line -- find broadcom -- buying broadcom. the site is the only one threatening to pull its sponsorship. why are so many companies staying so quiet? erik: after years of delays and billions of dollars in costs, lockheed martin's f 35 jets may be combat ready. 2 good morning i'm betty liu -- betty: good morning, i'm betty liu. erik: i'm sure it's -- i'm erik schatzker. betty: julie hyman is in the newsroom with headlines.

julie: another number that the economist estimates, showing a gain of 3.4% month over month. this is a measure of people who are signing contracts to purchase previously owned businesses. some of the recent data we have gotten is showing that this trend in housing market could be continuing. the number, 3.4%. economists had been looking for a gain of 0.9%. that puts the year over year number at a gain of 13.4%. it looks like another good sign for the economy. saw a add on to what we few days ago with new home sales and durable goods. erik: lots of strong numbers. sales. -- new home sales.

weston a look at what -- let's take a look at what is making news. new figures indicate job market remains well. applications for unemployment benefits remains low for the 12th straight week. when the number is that low, it typically means there is a healthy level of hiring. debate about of the definition of full employment, nevertheless it may lead employers to wages and retain workers. san francisco fed president says that will probably raise interest rates this year. the pace of growth and inflation are moving toward the fed's targets. janet yellen says she expects to raise rates this year if the economy needs her forecast. more on the fed's thinking, coming up on bloomberg television.

an interview with the president of the st. louis fed, james bullard. betty: avago technologies agrees to buy radcom for $37 billion in cash and stocks. the latest deal in an industry that has been hit by consolidation because of the rising cost of production and design. was once part of hewlett-packard. broadcom is the biggest maker of wi-fi chips to provide short-range connections for mobile devices. pressure is building on the president of fifa. the head of soccer -- the head of your house soccer organization is calling on the president sepp blatter to step down. vladimir putin does not agree. the russian president says a corruption probe is part of the u.s. plan to coincide with blatter's bid for reelection. >> this is another blatant

attempt to extend jurisdiction to other states. i have no doubt this is an attempt to prevent the seppection of se blatter has had a fifa. betty: he says the u.s. is retaliating. the irs believes these who stole tax information from more than 100,000 americans are from russia according to the associated press. the cross used the irs website to steal the data and claimed $50 million in fraudulent refunds. a group of seven finance ministers meeting in germany have lined up to reject greek claims that a deal is near on freeing up a lot money. -- bailout money. saysny's finance minister he is "always surprised when greece says an agreement is near."

those were some of your top headlines. betty: down to the wire again in greece. coming up in the next hour, he is the ghost of wall street. dick fuld has barely been seen in seven years, however he will be coming out in a public speech in new york. erik: visa threatens to drop soccer.hip of world cup spons r we will take a look at the pressure on these companies to say something. chaps -- snapchat maybe one of the most valuable startups but can it value -- translate that valuation into profits? betty: back to that big deal news of the day. avago will by broadcom $437 billion, the biggest tech deal in history. i want to bring in jeff mccracken on this. it raises the question, these

deals keep getting bigger and bigger, did the two need to make this deal? jeff: i think they did. they are under pressure from customers, the phone makers, to lower the cost of chips. neither one had the scale of a sizeomm to really use that to shrink the cost of manufacturing and designing the chips. we are all focused on the googles and yahoos. there a lot of cost the goes into these products. rascoff -- spencer us andasgon was on with we were talking about what the next leg of the chip consolidation industry will be and will call -- will qualcomm need to step up and he said yes. qualcomm probably needs to do something transformative. what with it buy? jeff: there are a lot of

companies they could pick up. it remains to be seen if they are going to do anything. we are in the era whether we are talking about chipmakers, cable companies or what have you, where we see some of the biggest deals in the industry now. consumer products with heinz buying craft -- buying kraft. giving takendcom out going to be a catalyst for intel to pay what i'll terawatts -- what all terra wants? jeff: they were close a couple weeks ago when they were at their negotiations. we think those talks could come back on. betty: getting back to this whole broader environment and whether or not -- first we saw companies that needed to make deals then we were seeing companies that kind of need to do it. this is the way they will boost share price. i thought it was interesting, an

