presidential voting has gone to a second round. nobody got a two thirds majority. betty: what lessons do wall street veterans have four young guns facing their first rate hike? and the convicted mastermind of the silk road website learns how long he will he going to prison today. we will have the latest on the sentencing. betty: welcome to the bloomberg market day. i'm betty liu. it is official, we are going into the second round of voting 's new president. sepp blatter did not get a two thirds majority. julie has more from the breaking news desk. a surprise.is

it was expected he would get the outright two thirds needed. he has 133 votes. prince ali of jordan getting 73 votes. aboutks like blatter has 64% here, so not a two thirds that is needed. as it goes to a second round, i'm a little confused. only a simple majority is needed for whoever wins. so the two thirds rule goes away in the second round apparently? they will vote again. i assume it will take another couple of hours to conduct that voting, just as it did for this current vote. associations from around the globe conducting the vote. remember, blatter is running for a fifth term. we will see what the second round of voting brings. we have mark barton, who

is joining us from outside of fifa headquarters. now going into the second round. about 90 minutes of voting. brendan greeley is also with me. he has been on top of the story. explain the simple majority in the second round. brendan: the reason there is a runoff, there was supposed to be several different candidates. the head of the dutch football droppedion, luis figo, out a week ago in the hopes to consolidate all of the anti-blatter vote would work. the most optimistic number i could come up with for prince ali was 60, but the vote was 73. that means a lot of votes are coming from the caribbean, which was starting to move, and they had to have picked up all of south america. mark: why is this so shocking?

brendan: because sepp blatter knows how to run that organization. within the rules with heavy set of the organization -- and he saw it when he spoke. he said, i am with you. it is not just about him handing out money. politician, heg knows the name of every head of football. he has a personal rapport with all of them. he has built up an amazingly compelling narrative that england, germany look down on all of you, the cook islands, various african countries, but i'm here or you. mark: let's take a look at this more harshly. he has come under a lot of criticism because some say he has too much power. a lot of people say he has not done much on the issue of racism in football. can he then continued to consolidate power in the face of such negative publicity? brendan: because it is not an

absolute democracy. he is appealing to the heads of these football associations. the cook islands, 5500 people. the football association president gets to apply to serve twice a year first class, stays in five-star hotels, lives an amazing life. these are the people that are part of the voting bloc. when he was asked why women's soccer was not more prominent, he said maybe they should wear tighter shorts. he is not -- he does not exactly have a sterling record on some of these things. get that he has this clear passion, and as you say, it seemed like a rousing speech right before the voting. but aren't these guys just voting for someone who helped set them up? brendan: two weeks ago, there were a series of speeches.

this was laid out in the business week, a profile. everyone else running for president promised even more money. money will need to be handed out, no matter what. a german the sonata money flowing in from the sponsors. a billion dollars every year. that is what all of these football associations want, but my count, at the most optimistic was 60. democracy broke out. betty: talk about prince ali and what he brings in. there was an assumption that because he was the european, he would be the morest figure to pick off anti-blatter votes because most of the europeans would go against bladder. spain voted for him. by no means is it uniformly against him in europe. is this about the scandal, is this what the second round is about? brendan: i think there has been a general level of frustration

-- some level of frustration and discussed with his iron rule over fifa. the scandal gives people permission -- rather, this scandal -- has given people wishing to say things they have never been able to before. david cameron said sepp blatter has to go. ini, the head of the european football association, says that he has to go. these are not things that you said in public. went on bended knee to sepp blatter four years ago for the world cup to come to the u.k.. beckham, david cameron, and prince charles. get thet to zurich to gains. for him to say this now, there has been a shift in power. money and politics. i know you will stay with us

throughout. much more ahead. coming up in the next half hour, in silicon valley, virtual reality is becoming a hot topic. how companies from google to go pro are getting in the game. betty: it is game on at the world's largest poker tournament. whether the world series of covert can deal biggest casinos a winning hand. many traders were still in school the last time the fed raised interest rates. how young guns may act once the fed pulls the trigger. betty: sentencing this hour for the mastermind of the silk road. he faces a minimum of 20 years in prison for prosecutors are asking for more. was convicted in february on several charges including money laundering and trafficking. for more, let's bring in tom kellerman.

