>> im erik schatzker. stephanie will be her momentarily. a lot of stories to make sense of this morning. another potential telecom deal and new bitcoin regulations. a new busy day indeed. the time now is for top stories at this hour. there is word this morning of a possible blockbuster deal in media and telecommute stations. the wall street journal reports dish networks are in talks to -- with t-mobile. but the final company would look like, the price and how the -- trading up in the free market. a sale or general electric, bloomberg is reporting ge is putting all of its commercial loan businesses in the united states on the markets for sale.

$20 billion in assets for health care. franchise finance, ge has been speeding up its plan to unload most of ge capital and refocus on core may fashion. the prime minister of greece will plot its next move over bailout funds. huddle with this and all -- inner circle to figure out what to do next. more tax hikes and cuts in the pension system. bailout funds to revert default. barclays is forecasting a last-minute deal. >> when you look at what is going on in the greece situation, there is negotiation happening at the moment. past experience shows there is generally a solution found. my money would be on that happening in this situation still.

erik: greece is scheduled to repay and those payments will not be a problem. the field of republican presidential candidates keeps getting bigger. jeb bush sent out a tweet this morning urging supporters to sign up and attend an announcement june 15 and reportedly, he will announce in miami he is running president. if bush runs, rick perry will be one of his rivals. he is expected to formally announce later today. and a senator has enter the race for the democratic nomination and i mentioned stephanie would be here momentarily and here she is. start with the five things you need to know this morning impaired we will begin with what else? a global bond market selloff. stephanie: number one is good to start with. erik: a day after mario draghi

forecast faster and nation in the euro area, bonds wiped out all of their games made thus far this year. it is a broad indicator but it does not matter where you are looking, germany or france for example, or here in the united states were bonds are flat for the moment, or at least treasuries are flat. you're seeing a pronounced selloff and it has been gathering for weeks. people -- stefanie: people were saying why this didn't happen sooner. number two going farther overseas, the yen. the yen strength has been corrected. this could indicate the japan central bank sees no need for additional easing any time soon. i feel the overarching theme whether we're talking about mario draghi, japan, or janet yellen, all of the global

markets are being dictated by the global quantitative easing process. erik: that is true. the question is, to what degree these economies and policies are moving at different speeds and whether we should see everything selling off at once or whether people should be drawing a distinction between the pace at which the fed and the boj's moving, the ecb, and deals should reflect that accordingly. stephanie: central banks just seem so closely involved, one might say maybe they should take a step back. erik: i want to see what julie hyman has to say. julie: we are talking about deals searching after the wall street journal reported the wireless country is in talks to merge with dish network. then of course you are talking

about two of the biggest personalities and telecom. john ledger at team local -- t-mobile. ledger would be ceo the combined company but that is not all. we had a deal in the past few moments in biotech. there has been so much activity in pharma and biotech. saying it would buy labs. ideal value of $1.47 billion. and paying a 60% premium in an all stock deal. you're making is alive and well. we will see if the t-mobile dish one will happen. t-mobile and its future in any combination of dish. we will see if anything gets done here.

erik: we also have to think of other complications and what they would be. if people managed to find a partner in sprint, at&t doing a deal with directv -- stephanie: which would be amazing after the abuse and criticism and assault, any chance he can get. erik: sprint is totally out in the cold if that is the case. stephanie: bill gross's eye and china. he took to 20 yesterday saying shares in the stock market are the next big trade for short-sellers. that is a big claim. especially because we have seen many other investors talk about the great opportunity. erik: let's try to station between what grosses talking about and the broader chinese market.

younger companies trading at high valuations. maybe it deserves a bit more skepticism. stephanie: maybe the young companies located in phantom cities built and protected with no one living there. erik: crude oil trading near its lowest level in caught show days. meeting in vienna right now. this week's meeting is not expected -- ryan, everyone is talking about the shell resolution. i want to know what opec will do in response. we know with the saudi's did in november. any possibility they might surprise us again? ryan: i do not think so,.. the bottom line is the saudi's

want to continue to pump oil. they pump more oil last month than they have at any time on record. we will get what opec calls the rollover. we will keep the target -- 30 million barrels. what they say in the fine print next to it that is, are they going to call here at the 30 barrel target. 31 million barrels, they're breaking the rules. right now everybody is pumping oil and not paying any attention to the news. erik: given the fact there are produces exceeding their quotas, what does that say that the level of solidarity within the organization that once functioned so well as a cartel perhaps not any longer?

ryan: that is a good question. the reality is the only country out there with any spare capacity for saudi arabia hold onto the share, not to kill she'll producers, but take care of any shale producers still some shale producers kicking around. that is why you will see it kicking around. stephanie: dish network and t-mobile are looking to hook up according to the wall street

journal. shares are up this morning on the news that the two parties are in talks. on the phone now, a senior research analyst. craig, marriage of convenience come a great opportunity? craig: i guess it is the latest in a string of nonstop announcements in the sector. the last merger, charter and time warner cable this has been talked about for a long time. we will have to see what happens because this will likely set new dominoes in motion. erik: t-mobile is working from a stronger position than six months ago and certainly a year ago. does that give john ledger and

deutsche telekom control of this country? no easy individual to deal with. craig: it gives john ledger more negotiating. ledger is the real prize asset. he brings the satellite business that, truth be told, he is almost as much a liability. he does not have value t-mobile. erik: how does two plus two equal five? that is what you want out of a merger. greg: the asset that dish takes is the spectrum articulated in the last couple of years. they are buying in t-mobile.

