stephanie: good wednesday morning. erik: soccer world live this morning. she fumbled the headlines. police raids, accusations of millions of dollars in bribes. stephanie: i read this headline. it is no dream. let's get you started here. erik: fans call soccer the beautiful game. so often, it is. perhaps not today. the politics of the game are anything but beautiful. nine soccer officials and five others were charged in what is called a bribery scheme. swiss police raided a hotel and arrested six officials from viva. -- fifa. fifa has been accused of

corruption for years. qatar and russia were to host upcoming. request the president is millions off. he is not involved in any, so how you -- how can you say, ok, he has to step down. he is the president in two days to an election. then he is the president for the next four years. >> loretto rent -- loretta lynch welding's conference and you can watch it live here on bloomberg television. bailout talks for greece are said to be going nowhere and bloomberg is now reporting greece will probably miss this. four officials told grace

they're not close to an agreement with the imf. they want more bailout funds civic and replay loans next month. voters will get a chance to say whether they want to be in the european union. queen elizabeth outlined the legislative agenda. queen elizabeth: legislation will be introduced to provide a referendum on membership to the european union before the end of 2017. erik: the queen was reading words written by the prime minister. the agenda also includes income tax cuts. stephanie: cyber crooks have gone after the irf but they do not have to add into the system to do any damage. they used to the irs website to steal information on more than 100 thousand taxpayers, and they

filed big tax returns and got up to $50 million in refunds. officials say they have removed the website function that allowed this use access. here on business week, the same budget. these things happen. when you are an irs employee and you provide your own staples, pencils, and pens, you are in a tough spot. it is more than embarrassing. moving on, regulators have cleared the way for a huge takeover in the cigarette industry. officials have approved a $27 billion purchase. rentals will have to sell four brands including winston and sound to the british company tobacco. it will make about nine out of every 10 cigarettes sold here in the united states. in the pro basketball playoff it is all about lebron james headed back to a familiar place. the nba finals.

he scored 23 points as the cavaliers completed a four-game sweep of the hawks. this will be the fifth straight time to game in the final spare no nba player has done that in almost 50 years. those are your top headlines of the hour. erik: let's look at the five things you need to watch today. yesterday a surge by the most since january, this is the gauge of implied volatility in u.s. stocks. the s&p 500 jumped almost 16%. the s&p 500 fell more than 1%. some people think stephanie could be the beginning of what we have been anticipating for so long, the point of the day with a market reaches peak valuation and begins to jackie around us volatility increases. stephanie: or they're just

justifying where they are today and we will find the same group a week ago or a month ago. i will give you number two after the rape victim scandals clients are seeking a more transparency. that will happen through electronic trading. it now accounts for more than half of the 5.3 chilean dollars a day in the foreign exchange market according to a euromoney institutional investor survey. this is how it is supposed to be. it makes sense. if you think of the massive volume in the fx market, it should be done that way. erik: the sad fact of the matter is what it reflects is a greater faith in computers than in human beings. stephanie: or the fact that -- erik: i'm just saying it is sad but true. stephanie: or maybe this is the way things can be moving. you do not need humans to trade that product. i do not necessarily think it

means you don't have faith in human spirit you do not need them. erik: maybe both. stephanie: someone could walk up and turn on the television, or you could just use a remote. erik: with got to julie. julie: you need people to buy stuff for this one retail at number three. tiffany's, all out with earnings this morning. shares are down 11%. i'm checking them now after the earnings forecast fell short of estimates hurt like currency fluctuations and sluggish sales in the united states. probably more important for course it lost its cool over the past several quarters after growing rapidly for a while and overtaken coach and consuming coach. we have seen cores have fallen victim to the same mistakes coke is made. tiffany also came out with earnings this morning and profits beat estimates.

they tried to counterbalance currency fluctuations are trying to interest a new product and that seems to have worked. stephanie: when i look at the numbers tiffany has brought in and europe, they are crushing it. is this another case of currencies in the fact that when it comes to europe, luxury is on sale? julie: it seems like it is working for them. it is more a problem here than in europe. but yes, when you make a conversion, it will be a problem. stephanie: signature tiffany collection are not just the blue box or people want not just your average thing from tiffany's. they want to wear something that says i purchased it from the iconic american store. erik: the easiest way to do that is walk around with a turquoise back here number four, my second favorite story of the morning, fee for --fifa has to be number one but this is number two. goldman sachs directors receiving the biggest bonuses in

london this year with an average payout of almost $300,000. $37,000 more than morgan stanley, which came in second according to a survey. it is not just that goldman ended at number one, which might have been producible. it is that goldman's average bonus paid to directors at 194,000 pounds is more than twice what the people at ing are getting. stephanie: those guys at ing and stockton, i feel bad for them. hold on they get paid a lot more money. doesn't goldman sachs make more money? erik: yes. stephanie: so we're not talking about factory workers here. if you make more money, you should he paid more money. erik: directors are the least happy with their bonuses and morgan stanley folks -- stephanie: maybe because they are not anywhere near goldman sachs been i would be unhappy as well.