analyst at jmb securities, interesting quote he said "i have my misgivings. this feels frothy for me. this seems like a stretch, like it has a touch of recklessness to it." jeff: we have heard that from a couple analysts. we quoted him in our story. we heard from another who said broadcom is slowing and now you are paying at a premium beyond its stock price. i think there is concern, are we in a bubble. people are not asking that in oil and gas or consumer products. in the tech space i think people are starting to get worried. it is surprising when you think of this deal once you discount -- want to look at aol is more of a media deal, this the biggest one. you look at first data when they first got taken out, the biggest deal ever intact. -- in tech. erik: what does it mean that we

are seeing stock being used in these large deals and company should with cash? for so long it was all cash. now all of a sudden stack is back on the menu. jeff: shares our way up. usually the company they are buying is a public company so it will cost more so you need to put some of your stock in and get shareholders on the other side who might be skeptical. they will support the deal because the get a piece of your company or combined company. erik: they were not feeling so optimistic about the prospects for growth during the post-financial crisis years. is this an indication that perhaps the m and a boom has legs to it now that stock seems to be more viable currency? jeff: it feels like we're in the middle third. this is going to run for the rest of this year, probably into next year. last year was a record year since lehman went down and now we are ahead of last year.

just two days ago, charter did a $55 billion deal. kraft.utch pg, table in lot on the the next couple of weeks. erik: banks for coming. jeff mccracken. when we come back, the former lehman brothers ceo who many blame for the firm's collapse, dick fuld will be making his return. why he's back in the limelight. ♪

betty: good morning and welcome back to the bloomberg market day. i'm betty liu. erik: i'm erik schatzker. some of the action out of china. some serious falling today, julie. julie: it is also affecting sentiment here as it has been recently. we saw a pullback in the shanghai composite overnight. 6.5%. brokers tightening their margin lending requirement, essentially putting bigger requirements on the folks investing in the markets. big pullback, 6.5%. it helps to look at the longer-term chart of the composite. let's call that up for my terminal. what we have is again -- is a gain over the last year. it is still up 100 the 5%. we have seen this -- it is still

up 125%. will there be some sort of curbs put on that stimulus? that is something a lot of folks are considering. if you take a look at the etf's in the u.s., we are seeing them feel the pain as well today. tracking what we saw overnight in china. the etf aspects i as well as the one that tracks the a shares, both trading lower. erik: thank you. betty: let's take a look at some of the top stories. a drugmaker will pay a big price to settle in ftc case over generic drugs. teva pharmaceuticals has agreed to pay $1.2 billion for the actions of the company it later bought. unlawfully protecting a sleep disorder drug agreements with generic drugmakers. the death toll from flooding in texas and oklahoma is climbing. officials say at least 21 people

have died. 11 were missing. volunteers throughout the region are organizing search parties. it is being called the worst coastal oil spill in california in 25 years. federal agencies have ordered a pipeline company to finish the cleanup of an oil spill near santa barbara. the spill blackened beaches and created an oil slick in the pacific. erik: for almost seven years he has been the ghost of wall street. fuld the former ceo of lehman brothers. today he is making something of a return to the limelight speaking at a conference this afternoon. bill cohan is here. see, in training for fuldcket -- why would dick

choose what some describe as a penny stock conference to make his return to the public eye? bill: since he is not talking to me or any of us, what i was able to surmise the writing this story is he had just advised something called the national stock exchange, a small, penny stock, less than 1% volume stock exchange, i believe based in new jersey. he went to china to talk about it. i think this is a business thing. .etty: i loved your piece, bill how you were trying to find these guys. , still playing bridge. 2008 -- talked to me in betty: and then go silent. erik: we know what dick fuld is

doing. bill: the used to have his attorney who would take all of the calls and then say no he will not talk to you. his attorney retired so now he has no one playing that role. , he made your piece half $1 billion in about seven , if this guy has so much money, why is he going to come out again? why not just buy an island somewhere and just without the rest of your life? bill: i think this is about redemption. he was viewed as the villain of this crisis. the man who caused it all and i think he is trying to -- erik: the most important question of all for these people. for folks like dick fuld who were near or at the top of wall street, it is an existential question, is there redemption?