if they were to try to build out a network it would cost as much as 15 to $20 billion. there is tremendous synergy but it is a puzzling analysis here. it is a synergy of cost that nobody really thought would happen anyway. dish building a network. it is not entirely clear this is the spectrum t-mobile needs. it is valuable, but not precisely the type of spectrum t-mobile needed. t-mobile really needs a low band for coverage and it brings a lot of mid-band for capacity. not a perfect fit. stephanie: thank you for joining us this morning. i like when they compare this akin to two people who hook up because they're the last ones at

the bar it closing time. erik: no, the last one at the bar closing time is sprint. stephanie: the problem is he is the last one. erik: pimco cost -- pimco's chief investment officer with us right after this commercial break. stick around. ♪

erik: i am erik schatzker with stephanie ruhle. here are some of the top headlines this morning. gm reported sales there have dropped for two months in a row 40 models automakers have come across more. forget about plans to cut oil the talk of the opec summit in vienna iran and iraq pumping more oil. the iraqi oil minister said

urging opec to make room for more oil once sanctions are eased. we may see $40 oil once again by the end of the year. best-selling author malcolm gladwell is mocking john paulson for his record gift to a university. $400 million to an engineering school, the largest gift in its history. gladwell was not impressed. he tweeted -- no response so far. stephanie: what do you think of that? erik: i was kind of mocking it yesterday. i take, as i said yesterday, to olivia sterns, i applaud philanthropy in all its forms but with the most of any

american college in any university on the planet harvard does not need the cash. stephanie: while i might agree with you, john paulson could put it is money anywhere, real estate yachts, and i am glad to see it is going to university rather than just his own pocket. let's move on. let's talk about the local bond selloff. it is wiping out the bond markets gains for the entire year. andrew joins us now. no better day to have you on with us. selloff, selloff, the story of the morning. what do you make of it? andrew: it is unusual for europe to drive the u.s. but leading the yields higher. leading a high level, you have got two that things.

ecb and qe, which tends to push yields down fundamental value, and value the fundamentals of reasserting themselves. greece looks a little bit better , the back roads look at little better. you see a move up with yields. they are still at low levels. it is something where mario draghi yesterday, he sounded like he was not overly concerned but this is what would happen, a tug-of-war between the technicals the slows between the ecb, and the fundamentals reasserting themselves. stephanie: what has is done to your performance? they are bleeding all over the place. andrew: we have been -- we've had drops in yields earlier in the year. now, recent weeks, this rise in

yields we sat it out and we have been pretty neutral. want to be underweight, european duration, we craig it is -- we think there are better things we can do. very hard to judge these markets, less liquid market we have been neutral. is the market -- erik: is the market testing mario draghi's resolve? andrew: you're trying to repress volatility. certainly a lot of people looking yesterday but against that, dangers to central bankers to start commenting on short movements.

mario draghi played it very straight and said a number of reasons for this. he would not trying claim he could damage market utility or quantitative easing could push yields down to lower levels than we would have otherwise. it would not take volatility 100% of the markets. we saw this in the fed, the u.k. japan, following a familiar pattern here. markets just front ran the ecb and pushed yields down to speculative, low levels. we are now having to some extent a healthy direction to more reasonable levels. erik: we want to hear more about

the notion of a healthy correction. we will take a quick commercial break. we will also be talking about the fifth-largest company of food. there will be some cash of these. stay tuned. ♪

erik: we're in london today where we find andrew balls. you and i were talking about healthy correction in the bond market. you talk about being underweight duration. but i want to focus on the 10 year maturity because that is where i tend to gravitate. in germany and the u.s., what is healthy? the 10 year treasury yield

german tenure at 89 asus points. is it healthy or can you see a healthier level? andrew: the yields look low in germany but we have to respect the slow impact. the ecb will be buying a lot. this level, 50 basis points higher, it would seem like a reasonable range, 2-3% is our expectation. so in the middle of that range. remarkably low, unsustainably low levels. people from running the ecb, we corrected back to levels now where they look less unreasonable. not so great long-term investment. the ecb point of view, the currency may become an issue. ongoing strengthening of the euro zone. one of the factors supporting a

somewhat strengthening european economy, putting yields at these levels, starting to look more reasonable. erik: to clarify, you're looking at the german tenure and 90 basis points and that still seems rich? hb closer to 140, but the 10 year treasury is reasonably fairly priced? andrew: avery pricing versus the u.s. -- a repricing versus the u.s. volatility we are having 75-125, it is something we should be reasonable. look back to where we are trading the second half of last year, before this big rally at the start of this year, getting into that range 1% looks about right, i think. on a medium-term basis.

less market liquidity there is very much the prospect for the scarcity, the ecb buying so we can have volatility paired we just had our secular format pimco. one of our features is with less liquid markets and thanks having less liquidity for trading, we will have to get used to these times of volatility where you can get sharp movements in terms of securities prices. we will try to successfully navigate the market. stephanie: can you put into perspective how much liquidity has dropped? it is causing volatility, but in terms of a firm like pimco with so much money under management some are you able to execute the business that you want to?

andrew: we can do what we need to do, but you just have to be aware that the banks have less liquidity and they will act less like market makers. you will have these times of volatility. about how we trade -- erik: we would not have seen yields back up the way we have since the past several weeks had banks been operating more? andrew: market trying to transfer risks in the bank will act less like market makers so something we will have to get used to. as is something good

opportunities for us if we get rapid movements and we can see value, but yes, what we have compared with 2008, we have a much safer banking system but also a banking system that provides less liquidity and these times of volatility and quantitative easing, central banks being so involved in markets, hurting on the parts of investors, that could also contribute to these times of volatility. it is likely to be part of the landscape. erik: we thank you very much andrew balls, the chief investment officer of local income for pimco. stephanie: we have got breaking news on the economic front. bonnie is at the news desk. thanks a second indicator this week for jobs.