okey-dokey number five. no. we're skipping number five because the number one story is so big and huge, we have got to talk about it. around the world, everyone is talking fee for. 14 executives were charged by u.s. prosecutors early this morning and a wide sweeping probe of bribery and rampant or option in fifa. saying "fee for welcomes actions that could contribute to doing wrong. we're joined now from zurich, where he just attended the fifa news conference. what was your big take away? >> the big takeaway was i felt i was in a power low uniforms -- parallel universe and we were listening to the spokesperson talking about the fact that he is not involved in the scandal

third to hear him talking in such terms left a lot of people scratching their heads and saying how could seth but are not be involved? he heads up the whole organization and he has since nice 98. erik: it is basically the same situation. who knows whether he did or did not know? what is certain, we're wondering who will cop a plea. how long will it take for somebody to turn states evidence with u.s. prosecutors and take down the whole freaking organization. stephanie: 14 people, how could the guy on top not be involved? let's just say he is not to and what is he doing all day long? erik: another excellent point. hugo, if seth blatter did not know, what business does he have

been elected another term at fee for -- fifa? hugo: people asked can seth blatter be held accountable if he did not know about this and is not involved. a lot of people were asking the question and also asking, if the swiss and the american prosecutors are going after fee for for this, how could they not have brought seth blatter in himself for touching? if you run the whole show, and he has for 25 years, he surely has to answer some questions. stephanie: they did not question him? hugo: not at this point. there is a lot going on that fifa does not tell the press or the world about, but we do not have any evidence that someone said, ok, you need to come and sit down and talk with us.

as we know, he was not among the seven arrested this morning rather unceremoniously at six ago cam in the hotel right behind me. stephanie: should we have seen him speaking today? erik: of course if you are accountable, seth blatter should have been instead of walter taking flak for fee for -- for fifa. as to whether or why, we're going to learn what kinds of tactics and strategy prosecutors employ the former prosecutor with new york later this morning. stephanie: if there were ever a moment to say the bucks that's here, he should have been standing here in front. fifa has not been put in this position ever, and they put a spokesperson out there? that is surprising to me. hugo: you are familiar with the

game where's waldo. we have been playing where's seth. i have been playing at the aft in confederation meeting this morning where he was expected to show p no sign. i went straight from there to the press conference. he was not even there. from what i and her stand, he did not show up for a meeting of the south american federation. he certainly has not put himself over and i think he feels he does not have to because in a way, i think he feels, i was not named among the seven, and i am vindicated. that is the line of argument his spokesmen are putting out. stephanie: are you kidding? fifa is an international joke. this guy is running the organization for over 20 years and it is not his problem? please. if he knew about it, he should be booted. if he did not know about it, he should be good quicker. erik: thank you, hugo. stephanie: i have an opinion on

this. we will be back with more in just a few. stick around. ♪

stephanie: welcome back. here are your top stories for the hour. flooded rivers around houston have started to receive. the city is still a mess after 11 inches of rain fell in just a few hours. the flood killed at least four people in the houston area and brought traffic to a complete standstill. 12 others are missing throughout texas and eight of those were in a vacation home slept down a river. ebay has a new strategy to attract advertisers p are merchants will pay for advertisements only if they lead to actual sales. ebay will be able to specify what percent of product sales price they will pay in order to run an advertisement. the higher the percentage, the

more prominent the advertisement will be. tiffany's found a way to offset the impact of the strong dollar. raised basis and injured his new products. the luxury jewelry chain posted first-quarter profit that beat analyst estimates. we will have more on that and a quarter they had the next hour. erik: crude is trading at $58 this morning in the big question remains the same one we have been asking for weeks. is $60 the new normal for oil? the head of global commodity research could see this morning. is it 60, 50, or maybe $70? tell us. >> for the time being this year and next we will see oil in the low 50's to mid 60's. i think we could get back to a

70 ranch in 2015 when the market tightens, maybe late 2016 or something. i do not see oil tray much higher than the 65 range throughout the course of the next 12 months. stephanie: it will get higher in 2017 why? francisco: we have to look a little tighter. $120 billion worth of capex in the last few months. in a market that typically set -- spent 600 mine dollars, 20% of capex investments in the sector. i'll impact projects particularly in 2017 and beyond. erik: what is putting a floor under the price of oil right now? there is no indication the saudi's have any interest in changing quotas and we will find out for sure next week. also, the cost of oil services,

drilling is dropping and it makes it cheaper and makes a lot of those wells economically. and more share oil -- shell oil to come out of the ground. francisco: absolutely. a think you look at it short-term and medium term. the short run was keeping oil the driving season. we just want to memorial day weekend. heading into the fourth of july the peak of the driving season in the u.s. that lends support to gasoline prices. we think once we get past the next few weeks, oil prices will come straight back down. epa heading to 50 barrels of dollar, or below. i think the question is with the collapse, how much of a production decline will we get and when will that materialize?

it is probably happening in the fourth quarter of this year and in the first quarter of next year. i think all that we have seen in activity will have an impact on supply here in the u.s. possibly by the end of the year and it probably brings us to hire again. we see a zigzag in the next few months. we expect very little. opec, the strategy is working. i do not see it can do much. lost control of the market with shale and we wrote back in november it is the end of opec paradigm sure they will have a great time. erik: all right, francisco, head of commodities research at bank of america and merrill lynch. stephanie: thieves stole data from thousands of test returns. it is another setback. the irs taking a beating.

we will have more on that when we return. ♪

julie: gold is what we're looking at. better-than-expected u.s. data has made the case for policymakers to raise interest rates this year. fourth straight down day, joining me is the director of strategy at the curve capital. we have had this movement downward as we have seen the dollar recovered. is there anything else driving it? chris: i think you hit it right

on the head, the proverbial straw stirring the drink down here, that is absolutely the u.s. dollar. we are hitting new highs a site we have not seen in months of trading. traders are specifically looking at the strengthen the euro in the past five trading sessions gone from 114 and we are trading at 108 handle. the six cent move is dramatic. but do not worry. it is a great place to buy. julie: d think the dollar will weaken from here and gold will catch a rebound? chris: i do not believe in catching a falling night. i do not believe that momentum has gone out against the yen for the u.s. dollar. that being said, if you look back to the last six months

this 1180, even in a day to day chart, has maintained a great base to buy from. we have seen a hold at 1180. we are transitioning into a long wait here. over to the 1200 by the week's and. julie: you think gold can hold at the 1180 level. chris: i think the only way it will break through the 1180 and more specifically 1172, if it just addict low that in the short-term and in month ago. that being said, if the euro does not break the 105 handle and does not tray below that, a lot of traders are buying in gold. julie: all right chris, we will see how it turns out. talking with us about where to trade gold at this point. back to you, stephanie.

