erik: president obama's a on russia are working. the ukrainian government says it still under attack. we will talk about options. : they are trying to get you to buy more coffee. olivia: good morning. erik: it's 10:00. more for us.as julie: we have the highest inventories in a year. sawthe month of march, we -- these are backward looking numbers. for march, we saw the number of

buyers up. to sales inventory ratios fell to 1.29. this number is usually not market moving. it's another data point that gives us an idea of how the health of the economy is. the inventories are up 4/10 of 1% and sales rise 16%. thanks very much prayed that was julie hyman. this is what is making news. the largest bank in europe is cutting thousands of jobs in an effort to approve profitability over the next few years. asy will eliminate as many 25,000 positions, 10% of its workforce. off operations in turkey and brazil. this will be a total of 50,000 jobs. they are trying to cut costs by $5 billion a year. he says this is an important

step area --. >> that's why we made the announcements that we have. we have a low return market so we are going to address that separately. i think the brazil in turkish transactions prove that there are no sacred cows. since he took over as ceo, he has announced 87,000 job cuts. he has reduced the number of countries in which they operate from 88 to 73. olivia: deutsche bank says the officers were searched as part of an investigation into security transactions by clients. the shares dropped on the news about the probe and state prosecutors. employees are not accused of wrongdoing. there have been a series of scandals. down.os are stepping john cryan is taking over.

some more tough talk on greece from the german finance minister . he says the ball is in increases court and they must decide if they want to carry a difficult load. new proposal to unlock bailout money. it's just a rehash of older plans. bulk it's the largest which is ever in the housing industry. they are buying 4200 homes that will be turned into rentals. homes are in midwestern cities such as chicago in indianapolis. the seller is plt homes. this will make them one of the top 10 housing owners. revolt at thed a shareholder meeting. only 22% voted against approving his pay package. was never under threat.

the package is finding for the next -- binding for the next two years. olivia: american airlines has joined delta insane benchmark revenue will be lower than expected. revenue from each flight will fall by 6%. that thereinforce market is getting weaker. those are your top stories this morning. , more on theup strategy and white downsizing. jeb bush's european adventure, he heads to germany, poland, and estonia. expectestions he can about foreign policy. israel may be facing a brain drain it could are running out scientists. and fewer students want to take advanced math classes. ge is taking a step in retreating from banking.

they are selling off their business for $12 billion. onvia: they want to refocus their industrial roots and use the money for that. jeff is joining us. thank you both for joining us. sheddingthe process of $200 billion in assets from shedding off ge capital. they don't want ge to be a bank anymore. had their near-death experience. it almost took the company down. they are going to get the money coming back. they are going to do $30 billion this month. we don't have to remain the credit rating. between 20 and $40 billion they will have to play with. they can help people with areas they might want to look at. it may be health or oil and gas.

those are areas they been trying to amp up. >> for the next year or two, they will be busy cleaning up and making the new ge. integrate. i think they will look in the health care area. they continue to like the assets. erik: is there an industry where they could serve -- surprise us? like to avoidthey surprises. they like to let investors know where they are going. this is where the next decade is going and they will spend their money there. they will let their investors know they are going to spend or theney on oil and gas

kind of flow controls. these do a lot of oil and gas. wants to telegraph the kind of company. what about life-sciences? specificallyhe is interested in life-sciences. a 10% rate.ing at ge's health care business in the large imaging equipment is not going very much. this is an area that they want to grow. aivia: we had jack welch on couple of months ago. we asked him if he is on doing everything he did. he said no, but he is. i think he is. jack welch love the finance business and it made a lot of money for ge. he did lot burning in the industrial businesses. it cost them in 2008.

jeff: times of change. they had their near-death experience. it makes sense to get out of commercial credit. getting rid of nbc was a good idea. ofthey could have done some that years ago. they had problems for five or six years. the timing is great. erik: assets have appreciated in value. rid of getting capital is a response to new regulation and general electric does not want to be a financial institution. jeff: it frees up money for them to spend on oil and gas and health care. erik: the timing is good. is there enough private dough out there to take them 10 and $20 billion chunks of the competitive a enough environment to give them high prices?