he is with us from washington. thank you for your time. "osecutors said of silk road the site enabled thousands of drug dealers to expand their markets from the sidewalk to cyberspace." was this the linchpin of the government's case, because ulbricht used the internet, he was able to influence and, in some cases, harm people? toyes, but you have understand that most of the underground economy is now moving through the dark wet itself. the deep web contains dozens of forms similar to silk road that allow you to trade not just drugs or child pornography or weapons, but also cyber weapons that would allow you to hack organizations and businesses. betty: does he deserve 20 years or more? factthink so, given the that he is participating in a large volume of narcotics

trafficking, money laundering, other things, based on the allegations and convictions. any to be a clear message to the underground economy, that you cannot transact without fear of prosecution. interpol has redefined itself recently to create a fusion center in singapore to coordinate international law enforcement efforts for this purpose. betty: it would send a strong message, but right when silk road was shut down, 2.0 came up right away. >> very true. it is whack a mole. we have to start targeting the money and financing of these individuals. they are laundered most of the proceeds of cyber crimes and drugs through things and systems. they are not being laundered through the financial sector itself. funds, is thisof

also an indictment of bitcoin? >> i'm not sure. bitcoin is one of about 200 digital currencies that exist. bitcoin is not the most widely used anonymous payment system out there. there are others. we need to pay attention to the fact that there are shadow economies, bazaars of weapons and drugs that exist in eastern europe and south america now providing more than just drugs to the markets. traditionalbling criminals to have cyber attack and capabilities, to perpetuate this cybercrime wave we have been experiencing. mark: so is the federal government giving bitcoin and emphasis stamp of approval, as it is willing to sell items appropriated at silk road by auction? i don't think so. there are different perspectives on the viability of bitcoin.

that is for the politicians to decide. bitcoin has to adhere to the principles of knowing your customer and adhering with law enforcement. betty: is it getting any easier to find these rogue actors? is, criminals and the various individuals are ofning these cyber guilds thieves and are endowing themselves with capabilities that allow them to be invisible a lot enforcement in cyberspace. it is basically an arms race of you haveists where people purchasing the capabilities they need to maintain their anonymity online and perpetuate these crimes that we see today. you so much. tom kellerman, chief cyber security officer at trend micro. the sentencing hearing has just begun. mark: still ahead, camera maker go pro hopes to ride the latest wave in silicon valley virtual reality. betty: but it faces plenty of

competition, including google and facebook. ♪

betty: welcome back to the bloomberg market day. i'm betty liu. let's go to julie hyman with a look at how the markets are trading. julie: looks like we have a pullback for today and for the week potentially. at least pairing any advance we may have seen. declines across the board. we have been bouncing around a bit. earlier we were down as much as .75%, but now we are down across the board. take a look at the biggest advance and declines in the s&p 500.

stop is surging after the company beat estimates. they also raise their forecast. the shares are up 7%. even in the midst of the changing dynamics individual game industry, going to more digital, right now they are holding up pretty well. there is something else you have to consider when looking at the shares today, and that is the short interest. as a percentage of float in this stock, you are seeing the absolute level of short interest. short interest on gamestop is the highest in s&p 500. 4300% of float. that means when you have some gains in the stock, some of the gains on top of that may be accounted for by short covering. on the other end of the s&p 500, as it was yesterday, united rentals. falling sharply.