i was looking at the list of the former members of lehman brothers executive committee and i could find only two who have kind of found redemption on wall street are you michael gelfand now runs fixed income at millennium. not a bad place to be. tom russo is the general counsel at aig. everybody else has been scattered to the wind. a couple of them what art mcdade , but look at the other firms. tom harris and chuck prince, gone from citigroup. jimmy kane, warren spector, stan o'neal, the list goes on. no reduction for these guys. -- no redemption for these guys. bill: some are looking for it. warren spector, who is out in about in new york city but does not want anything to do with wall street anymore. enoughople, enough is

and they can live the way they want to live and quietly. i think this was about redemption for dick fuld. of course he can't find it. pass for enough time enough once the field for such a guy? you,: i have two words for bill clinton. erik: whoa. bill: that is heavy stuff. bill: on that note, cohan. thank you very much. ♪

betty: america possible most expensive weapons program is close to passing a milestone. operational testing could clear

the first f 35 fighter jet combat duty. erik: peter cook headed out to watch the f 35's in action. being the expert on military armaments that you are, is it ready to go? peter: the f 35 pilots certainly think so but the decision is not up to them. one big factor is the two weeks of testing underway aboard the uss wasp. a potential turning point for a program that is based criticism over the years. -- that has faced criticism over the years. the f 35 is being put to the test. >> that thoroughbred wants to go. you can feel the airframe -- the airplane rearing up. peter: this fifth-generation stealth fighter has been hailed for years as the future of american combat aviation. the pentagon plans to buy 4400 at a cost of nearly $400 billion. the navy, air force and marines

each get their own version. spite being $160 billion over budget and seven years behind schedule, the f 35 has yet to fly in combat. marine pilot flying off the uss wasp are trying to show that the future is now. the f 35 is finally ready for action. >> i've watched almost every single takeoff and landing except the ones i'm flying, and it is a great site to see. peter: with its ability to land vertically, the marine version of the f 35 is the most complicated of the variance. it is also the first to join the fight. john davis is in charge of marine aviation. >> i'm confident we are on the right track and this going to be a winner for the united states marine corps. peter: combat status this summer for the first squadron would mark a major step forward for a program that remains under scrutiny. last month, auditors concluded

poor engine reliability could threaten at 35 progress. -- f 35 progress. >> if i had to do it all over again, i would not approve of that kind of weapon system and the cost overruns associated with it. now that it is at the stage it is, we need to continue to acquire it. peter: these marines hope to show the world it is money well spent. >> i am a taxpayer and i do not think my tax dollars are being listed on this. -- being wasted on this. peter: once testing on the wasp is complete, a final expansion -- final inspection will take place. squadron would be based in mccain's home state of arizona. betty: we did not see you in the cockpit of one of those. peter: they did not trust me.

betty: how did you get out there? peter: that was part of the fun if you will. we flew from the pentagon, group of reporters aboard marine aircraft.he tiltrotor they're hoping it is a duplicate but we took about an hour or so. cannot tell you exactly where we were but it was an interesting trip and fascinating to see that plane in action on the deck. standing on the flight deck, this is the closest i've ever been. i tried to do a couple things on camera come at you see me get blown sideways. erik: mccain would not do it again presumably due to the price tag. is the future as bright for the f 35 that it was now that we are in the era of nonconventional warfare? peter: this is a program a lot of people said is too big to at this point in the

program they are not going to turn back. they've made a huge financial commitment to it. it looks like the navy version, the air force version, still in development. the fact that we get the first combat certification would be an major milestone -- wants to be -- would be a major milestone. they argue the price tag will go down and that will make the controversy as well. erik: that does it for me. betty: you're at a long morning. still ahead, lisa is out on its word on the fifa scandal. ♪

betty: welcome back. i'm betty liu. -- top u.s. and iranian diplomats went to meet

