it will be harder to cut them if the economy slows down. we have another phrase. are not date determined. they are data determined. we will wait and see what happens. we do not have to announce we're in september. if the economy is growing very, very slowly, we will wait. scarlet: he says going from an ultra-expansionary monetary policy to an extremely expansionary one.

deutsche bank is paying $55 million to settle sec charges that the bank felt incorrect financial reports during the financial crisis that downplayed risk. reports filed inflated the value of its transactions designed to hedge against bonds and securities. that created a gap worth billions that was not properly taken into account in the bank's reports. those are your top stories of the hour. snapchat has over 100 million active users and is drawing attention from ad agencies and media companies. driving the charge, the 44-year-old cofounder evan spiegel. emily chang has more from san francisco. what did we learn about evan spiegel in this interview? think everyet, i interview for the next 10 months, the first thing anyone can write about evan spiegel is this is the bad frat boy to send a bunch of e-mails in college he

regretted. but what is great about this sat down, my colleague with them for 90 minutes to try to get more of who this guy really is. a $15tainly did not build billion company by being a misbehaving frat boy. he's always leading something right. but to get a sense of where that badness comes from, why are you so secretive? he said right away, this, you know what, is hard. and he went on to tell a few stories that were not just off nge record, but off the effi record. you get a sense of who evan speigel is. he said, i know as a young guy, people are not being served by the financial records that are out there, and that is why they need something like snapchat.

that he understands what young people want and need in his social network. a plan tooes he have make money for the company? right now snapchat has zero revenue and zero profit. emily: he certainly does have a plan and he lifted the curtain on that plan a bit for this article. one of the things that he pointed out is not jet is getting to billion video views per day. per day. that's half the number on facebook and facebook has 10 times as many users, so he thinks that is the holy grail for snapchat and is getting ready to make a big push to advertisers where he is going to show them some of these numbers. longtime former facebook executive and he said something interesting. at worst, snapchat is the next generation mtv. at best, they are the next generation via comp. a lot of people have written snapchat off, but it's clear

they have a lot of potential. if they are not going to go all the way, maybe they will disappear forever. scarlet: kind of like a product. losing extent are they momentum? they came out, they are a trendy thing. millenials, they have a short attention span. the not going to stick around. that has not happened, has it? emily: when you look at their value -- investors are always leave very bullish on the comp me, and yet, i was getting ice cream on a saturday night, and literally every single kid in usinge cream shop was snapchat. i use snapchat, but i do not use communicate with my friends because i'm not 24 years old. people use it all day long. snapchatting pictures

of your ice cream? i just thought it was selfie pictures. emily: an ice cream flavor is one thing i would not have expected, but apparently that's happening. scarlet: the short to -- be sure to catch emily chang on bloomberg west. start raisingfed interest rates? if the conversation we need to have on tuesday afternoon. that's coming up next. ♪

scarlet: positive news on the economic front today. home sales and consumer confidence climbed higher. will these reports have an impact on when the federal reserve will begin to raise rates? market seem to think so. joining me, our carl riccadonna and lisa abramowicz. the data we got today, carl, is

that a bunch of data overdrive? how about that? the q1- carl: contraction is over, but it's a relatively soggy step into the second quarter. this is nothing like last year. this is half of that at best, 2% growth in the second quarter. we are moving in the right direction, but this is not changing the mind of the fed. janet yellen tried to keep the theon of a rate hike on table. will it firm up for september is really the question. lisa: i remember when you thought positively about the u.s. economyc. atar percentage is a point swing. lisa: i would say the bond market agrees with you, for now. we had good data today.

you would think the bonds would sell off, and yet, they are not. you had a pretty good two-year option today of two-year treasuries. you had the yield come down pretty significantly. you had 10-year holding steady. why? us the data is good, but not good enough. lisa: you're looking at a stronger dollar. you are looking at a safe haven play with greece still in the air raid you are seeing that in the eurozone. also particularly with the 30 year treasuries, but also the 10 look -- let'sd say the fed does hike rates. so what? scarlet: going from zero to 25 basis points is hardly a big move. lisa: right. : this is a victory lap for

janet yellen. she wants to show the market is that this is not a one and done fed. then you escape the taper tantrum and they get the zero bound, which they really want to do -- lisa: it's not quite a victory lap -- if you look at the futures, the bond futures, you will see that they are steering the fed with respect to where the benchmark rates will end in 2016. scarlet: talk about the nature of that disagreement. itself already brought closer to the market. the: beam market has -- market has stood firm. the fed is the one that caved. they said 1.8%, where is the bond market tried to get a 1% rate. and we have the june fomc meeting with the dot plot and

the -- right now it takes about three and a quarter percent growth in each remaining quarter of the year to hit the federal year-end target. scarlet: r from it. carl riccadonna, thank you so much. abramowicz, our bond markets kuru here at bloomberg news. we have so much more coming up on the bloomberg market day. we are counting you down to the close. it has been a volatile session. we are off our lows. have the closing bell next on the bloomberg market day. ♪

scarlet: we are moments away from the closing bell. this is the bloomberg market day. in scarlet fu.

-- i'm scarlet fu. i'm joined once again by bloomberg markets managing editor joe weisenthal. in the industry groups s&p 500 finishing down. do not the only member of the dow industrials -- dupont the only member of the dow industrials that did not fall. joe: still counts. scarlet: the s&p 500 and the nasdaq seeing their worst day since may 5 and at its session low, the dow lost 242 points. so, that was certainly be slow down leading into the three-day weekend and now that we have come back for memorial day everyone has responded by selling off stocks in a comes on