wherehink there is a shop they might exceed their expectations. they have had a lot of traffic and we have news every day of somebody looking at the assets. on the finance stuff, they will remain in the business is related to their core businesses. that is a great stabilizer. stabilizer ford the core businesses. erik: thank you both. and karen.ken olivia: we have some breaking news. it seems that julie hyman is at the breaking news desk. ruled thatcourt has chris christie does not have to fund a $1.7 billion pension budget gap. this does not mean that the issue is resolved. it means it is pushed back to some extent. this poses a political challenge for christie.

he is a potential presidential candidate as is everyone nearly. this ruling does avert immediate cash crunch. there is a pension hold on schools and tax relief and municipal aid. he has vowed not to raise taxes. a little bit of a stay of execution or a stay of him having to deal with this issue more directly. pensionlowing unfunded liabilities to grow is almost by definition a ticking time bomb. the time bomb just keeps taking. olivia: chris christie is going to do what he wants. julie, thank you very much. shrinkingng up, balance sheets and job cuts, ise of the challenges hsbc facing. we will take you to britain for the latest in the restructuring

at europe's largest bank. ♪

erik: let's take you straight to julie hyman. julie: more selling as what is happening. we had a mixed picture right after the opening bell. things have deteriorated. we are seeing a pullback across the board of. it's the fourth straight down day for the market. the s&p and the downer not seen much of a decline. the nasdaq is more deeply in the red, down half of 1%. i want to talk about the bond market. it could be a little bit of the

tailwagging the dog in terms of the relationship between bonds and equities. but at the long bond. there is a surge in yields this morning. inare seeing this action recent weeks. it's interesting because it didn't happen somewhat dramatically an hour ago. the yield is now at three point 17% and mimicking some of the moves we have seen in europe, similar movement on the 10 and the two-year. what isalking about going on besides the general perception that we have recently that the fed is going to get more aggressive. we have some supply coming to market this week in the u.s. in terms of the government option auctioning off the 30 year bond. if you look at my terminal, i have a longer-term chart. the highestg yields since late september. they are continuing to move higher and higher.

that itthis disclaimer is historically still low. it is working higher from a we have had in recent days. this may be related to what we see on the longer end of the curve. the stock is plunging by 13.5%. they came out with numbers this morning and contracts are down 7/10 of 1%. they have said that concessions on started homes that were not sold, the affected on that was worse than estimated during the quarter. olivia: thank you so much. erik: once again, that keeps happening. top stories.ve we are going to start with mcdonald's reaching back into the early days of the obama administration for its head of communication. they named robert gibbs the communications division. press obama's first

secretary. .udi is taking a shot in berlin, the ceo is pledging to safeguard on board data rather than try to profit from it. eric schmidt was attending the conference. car owners want to be in control of their own data and not subject to monitoring. next march, you will be able to buy a mercedes that says -- does some of the driving. drivers will still need to have their hands on the steering will. the system will not be able to handle sharp turns by itself. those are your top stories. that is terrifying. h sbc. new strategy for off turkey andg brazil. cutrt gulliver has already

thousands of jobs. let's bring in our perdition banking reporter who is in london. richard, 50,000 jobs in total. that is going to disappear. reductiont's a huge out of 250,000 worldwide. they're going to get rid of about 25,000 employees through job cuts and natural attrition. they are also going to be reducing to play 5000 staff hsbc in brazil and turkey. erik: why now? has already taken some hard decisions. why did he wait this long for 50,000? been facinghas pressure from shareholders. they say that they are not in turning enough revenue for

investors. they are seeing lower revenue and costs are increasing. they are having to invest a lot in compliance. they face of money laundering fine in the u.s.. they have increased number of compliance staff that they employ. they have systems to deal with those sorts of problems. items with reduced revenue means they are making less profit. olivia: what kinds of jobs that are on the line? are they responded to regulation? are they getting rid of derivatives traders? are they responded to technology and getting rid of bank teller's because people are doing banking on their phones? richard: they are going to be jobs across the board. they have not said which divisions. they have said around 21,000 of the jobs are going to come from back-office and support functions as they try to invest.