in switzerland to reach a nuclear accord by the end of june. john kerry and the iranian form prime minister will hold talks -- four in prime minister will hold talks. the u.s. says it is not considering an extension. china is the felting -- defending its building of islands in the south china sea. servetus talked about how the u.s. should handle china's growing military presence. >> we need to look at perspective missions we have. i would argue operating in the western pacific is crucial. to do that you need the aircraft carriers. you need big deck amphibious ships and you need shipped to protect them and the submarine force that is going to have to do battle under the water as well. secretary. defense

ashton carter called for a lasting halt to all land reclamation projects by any pacific countries. china's most wanted fugitive is in the u.s. in a detention center in new jersey. hiding abroad after being accused of embezzling more than $40 million. she tried to enter the u.s. with a fake dutch passport on a train from canada. the chinese government has been .racking down a list of 100 fugitives who fled the country. 40 of those people are reportedly in the united states. george pataki is the latest republican to get into the race for 2016. in a video posted on youtube, a pataki said he is going to formally run for the nomination. he follows her senator rick santorum into the race. santorum announced his candidacy yesterday. coming up, much more ahead.

snapchat ceo and cofounder is ready to talk. more on plans for the business and when he expects to go public. you are looking at what could soon be the world's largest yacht. it does not come cheap. we look at the numbers behind the world's next gig a yacht. how will this impact the upcoming ipo of jawbone? major world cup sponsors are speaking of yesterday's corruption indictments. visa said as a sponsor we expect these -- we expect fifa to take immediate actions. we have informed them we will reassess our sponsorship. fifa's other major --

other major corporate sponsors. is a formerchman fifa advisor. he wrote a report on government changes in 2011 that were largely ignored. me.t galloway, joining let's talk first about this. should the sponsors be taking a stronger stance on this? ,cott: i think as this unwinds i think you will increasingly see them start to withdraw. is --k this betty: yesterday was a big bang. scott: you're talking about media plans to take weeks the plan. they want to be thoughtful and measured. i think a lot of different

sports agencies are looking at the brands and how they will respond. i think it will be a measured unwinding but i think they will withdraw from this. betty: do you agree, michael? michael: i think some will. i am disappointed that the neutral stance that some sponsors have taken. not even sponsors, the media partners of fifa have not said much at this point. if an athlete gets in trouble, whether it be a lance armstrong or tiger woods, they withdraw sponsorship overnight. it seems to me they can make the same sorts of decisions with fifa. fifa hasnt that improved is not good enough. they have to help fifa lead the reform. betty: here is one of the statements from another advertiser that was less strong. one of the more muted ones that

we found. it said "the adidas group is committed to promoting a culture that promotes the highest standards of ethics. we can only continue to encourage fifa to compliance ."andards ar why do you think they are not taking a stronger stance? he saw nike drop others right away when something happened. ray rice saw that as well. what do you think is behind that? michael: dollars. it is about the money aspect of it. it is concern and frustration about what changes fifa needs to hisrtake and how deeply sponsors want to get involved in making specific suggestions on what changes fifa should take. is,his point, my assessment

having worked on the independent governance committee at fifa for two years, that fifa needs a change in leadership. it is not about regulations, it is about culture, the values of the organization. betty: here is the problem i think for sponsors. this is not -- it is not the players or the game that seems to be rigged, it is the broadcasting contracts. the placement of the world cup. maybe that is why sponsors are hesitant right now. scott: that statement from adidas, leadership brightens up the room by leaving. they said, we have to say something but we are not going to say anything. this has larger ramifications across a bunch of different sports. a lot of these agencies have monopoly power and operate in the netherland.