stephanie: thank you, julie hyman. corruption in the sport of soccer. five corporate executives, they call it a 24 year long conspiracy involving more than $150 million in bribes and kickbacks. early, please raided a hotel in zurich -- police raided a hotel in zurich. fifa spokesman was at this. >> it is not good in terms of image or reputation but in terms of cleaning up, in terms of everything in the last four years in terms of the whole

process, this is good. stephanie: you can watch a news conference here on bloomberg tv at 10:00 eastern time to the first question will be where is seth blatter. greece will probably miss its deadline for creditors. four international official told bloomberg that greece is not close to reaching an agreement with the imf and the european commission. greece needs more bailout funds. erik: as many as 40,000 syrian refugees who risk desk -- death will be moved to other countries. the plan will last for only two years.

once again, burger king is number two. wendy's took its place. burger king added more menu items in 2014 focused on value. sales rose while wendy's fell slightly. still, mcdonald's u.s. sales are four times larger than either burger king or wendy's. those are your top headlines. stephanie: i do not go to any of them. erik: nor do i. stephanie: i like shake shack though. identity fees -- thieves stole information on 100,000 u.s. taxpayers from a irs website. they used the data to file fake cast returns. $50 million in refunds. what the heck happened here? >> it is pathetic.

it shows the kind of information -- for all these hats, this stuff is collected. going on deep websites, and just buy it. that is apparently what they did. they had a database that, if you gave them enough information and symbol information in the last quarter, security question answers, they would spit out your tax return spear that is what these guys did pair they used the test returns to file new returns. stephanie: if we back into how they got there will we get to the point where the irs does not have the budget or the manpower to protect itself? >> they were one for months and years.

the other side is we have not had enough money to fix the system. one of the biggest numbers that came out of this 2013, the irs gave over $5 billion in fake refunds. it is a drop in the bucket and 80% of that was organized crime to that is where the money is. erik: the reason the irs director holds an event like this is to draw attention to the fact? >> course. you need the money to do it and there saying we do not. erik: how are they not difficult to implement? >> although it have to do is implement a two factor thing where they have to send another coat to your phone or create a

password. they did not have that basic stuff. gmail is more secure. stephanie: $50 million just like that? >> they seem proud of event they stopped about half of the attacks but only about half. stephanie: all right. thank you for joining us. erik: coming up, as fee for faces corruption charges, can people survive all the bad press? ♪

organization around which or over which is very dark cloud hangs today. >> it is impervious to criticism from the outside. a lot of people do not understand that the only important constituents really are the 209 national federations that vote in this election.

as long as he has got their votes, he will go ahead with the election. there has been so much noise about corruption but they are impervious to it. stephanie: one of the first things a suzman said at the press conference is it will continue in russia and qatar. doesn't that make people lose confidence that anything will change? qatar is a country with 100 degree temperatures, human rights issues. shouldn't this be a moment where you say, let's just told off and take a look at things? >> absolutely. let's see what the big companies, coca-cola these two companies in particular, head on broken relationships with fifa stretching back to the 1970's. we have gone year after year

with corruption allegations either related to the world cup or presidential elections, and occasionally they do not like what is going on and they're hoping to change. the world cup matters too much. the world stopped, everyone watched all of these guys and they went on talk about all the suits. erik: the world stopped when brazil lost against germany there is one in the u.s. looking to bribe her death bribery kickbacks, in the u.s. federation and the south american federation. these are parts of fifa. the swiss investigation is far more far-reaching. they're looking at these votes.

>> for the soccer fan and the casual viewer, that one is more interesting. the two something close to everyone has his heart, which is the world cup, and it's bestie future world cups. the one in russia and the one in qatar, we cannot thought speaking about it. no one quite understands just how these guys decided to get together. this tiny place, one of the hottest places on her, the best place for world cup. erik: i think there is more to come. what is most interesting is we have two parallel investigations and one from the swiss justice department working in tandem. it is not an action at the time to these tedious days before elections. a wrong that's a long essay was

written up about how that that is, and we are two countries get together to try and affect the election. the ultimate question goes back to the point you just made. what other chances rule of law will take control of fifa which in years of just years which you know enough documented, have fallen under the spell -- it is a culture clash cultures with different values, the middle east, africa, southeast asia? >> i would say close to zero. we are talking about 290 countries that make up fifa. it is a big story and people are talking about all over the world

and has been headline in brazil. people here would not be as shocked as we are in northern europe with the united states as to how business could be done this way in this part of the world. we have a big scandal with petra grass, for example. the big energy company were billions of dollars were siphoned allegedly from the country. it is a normal part of the business around the world. extremely popular around the world despite what we are reporting. erik: we have got to leave it there. thank you so much. later this morning, you will hear directly from loretta lynch holding a news conference in brooklyn. you can watch it live right here. stephanie: when we return chief

moynahan said his business will have to find new ways to cut expenses even further. we will have more on those when we return. ♪

fuel prices are now rising. oil is up 34% since the middle of march, though when it went down, everyone said we will not see it in effect.