they're going to invest $1 billion into i.t. and infrastructure to automate processes and that will mean they don't meet as many people in the back-office helping traders in the front line. what seems to be so wrong with the u.s. business? richard: it is massively important. they still need that business. that was an area that was underperforming and they are still seeking to address that. have a call with the management there every two weeks trying to take sure that the returns are posted in that unit. they need to keep hold of it, even though they are going to make cuts in retail banking. they want to hold onto that commercial business that they have. it's massively important in the global clients that they serve. they have to transact in dollars. you need to be able to transact in the global currency. erik: the backdrop for this is capital due to

regulation. why is it that they want to be a global bank with this high capital surcharge? why not try get to the point that the surcharge the kleins? richard: some investors may be asking that question today. they are asking that question of deutsche bank recently. they have seen some investor unrest about the plans they came out with an april. that led to the resignation of the ceos. the coat see if executives. they decided not to take that radical action. they'd believe they can still be a global bank, not the world's local bank which is their old catchphrase. being all things to all people was too expensive. they need that international reach because the clients that they serve, even if they are not profitable in one part of the world will be in another. it's important to them to have that network reaching people around the world. olivia: what about the base?

really going to leave london? are they really going to the base to asia? richard: they could've possibly. they are undertaking a review and there has been a lot of noise in the u.k. about this. the chancellor is going to make a speech in london to bankers and large companies. i think the banks are going to be looking to that to find out how competitive london can be. the bank here has to pay $1 billion each year for a bank levy. that is a tax on a banks global spreadsheet. that was instituted after the global crisis. for their support they get from governments. they could go to hong kong where they are originally from. olivia: we appreciate your time this morning. he is joining us from london. t's coffeed, why pee

has its head in the clouds we will be back in just a moment. ♪

olivia: the impact of technology on spending seems like an academic matter. when it comes to software, the results can be tasty. cory johnson has the story of a 's coffee. at peet >> fresh coffee means great coffee. optimizing technology that does more than anything. it's a $5 million investment in all of theross global sales channels. >> we are getting demand signals from different channels.

these aggregate those orders. peet sendignals let each order. >> its kraft coffee. >> we roast them based in the orders. we package of a week ship. roasting is 3000 orders a day. that is twice what they did five years ago. >> the business has grown and we can keep up with the gross and an -- growth and anticipated. we are more effective. rex this gives them speed and creates the opportunity for new products like iced coffee. >> we have more than we have ever had before. >> the growth rate has been tripled. ask the key thing is getting the orders and in making sure that we deliver exactly what you are looking for and get the freshest

product possible. olivia: that was cory johnson. there is so much to just ask and position in the back office. i would think they would have it down to a science how much caffeine i need. sometimes it's two cups and sometimes it's half a cup. it depends on my mood in your mood. erik: my mood? that's news. it's a good thing. tomorrow, we will tell you how likes his coffee. jeb bush is in europe ahead of his announcement. gaffes that the have plagued other republican overseas trips? we will examine that. don't go away. ♪

olivia: good morning and welcome back to "bloomberg market day." part-time workers at tripoli are getting a boost and benefits .