outrney general lynch comes as a big winner. someone has the backbone to say enough is enough. this could literally be the end of fifa. i don't see how they don't come out of this dramatically reshaped or they just do not go away. there will be a big opportunity if nike or adidas or some other entity steps into the vacuum and says we will host our own tournament, there is an opportunity for someone to come in now. betty: that's like saying the end of the nfl. is fifa two big? endyou and fifa -- can you fifa? michael: i think days of self-regulation are over. if we're going to see changes in fifa or other organizations, we are going to have to have some government regulation and rules. i know they value the sports --

the sports industry values its our economy but when it comes to transparency, governments must ensure that these organizations are being run following best practice. this issue of fifa going away, it is not only sponsorship and the media rights, it is about the federations. if the federations from europe decide to break away from fifa, it could indeed be the end of fifa. fifa has an opportunity to straighten itself out that window is closing shortly. we have got to change leadership and return to some degree of credibility. fifa's days are limited. betty: so blatter has to go? scott: you have to acknowledge the issue, you have to have the top guy or gal communicate and you have to over correct. so far they are zero for three. betty: great to see you today,

scott galloway. thanks to michael hirschman. much more ahead on bloomberg market day. went from being a secretive executive to being pretty chatty. what millennials really want from his app ♪

betty: welcome back. time to get you caught up on the market action around the world. i want to start in europe with ryan chilcote in london. see it is a sea of red. not so good today. given what we've seen in the past, it could be worse, down

about 1% on average across europe. corporate movers, based on earnings, sports direct said that their profits are going to be better than previously thought. kingfisher is the biggest diy retailer in all of europe and they beat on like for like sales. not so good for national bank of greece. we heard from the ecb which said they will not raise the ceiling for ela funding. .o more money right now no more emergency liquidity from the european central bank. hl was holding its own. it is just south. much more pronounced downhill ride is what the pound has seen today. the reason for that, we got revised first-quarter gdp data. the originaly as

data was, .3% growth in the first quarter. economists were looking for .4%. that is the story in europe. julie: take a look at the u.s.. we have some selling going on today in u.s. stocks. this after a whipped couple of sessions are we had stocks down sharply on tuesday. of sharply yesterday and now muddling along, not much -- not that much change. the nasdaq closed yesterday at a record and we have had trouble going up and up. there have been fits and starts once we hit records. a longer-term chart of the dollar versus a basket of currencies. this is the dxy. we were seeing it trade at a three month high. it looks like it is slipping or at least going sideways. when it was gaining the third day higher, it is about 3% above .ts peak we saw in march

about 3% below that. i also want to take a look at what is going on with the japanese yen because that is a notable move, if i can find it on my terminal. is a much longer-term chart of the japanese yen going back to 2000 and we're looking at that because it is at a 12 year low versus the dollar. what you have are divergent strategies by the central banks around the globe while japan is still accommodative and doing some easing in the u.s. we are going to be headed in the opposite direction. if we have a chance to check on what is going on with oil prices , they are trading at a one-month low. we will get inventory data today it is coming a half hour later than it typically does because of the holiday week. we will see what that number shows. there is a forecast for a drawdown in those inventories.

betty: julie, thank you so much. expending its rally. chinese shares deep in the red as brokerages tighten margin lending. the shanghai composite dropping more than 6%. chinese property developer kaiser is now in limbo after soon abandoned a proposed acquisition. >> certain conditions were not met according to a hong kong stock exchange filing. the deal had been worth $1.2 billion. those conditions included a restructuring of kaiser's debt. nota bondholders could agree on a deal. in april, the founder in

children return -- the founder and chairman returned to the company. he is changed his mind about selling off. betty: that was roslyn chin in hong kong. executive appears to suggest that cars will be the company's next frontier. president jeffce williams said "the car is the ultimate mobile device." bloomberg has reported that apple has been pushing its theme to produce a car by 2020. the program could still be halted. amazon will offer free same-day delivery to amazon members in major cities. same-day delivery used to cost 599 -- $5.99. now it will be free for orders over $35. customers will have a choice of

over one million products. mcdonald's goes back to its roots. the company is planning changes to make its burgers better. bonds will be toasted five seconds longer, boosting the temperature by 15 degrees. grilling methods will be changed to make the patties juicier. those are your top stories at this hour. snapchat ceo average beagle turn -- evan spiegel turned heads with he rejected a $3 billion offer from facebook. today he is looking smart. is now valued at more than $15 billion. the founder has big plans for the future. sarah frier spoke to him for this week's cover story and blue --in bloomberg news bloomberg businessweek. sarah: he has been pitching madison avenue. he is telling executives that snapchat cost service --