another republican is getting ready to enter the presidential race paired it is getting crowded in the gop. the former pennsylvania senator rick santorum is set to announce his white house bid. he would be the seventh declared republican candidate. bank of america may end up needing more cuts. a 20% decline. the here at the conference earlier today, brian moynahan said the expenses they have to be. >> if the environment stays flat with less follicle, we will have to keep working it down. we were to down to one level returns. we have got to probably work down again in the next couple of years. stephanie: moynahan also said to

resolve all of legal cases involving mortgages as their biggest accomplishments. those are your top headlines. erik: let's get back to the market action. big calls on the street today. scarlet fu is here with analyst action. francisco from maryland was on earlier saying oil could drop. scarlet: this is bernstein, saying it could read about $80 per barrel. when they say short-term, we are talking very short term. there will be a supply deficit in the second half of the year. they quantified it at 1.5 billion barrels per day. it is basically what we have seen since the collapse of oil prices in the second half of the year. erik: it has nothing to do whether saudi arabia --

scarlet: no, not at all. the thing is, it is kind of like, you throw a ball up in the year. it will go down but at what rate? it is all a big question on where it goes in the long-term. oppenheimer has upgraded and we will stay with this year. the analyst upgrading petroleum. he already has outperformed on valero. a couple of reasons why. the fundamental industry -- industry for a metals favorable because the collapse in oil prices means costs go down. though there is some concern about their margins into the second quarter because oil prices have recovered wti is down from the same time last year. it is still differential. copies are taking a lot of action to support higher evaluation. they have increased dividends and buybacks and done what they can to support that.

they're also reducing the debt. these fundamentals are working in their favor. erik: thank you, scarlet fu. stephanie: david einhorn are you watching? we will be back in a few talking shiny stock market. ♪

stephanie: the chinese stock market has been on a tear since the middle of last or but how long can the bull market run? recent speaking with the ceo of capital management specifically investing with china and japan. china has clearly been working. when does this end? >> valuations have increased immensely. trading in the high single digits of august of last year.

they are now trading at 25. if we stripped down the state owned enterprises, valuations could be as high as 40. we are very close and cautious about the market continuing. i'm hesitant to say bubble yet. i think we have more to go. the momentum is a mess. we have trimmed our exposure a great deal and are a hedge fund that hedges. we are doing far more than just speculating on the market flying higher. we trade with a lot of value. it was obvious last year to be long in china. right now, i think it is not for the faint of heart it upside prices are far more limited. erik: how pervasive is what you saw? the risks?

>> anything in china now is starting to get very risky because of the run-up we have seen. we have seen the run-up close to 140% last year. over 50% in the shanghai market this year. anything you touches getting risky. erik: there is a difference between five and 10% pullback and i plan to 40% in the space of a day. >> correct. if we look at the last bull market of 2007, the market ran up many of the stocks we were looking at in august of 2000 seven, a double -- doubling in a time of one 20 months. that will occur in a market such as china appeared i mentioned coffin -- caution that we are not quite at bubble market territory yet, but i think we are approaching that and if we saw the shanghai composite up at

6000, all-time highs, then we would start looking at bubbles are the evaluation of 7% growth of the market, i think there is room to grow. stephanie: any specific areas where you think, when you are trimming within china and within the region, where he most concerned about? >> mostly about retail buying slowing down and what we're seeing now is students, taxi drivers, barbers, common retail investors. i say those words does it is silly. literally everyone is speculating on the market and there is a reason why they make as much as they do. the chinese like to gamble and they like to punt. they're pushing this higher with momentum and that is continuing. everyone is not quite in the market yet. when those retail holders start to sell off, then we have to get concerned. stephanie: thank you so much for

joining us pair we will be back. please stay with us. ♪

erik: good morning, everybody. i watching "market makers" at our new time. stephanie: there have been extraordinary developments overnight in the soccer world. let's get you right to it in case you have been sleeping for the last six hours. it is a. it is crazy what is happening now. erik: loretta lynch detailed a widespread investigatione of international soccer. punited states is charging 18

people with bribes and kickbacks. in switzerland, seven people are under arrest. the world governing body. they say payoffs let people to choose the sites in 2018 in 2022 world cups in russia and qatar. the head of the eurasia group says he thinks fee for its facing a crisis. >> fifa will implode on this. i do not want to eat on how far that would go. it is big but not incredible. talking globally of the most important of the world policies towards network. erik: fifa says it is quite grating with the investigation.

you can see the news conference live here at 10:30 eastern time. bailout talks for greece are said to be going nowhere. bloomberg is reporting greece will probably miss this week's deadline for creditors. greece is not close to an agreement with the imf and the european commission pair the country needs bailout funds so it can repay an imf loan due next month. stephanie: tiffany's finds ways to offset the impact of the stronger dollar pair they raise prices and introduced new signature product spear the luxury jewelry chain posted first quarter profit today that these -- beat analyst estimates per the stronger dollar lowered the value of tiffany's sales of is where it gets most of its revenue. shares of michael kors singing a different tune, down sharply in the free market here the earnings fell short of analyst forecast. the luxury company says earnings this year could fall as much as

$.32 per share. same-store sales in north america fell last quarter by 5.8%. michael kors says it is also being hurt by peng shuai shins -- by fluctuations. i am not sure everybody considers it a luxury brand anymore. in britain, here for their hearing from their queen. when elizabeth delivered a speech this morning to open the british parliament. sitting on a gilded throne and wearing a diamond studded crown, the monarch to lift a proposal from the government. one must anticipate an announcement of the nation passes future relations with its neighbors. >> will be introduced to provide for an in-house referendum, a membership for the end of 2017. stephanie: the queen also read

proposals for five years. erik: a little news update out of europe. the belgium airspace has been closed after technical problems shut down air traffic control systems which cost hundreds of fights to be canceled and diverted around europe. passengers trapped described chaos as planes were stuck for hours. according to the brussels airport, there will be no landings or departures until 1600 hrs local time. 4:00 in the afternoon local time. just for context, brussels is not quite as small as you think you would handle 29 million passengers per year, have fat -- about half as much as munich. half as much as munich is still busy.

