the greek prime minister accuses the imf of criminal responsibility for his problem. a default is looking more likely by the day. their mergeld be on of serious consolidation. we will sort it out -- aivia: another sign of collapse. the gap closing a quarter of its stores after more than a year of falling sales. ♪ olivia: good morning, i am olivia sterns. erik: i'm erik schatzker. olivia: u.s. stocks reversing declines. 1% nasdaq now up to tens of

but still below 18,000. the big story dominating the market is the impasse over talks in greece. erik: it is reflected in currency markets. the zigzagging trading in the euro. it strengthened earlier and now 2t has can back down to about1>> >>55 -- olivia: the mood in the market seems to be risk off. treasury markets getting big. 10 year yields down five basis points. now i go to news in the bloomberg terminal. a top european officials as it would take a miracle to resolve the debt crisis. the country could be forced into default later this month. tom nichols has the latest from berlin. >> good morning, or good afternoon from here.

a remarkable speech from the primacy of grace to his own parliament where he doubled down on this idea he was not going to compromise. that he had a democratic mandate from his people not to submit some more austerity. talks are going nowhere. stronglyse of how opposes to burress, he said the imf has quote "a criminal responsibility to today's situation." the imf is one of his creditors. he seems to see them forcing him as taking the hardest line on reform. we heard from angela merkel. she is trying to put a trade face on things. she wants to continue to negotiate and find a deal but unfortunately she said she did not have more to report. the finnish prime minister said clearly they will need a "miracle" to have a deal before june 30.

and thursday -- thursday, everyone will need in luxembourg. wednesday, the european central bank will decide what to do with emergency liquidity assistance. these are the credit lines they provide to the greek ranks -- banks. will they raise the ceiling and will they propose haircuts on the kind of collateral they will require. mario draghi seems to be intent on putting the pressure and keeping the pressure on greece. olivia: depending on what happens tomorrow, that is whether or not economist think -- thank you so much. it has also been a busy couple of months for homebuilders. most april, they cited the work in years. future stocks have climb to the highest level in eight years. homebuilding is likely to pick up even more as we head into the summer season. fitbit is boosting the target

size by as much as 37%. the maker of wearable devices like data and exercise plans will offer 44 million and a half -- 44 and a half million shares. at the high end of their offering range, they will be valued at almost $4 billion. pay: warren buffett will $300 million for insurance australia group. the agreement gives berkshire 20% on iag's insurance payment and is liable to make 20% of claims over a decade. boeing pulled in its biggest overyet, extend his lead airbus in the second day of the paris air show. the list price is almost $11 billion. it gives going close to $30 billion in sales, almost double airbus's total. tim clark also told us the

8380's final to his business plan. >> this plane is vital to our business plan and model. it is a hugely successful operation. it continues to draw consumers. they still get out of their way to go on the airplane and they love it. will bear anors from the american food supply. the main source of that is partially hydrogenated oils used in frying and big goods. the fda has said that transports . pose health risks. olivia: still to come on ," a gameg markets day of musical chairs in the health insurance industry. otherp eyes eyeing each -- the top names on each other as takeover targets. plus, under armour investigates -- yemen is onr in

everyone's mind. the special interview you do not want to miss. erik: investors trying to digest effect of a potential greek default and the possibility of that is growing more likely. a hedge fund manager is not too worried, here's what he told us. >> greece defaults on public sector, no big deal. decided 1.6 trillion. the greek default is about 120 billion. governments have issued a response. olivia: shorten it off. incredible to hear him say that. erik: that is only in the event of a default, not in the event of a greek exit from the euro. of the this is part

instability which will re-fence the european economy. olivia: without a default automatically met a quick exit from the euro, and no longer means that. now we hear about capital controls without a default. erik: they will bring in capital controls just as sippers did and he has been able to shed those off. olivia: iselin guarded of theirs. we also hear from janet yellen tomorrow. for more, i want to bring in kelly boss and carl riccadonna. carl, i think we have to start with you. housing numbers. u.s. permits at an eight year high. the chart goes like this. >> it is part of the mix of economic cycle we are in where all the fires -- all germans are firing out of sequence. is only nowengine in gauging six years into the recovery. up sharply.are