service, because a vertical video, people do not have to tilt their phones some more people will see them. what do you mean they do not have to tilt their phone? oh, because their vertical. sarah: you do not have to tilt it. by not tilting it, you're more likely to watch the whole ad. betty: that is the big innovation? sarah? sarah: yes. it is so simple. yet, it works in terms of this pitch to advertisers. betty: how are advertisers responding? sarah: it takes more creative

effort on their part to develop a vertical ad as opposed to a horizontal one. horizontal at work on facebook and twitter. snapchat is really the only one asking for this now. it is also an expensive thing to advertise on snapchat. spiegel's at started out by asking for more than double rate of youtube. he has taken the price down but it is still high compared to what advertisers are willing to spend. .etty: tell me about spiegel he has been more under the radar. he has not granted many interviews. how is he bucking the trend in silicon valley? looking to beot like any of the people in silicon valley. he is in l.a.. he told us while facebook and google have put their business , hes surrounding data

really thinks that a good editor can do just as well and he has this discovered set of channels from content partners including cosmopolitan, espn, comedy central. he wants those to be the places where people go to get news as opposed to having some kind of feed based on what people like or share. betty: i can't help but look at these pictures of him with rupert murdoch and michael bloomberg and others. what is the route for snapchat? to be acquired by one of these moguls? to go ipo? sarah: he said he is aiming for an ipo which makes sense. snapchat is worth $15 billion in its recent funding round by ali baba, they gave the startup evaluation of $15 billion. this is passed the $3 billion

facebook agreed to pay for it that they turned down a couple years ago. he is gunning for it. he wants to be an independent business. he wants the ipo and he is hoping this new method of doing things, not like a typical social media product, will help them get their. betty: thank you so much. sarah frier. the latest bloomberg businessweek cover story. ahead, how to get your hand on the largest megayacht ever. the size of two football fields. ♪

betty: locum back to the

bloomberg market day. -- welcome back to the bloomberg market day. president of the united arab emirates owns what is called the world's largest yacht. it is about to be blown out of the water by the double century. it will be the link of two football fields and rise 88 feet above the water. all that luxury is not cheap. joining me with a look at what you get for all of that is pimm fox. boat.$777 million for a it is called a megayacht gigayacht is the new term. 658 feet. i do not know if you're familiar with the four seasons hotel in manhattan on 57th street. that is 650 some odd feet. imagine taking that building, turning it on its side and putting it in the water. it is going to be 88 feet in the water.

about an eight story building. no details on who is going to be the buyer. this is just a design right now. christopher seymour is the designer. , twoests, 100 staff elevators.ight some of them you will not even be seen. theater and stage for up to 126 guests when you hold intimate dinners. betty: this is a crucial. -- a cruise ship. pimm: it is actually larger than several destroyers in the navy. it could be refitted. this is part of an ongoing trend. has a boatkovich called eclipse that will end up in third or fourth laced now. -- third or fourth place now. a bigger boat will be made called the triple deuce. i believe it will come out and

about 2018. a littleake this boat bit smaller. betty: you and i were talking about the $500 million los angeles house. who could buy this? pimm: many people. for example, david geffen owns a yard lot -- eight large yacht. betty: paul allen. pimm: larry ellison. i think this is headed to the middle east and build in germany. betty: or china, let's say. coming up in the next hour, google's i/o conference kicks off in san francisco. we will be headed there. ♪

. .

betty: it is 11:00 in new york. pimm: welcome to the bloomberg market day. we will be deciphering fed speak

-- more signals a rate hike will come later this year despite a less than impressive run of economic data. betty: the fit bit is moving from your wrist to the court -- they are revealing their trade secrets. pimm: and what is life really like in greece these days? a country that is bankrupt in everything but name. betty: we start this hour with breaking news in the oil markets -- crude inventories are out a day late because of the holiday this week. julie hyman is in the newsroom with the headlines. julie: we are seeing a bigger than estimated drawdown and inventory, down 2.8 million barrels according to the energy information administration.