paid vacationive and sick pay and tuition reimbursement. onlyenefits were offered to full-time workers. suppose i has more than 50,000 employees. cooking upis something big. the company has raised $135 million in new funding led by fidelity investments. the company is using the new money to improve its supply chain. our fore investing in film and our supply chain to get fresher food at better prices. blue apron announce the opening of a new warehouse in dallas. it will them to disparate -- distribute to the entire u.s.. officials in san francisco are talking about a warning on sugary beverages. it would require health warnings in oneboards and buses

of three anti-soda proposals. the state beverage association says the ordinance is just a scare tactic. those are your top stories at this hour. let's take a look at the markets. stocks are continuing their decline. the dow has erased its gains for the year. the s&p is up 7/10 of 1%. the nasdaq is below five thousand. to come, much more including western sanctions that crippled the russian economy. they have not stopped vladimir putin's aggression in ukraine. we will talk to a former defense secretary. israeli students majoring in math and science, what it means for the startup nation. next hour, amazon is thinking outside the box. how they are teaming up with the onions film to advertise packages.

jeb bush is taking his first foreign trip. he is headed to germany and , a trip designed to elevate his image as a commander in chief. he has a unique challenge and foreignng how his policy would be different from his brothers. popular inme is not europe. what will he have to do to prove he is a different man? phil: when george w. bush left office, his confidence and approval rating in germany was at 14%. there is a lot of ground to make up when it comes to the last name. we talked to his aides in advance. they see an opening and that assembly you were talking about. been doing ins ukraine, there is a lot of wariness in europe.

you are going to hear a lot from jeb bush about vladimir putin and how he would embrace a stronger and more robust foreign policy when it comes to russia if he takes office. ifwill be interesting to see he provides specifics to that. those will be his topline talking points. he chosehat's why germany, poland, and estonia. back in 2008, barack obama went over there and he had an incredible trip. did he do so well over there but republicans keep stumbling? phil: pictures that the campaign aides would pay millions for when you think about it. what was different between what barack obama did and what candidates have done, mitt romney in london in 2012 when he made fun of the olympics. some republican candidates this year like chris christie and scott walker, it's about

preparation and it's about avoiding pitfalls. barack obama's visit to berlin was very controlled. the trips that republicans have taken have not been so. jeb bush is very loose and willing to talk to the press. he has availability scheduled and that is where mistakes can occur. there is going to be a very close eye on anything jeb bush likes to talk about. sad, thatat is so appointment with the precious where mistakes happen. it's not even official. he is already installing a new campaign manager. what's going on internally? never a good sign when you have a staff shakeup before you launch. he will launch on the 15th. a longtime republican hand from toa was assumed by everybody be the campaign manager. as of yesterday, there is a change. , a tough operator

with experience in the romney take over.ll it's a combination of a couple of things. help withcoming in to this campaign after trying to mess with old staff that has been with bush for years. it's way too early to say this is a fatal problem for jeb bush. this does underscore that there are a lot of changes that are coming at a lot of big issues that he will have to control. he has major staff changes coming. they are going to have to get on a roll as early as possible after the launch. olivia: 18 months seems like a pretty good lead. we were talking about jeb bush anddoing well in the polls key primary states like iowa. he raises so much money. do we ever see a situation where the front runner doesn't actually get the ticket? phil: i think it's possible because the money is about keeping the money flowing.

his team will announce $100 million raised when he launches on the 15th through supertex. donors will stop giving if he has a bad performance in new hampshire. they arehe state targeting and the state they need for him to move on and move up. andhat money runs dry donors redirect the resources, that huge lead he is starting with won't matter if he can't translate into votes olivia: read thank you so much. it's great to have you. come visit us up in new york. still ahead, much more including head scratching from a comment president obama made yesterday. >> we don't have a complete strategy because it requires commitment from the iraqis as well. how recruitment takes place. not a complete strategy. we will talk about u.s. policy next.