we have to look a little through the smoke to get the true underlying story. stocks were due to pull back given the whopping increase we saw in prior months. i am inclined to dismiss the drop in that series. but building permits were distorted by expiring tax credits in new york, which led to a flurry of building permits issued last month. we have to temper the gain and the building -- in the building permit series. if we look at the year and chain of a moving average and it goes up 6%. permits up about 10%. housing looking good, not as good as hermits headlining would suggest. erik: you are way too micro for me. ishousing is doing ok but it not good enough to do the heavy lifting. erik: fortis janet yellen channels stan fisher and

christine lagarde and we hear concern from the chair about the .mpact of rising rates the event it would have on economies outside the u.s.? >> the fed is definitely attuned to this, but their primary focus is on the domestic economy. they are cognizant of the eight potential ripple effects. what janet yellen is trying to do is signal this will be a gradual fed. a one and done or two and done type of fed in 2015. that will prevent some significant backup in interest rates or tightening conditions. that is a prerequisite for the fed to move. they will not be confident enough to make the leave if they are worried about a dramatic appreciation in the dollar. olivia: this morning, strong housing numbers. add to that they're very strong

most recent job report. all of these suggest good things about the u.s. economy, but now there is a buildup in shortages in the equity market. >> all of these economic signs investmentg to workers. it is the tightest in two decades. investors are wondering, we are seeing good economic data, but what does that mean for the fed? we have seen that buildup in short interest. if we do get some indications out of the fed that they may move sooner in september or may even have a rate increase at the meeting this week, we could see the market break out one way or another. olivia: hedge funds have been building up these shores by the market has been moving sideways so and has not been working. why do they think it will work now? >> the last time they did this was in october and it was right at the bottom of the near correction climate we saw. they are looking at market internals.

olivia: that is a long time to short. that is precisely the wrong time. >> it has been moving sideways but everyone says we have it reg out one way or another. the market is at >> is at record highs. gravity does exist. olivia: maybe they need to get back into housing. boss and carl riccadonna, great to have you. erik: coming up, what do we have? olivia: a flurry of takeover reports in the health insurance sector. it is actually interesting this time. and thumb, united health care, they may go after each other.

♪ good morning. i am olivia sterns. erik: i am erik schatzker. mostlyequities trading flat now. there are some movers at the top of the morning. we get that from julie hyman, starting with monster beverage. have added to the u.s. sigridist over it analysts who say they stock is considerably up. city says there will be outside growth in both ebert and sales. shares of about 4%. they are among one of the best performers in the s&p 500. we also watching shares of the cody won theany

auction over procter & gamble shares. the company that may have been left out in the cold is henkel 's, which apparently lost the bid. we are waiting for confirmation. on the negative side of the rentals, which has been volatile. it was downgraded to an with the company likely to lower its rental rate and utilization rate in the next quarter or so. , the truck maker, down about 8%. terex is following suit. that is after oshkosh came out with news, cutting its third

quarter and full-year earnings forecast. it seems the equipment, pedroia access equipment, is not doing well. shares have fallen. olivia: you say oshkosh, i think overalls, you say henkel, i think knives. now i look at some of our top stories. confirmed arts death sentence to the former president morsi. from ason sentence came clue that eventually brought him to power. officials in california say many of the victims and a balcony collapse our young people visiting from ireland. it happen in berkeley near san francisco early this morning. five were killed and eight were hurt when the balcony fell from the fourth floor of an apartment building.