yesterday, the stock fell on commentary from management that business was maybe not terribly strong in the month of may, falling again today. analysts coming out and commenting as well. i want to look at the longer-term chart of united rentals. it has had a very good run until recently. it looks like today's fall could lead up to the biggest two-day decline in the stock. at least in the lows of the session since 2011. we have not seen a two-day drop in the stock for a long time. either way you slice it, it has had a big uptrend but this decline is a big one for that stock. betty: breaking news right now. blatter has been elected to president.m as fifa prince ali has withdrawn his name from the race. that effectively handed

him the presidency. as brendan greeley said, it took two rounds to do this. something that people do not think would happen. first time he needed two thirds, and a simple majority. brendan greeley has been kind enough to scurry back. are you surprised? brendan: not completely. we went to a second round but they did not revote. it was clear that there was no way -- by the way, nobody expected, in a short time they had to renegotiate the votes -- that they can get the majority that prince ali needed. whilee found out is that still president, sepp blatter is much weaker than anyone anticipated. he is a survivor. this scandal has really weakened him. betty: but why not? there are nine indictments here for corruption. why wouldn't he be tarnished? brendan: there have been

allegations and convictions in the past. this is not news to anybody who has followed this organization. he has managed to brush it off before. he has been much less successful, by sepp blatter's standards, of brushing it off. there are people coming out in public saying things that they were too scared to say before. that makes a difference. mark: even with the indictments, arrest, charges against some of officials, a-fifa lot of people say, we are talking about sports. why does this matter outside of the realm of sports? brendan: sports is a way to express power. it has been very important for vladimir putin to get real ethics and the world cup. we suspect he got the world cup basically by arranging it. by the way, he has been with fifa,working

that both of the relationships with them and the olympics is locked down. withom is now a partner fifa. that is no accident. that is part of his payment to show his generosity. these things are important to power. when you give a country an event like this, it's a way of standing that country with legitimacy. so there is tremendous hustling around these votes. usually, the votes for where the next world cup takes place is usually one at a time. two,ne in 2010 pushed the the one that qatar and russia got together, so there could be efficient vote trading. this is not about soccer, but power. betty: it's a great question, and a great point. mark barton is ready.

he is giving us the immediate aftermath of the news that sepp blatter has been reelected to a fifth term. you said it. five terms running. he will serve for probably over 20 years. after the fourth occasion, he said he would not run again. will he go for a sixth term? that is the question. theprince ali to have won second round, he would've needed a 40% swing. this is one for brendan. in the u.k. election, there was a 40% swing in the scottish boat. -- vote. it was very unlikely, however, to happen here. that is why prince ali stuck down. there was not going to be an election shock the size of the u.k. or israeli election, but this story runs and runs.

don't forget it. the indictment has happened. it will play out. executive that i spoke to said that other federations could be under the microscope as well from investigators around the world. it will not be an easy fifth term for mr. blatter. betty: not at all. a very different one. thank you, mark barton. outside of fifa headquarters in zurich. brendan greeley, thank you for being with us. brendan: can i stop talking about fifa now? betty: thank you. mark: julie hyman is standing by with breaking news on humana. julie: we have seen a big spike. headlines came out from "the wall street journal" that they are working with advisers from

goldman sachs to consider a potential sale after it got indications of takeover interest. aetna andiliar say cigna are among the possible bidders. all three are now trading and records. there has been so much consolidation on the pharmaceutical side of the health care business. on the see what happens insurance side. humana shares up by about 17% after the journal reporting that the company may be considering a takeover. right now, going as high as 70% after the headlines -- 17% after the headlines came out. inside there going world series of poker. mark: find out what the real stakes are behind the world biggest poker game. ♪

betty: welcome back to the bloomberg market day. i'm betty liu. let's get a look at the top stories crossing the terminal. shares of altera. intel is close to a deal to buy the semiconductor maker. the price tag, $15 billion. aast week, we reported alter rejected an offer from intel. amazon plans to expand its lineup of private label brands. amazon will offer a wide range of grocery items such as milk, serial, and baby food. the move is similar to what other retailers have done. labels build loyalty with customers and generate bigger margins. betty: google is taking another shot at mobile payment. it has introduced android pay. shoppers will be able to use it in about 700,000 locations in the u.s. and will also be

accepted in about 1000 apps, including in the car service ly ft. mark: and our big story, sepp blatter is still standing. so many were calling for his head but he says i am still here. mark: and it is about unity and we will figure out our problem going forward. not about revolution but evolution. betty: you heard the speech. what do you have coming up? mark: most traders on wall street these days have never experienced a fed rate hike during their professional careers, so how will the young guns handle it compared to the old guard? that story is next. ♪ is there such a thing as a sure thing in business?