the impact will be big. erik: and the origins, i'm not suggesting it is the root of it all, but today in this role, it raises questions and we are looking for answers. stephanie: and on fifa corruption, we're looking for answers as well. erik: nigel, can you hear me? let's talk about whether this is or is not an axis stent all crisis for -- and ask essential -- an axis dental -- existential crisis for fifa. as we established a few minutes

ago, the countries that put seth blatter in power who have elected him repeatedly do not feel the same way about it. bribery and corruption are the way business gets done in the middle east and asia. >> i think people will realize a lot of other countries have other rules. someone has got to give. stephanie: in defense of the countries who have participated all these years, was it necessarily their job? they were not the government or regulators? they were simply players of the game. erik: they're the members who

resent deaf representatives countries and consequently the players. stephanie: seth blatter has been running the organization for over 20 years. they cannot control the situation. erik: participants in an enterprise and possibly even a scheme, that leads me to you nigel. if money has been what is striving corruption, which is always the case, if someone shuts off the money cap and sponsors like lisa -- visa, it is not ultimately [indiscernible] stephanie: do you want to be the one guy to do the good thing? sorry, nigel? nigel: the sponsors have huge partners and they supply about 40% of fifa's revenue. they have collectively a lot of power. i think they have to act collectively to sort it out. individual brands start breaking ranks and saying things and that

is one thing. if they all pull together, they could have a real impact in damage fifa badly. i think you will then start to see changes and take notice. erik: if you look among fifa's's top sponsors, coca-cola, adidas the russian oil and gas company, which of those five, let's just take those as an example, which would be the likeliest to break ranks first? most concerned about the image and reputation worldwide, such that abandoning seth blatter is the right thing to do? nigel: brands are so paranoid about their images days and so concerned about doing the right thing and being socially responsible. this is the sort of thing a lot of them will not want to be involved in p or you will start to see brands kicking back and see a lot more noise and

creating a lot more fuss than they ever would have in the past. stephanie: those brands are clearly concerned about their image. i'm guessing seth blatter is very concerned about his? he was nowhere to be seen at the press conference where the moment he was innocent, he should be sitting at the podium saying the buck stops here. nigel: he is the ultimate politician and has managed things from his own point of view very well. how he gets out of this one, i do not know. it is such a mess and to think this great sport is in this sort of dire straits at the moment is unthinkable but something has got to happen to her you are quite right the man at the top should be coming forward to tell people what he will do sue sorted out. erik: is it safe to say any company --

nigel: it is a crazy sport, and the world cup, probably the biggest global marketing event even more than the olympics because of the amount of branding available, it gets to so many countries and huge audiences. they will not be short of other sponsors looking to get involved. certain individual sponsors will be a little bit worried about saying, let's just digit and forget about it. mastercard visa, adidas nike, coke pepsi, all of the brands are paranoid about letting the opposition into this event delivers so much. it is a damaged sport at the moment. stephanie: thank you for joining us to her the u.s. justice department will hold a news conference on these charges at 10:30 a.m. eastern. you can hear it right here on

bloomberg television. eric, a failed the election on friday and seth blatter stays in his seat, give me a break. erik: julie hyman has breaking news out of mcdonald's. julie: monthly same-store sales paired from mcdonald six -- perspective, perhaps driven by the scrutiny it has come under recently and it struggled with the concept, particularly in the united a spirit all of that said, mcdonald's is far from alone in doing this. most of the retailing restaurant industry has stopped reporting monthly same-store sales. one of the big ones that jumps to my mind is gap here besides that, many companies have stopped doing this and i do not want to be scrutinized on a monthly basis. they say there is solved to death volatility in those numbers. they will only report quarterly

numbers. mcdonald's says the june same-store sales will be reported with second-quarter numbers and a last reporting of comparable sales will be for that month, for june. stephanie: we have got to give mcdonald's a break here for a moment. hold on. we always say we want ceo's is to make long-term decisions and that they should not be trying to just satisfy shareholders. maybe we are giving them a bit more breathing room so they could make decisions. erik: that has to do with judgment. what you do in the face of data there is nothing wrong with transparency. more data is better. stephanie: that is not true. listen. they have a new ceo. if they want to employ new methods and new tactics, it may take time for them to flex their muscles and find their groove and the new strategies start to work. erik: there is no way they will be incentivized to return that

level of transparency. stephanie: it is no different from hedge funds who struggle to perform when they have to offer their clients daily, monthly weekly liquidity, whereas hedge funds and private equity's brother and who have their money locked up for 3-5-7 years, it is just easier. erik: maybe they should not be in the hedge fund business. stephanie: or maybe they should not become daytraders. it is turning them into daytraders. erik: this is a point on which we will fundamentally disagree. stephanie: two that you're are not here on the commercial break. erik: b man or woman enough to take the pain when you cannot deliver the results. stephanie: there is a good thing there is a commercial because i will not talk to eric for the next minute. still ahead, tiffany's there they're getting serious with the watch business to we will look with the big bet on business inspired watches to boost sales to an, i'm not sure if eric will

be here but i definitely will. ♪

stephanie: coming up this hour three things you should be watching. and the man who founded goldman sachs international retail franchise and helps take companies like yahoo! and aol public, he will join us to talk google's's annual meeting in the latest news with apple. that is starting in a few minutes at 9:00 a.m. eastern. erik: it is time for a few of your top headlines in this hour. rivers and houston are receiving. the city is that a virtual standstill because of high water. 11 inches of rain fell in just a

few hours. 12 others are missing elsewhere in texas. a huge takeover in the cigarette industry gets the green light from regulators. ultimately, $27 billion by rentals american. it will make up 90% of the cigarettes sold in the united states. this sold to winston and salem in britain. the republic and field is more crowded as of today. pennsylvania senator rick santorum is set to announce his white house bid. he figured that finished second in his bid and will be the seventh declared republican candidate. brussels airport a story we brought you earlier, has been gradually resuming air traffic control after technical problems shutdown systems. the glitch caused hundreds of flights to be canceled around europe. passengers described chaos and according to twitter postings,

some flights have resumed in those are your top headlines for the moment. stephanie: tiffany's is rising in premarket trading after reporting first-quarter profit that exceeded analyst estimates. new products helped to boost sales. chris of bloomberg luxury and olivia sterns join us now. let's look at tiffany's. olivia: globally, sales fell 1%. it is a turnaround story at tiffany's p michael's momentum is slowing. stephanie: to be clear, do you still consider michael kors to be a luxury brand? chris: now -- no.