some of the injuries are life-threatening. because is not known. tropical storm bill is thinking of strength as it approaches the texas gulf coast. winds are now at 60 miles per hour and it is expected to bring up to eight inches of rain and cause flooding. texas still recovering from the wettest month on record. it has been a busy couple of days for health insurance investors. buy and thumbd to for $175 a share. last month, they were both said to be taking over humana, or interested in it. is interested in either cigna or at now. -- aetna. erik: we talked this over with our bloomberg analysts. why now? >> health insurers have been dormant for the past couple of years. health insurance is

actually going to rise this year. the impact of the affordable care act is waning on them in terms of cost. they have a lot of cash now. it may be a good time for them to say we have paid for a lot of and nowterms of taxes we have the ability to do some transformative deals. consolidation in the industry, we should not read that as a response to new regulation from obamacare but rather as a response to the fact that there probability has changed now that they have more cash. >> yes. i think they have more probability. united health has shown the impact of the affordable care act is less of this year than the prior two years. we have also seen that they do have more of a willingness to gain scale, which is partly due to the affordable care act. erik: among all of these

insurers, and perhaps busier not mentioned, can you say who is in the best position to be a consolidator? jason cao they are in different -- jason: they are in different positions depending on the company. -- is one of the key targets because they have one of the best plans for the growing medicare population. , they have one of the highest operating cost margins in the industry because they have a strong underwriting discipline. it depends on what your strategy is in the market and what you're interested in. not sure what perspective it would be, but if you were look -- if you were to look at the insurance industry, does it require consolidation to be healthier or is it fine the way it is?

jason: the more scale you can insurerscan help these get better pricing power in the states they operate in. erik: they may lose the underwriting discipline and the process. jason: they could. but the question is also regulatory. olivia: does it shake out well for the consumer and they have greater pricing power, do i pay a lower premium? fewer you have would have choices in many states and higher premiums. olivia: which is hard to believe because you have your choices already. >> yes. there's also the concern we are moving to fewer payers. erik: what does that mean regarding doj approval and other regulators? >> unitedhealth group, they have had to divest certain product lines and other deals. we have never seen deals of this scale. we are talking $40 billion plus.

weget that kind of scale, would see concern and potential sales of product lines in certain states. olivia: i saw in some analyst notes of the fact that anthem has a relationship with blue cross blue shield. that could be on the table if they merge. erik: is it possible there are activists defined the scenes shaking the tree? >> it could be that and it could -- there are those who want more value from the shares. outperformeds have some of the other sectors very well due to low costs. olivia: that raises questions about deal price. we are seeing a huge uptick in m&a across sectors. thank you. jason mcgorman, covering the insurance sector at bloomberg intelligence. still ahead, how under armour's ceo plans to keep control of his

company.

♪ under armour is taking a page from google's playbook, announcing plans to create a new class of stocks without voting rights. it will keep founder kevin plank's control over the company even as he sells part of his stake. erik schatzker still with us on set and has some strong thoughts about this. i was listening to your conversation with stephanie ruhle and an analyst. there take is does he not have the right to cash out now that there is a $3 billion market cap? erik: that's a canard. the question is if this is good governance. kevin plank struck a deal with public shareholders.

the deal is i will create two classes of stocks so i can maintain control, but if i am certain point, a if my ownership stake is diluted down to a certain point that i run the risk and may lose control of the company, because in order to realize gains personally from selling stocks you have to take the super voting b shares and convert them to a shares and then sell those shares, that is what kevin plank has been doing. he has done this the past 18 months. sold almost $240 million of stock. these shares were not worth nearly as much when he was granted them. under armour stock has been a rocket ship to the moon. it appears to be a great company. he appears to be a great ceo. but why does he need to control the company? appears as great as he to be, no board would want to get rid of him?

olivia: why would he need to create a whole new class of shares just to give himself the voting rights he gave up if corporate governance is actually -- erik: it is important to read the letter to shareholders that he penned. you combined on bloomberg terminal, if you happen to have one. olivia: and you went through it this morning. erik: he talks about the risk of his losing control as "undermining our current governance structure." some would say it would bring governance, because if you are not the controlling shareholder, you would have a truly independent board elected by shareholders. olivia: when google tried to pull this off, 88% of shareholders rejected it.