and 270 6000 initial jobless claims last week right about consensus less than consensus in fact. all in all, for the last two months, right on consensus. people looking at today's number before tomorrow passes nonprofit payroll, and right now the consensus among the economists surveyed is that it would come in at 226,000 jobs being created. also looking at productivity, it was worse than the final reading than we had first seen. coming in at -3.1 percent, the reason this is not good is it pushes up unit labor costs p are they came in more than forecast, up 6.7%. that may not be good for corporate earnings. stephanie: really all of this is a lead up to the unemployment number tomorrow. until we get to that number, they will simply say that these

of data is not the most important to us. really the big number we will get tomorrow, given the volatility we're seeing right now there is someone saying, i'm sitting on the sidelines and it is too hard. erik: partly for the same reason we heard from andrew balls. there are fewer shock absorbers in the market and that is for sure. whether you agree that the moves we have seen in the past few weeks in the markets are because of the lack of you know, trading participation, i do not know the answer, but it may be enough to inspire you or motivate you to take a breather. stephanie: all those hedge funds or real money, saying we are observing, not necessarily the market capabilities but we are doing what the street used to, in times of extreme volatility, can those clients actually see themselves saying, things look rock ep or i will take a big

position there and absorb it? it is not in their dna. erik: what we're seeing now is not extremely rocky. it has been a fairly orderly selloff not like what we have seen on the 15th. stephanie: what about when there is? when there was five or six years ago the head of the trading desk of morgan stanley to get his or her desk in the room, we need to step up. who is it? maybe they did not. listen. erik: look, you know more than me having worked on the street at deutsche bank are but i will say i am skeptical that deutsche bank or credit squeeze or goldman sachs or morgan stanley or jpmorgan or citigroup for any of those banks was there to catch a falling knife in a truly distressed market. no way. stephanie: not in a truly distressed market but i can promise you the conversations were had here there was some thought about how we would work

with our clients. right now, is there a way to have that conversation? when we spoke to the founder of canyon -- are they going to sit in their office? $500, they do not look good on me. erik: i will share with you a conversation i had yesterday with obsessively the number two guy. he is the sole president at carlisle. ♪

stephanie: welcome back. let's get corny. a deal is ready to cut the mustard here and july 1 one craft shareholders will vote on a merger. that might not stop the ketchup maker from continuing with jobs. craig not cutting the mustard,

one of the biggest days of the year? greg: -- craig: they are losing market share and struggling and the question is, -- >> what you mean? craig: cutting costs, those are the guys who are orchestrating the deal so the sense is craft people will get cut and there will be job cuts in the question is, where with a land? we talked to a bunch of recruiters who said, you have been there for a long time, the job market is doing pretty well he will find a job. the more foods specific your

job. erik: one of the things is that there is more mobility in this country than any other label market in the world. is there nowhere else for them to go in the industry or in that air -- area? craig: craft has a stable household brand. you can say come -- say, plenty of places to go. the bit of a coulter shock. you want to go to some startup. it is a different atmosphere. and there is uncertainty. stephanie: where could we see many of these people lose their jobs? that would affect the opportunity they have. craig: recruiters say the job

market is strong. craft people, with a good resume who have done things transferable he, they should be ok. the food people are faced -- facing a tough job market in that industry. stephanie: thank you for joining us. click -- craig giving us the latest. erik: showing out $5,000 to obtain a license operating in new york state. the currency will face a host of new rules designed to protect consumers and companies. for more let's check in with the ceo of bitcoin. the superintendent for financial services is trying awfully hard to strike a balance between the potential offered by the new technology and the risks in the form of this -- bitcoin.

didn't succeed? >> there will always be people who complain of regulation. there needs to be sensible regulation to protect consumers and it is a start. it raises the bar of what companies need to do to be able to operate. erik: raising the bar means he will have to fill out a lot of paperwork, two of the limited overlap in some of these anti-money laundering, for example. restrictions the new york state imposed upon people. there is groaning out there that this will be too expensive. >> it will be very expensive. we specifically designed it to not have to comply. mining bitcoins, we are about to

merge with companies that doing revenue, i have no interest jumping into this regulated segment. stephanie: of course you don't. is there it -- any much know that wants to jump into any regulated environment? >> not originally, but you could be in the space -- it makes perfect sense. the question is is the bar too high for actions? it is like, do you want to be an investment banker? it is expensive and for good reason. the question is if the bar -- it is the bar too high. stephanie: isn't this a moment to be extra conservative? bitcoin, so many people have a hard time understanding how the

product works brady would not want to be a regulator is bitcoin fails. you have to explain yourself and your never understood it to begin with. doesn't it make a lot of sense for something as new and different as this to be extra conservative in terms of regulation? because apart from the regulators, you have consumers who jump in who do not really a -- understand it. more user friendly. to be able to do that, you have to explain it. it's the general public does not understand the risk, there will be another. regulations like this may stifle growth in the short run but it gives clarity for larger companies that want to come in and in at least gives smaller companies and understanding of what they has to do with a out and raise capital necessary to pay this.

$5,000 is not a lot of money. the big cost is compliant. it is not the 5000. what do you need to do to comply with these regulations. erik: i'm glad you brought up mount goc. we will have much more today. i will speak with the super intendant of financial search -- financial services, the man who drafted the license. stephanie: vonnie quinn has more. vonnie: maybe selling watch models in retail source in two weeks. making progress with the order backlog. the main headline is it will be available in retail stores in a couple of weeks. there has been speculation apple is not selling quite as many as

forecast saying there really was not as much interest on apple watch just yet perhaps waiting for another iteration. apple saying it will put in retail stores in two weeks. $30 million worth of shares where it has been trading all morning. stephanie: i live with someone who habits to like it. erik: i'm ignoring the reviews and i'm trying to get anecdotal feedback. every single person i spoke to said it was great and better than he or she expected and day by day finds new reasons to love it. i do not have an apple watch. i would love to try one. as is the case with every single apple product, first-generation is admirable come up -- admirable, but it gets better in

the second and third generation. it took until the iphone 4 for that thing to be amazing. the same goes for the ipad. 3g was when it hit its stride. stephanie: what phone would you have had at the top -- at the time? erik: i had a blackberry. a bit of a different one now. stephanie: i do not like it because i do not like notifications. erik: you can turn them off. stephanie: but the whole point is to do this right now. i do not like it. erik: the carlyle group they focus on one thing. the performance of its funds and a disciplined approach to investing. investors are wondering about something else. the copresident and co-chief officer, abruptly and unexpectedly left the firm in may after only nine months.