stephanie: is it saturating the market? stephanie: it does not have to be expensive or luxury to be fantastic. >> you at great yesterday and today. could you look beautiful. classes mutual admiration. >> i never say that to tom keene. olivia: it is all good expectations with tiffany. i have a terrible holiday. there was concerned they would be cannibalistic. the numbers say fashion jewelry is selling well. it is good news not only because higher margins get out to new customers. stephanie: do they come out with the line when i look at over success?

whether you're looking at airport in stores, they barely keep them in stock. is this just tiffany's filing suit? >> what they are trying to do it is a 170-year-old rant. you do not see anything necessarily new. last year, it was a teacup aimed at women to buy gifts for them self. not necessarily to wait for an engagement ring. this year, they are getting into vintage. a senate do have a cool design. it's a time woman used to work at chanel and she is bringing a cachet to the brand. also high-end with the blue book and i'm sure you get that in the mail. the more expensive stuff. they are focusing on the brand the lower end, and they are standing on the higher end. erik: globalization is what every luxury retailer wants pay

look at tiffany for example. it is back in january that the stock trader -- cratered. due to sluggish sales in japan largely driven by currency fluctuation. like, what is the strategy? has any luxury retailer figured out how to push back against -- stephanie: they change their pricing between japan. collects they were very early on it. erik: you have got to have awfully strong pricing power to do that. >> yes, tiffany is an american company. most of their stores are here but a lot of the shopping is from forests here who do not want to buy an american currency because it is so expensive. stephanie: for them, the hit is a double whammy. it bites into the bottom line when they get 50%. erik: is this likely to be a story, i just thought for the first time and maybe i missed it

in the course of the retail earnings season, this idea that there are tours coming to the america because of a stronger dollar, that will undermine result to activities and perhaps elsewhere as well? >> it does not make any sense to shop here. i do not know about tourism numbers. olivia: all the research i saw said they were worried about russians and brazilians not shopping the u.s. eric mentioned the disappointing figures coming out of japan. terrible, yes. it is largely because of the sales tax hike. everybody brought forward shopping. stephanie: thank you so much clear we will be back with more "market makers." we are going from luxury to trouble we are talking greece. ♪

[baseball crowd noise] ♪ ♪ [x1 chime] ♪ ♪ [crowd cheers]

oh! i can't believe it! [cheering] hi, grandma! ♪ erik: the senior market strategist and boomer market's executive editor. tracy is here as well.

we're looking at what is moving the markets to the dollar. tracy: the dollar had a huge day yesterday. i cannot stress it enough. almost an eight year high against the japanese yen. what happened is we had a rare day of slightly better than expected u.s. economic data. people started to think about the rate rise in the dollar exploded. >> certainly this year when you look at the euro the 105, a move that happened so quickly, it really disrupted markets. a lot of it has to do with the fact of the diversion monetary policy and economic growth. erik: what kinds of strategies can you build a long a scheme? art: you have to look at retailers that will be adversely selected. tiffany, abercrombie & fitch. if you will play the european

markets, you need to hedge currencies. do that by by needs -- and doing it for you. stocks and euros, when you sell them back you lose them in translation. it is a dangerous strategy. tracy: another day to talk about -- it is greece every day. it looks like they will not get a deal by the deadline. that is not entirely disastrous. erik: those deadlines are set for show more than anything else. tracy: exactly. and even beyond that, a good analysis from bloomberg is out today saying july 20 will be the big day. yes, we will be talking about this for a while longer. erik: how closely are you watching greece? >> greece will stay in the euro

zone long as germany wants them there. when germany decides to drive a bus on this. following suit and say, ok, we have waited too long. the whole story, we talk about it too much. to your point, stephanie three or four years ago, we did not know what the fallout would be. it is now like a train wreck we have been watching for hours and hours. erik: that has been restructured. stephanie: those deeply invested this point are the guys so entrenched in this and they know how to swim at the deep end of the pool. it is what they do. erik: there is not that much private debt out there. tracy: i do not think we should underestimate the expected impact of greece leaving the eurozone if it comes to that. but for sure, a lot of people are expecting -- i have said that i think that eric and i should do the show from me connotes --

from mccann oh's -- mikanos to let people know what is going on. the last one? [opening bell] >> crazy credit markets in europe. i love the story. if you buy a bond, any type of floating-rate bonds. erik: floating-rate? >> got it. you expect to get a coupon and payback at some point. not in european markets necessarily anymore. basically they haven't barked on a huge stimulus measure, floating rates are near zero or negative. investors are worried that they will have to pay in fixed income holdings. how crazy is that? stephanie: crazy, crazy, crazy. tracy, thank you for breaking down your own look today. erik schatzker shaking hands and kissing babies. erik: let's get to julie hyman to find out what's moving.