♪ welcome back to ."loomberg markets day

we hear you straight to the top headlines. a warning from the congressional budget office. u.s. government debt held by the public is expected to rise. by the yearto 107% 2040. the problem is an aging population and rising health care costs. the cbo says further sustains in the index could hurt growth. the rules committee agreed to delay another trade phone until the end of july. this has to do with a bill to compensate workers who lose their jobs due to free-trade legislation. it is linked to the approval of the fast-track trade bill. charlie rose is told trade deals are vital for america. >> in two weeks, we will not have trade bills. -- on the only country in earth that would have those things happen in the next two weeks. i would say to people watching the show, we can compete.

this is a job creator. bills are forrade people like ge. >> you can watch all of that interview with jeffrey immelt on charlie tonight at 7:00. slowest inose the six months in europe. car sales were down almost 7% in europe's weakest market, germany. the tech startup github is trying to raise $200 million in a new round of financing. that the news reports company may be valid at almost $2 million. -- $2 billion. those of the top stories of your hour. the yuan is holding peace talks in geneva for the civil war in -- n, but no breaks or read yet.

saudi arabia's already in the conflict. will the donald enter the presidential race? we talk about a possible trouble candidacy and what it means for the rest of the republican field. could a fat rate hike cool off and overheated tech center. hike cool bad rate off and overheated tech center. a quarter ofosing its stores in the u.s. it is part of the ceos plan to and around sales at the gap at banana republic. we look at the issues facing the bloomberg news reporter lindsay who joins us from chicago. what does the ceo think he will accomplish? >> in 2011, when he was president of the north american gap brand, he closed stores them. a way to gets is

rid of stores that are not part of the company's image for the brand. maybe they are not in -- are in not great malls or get a lot of foot traffic, but it is a significant amount of stores and they have not specified what makes those stores underperform. indicative of a larger trend over american retail? >> a lot of what the gap is suffering is the gap's own problem. that he didblicly not have the store. , she was brought in to bring european flair. he did not work and so she was rejected. a lot of retailers are closing stores, saying that stores are expensive. more sales are moving online. with keep the best stores the best experiences and cut costs where we can. >> i want to bring in marshall cohen, a retail analyst at npd

group joining as the as skype. nice to see you. do you agree, do you think the problems with gap are cap-specific or are they indicative of larger problems across retail in america? retail, a justof closed 10% of its stores. teen retail is struggling. what do you think? it is skype, it is not perfect. we are having technical problems. lindsay, back to you. given all the other stories i mentioned,- stores i gap is facing the struggles j.crew had. decline of mall traffic. a aumers expecting 50% off have a lot of the same problems as their peers. but there are stores that will tell you if they have

the right products, they will sell it at a good price. there are brands that do not have this problem. but off-price is king now. old navy is doing well at gap. nordstrom rack is doing well at nordstrom. if you do not have great pieces and the fit is not great, which the gap said, saying we missed on the fit and the colors and the fashions and j.crew said similarly, we did not have the will fit and colors, you not get people in your stores to buy and you run the risk of having them not come back. >> so maybe they need a new creative director instead of to just close stores. >> the gap has said they are working on their products, building in new -- bringing in new talent to look at the design. there is a new president at gap. the president has arranged folks. they are having their meeting with analysts today and i think

we will hear more about leadership changes than. -- ath-leisurehe the solution? >> i think it will be a driver of retail but not the silver bullet. as much as we wear yoga pants to everyday life, we are not only wearing yoga pants. >> that turned into quite a heated debate, whether or not that would be acceptable. to wear leggings to work. you would not be able to tell if i had leggings on under the desk. i want to try to bring in marshall again. our gaps problems specific to the gap or is a part of what is troubling broader retail in america? >> it is not specific to the gap. their challenge is how to blend in with a couple different things. everyone is doing basics at great prices. everyone has similar looks. the gap has to find a way to differentiate themselves.