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crumpton in new york. let's go straight to the headlines. blackstone group is looking to benefit from san francisco's skyhigh housing prices that have resulted from the bay area's technology boom. it is working with a partner to develop a $115 million residential and retail project in nearby oakland. blackstone and city view our property companies started by clinton administration housing official henry cisneros. they hope to start construction by the end of the year. plans call for 35 rental apartments and 24,000 square feet of retail space. the former home of the late pop music superstar michael jackson is up for sale. it is yours for $100 million. the 2700 acre estate once known as neverland ranch is located 130 miles northwest of los angeles. jackson bought the property in 1988 and turned it into a combination of amusement park and a zoo.

he stopped listening after it was searched by police investigate allegations of child molestation. jackson died in 2009 at the age of 50. the u.s. national transportation safety board is investigating the crash of a prototype of a solar powered drone. that google plans to build. it was destroyed in a crash in a new mexico test site on may 1. crash -- the creche is a setback forse drones as a platform delivering internet service from the sky. it has been driven or than a million miles and gone through three engines and has tonsported jackie onassis muhammad ali, not to mention countless new yorkers. jenny, billed as the last checker cab in active service is up for option. the 1955 model was decommissioned in 1999 and later sold for more than $134,000. bottoms doesmpany

not expect that kind of price this time around. of $10,000s a price to $15,000. no tip is included. choose fifa's president has finished. aliave learned that prince withdrew from the race. a few days ago he was an overwhelming favorite but that is before 9 fifa officials were corruption scandal. if the u.s. federal reserve raises interest rates this year, it will be the first time they have done it since 2006 and that means there is lots of young guns on wall street who have no experience trading during a fed tightening cycle. does it really matter? joining me is michael mckee and kevin kelly who is managing partner and chief investment officer at [inaudible]

capital partners. does it matter? is -- these guys are the punch line around the fed. the last time the fed tightened -- 2004 two 2006. they went from numeral 1% to five point 75%. -- 5.75%. they are uncertain without a predictable pattern so you have people who have never done this and who do not know what the fed is going to do next. you saw what happened with the tapered tantrum. there was concern we might see that repeat. -- lack ofe mike experience a plus or minus? kevin: what is really happening

is everyone got their training wheels taken off in 2013 when the taper tantrum happened and the fed did not do anything. it was only verbal. we saw rates rise 100 basis. a lot of people are understanding liquidity is the key and that is big issue going into that. you saw the flash crash october 15 of last year. one of the deepest, most liquid markets came to its knees. we'll have to see what plays out. imf has warned about it it is in the back of people's minds with liquidity and regulation. are calling it the class of 2009 and the average age is about 29 or 30 right now. they do not have the experience. is this a paradigm shift for them? to the go to the gold -- do they go to the old guard and go back guys and say what was it like? just the ages not

of people. we have been so long in a zero trainf the -- that the has been easy to make. when you get some volatility, some risk on both ends of the spectrum, do people get out too quickly, do they try to move to fast? then becomes a much more fundamental question when you're trying to analyze the trades. michael: we did get to see slight bend to that. technology has changed and what it -- that is why the new guard has the tools that they are -- we have seen dodd-frank be leveraged. -- non-bank sector that should be concerned. does that mean the young

guard does not want to roll of its leaves and look at the graphs and charts and spreadsheets? ichael: you are seeing that and back to the regulatory environment, risk has been taken down. west giggle.rs everyone has been conscientious since 2009. ever since 2009 will leverage has come down. the new guard is ready and they have the technology at their fingertips to diversify and had some self because they -- it has been a macro trade. >> it is the mathematical geniuses of these high-frequency trading firms and the people who use algorithms to trade. the algorithm is going to capture without experience the nuances of a new world of economics and fed policy. donech trading is automatically by machines that