♪

olivia: welcome back. we are one hour into the trading day. it's time to get you caught up on the market action going on. i want to start in europe and head over to mark in london. mark: we have six days of

decline for the stock in europe. that is a longest losing stretch since december. most markets are down. demand at homeg and abroad. the german drop continues, olivia. there was a correction. today that declines kleins with a drop of 1%. billion in market value since it reached a record in april. when of the only rising markets we are hearing, that the country has submitted fresh proposals to its creditors to unlock its bailout funds. the revised says plan is a vague rehash of earlier proposals and isn't considered credible. stock market the is higher. the bond market is trading lower. year are the greek 10 up by 23 basis points. italy and spanish yields are

falling. there is hope of the greek deal. the germans are continuing to rise. they are up 2.91%. , it was almost in negative territory. this is the big corporate story of the day. slashing 25,000 jobs and selling units in brazil and turkey. they want cost savings to the tunes of 5 billion by 2017. hsbc shares are down, wiping over one billion pounds in market value. back to you. we are looking at selling in the u.s.. the dow erased its gains for the year. take a look at the 30 year yield. that is true across the yield curve. we are seeing selling and that means yields are going up. -- has very little

change. what is pushing stocks lower today? helping at least is the airlines. american airlines comes out and says it's going to earn less in terms of passenger revenue per mile in the second quarter. it's going to see a decline of 6%. 2%,t of it is down southwest, delta, jetblue, we are seeing selling across the airlines. we have oil. that is the upward pressure that we are seeing and stocks. prices are going higher on the outlook for what is going to happen with shale production. we have oil back over the last year. today.seeing a rebound the green line is $60 a barrel. been aough there has rebound for the year to date, it has not made it above that $60 level with any sort of regularity.

not been sustained. some of the energy stocks are doing well in the s&p 500. we have a qt and noble energy. oil stocks are doing well. there is a positive call out from oppenheimer. i mentioned what is going on with production, if you look at shale production from eagle ford in texas, this is the trajectory we have been on. there has been a flattening recently. the projections for shale less sunny.re the energy information administration is saying we will see production fall by 1.3% this month. that perception is one of the things that helps boost oil prices. shall production is going down. olivia: thank you so much. these are some of the top stories. a victory for chris christie. the state's highest court says

he does not have to fund a $1.6 billion pension budget gap. the supreme court ruled that it's up to the state legislature to resolve the issue. the decision diffuses an issue that was a political challenge for the potential presidential candidate. pensions will remain underfunded at least for now. will be in court today. he is accused of breaking banking laws and lying to investigators. the indictment says he agreed to pay someone 3.5 million dollars to cover up past misconduct. it is believed to be sexual misconduct when he was a teacher in the 1970's. .nother disaster for fifa movie made only $900 over the weekend and that is according to the associated press.

from the 10 theaters where the film played, it stars tim roth fifa president. it's a puff piece. released before rampant corruption. turning now to world affairs, ukraine is negotiating a natural gas deal with russia. rebels seem to be falling apart. the prime minister and is in washington today. in the washington post, he writes that ukraine is fighting a war on two front. the military tension in the eastern part of the country and the other is what he calls the legacy of corruption by the soviet union. bill cohen.ring in

bill: i was impressed with his statement and his passion. he was joined by his finance minister. they made a very presentation to an organization this morning. i think he stated very clearly fronte is fighting a two war. he is dealing with the russian to continue to send soldiers into ukraine and then trying to deal with the legacy of corruption. he is not going to be able to attract significant amounts of funding which he needs badly into the economy unless he can assure investors in the international institutions that he is dealing with the corruption issue. it seems he has a good handle on what needs to be done and is working hard to do that. if you are confident, he is moving corruption and cutting red tape and sticking to the budget's he says he is? should we offer more financial assistance? should we be offer military

assistance -- offering military assistance? bill: he seems direct and confident. we know that he needs help. he will not be able to meet his obligations without capital. spending 5% of his gdp just on the interest payments on loans of her made and loans we do not know where the money went. it's hard to reassure the international institutions the loan more money as well as the private sector to invest. i think he's a very competent and honest individual. i think we need to give him more time and help. survives, we need to help. olivia: should we send weapons? providinghould be some equipment. that is not the policy of the administration. much on theiry