we know they overbilled and the 1980's. it has been decade after decade of redefining the right number of stores. the biggest challenge for all of retail is how do they blend online the in-store experience? fashion and apparel industry is the worst at figuring out how to do that. this will be about having one feet of the other, not cannibalize the other. gapother big challenge is opened up all the athleticism is but they did cannibalize. sales for every pair of jeans we did not sell, we are selling a pair of casual bottoms. that is eroding the business. athleta's been cannibalizing the gap. >> there is no question. it is cannibalizing everybody. back to school will not be about genes -- jeans. it is about athletic-inspired

sportswear and it will come the expense of the denim business. >> you have been talking about how cap needs get all need channel right. do they need to fix creative? >> what they have to do is a better job of driving traffic that to the store. use online to drive it, not suggest displays the sales. if you look at impulse purchases, it happens or the 3% sales for fashion come from intel's buys of stores. theive me an example where website dries in-store traffic. >> that is a challenge. when you look at something like an apple store, they do a great job of blending the two things together. that is why they are always know -- so crowded when you go to the mall.

is they aree doing driving the two together. it is on the presence -- omnipresence. >> i would argue that is part of the problem. people are spending more on tech and less on apparel. thank you to you and to lindy ruff. , much more, including al qaeda in yemen confirming the death of their number two leader in a u.s. airstrike over light -- night. we take a closer look at the civil war there.

♪ welcome back.

we are one hour into the trading session. time to get you caught up on the market action. i want to go to europe. >> let's start with the equity markets. a more positive picture from earlier today. you can see the text 40 in france. the swiss market index rebounding. the dax even. still declines in other places, not least of all in greece, where the athens stock exchange is leading the way. worst -- been the greece is still a concern. alexis tsipras, he through the -- threwto greece is the guantlet to greece's

creditors, saying that the ecb's associationagain to -- tactics are akin to asphyxiation. angela merkel said she will do everything to keep greece in the eurozone. around midday london time, the stocks started moving up. it was after the eu says that they are ready to restart talks is greece has something new. greece says they will not have a new proposal by the time that europe's finance ministers meet thursday. greece has two weeks to reach a deal before it current mail out expires. a lot of concerns in the euro, headed for its first drop in three days. about people talking greece in the u.s. as well but it does not have as much of a negative effect on u.s. averages. and the the s&p,

nasdaq, no negative pressure at this point. the dow about 50 points. the s&p and nasdaq also gaining. the decline we have seen in the euro and the concerns over possible grexit as well. here is another chart for your consideration. look at this spread between german and spanish debt. michael mckee pointed this out earlier. going back to 2012, there was huge spread because there was more concerned about peripheral countries, spain in this instance survey could be elite or any of the other peripherals. safetyperceived relative of holding german debt versus spanish. that has compressed significantly since then. the same type of concern is not reflected in this then in 2012. there is an uptick, but on a relative basis, nowhere near and then where was then. the u.s. treasury market, not a

lot of movement. 2.35% in the 10 year. and has come down a little from where we have seen it certainly. we look at oil as well. and uptake in oil prices. the expectation is we will continue to see a contraction in inventories. we have seen that over the past couple of weeks. tropical storm in the gulf of mexico. we have begun to see some of the operations evacuating nonessential personnel. talkingi know you're about a storm, but there was a very mild ocean scene behind you. i like the chart, the german-spanish spread. it has compressed significantly. that chart has to make mario draghi smiled because he has kept the contagion in greece from the core. .ulie hyman, thank you in asia across the board, the nikkei and shanghai composite