the other copresident and co-chief operating officer faced questions about yesterday at the financial services conference. i have the opportunity to ask about leadership -- leadership. and if it had anything to do -- >> they are still very much involved. they are hugely capable. generational change, that is some -- that is something that people in the 90's worry about. i do not think it is something we should be overly preoccupied with p or when mike came to carlisle, and it was a high profile hiring, and i was thrilled to have him as my partner and we get along great when he joined, i think the whole discussion around generational change took on a

vet -- a very high profile and was almost a two it vanished -- -- too advanced discussion around it. erik: how you'd distill the motion -- the notion that it is too good? >> we could not unless we made them to begin with. i do think one of the things we have really done extraordinarily well over our 28 year -- 28 year history is to know when to make investments and spend a lot of time during times where we spent a lot of opportunities and selective with not so many right now. erik: why would you say investing money is so hard right now?

>> it has to do it as that prices relative to value creation. we try to always balance of the price we pay with a value that can be created over a certain time, and that risk, does it feel right? in today's environment, the value creation relative to the price you pay is tough to get comfortable with all the time. erik: another notion for you to dispel, that carlisle is not so great at real estate, credit, or energy. and there are some numbers. >> first and foremost, a lot of the assessment some people make to result in a preliminary conclusion is ace first and foremost, we have been in private equity for 28 years. some of these other businesses are reasonably new. our acquisition in the raising of an international energy fund, our fund and an energy

business, those rt does and three-year-old businesses. the performance for those funds have been really good. three years versus 28 years, we will eventually catch up and have a robust track record to compare with it. our u.s. real estate fund is always rated as one of the top performing opportunistic funds. i think there are some businesses that they right now are very much the standard of the industry that people talk about. i do not think that diminishes hours at all. when i stand next to my kids i look really talked her when i stand next to the washington wizards, i look short. erik: what about energy, it has not been active.

this is supposed to be the opportunity of a generation. quite as everybody concluded it was the opportunity of a lifetime. everybody moved capital in place and the capital markets really eased a lot of the stress. the amount of equity placements in the capital markets and credit or fixed income places have really alleviated a lot of what would have in the early stressed energy space. the early prices are rebounding a bit and a lot of expectation great deals would be done is when it was love 50's. it has crept up in the low 60's and sellers in the 70's, this spread is it -- is compressed a bit. i do think the pipelines are

busier. the spreads are tighter. i fully expect there to be a meaningful amount of energy investing that happens. erik: when it comes to real estate he feels short next to blackstone. it is inevitable blackstone is heading the standard. the time will come when blackstone is not setting the standard. stephanie: you do not have to be number one to be successful and i would not sneeze at their success. erik: we will be right back folks. stick around. ♪

erik: analysts are making some big calls on the street this morning. julie hyman is here to share

some of them. julie: we have interesting commentary, not from an analyst but from someone who used to be the head of research at opec. he is making a call on oil prices saying print will be lower, looking for it to fall to as low as $40 per barrel. well below the levels here. pretty much at the bottom were slightly below where oil prices were before. he said the fourth quarter will be a real test when we see what happens with how much members are pumping. you see we had obviously been rebound and oil that we looked at. an 11 week streak of gains for oil prices. it now seems to be coming to an end to some extent. we have seen a little bit of falling back on oil prices. i want to touch also on telecom consolidation. we have talks between t-mobile

and dish and on the other hand analyst calls on the telecom at&t upgraded and verizon downgraded. erik: thank you very much. that is julie hyman. we will be right back. ♪

arket makers," with erik schatzker and stephanie ruhle. erik: we are halfway through. i'm erik schatzker. stephanie: i'm stephanie ruhle. the sell off. we have top stories first. erik: let's talk about those top stories. stephanie: it is the last

economic figure we get for to marcus jobs report. the government says fewer americans apply for unemployment benefits. the total number of people getting jobless insurance payments was the lowest in 14 years. the jv -- the main jobs report will show gains in hiring. dish network nt work -- t-mobile are rising after reports that they are in merger talks. the law says a number of issues have been resolved but not the price. -- the wall street journal says the number of issues have been resolved but not the price. erik: we are waiting to see who will make the next move in the greek crisis. alexis tsipras plans to huddle with his inner circle after another high-level summit failed to resolve the stalemate over the distribution of bailout funds. greece needs the money to default best to it avoid a default.

citrus is rejecting proposals the call for tax hikes and pension cuts. ceo of barclays figures a last-minute deal is still possible. >> was going on in the greece situation, there is a process of negotiation happening. i think the experience shows there is a solution found albeit at the 11th hour. my money would be on that happening in the situation still. erik: his money or berkeley's money. when citrus was asked if greece could make payments he responded "don't worry." the list of republicans running for president is getting longer. jenna bush sent out a tweet urging supporters -- jeb bush sent out a tweet urging supporters. reportedly he is going to announce in miami that he is officially entering the the

race for the right house. rick perry's website displays a harry president logo and perry most likely will announce that he is entering the race. stephanie: mario draghi speaks and the world listens. ecb president mario draghi forecast faster inflation in the euro area. we saw from a width more. traders -- lisa abramowitz is here with more. lisa: he was supposed to come out and say i'm going to accelerate qad. we're going to bring yields back to 0%. he said get used to it volatility is here to stay. it pushed people over the edge. there has been the worst two day

selloff in general -- german bonds in the euro area's history. $388 billion erased from the sovereign world bond index is the end of march. these are big losses on paper. how much actual selling is there? are big bond investors actually selling their holdings? the volumes and colors i'm peering from traders, not really. this is a lot of marginal buyers. people who are invest -- think about the scenario now. it is not just german bond yields. it is also the dollar. the euro. how about all of those macro hedge funds that are levering up cross currency bets? a lot of different trades that are in here that are not hard-core institutional investors that are in bonds for the long haul. if you think about it, what fundamentally has changed? a .3% inflation rate in europe.

this is not necessarily -- stephanie: you are feeling it today. lisa: that is the question. every single route in the past couple of years has been a buying opportunity. stephanie: all these traders you're speaking to, i'm guessing they've lost a lot of dough. are they sitting on the sidelines? lisa: they are trying to figure out what's going on. trying to figure out how long this will go on. is this it? is this the actual selloff people are waiting for? erik: we were just showing with a german 10 year and here's the u.s. 10 year. andrew balls of pimco is blaming some of this on bond markets illiquidity. everybody's paper best ever but favorite explanation.