own other than training, which we are providing. we are providing some communication equipment, but he needs more. olivia: when you look at everything that has happened in it last year and a half now, does look like the resurgence of imperial russia. what would you advise the president to do? what is the appropriate strategy? taken the right position by saying we need to and testify sanctions against they cease and desist what they are doing in ukraine and abide by the minsk agreement. that ouro make sure other allies are reassured that the united states will back our involved ino being nato security. russia may decide that they want thery to destabilize balkans or other countries. we need to reassure that that will not happen without a u.s. response. , tong to deal with russia

welcome them into the international community as an important player, it has to be done on terms that the international community finds acceptable. unless vladimir putin can do that, we will continue to see the stabilization tactics on his part. let's switchgear sent talk about iraq. we heard the president say at the g7 summit that he does not have a complete strategy to counter islamic state. if you were still secretary of defense, what would you be advising him? say that.n't it sends a message of confusion. we don't have a plan. i think the president has to say that we do have a planet we are trying to implement it as quickly and responsibly as we can. you don't send the signal that the trumpet is uncertain. that is counterproductive. , would say to the president say that we have a plan and we know what has to be done.

we are not there yet in terms of completing it, but we are and thewith our allies iraqi military to achieve that. i think that's a much more positive message than a contradictory when. you think should be done? we have heard -- carter say that there is a lack of will locally to fight islamic state in iraq. given that lack of will or the perception that there is one, should we put troops on the ground in iraq? it's a chicken and the egg issue. leaders are not going to support the iraqi government unless they feel they are going to be a part of it. until that takes place, we will not see much cooperation. if we don't have their cooperation, we will not be successful in fighting isis. that's the dilemma. order toantime, in

implement the policy that we have to pursue, it will require , additional forces forces to help the air campaign be more successful. i think we are deficient. if we are just contribute from the air, we have to be much more effective from the air and that is not being done. olivia: just to get your perspective as the former defense secretary, when you look back, do you think we are safer before 9/11? i think we are safer, but not yet safe. i think we are safer in the sense that we are much more effective at disrupting those from al qaeda and others who plan attacks against the united states. we are safer in that respect. we see a world that has become more destabilized and the long-term threats are much greater than they were during the time we were in office. olivia: my thanks to a bloomberg

contributor, william cohen. still ahead, israel may be losing its science geeks. that is bad news for a country profiting big-time from a tech boom. ♪

olivia: welcome back. israel is one of the biggest tech startup scenes in the world. they are called a startup nation. seem to be slowing down. the number of high school's duties matriculating in math has slowed down. there are not enough qualified developers to fill jobs. pimm fox joins us. how big of a problem is this? tim: the education minister is talking about ways to increase the number of students who are taking these advanced math

courses. right now is that on top of the 20,000 engineers and computer scientists that they regularly have jobs for, they need another 10,000 people to fill slots that are going vacant. there are two issues. one has to do with the migration of former engineers from the former soviet union to israel in the 1990's. a lot of them are retiring. the second thing is to take more particularlyses math and engineering, that may be more challenging for the student body and they dumped want to lower their average grade. things.e two specific you've got those issues and as you mentioned, so much of the , maybe 40% of the economy's exports, our technology driven. this becomes a critical issue

for the country. they are trying to enlist new ways to get the arabs to become part of the workforce. they want orthodox jews to be part of the workforce. if they don't, they will end up with a situation that they already have, companies have to xook outside israel like wi to make up for this lack of talent. we have a similar problem in the united states. i can't wait to see you animate. the next half and hour, we are going to discuss amazon thinking outside the box. how they are teaming up with the minions film. that's next. ♪

olivia: good morning. it is 11:00 a.m. in new york .ul this morning

>> we have a strategist expects things to move higher, but it could be a bumpy ride. "minions"u can thank for cheaper delivery. pimm: a startup called chill cvs and companies like walgreens are watching it very closely. ♪ olivia: good morning. i'm olivia sterns. pimm: i'm pimm fox. you are 90 minutes into the trading day so let's take a look at how markets are trading right now. bitks moving a little higher. they were low for most of the morning session. dow jones higher now by 16 points. the game ofx with just one point. peopleoc