it is hard to know exactly how they are going to react until the get a couple beers of new data to work on. mark: is it something where the young guard, and please correct me, i am not being disrespectful, but perhaps not understanding the nuance of that, the nuance of what folks did 15, 20 years ago when they did not have this technology at their disposal. >> with all this technology there is new devices out there, new futures, contracts. we are seeing the flash crash that happened that was due to the ea-many features. we are looking for the regulatory environment but there are record -- mechanisms. the new york stock exchange closed as well as we are going to see -- not a question of the old guard being prepared but

how will the young guard respond? as been -- has been telegraphing this. is conscientious of valuations that are in the marketplace as well as liquidity so they are trying to telegraph that it should be gradual. you look at the fed fund future rate out to the end of 2016, it is indicating a listen 1% move. goldilocksis in a situation. economic data is slowing. they can do that slow, tapered move. that janet yellen will not be going to jackson hole. is that a big deal? >> we do not know why. she has the fed meeting at which people think they will move to weeks after that it may be she does not want to be out in public with people expecting her

to say something about it with all that media focused area -- media focus. mark: gentlemen, thank you both so much. 's deal ahead, -- still ahead. after the break. ♪

mark: welcome back. i am mark crumpton in new york. we will head to japan where we have new evidence economy is

stuck in neutral. let's start with ryan chilcote from london with how the european market ended the week. can see, a sea of red. continued weakness in grace as well. we're pointing out. take a look at some of the corporate movers. interesting stuff particularly in the retail center. a britishthis is retailer that not only sells food but also clothes. the stock is up because the banks gave it a double upgrade. really good for ab foods. sky walked away from a deal with mediaset. we are taking the story back to greece. what we learned today, depositors continue to pull their money out of the banks in

that country. 1/5 of all the money in the banks in greece has disappeared or been removed from the banks since the government that is in power right now took office. the britishat pound. the pound is down over 30 days. this right here is where we had an election. we had all this euphoria that we -- after the certainty of the election but it is gone now. just going to give you one ick update on the euro. the euro continued to show weakness in the long run and that is the story here in europe. core prices in april rose 3/10 of a percent in april. excluding the effect of the tax hike they remain flat. onap oil is putting pressure prices. quark's -- core inflation is expected to decline. data shows surprising

downturn. housing spending fell, declining 1.2%. industrial output did gain 1% from the previous month but it fell into the red year on year. mark: let's get straight to a check of recent news out of the health care sector. julie hyman joins me now. julie: we have been talking about humana spiking after an article that they had engaged goldman sachs. assaw them spike is much 17%. you can see this bike that we saw a right now up almost 18. who could be the potential buyers? according to the journal a could at not.f two, another huge insurance company. aboutshares spiking out 2% and cigna is another name that has been mentioned.

4.5%.ares are up about all of the stocks are trading at record. i want to take a look at the effect this is having overall on the markets. the imac at we call the s&p 500. the big green one is health care. that is -- health care as a whole has started to regain as a result of these headlines. i want to look at the effect on etf.lv, an .5 of 1%. i have a longer-term chart. there has been a lot of consolidation in pharmaceuticals, and insurance already. this etf is up by about 10 point 5% for the year to date and if i can max it out as well, you can get a view of what we have seen over the longer term. huge gains over the longer term particularly in the past and weirs and this etf is trading at

a record. the highest it has been since it will -- again -- since it began. mark: let's take a look at the top stories crossing the bloomberg terminal. bill ford says selling cars and trucks will not be enough to keep the automaker rolling in the next century so the automaker is repairing for future that includes self driving cars in shared vehicles. the great grandson of henry ford told bloomberg the company knows it will have to deal with two different worlds. it has to help grade vehicles and it has to have the intellectual horsepower to navigate an uncertain future. for the first time in more than to get -- decades, chevrolet will build its camaros in the usa. the company is moving production to2016 models from canada lansing, michigan. the plant will add 500 jobs. been elected to the president of fifa.