-- everybody's favorite explanation. there has been a sharp move in german 10 years. lisa: not to get philosophical. what is ill liquidity? are we talking about banks making markets or are we talking about the fact that everybody -- erik: he said we would not have seen a selloff of this scale and at this pace if this were the pre-2008 era. lisa: if you look back, we are in such an unprecedented time for the bond market with central bank intervention that has never been seen before. investors that have been pushed into the same positions. that is causing illiquidity. people are not as quick to sell or buy. people are moving in the same direction at the same time. what happens when i pressure takes a step back and people start to try maneuvering? the banks play a role in

cushioning some of the rapid swings in yields. with the calls i'm hearing from traders, they are having a hard time selling big blocks of bonds. stephanie: there is no one to sell to. erik: who wants to buy german two years at a -30 basis point yield? now it is -22. stephanie: i don't disagree with you but there was a point in time, not that banks stepped up and said i'm here to help you -- erik: actually they did say that. stephanie: they said it. if you want to portray in any way client service, we are here for you, they were providing more liquidity than. it felt more obligation than. not only can they not by bonds they love having the excuse that they can't. they can blame it on jobs. i would love to step up, that is what i want to do more than anything, blame it on regulators. lisa: people say with

treasuries, why aren't they trading more? erik: that's true. it is not restrict it by the boko role. lisa: pre-dodd-frank, the banks would hold big portfolios of treasuries to offset holdings. they naturally had a market they would make for those securities that was independent of a direct bet on the directionality of those bonds. that has evaporated as they have curbed riskier assets. that is one reason why they've done this. this has had a big effect on markets. in a treasury market, the most liquid market in the world, traders can't transact. if someone wants to step in and say, i want to buy a huge block of treasuries which i heard people trying to do, they could not do it. erik: inventory was not to be found. stephanie: we're in a world

where you need to match buyers with sellers. erik: conversation continues about the bond market. lisa: there's something going on. stephanie: our own we saw bravo it's -- lisa a bravo. erik: opec is meeting and the world is watching saudi arabia. to set the direction for oil. how much do saudi arabia produce? stephanie: we will break down those numbers. ♪

erik: decision time indiana. -- decision time in the vmien

na. it is all about saudi arabia. here to put into perspective is alix steel. >> 10 million barrels a day. it is right around the record. i want to put that in perspective for the rest of the world. we talk about shale and how prolific that is. 4 million barrels a day. opec is 31 million. non-opec is 58 million barrels. saudi arabia is extremely influential in the world. there are a lot of other fish to fry in the c as well. erik: it is about the marginal increase. before she'll existed, -- before she'll existed -- alix: it is also about growth. opec and russia, their growth

profile has been about 5%. the u.s. of a 75%. the go back to the idea that it is very important to produce a lot but the growth is canadian oil sales. -- canadian oilsands. stephanie: why do saudi arabia's want to produce so much oil? alix: great question. market share. stephanie: the enthusiasm in this house today is amazing. alix: market share has been slipping. china's market share for saudi arabia has fallen from 21% to 15%. they had been lowering their official selling price to get up on that. one of the biggest competitors is actually iraq. it comes from within opec. they compete for the same demand in china. the other big deal, they want to

hurt high-cost producers not necessarily in the you pass. best in the u.s. -- in the u.s.. erik: is it working? alix: not yet, but it will be. we have seen about 2.6 million barrels a day of projects that have been put off line for the next few years. 22% of deepwater drilling -- 30% of deepwater drilling could be at risk. deepwater drilling is a huge supplier. that is where we see brazil get most of its production from. erik: it is the timing of those projects. if the oil projects were to recover, these are 25, 30 year projects in some cases. alix: the volatility could have producer scared. if you see prices around $75, if that is where we end up is that enough for something where you will commit billions of dollars? stephanie: current one make the

argument, why do they want to make so much when the best produced so much when the price is not a good level? they want to regain market share but market share when the price is low. alix: their break even as about $105. around 60, they are struggling with that. erik: saudi arabia? really? i thought their break even was way lower. alix: according to bloomberg and other analysts we're looking at 100 and five -- 105. erik: the fiscal breakeven, not the production cost. alix: fiscal breakeven, 105. these prices -- they get a lot of the revenue off of oil. erik: the russians are the same boat. alix: yes. vince will you want -- venezuela

wants higher oil prices. they have a lot of foreign exchange reserves of medicine are the reason they can sustain that and they want to do it because they want the market share. that is what we will here at the opec meeting. stephanie: no one on planet earth that likes to get greased up more than alix steel. you love it and i love that about you. alix: thanks, guys. stephanie: stocks moving this morning. t-mobile and dish. what a potential media marriage could look like. john ledger's twitter account. stick around. ♪

stephanie: welcome back to "market makers are." we have got our eyes on two media massive giants is morning. dish network in talks to merge with t-mobile. the potential deal has investors excited. shares are up in both names this morning. let's bring in mark beach who covers the industry from london. are these the last hanging around the bar late-night nobody us to go home with or is this a genius idea? mark: some analysts say it is genius. there is a big health warning michigan about this. -- they should give about this. back last october they were talking about something coming

through. we knew dish had made an approach through the largest shareholder to make some inquiries about whether things were for sale. it has been a subject ever since then. erik: is this a case -- who is buying who? t-mobile has a market value of $31 billion. dish is about ernie 2 million -- $32 billion. dish's -- t-mobile's shareholders would end up owning most of the company. mark: when we were talking last year we were talking about her share value. -- per-share value. it has gone up a lot and we are talking $42 or more than that. dish is having to pay more than last year. at the time when it has quite a bit of airwaves capacity.