julie: looks like a higher open to get moving this morning. i want to talk about some of the movers that are not necessarily higher, like michael moore's. -- michael cores -- michael kors. their earnings forecast fell short of estimate, same-store sales down. a -- analysts had been protecting -- predicting a 3% gain. also want to look at toll brothers, the largest u.s. luxury homebuilder. those shares are down, but very slightly at this link. their quarterly earnings went higher because of the lower tax provision they got for the decline in revenue. some of the housing numbers we have only have been improving so we will see how that dock trade throughout the day. carmel, the maker of spam -- or mel -- hormell, the maker of

spam, getting into the organic foods business. like many competitors in processed foods they have been making acquisitions in the natural foods industry to try to tap into the growth. stephanie: that makes me gag in my mouth. spam, going natural? taco bell all natural? except we have a shell made out of under burrito. julie: it will be a separate unit within. spam will not go organic. that would be an oxymoron, wouldn't it? erik: yeah. where briefly, i want to go back to the point the tracy -- the point that tracy was making about investors being concerned and having to pay the people who are borrowing the money who in theory should be the paying for the luxury of getting credit. what does that say to you about

the world we are living in? >> that monetary policy is too aggressive around the globe,. . one of the negative impacts of being that aggressive is think about the fact that we have been zero bound. we never went into real interest rates. to the extent that that is happening in europe it becomes a concern if you are the person lending the money, right? i think of the story is great, it's eye-popping. stephanie: there you go, but how realistic? art: not realistic whatsoever. stephanie: ding, ding, ding. [laughter] art: for a couple of weeks you are there. stephanie: felt like forever. art: to the extent that you were able to structured debt anyway that you like them are able to put it in a column that says you never have to a to get your -- never have to pay to get your money back. erik: lots of people prefer to invest in u.s. stocks and pay as

will attention to europe as they possibly can. how concerned should they be about ecb monetary policy and what we are seeing from the bank of japan? art: you have to think about the fact that these are two important trade partners and you have to hope that the stimulus works. stephanie: -- erik: is it inflating u.s. equity value? art: it is and the where you want to be the most careful is the bonds that are stocks. stephanie: what does that mean? art: like a utility, where the multiples are very high yields being low in a crowded place. a dividend darling that gets to be very dangerous. art: beware -- erik: beware of income stock trading? art: you could not get that yield anywhere else, but it has gotten very crowded. stephanie: art hogan of wunderlich securities, thank you for joining us.

google is kicking off its annual conference tomorrow. what do they have in the works? and is it enough to overtake apple? you know what they have? so much money. ♪

erik: hank greenberg may have turned 90, but his age is not keeping them down or fighting for what he believes in. matt sat down with the legendary hank greenberg. stephanie: fighting for his right to party. matt: it did not necessarily do well when i sat down with him. all journalist like to think that they are really good at asking questions, getting people to talk, that supposed be my specialty -- he was really not interested in telling me about himself as a person or his many lawsuits because he is suing the government suing eliot spitzer for defamation and also

of course facing new york attorney general lawsuits that he was involved in. stephanie: what did he want to talk about? matt: he essentially said you don't know me, you don't know the things and thinking about. i can what he wants new company called star. he told me basically that i would see it when it happens, that he did not need to tell me about it. to be honest that interview fit in really well with what we had heard from all the people who had known him really well over the past few decades, which is that this was a guy who could be really voracious. erik: what did you set out to discover? matt: he just turned 90. he's a nonagenarian, is that the word? stephanie: in this case adorable. matt: most 90 euros are kind of

lackadaisical or go with the flow? hang out with their grandchildren? he is not an easy-going man. he is fighting strong and be wanted to figure out why. stephanie: these open-ended lawsuits seem ridiculous for a 90-year-old. matt: he does not think it's ridiculous, he said that we had to fight for what you believe in. we spoke to his daughter. for him it's not about the money . it's about power and being right . i think he feels that he's fighting because what would be ridiculous would be for him to give up because he believes he's right and he knows that he did nothing wrong. there were no sham transactions at aig he says. he feels that the aig bailout, the u.s. government ailed out aig $180 billion, right? gazillion is technically the right number. he did say -- thank you, mild old company has been saved and

that this is completely unfair because his big stake in aig was some -- in some ways taken away from him. stephanie: i appreciate the fact that he is not hiding out. erik: for sure. thank you for the story, matt. stephanie: do you agree with me? you have got to give hank greenberg credit. erik: i think i did say that. stephanie: jimmy, come on over. erik: we need to talk about tech, everybody. the annual google conference kicks off tomorrow likely to announce future plans, shedding light on important questions like to leave in consumer technology. michael might have a good idea as he founded the goldman sachs research division in 1994 taking technology giants like yahoo! and aol public. they are certainly not the leaders any longer but if you look at the triumvirate of google, apple, and facebook, you have to ask -- which of those

would you bet on? >> i think that the 90's would be a dress rehearsal for how they present themselves today. obviously the sign of the times that you talked about, microsoft is utterly changing its game plan as well. stephanie: i am -- erik: i'm amazed that you would still mention microsoft in the same breath as facebook microsoft, and google. michael: i do because microsoft has had a seachange in its attitude and its approach to the business. they have new bit -- they have had new leadership over the past year or so. the company has by necessity change from being a dominant leader to playing a very horizontal game. to make sure that their products and services are available on every platform.

stephanie: they have a new attitude, but no results, when will we see the change? michael: great question. there's nothing imminent in the short term but over the next few years it remains to be an open game. we are still in the beginning of the commercialization of the internet where in the 1990's we had maybe 50 million people that could access the internet. today you are looking at a global market that's over 2 billion smart phones, two thirds of the internet overseas it's no longer the language in many parts of the world for this. the companies that we are talking about, the facebook's, googles, apples they have to play a global game. between google and apple is of global ping-pong game. the battle is for developers, as

they set at microsoft or a famously, it's all about developers, developers developers. that is what google is setting up for this week with its conference and literally in a few days you will have apple on june 8 with their 2015 conference. stephanie: we are always trying to read the tea leaves from apple and figure out what they are doing. johnny ives got a promotion yesterday to a job that did not exist anymore. now he is the chief design officer? if you ask me last week i would have said i guess that's his title. how is that a big change? michael: it's an evolution. it has been or years since we saw the sad demise of the jobs. a lot of initial questions in the first year or two in terms of the management team upping their game. right now the executive ranks can take a bit of a deep draft.