jordan'-- survived a challenge from jordan's prince ali. scarlet fu joins me with more. still standing. you wonder what the repercussions will be. we will we speaking with jimmy conrad, a retired soccer player who played on the u.s. national soccer team. i want to get his take on what the repercussions are because he has seen it on the field and he can compare and contrast his time versus playing at a fee for event.- fifa the culture is one of retribution. a lot of people talk about this. >> brenda gave me the best explanation. i asked why outside of the realm

of sports, outside of foot all, soccer, should anybody care about this and he said, it is about power. it is about loading onto power and about disturbing power, especially to the nations that may hold -- host world cup games and as you said, will the u.s. get smacked down because it was the one that alerted this was authorities and said we need to haul these guys in? big sports have a weekend. this week.vens i found this great chart that said in game seven referees and hockey 10 to let a lot of stuff go by. there are fewer penalties than in the regular season which is the dotted line. of theo versus the rest playoff series. in game seven you get less than 10 minutes of penalties called so what does that mean? are letting the

players play and they do not want to be the one to decide the game. is a good sign for the rangers. and in terms of ticket prices i had to bring this up again, $1089 for tonight's game at msg. that is the most expensive non-stanley cup final nhl game in five years according to thinkgeek.com. more than three times [inaudible] mark: the game is going to look really good on my couch. see you in a few. still ahead on the bloomberg market day. high-stakes in vegas. we will take you inside the world series of poker next.

the bloombergk to market day. i am mark crumpton. card sharks a dissenting on las vegas for the first week of the world series of poker. so what is inside the engine that drives the world's biggest poker tournament? we take a look. david: this is the 46th world series of poker. the tournament caught fire in 2003. espn had signed a multimillion dollar deal to broadcast the event on cable. there were weekend specials, color commentary, and something card camera.le amateurs got a perspective on how professionals play. suddenly, poker was popular.

market -- martin jacobson has his breakthrough win. david: they were sold in a 1.45 billion dollar deal. that included casinos. since then, the prize pool has gotten bigger from $21.8 million in 2003 to 227 $.7 million last year. $227.7 million last year. third.ar's peak was one to keep viewers watching an event that last for weeks, espn has planned more live coverage. there are 11 new events and there is a three-month break for the finals. the world series of poker says that gives players extra time to line up sponsorships. and for caesar's rio casino, the longer the event lasts, the better. he draws in crowds during the

summer slow season and the world series of poker accounts for 35% of its annual revenues. david garrard joins me in the studio. we were talking during her piece. i'm shocked at how explosive the growth has been for this on television. you go to sports bars and some people ask, can you change it from a sporting event so we can watch people play cards? an event that goes on for months and months and some people dive deep into his. it has become the pop culture touchstone. people who do not watch it do not necessarily know about it. people think it is the world series of poker in the biggest tournament in the world. all: they get players from over the world. speaking of pop culture, online gaming, how has that been affected by all this? david: hugely. that was consonant with the

-- victory by chris moneymaker. and the moneymaker effect. he paid $39 to play online and got into the tournament and left with $2.5 million. think i could be like that guy, i can play online and make it into the tournament and make a lot of money. mark: do these gentlemen and a certain setave of skills. this is not as easy as it may -- they make it look. people have tried to learn but online is where the money is. if you look at the sponsorship who is backing the players, they can get sponsorships. a lot of them are sponsored by online gaming sites. is not a huge market. online gambling, you're having people advertising for the competition. mark: do they take a page from

pool because pool started this. you would think there would not be an audience but that has grown as well. where it is something well have some basic understanding. you see some date -- some people who are good at it. we have seen people playing pool. there is the possibility we could be great. felt again.ed the thank you. hourg up in the next half of the bloomberg market day, we will have the latest on the reelection of seth blatter as despite aof fifa corruption probe. ♪

mark: it's 11 a.m. in san francisco, 2 p.m. in new york, and 2:00 a.m. in hong kong. it is a vote that rocked this boards world. ash blatter won a fifth term

president of fifa. considering a run at goldman sachs, president gary cohen. the: we will take you to snl exhibit that opens on saturday. good afternoon. i'm mark crumpton here with scarlet fu. scarlet: let's get you a look at the markets on this friday afternoon. you have taken this big link down and then pared some of their losses. with the dow falling 150 points. take a look at what happened with humana. juhy