maybe up to about $50 billion or something to look after. it has to do something while everyone else is consolidating. erik: what about charlie ergen? mark: there have been amusing comments about him being the last billion are in the bar at the time that everyone else is hooking up. we had at&t, time warner and so forth. direct tv has got to do something to make -- dish. at the time this happened this would make every bit of sense according to analysts. stephanie: thank you. mark beech. shareholders are excited. erik: we will be back. a bond market selloff underway. ♪

erik: tracy alloway. good morning. tracy: this large on market selloff. stephanie: i'm not familiar with that. tracy: we had mario draghi saying yesterday, investors better get used to volatility in the bond market. we are also starting to see moves in the equity margins. european markets are down based on the bond selloff. we have seen wild swings in chinese stocks. we said yesterday they changed directions like 15 times. in fact i wanted to tell you the story of a hong kong listed's not called m ie. this is an oil and gas producer. on monday when we started trading, this company was worth

something like $2 billion. as of thursday, is worth 4 billion. the company put out a statement saying it does not know why shares are rising so much. stephanie: the founder just bought six megayacht's. tracy: these wild swings in the chinese stock market everyone is trying to decipher them. erik: is there a line to be drawn between wild swings in the chinese bond market and german bunds? stephanie: or fraud? tracy: i think what we can say are government bonds are the benchmarks of global market. that feeds it to other asset classes. they create shock throughout the global financial system. stephanie: do we know what the volume is like? tracy: i have heard from traders

in europe that volume has been low. that feeds into the liquidity arguments which we have been talking about for ages. erik: oil. tracy: we have the big opec meeting tomorrow. erik: it is happening already but the statement is going to come out tomorrow. tracy: the big decision comes out tomorrow. we have the conference going on. one interesting thing, a lot of people are talking about what shale has meant for the oil industry and opec in particular. we had the ceo of conical phillips saying that shale is here to say and it is been more resilient and people have expected. that means opec is losing some of its pricing power. erik: i wonder whether that should be as much of a surprise as some people say it is. the last time there was a huge oil selloff after oil peak in

2008. the price of oil spiel services collapsed. that is what is making it more affordable for shale drillers to stay in business. tracy: there's this delicate balance between price and supply and it is tricky to work that balance out. it seems experts in the oil industry cannot predict how those two things are going to move. stephanie: who is ringing the bell at the nasdaq? what is that? i might have to find that out. erik: a few seconds to wrap up. tracy: payrolls tomorrow. u.s. markets are waiting for that data point. erik: i'm glad you didn't say on edge. nor did she say all eyes on. another congratulations. tracy: markets are expecting

improvement to april's number. a lot of uncertainty. goldman sachs is forecasting 210,000. erik: i have never seen anything like this before. the imf has put out a statement calling on the fed to delay its first rate increase until the first half of 2016. stephanie: hold on. erik: christine lagarde and an institution like the imf tried to influence fed policy in public. stephanie: start again. erik: to reiterate the imf is urging the fed to delay its first rate increase until the first half of 2016. what do you make of that? tracy: that is surprising. erik: i have never seen anything like this before. tracy: i think the imf is concerned about global economic

growth. erik: what the impact of a stronger dollar is going to be on trade flows. stephanie: is it their role to point the finger at another organization and advise them to take action? erik: let's bring in jim beyond go with us from chicago. have you ever seen anything like that before? jim: i have not. usually these types of organizations do not tell each other what to do. it is surprising that the imf would come out with a statement like that. erik: we just tried to come up with some instant rationale for what it is the imf is concerned about. what it is christine lagarde and min her deputy managing director see is a risk i would want them to publicly influence fed policy like this?

jim: nobody at the imf, the fed the treasury or anybody else has insight as to what the economy is going to do next. i think it is more about financial stability. they are worried a fed rate hike is going to cause unstable markets, especially in the emerging market area. a lot of people have thought that for some time. i think that is what they are starting to get worried about especially with the bond volatility we have seen in the last you weeks. -- the last few weeks. we might have a scenario like we had with the bond market in 1994. the fed raised rates the bond market collapsed it created a host of problems. stephanie: the fact that we never see action like this taken, does it make you panic? jim: panic is a strong word. it tells me officials at the imf and other officials like this are worried about what is going

to happen when the fed raises rates. this is not some benign thing where you hear a lot of people say, what is the big deal. in the fixed income world come a given what has been happening, it is a big deal and it could be a big deal if they do not get it right or surprise the market in some way. i think that is where the concern is. i am not panicked because this is not new. it is coming from an official organization might this. stephanie: i want to bring in julie hyman. what kind of market reaction are begetting? julie: you are think you would see stocks turn higher or not be down. they are not much changed from before we got these headlines. what we've seen recently is one there is any glimmer of a rate hike pushed out you tend to see more positive reaction in stocks. all three majors are down.