they are in a better place, the company is on its way to potentially being the first one dollar trillion company. they have had significant product launches in the last year, iphone six, iphone six plus. the announcement yesterday to me was another data point in the continuum of his role of being truly the chief design officer at apple. in the last few weeks he has been in the media bloomberg did a wonderful interview he's in the media showing the work that he has been doing on the apple campus which is a spaceship logo and he is very involved in the design of that and all of apple's auto. the other thing -- sorry, go ahead? erik: eric schmidt was here a

couple of years ago and we were talking about the four horsemen. amazon, apple, google and facebook. the question then was whether twitter would evolve into a platform that could become the fifth horseman. right now it seems like there is no chance that twitter is going to evolve into that company. their growth has begun to flatline and there are serious questions about their strategy. stephanie: it's crazy, their management cannot seem to monetize the juice. erik: you have known the cfo and worked with him at goldman sachs. if i'm not mistaken you might have even hire the guy. can he fix what's broken that twitter? michael: he has a very important role at twitter. in the time that he has been there he has taken on additional responsibilities be on the cfo role and he is also a very key part of the executive team that has had a fair number of changes on the product side in terms of communicating with investors

with wall street. twitter is again one of those companies that absolutely has a tremendous amount of potential. no question the amount of impact they had globally on the media landscape and the voice that they provided not just to dozens or hundreds of professionals like the early media companies in the cable era but today literally hundreds of thousands of professionals have a voice through twitter. monetization is critical and i think that they are still trying to figure out the way that you get to mainstream adoption. erik: michael, thank you so much. the disruption capital founding partner and the founder of the goldman internet research division. stephanie: they took him a while to join twitter, but he now knows the difference between a direct message and tweeting. we will be back in a few. we are going back to fifa still looking for stepladders. ♪

erik: finally a corporate response to today's corruption charges against fifa fever -- fifa. erik: here to provide some key legal perspective is kissed -- chris garcia a former federal prosecutor. also, the latest column on bloomberg was called "fifa is now officially an international joke." erik: how does the doj begin to build a case like this and exert authority in switzerland for extradition? >> first of all, thanks to having me. the index -- the indictment from the department of justice is sweeping, as you know, legend 47 counts of bribery critically builds on cooperating witnesses.

in addition to the indictment today, the criminal please were released and at least one of them, i believe, was cooperating with the government in building this case over the last several years. this is a big deal for fifa and for soccer. erik: what would you like and it too, thinking back to a fraud or corruption case that you were seen or involved with at the doj that bears any resemblance to what they announced today? chris: this is something that we saw with insider trading, for example. it's a similar type of approach to building a case, using white-collar tactics like flipping witnesses to build a case over the long term and in this case we will have to look to see if there are cooperating witnesses. stephanie: what do you make of

the fact that step ladder was not seen at the conference today? >> he is very good about staying out of the conference. fifa has already released a statement with characteristic hubris that the world cup will be continued to held in qatar and russia. stephanie: making a statement out of the box, could one not make the argument that the beat goes on, things will not change if guitar and russia -- which many people said when those people are named -- were named, that this stinks? not -- yup, still going to be there, 100 degree weather. >> you would like to see a little bit of contrition from fifa from that perspective, but going back to that perspective blatter still being there means that nothing will change. if roger goodell changed -- left, the corruption would be

the same. the same thing with this. erik: soccer fans are most concerned with vote rigging. if it is corrupt to the core. how narrow, by definition, by virtue of statute does the doj's investigation have to be? how broad could it the? chris: it could be very broad. they could bring it case alleging corruption and bribery and jurisdiction could be established i something as simple as using an american bank through which the funds were funneled. that is part of the allegation here. this could be very wide sweeping. to your point about where the investigation might go if you are a prosecutor that has indicted 14 individuals that's 14 opportunities to go to the next level and that's probably what they are thinking about right now. stephanie: friday seopp is in a

position to be renamed again. should we not be making the argument that this should be postponed? chris: i don't know much about the politics of soccer. that would be a prudent thing to do, although to your point before, fifa has been historically tone deaf. stephanie: yes, but they could say that we will not read kavitha:'s article or what adidas says, but how can they ignore this? kavitha: they need to say that there is a big difference between the nfl and fifa nfl does things in the name of its own image, but fifa is a dictatorship. we have seen thousands of migrant that's in the have not addressed any of these issues. now you might see some more legal and sponsorship pressure but they are still kind of standing strong. stephanie: he should go on the

record to say something. erik: these white-collar criminal defense firms? chris: you scramble, absolutely. stephanie: as always, lawyers will win the case. erik: chris, kavitha:, there is a 1030 -- 10:30 news conference this morning at which the attorney general, letter lynch, will discuss the results of the best loretto lynch will discuss the results of the investigation that she oversaw. stephanie: but that does it for us on "market makers." stick around. ♪

>> good morning. >> welcome to "market day." kavitha: stephanie: 14 people

indicted on the charges of arrests. top officials reportedly took millions of dollars in bribes. erik: that could mean big trouble for some of the biggest rands in the world. fifa sponsors include adidas coca-cola, and visa. >> what is next for the embattled fifa president? the future of the global soccer federation is very much in doubt. good morning, welcome to the "bloomberg market day." >> we have a big hour ahead for you, we're looking at one of the biggest corruption scandals in the history of sports. 30 minutes from now loretta lynch will