erik: i would postulate it is because nobody has ever seen this before and they are wondering, why would there be a disagreement between the imf and the fed. it is not like there is not an open channel between janet yellen and christine lagarde. the fact that it has come into the open -- julie: it creates uncertainty in the market. i want to show you a short of the 10 year yield and what we are seeing is maybe more predictable reaction. the yield is going lower after we got these headlines. we are seeing elevated levels compared to what we have seen as of late. after the headlines came out there was a move downward. erik: i want to make sure everybody is aware, christine lagarde is holding a news

conference right now. i would expect her going to get more details -- we are going to get more details. nothing certain. lisa abramowicz is here. jim bianco. julie was giving us the action in the 10 year and we did see some movement. i'm looking at the two year to see what is going on. would you expect to see more movement? yields are dropping. lisa: it is very interesting timing. the imf is saying said, you do what -- fed say you're going to push back your rate hike. as inflation starts picking up, when the fed hikes the interest rate won't have as much of an effect as inflation

expectations. a recent selloff has not been led by expectations of the fed hiking right now. stephanie: the bond market collapse has occured. on march 17, she turned dovish. that triggered the collapse. the opposite of what the pundits have been saying. the bonds of going down 16 points while rate hikes haven't pushed out. -- have been pushed out. jim: one thing to keep in mind is there has been a big argument in the marketplace for the last few months. the fed keeps talking about raising rates. the market almost has not believed the fed is going to raise rates. something lisa and i have talked about. the imf said do not raise rates until the middle of 16 -- the middle 2016. the market was thinking that anyway.

it is not that it is shocking news. it is shocking who said it. stephanie: publicly. erik: this is a statement by the imf. i wanted to share with you more of what has come out of this. the imf says u.s. public finances are on an unsustainable path. the fed should wait for tangible signs of wage and price inflation before acting. the imf has cut its 2015 forecast for the u.s. economy and furthermore, the imf says there are potentially serious risks to financial stability in the fed great height going back to the point -- the fed right hike. what you make of that? jim: i think the first half is boilerplate. financial stability. that could be the only reason they want to have the fed stay still especially an

organization like the imf. street thinking is they are not very good at predicting where inflation or gdp is going to go over the next couple of years. they are not necessarily bad, but nobody is. i do not know why they think their opinion should supersede anybody else's. they are worried the fed raises rates with it is not priced in and the environment we're in now the bond market could create havoc, especially in foreign bond markets around the world. stephanie: do you think the 10 year yield could be under 225 by the close of business today? jim: the 10 year yield to be anywhere by the close of business today with the type of volatility we have had. if you want to look at the move we have had in the first three days of this week it looks like we might have peaked this morning. it is possible we could see a rally this afternoon. i would not be shocked if we go back up. the problem is predicting the

market with this kind of volatility is difficult. stephanie: am i wrong? isn't this what paul krugman has been saying all along? do not risk hurting economies. you don't want to create overheating. erik: krugman wants to see fiscal stimulus. i think paul krugman likes to see anything incentivized demand. it be difficult. k paraphrase -- can you paraphrase paul krugman has position? lisa: government has to do something. they have to implement plans to stimulate growth. the big question that i have is, our policymakers more concerned about the fed raising rates or the appearance of that to bond

fund holders who willfully? -- who will flee? they are examining this issue very carefully. that bond fund holders do not ask the way stock bondholders do. they are more inclined to pull money if returns get negative. erik: that is a good point. here is another thesis. the imf coming out publicly like this and commenting on fed policy reflects a division within the fed. we just heard from stan fisher at the fed is going to take into consideration when setting its next interest rate, the impact that will have on non-us economies. i know for a fact that there is not unanimity on that issue. stan fisher having been the former deputy managing director

of the imf makes me wonder whether the imf is channeling stan fisher in an effort to give his trend -- his position more weight in the fomc. jim: their position is consistent with his. you had a voter in charlie evans coming out and saying the fed should not raise rates until the first half of 2016. everybody is all over the place. the fed has never been in this environment on the same page with each other. i think that if the imf wants to force their opinion upon the fed or the ecb or anybody else, that is a bad precedent for them to set especially when the market was already there to begin with. they were thinking there was not going to be a rate hike in june. some think it's going to be in september. i think they are not going to move until 16 -- until 2016.

the should not inject himself within the debate when it is already moving in their fate to begin with. stephanie: some credit investors are pushing to make the argument, this is a nonevent. maybe -- they believe the fed is determined to raise rates this year. some points that show how slow the economy is moving. and looks like it is moving forward but the fed is determined to raise rates this year. they do not want to continue to sit in this zero interest rate environment. one could push this aside and say focus on that. it is going to happen this year. is it fair that some investors say they can pass this off as no big deal? jim: it is no big deal to the extent that the market has not priced in a fed hike this year. maybe one is priced in december but that is about it. the fed has publicly said --

erik: christine lagarde of the imf is on television. >> is a conference of exercise and the overall report will be published on the eighth of july. the concluding statement includes some of the key findings but all the details, the work, the underlying assumption the policy recommendations in their full extent, will be found in that paper which is due to be published on july 7. i highly recommend that to you. we have also commented upon the status of the dollar as a currency. we have commented on the timing of the interest rate hike expected at some stage in the

future. before we get policies, let me say a few words about how we see the u.s. economic outlook. we meet against the background of a shaky first quarter of the u.s. economy. you have seen we have revised our growth forecast down to 2.5% in 2015. this is largely due to those factors that affected the first quarter. this is not our main message. we believe this is -- this does not indicate substantive material trends in the u.s. economy. our main point is that we still believe the underpinnings for our continued extension are in place. the labor market has improved over the last year. job growth has averaged 260,000

per month. financial conditions remain accommodative. we expect cheaper oil prices to continue boosting growth while at the same time taking a bite out of the oil related investments we saw in the first quarter. there are risks and uncertainties to this outlook. for the delay of the housing recovery and the strong dollar could be a drag on future growth. when we look at the whole picture, we believe that growth in the coming quarters will be at an annualized rate of 3% or higher. we see inflation pressures as muted. long-term unemployment and high levels of part-time work boost. weight indicators have shown only tepid growth. when combined with dollar

appreciation and cheaper energy costs, we expect inflation to start rising later in the year. only slowly reaching the federal reserve boss 2% medium term objective by mid-2017. over the medium-term, there is still much work to be done. a forecast of potential growth around 2%, far away from the 3% average growth rate we saw before the great recession. given this outlook, i would highlight our policy recommendations in three areas. i would start with monetary policy. as we have noted before, the fed's first rate increase in almost nine years has been carefully prepared and telegraphed. nonetheless, regardless of the

timing, hire u.s. policy rates could still result in significant market volatility with consequences that go well beyond the u.s. borders. in weighing these risks, we think there is a case for waiting to raise rates until there are more tangible signs of wage or price inflation that are currently evident. in other words, we believe that a rate hike would be better off in early 2016. in and after this first rate increase, a gradual rise in the federal funds rate will likely be appropriate. a modest rise of inflation above the fed's medium-term girl -- medium-term goal. we believe that would be manageable.

pursuing a gradual approach to interest rate normalization would provide insurance against the risk of disinflation and needing to cut rates back to zero. in the coming months, effective communication by the fed will be more important than ever. last year we made some recommendations on the communication toolkit such as scheduling press conferences after each fomc meeting and publishing a quarter turn -- a quarterly report. we recognize the difficulties with adding more munication but we believe it merits consideration. -- more communication but we believe it merits consideration. our team has taken a look at the health of the financial sector and financial stability assessment program. much has been done over the past years to strengthen the u.s. financial system. it will be important to ensure

that that progress, including legislative advances under the dodd frank act, is not rolled back. the important progress made. risks have built up during the long period of low interest rates. nevertheless, the data point toward a system will focus on pockets of and vulnerabilities rather than with broad-based access is across the sector. those pockets of vulnerabilities should not be minimized. you could create macro irrelevant -- that grow relevant -- macro irrelevant sources of instability. intermediation to so-called shadow banks or non-bank rental institutions. -- financial institutions.

the potential for liquidity in fixed income markets as these markets come under stress i know that u.s. authorities are investing in understanding and assessing these issues. some recommendations to reduce risks that i would highlight include, giving all members of the financial stability oversight committee and explicit mandate so as to further strengthen the effectiveness. undertaking an effort to provide the office of financial research with all the data they need to build a comprehensive view and an analysis of systemic risk. abating the regulatory regime in the insurance sector to create an independent and will resource

body that has nationwide permits. further details in the concluding statements. as i have said, it is explained in a document that will be released on july 7. let me turn to fiscal policies. given the forecast of the rise in debt to gdp ratio, it remains important to adopt and implement a credible fiscal plan. this requires action on tax reform, social security reform and steps to retain health care costs. if the fiscal challenges i am referring to were tackled, it would provide scope to expand the near-term budget envelope for measures to support future growth, job creation and productivity.

here, i would prioritize infrastructure spending education spending and policies that raise labor force participation, including steps like subsidized childcare facilities. we believe that near-term u.s. growth prospects are good notwithstanding the bad first quarter we saw. muted inflation pressures suggest interest rate hike can wait and that such interest rate hike would be better off in 2016. even after this initial step is taken, we believe that a gradual rise in the federal funds rate will likely be appropriate. although we recognize progress has been made to strengthen the u.s. financial system, there is more to be done to address the

pockets of vulnerabilities i had mentioned. very happy to take your questions. preferably on the u.s. economy. thank you. >> if you could keep your questions as brief as possible. >> i assume you have spoken with your friend about your proposed plan. i'm wondering whether this will solidify your friendship or put -- does she agree? i cannot help but ask about the topic of greece. can a bailout of greece credibly go forward without any sort of serious debt relief? should that be part of the current proposal? lagarde: thank you.

we essentially agree with the president of the fed in that the interest rate hike must be data dependent and based on sound and detailed analysis which is the line that has been articulated by chairman yellin. we agree with that. what we are seeing in the data the team has analyzed is the inflation rate is not progressing at a rate that would warrant without risk. i can come back to that. a rate hike in the next few

months. we are saying that the economy would be better off with a rate hike in early 2016. hopefully, the inflation data and numbers will have consolidated. even if it is to a risk of a slight over inflation, relative to the 2% rate that has been dated under the fed's rules. we believe the trade-off starting to early and risking disinflation and having to return to lower rates is higher than the risk of slightly inflation going forward. on greece we certainly welcome

the constructive meeting which has taken place yesterday between the greek prime minister and the president of the european commission and president of the eurogroup. it opens a window of time during which we can here in details from the authorities their views on the joint proposal that was proposed to them yesterday. that joint proposal, agreed between the european commission, the imf and the european central bank, has demonstrated flexibility on the part of the institutions, relative to the previous program, in order to take into account the political situation and social situation, in order to mitigate and soften

the consequences of the necessary measures that have to be taken to allow greece to return to stability and a stiff thing about a sustainable -- erik: the imf has come up with a recommendation that the fed wait to raise rates. jim bianco with us from chicago. my family guard says -- lagardere and says the fed can wait. she agrees with the position that any move in interest rates should be data dependent. jim: it is hard to reconcile those statements. she had some contradictory statements. the economy seems to be fine but inflation is too low. i think the key of what she said was when she talked about regulation. she's talked about financial

instability. if the fed raises rates, there were a vet markets around the world will have a bad reaction. they want to have more time to insulate markets. what she is not saying is the reason we will have this bad reaction is because monetary policy has been on zero for so long. it will be so hard to get off of it. it is a tough situation the fed is in. having regard was speaking for emerging market -- i think christine lagarde was big for emerging markets. to me, it is about financial stability. erik: great analysis. thank you for spending time with us and waiting to give your take after listening. jim bianco in chicago. some unprecedented activity.

the imf weighing in on fed policy for the first time in my memory. i've never seen anything like this. stephanie: lisa abramowicz is here. joe weisenthal is here. from all the traders i'm speaking to in the market, this shows just how -- the underpinnings of this qe based global economy are. the fact that christine lagarde is saying something like this. volumes are down 70% in u.s. treasuries since 2007. the fact that she is coming out, waving a flag like this, this is concerning. erik: don't stop the morphine drip. stephanie: do she want to put a big band-aid on this because she cannot face a disaster on her watch? lisa: the imf has come out a lot of papers about what will happen if people start pulling their money ou