down for the day. news from theting bad and negotiations between greece and the eurogroup. berkshire hathaway making another bet outside the u.s. buffets'les reports on latest moves into the pacific. >> he took a further step to expand his operations globally. 3.7% stake into berkshire hathaway. we spoke with iag's ceo after the deal was announced. for iag, it frees up capital. they can then deploy that to build and expand in asia and markets like china, malaysia, and thailand. olivia: bloombergs david ingles reporting from hong kong. now here are a some of the top

stories crossing the bloomberg terminal. the golden state warriors have two shots to win the nba finals, but they want to get the job done this time. they hold a 3-2 lead going into tonight in cleveland. the meantime, lebron james says he will do what he -- whatever you can to get a divisive -- decisive victory. the chicago blackhawks won its third series title in six seasons. thean keith scored one of goals and was named the plant m.v.p.. the two biggest makers of videogame consoles are squaring off at the e3 convention. microsoft previewed the next game in his halo franchise and sony showed clips in new games and final fantasy. u.s. forcesory for

in yemen. al qaeda's number two leader was killed in a drone strike overnight. death iswuhayshi's describe as a significant blow. it is not enough to stabilize the country wrecked by civil war. saudi arabia is clamping down on any violence that spills over into its borders. with more on that, we go to willem marx who joins us from r iyadh. good morning. >> those talks are taking place in geneva between the yemen factions. not proving fruitful so far. the exiled government insisting that rebels be disarmed immediately. thi rebels say they will not give up their arms and they insist on a cease-fire before they get serious on any negotiations. north of yemen, the houoth

i-backed force has taken over a border town. we are at the border with some of these saudi order patrol forces. with a major general from the interior ministry. i asked about the risk his forces are taking. >> it is very dangerous. job and what they are trained to do to protect the border, look after the border. up because give there is a very high probability that terrorists can take advantage of the military operations and tried to sneak through the borders and get inside saudi arabia. willem: this is the moment where saudi arabia is courting foreign investment. domestic security is a major factor for companies to

consider. i asked the major general whether he thought that saudi arabia's aggressive style versus the islamic state in syria and the houthi in yemen could impact this. the militaryen operation going on for more than two months now and you have seen that the country is stable. m: by creating instability in yemen, terrorist organizations will wander into a saudi arabia and create problems? >> no one can say that carrying out a military operation will not expose our country and security to any kind of danger. by terroristger groups like al qaeda in yemen. , are we able to

defend our country, willing to defend our country, sacrifice our lives. that is what we have shown so far. we are ready to defend our country. say that we will not be targeted. we are being and have been targeted by al qaeda in yemen. we are targeted by isis. i will not exclude other groups from targeting us, but we have shown that we are capable and willing to defend our country and to keep such threats as i our borders.tside

willem: there's threats may be outside the borders, but there have been major attacks from islamic state's against mosques in the country. that is a security problem people here are not willing to talk about. olivia: thank you. interesting stuff. hope you get home safety. that is willem marx reporting from riyadh. alive from, we are the bloomberg technology conference and san francisco. ofall-star lineup interviews. emily chang will be with us.

♪ , i'm oliviaome back sterns. some breaking news. billing your kirk kerkorian, the investor, died at the age of 98. we will see if we can get more

details, but that is the headline for now. bloomberg technology conference code and the corner office is in san francisco now. they are bringing together entrepreneurs and business leaders to talk about the impact of coding and software. emily chang is there. i know you spoke with airbnb's cofounder last night, what did you talk about? conversationtimate with a cofounder of airbnb, nathan blecharcyzk. he focused on china who says -- and says that china is the biggest growing market. one of the things he talks about is how fast airbnb is growing. i stopped paying attention to the numbers. it surpassed all expectations. my expectation is that this

company would be a side project, frankly. materialized into something so huge and transformative it is hard to understand what the numbers mean. so no indication on when they will go public, but there is an eeo said that airbnb will be public. nathan told us last night they have not started the process, but that is one we have our eyes on. it will be a great day at the bloomberg tech conference. first up on stage, dick costolo, i'm going see no twitter. also yahoos ceo and the ceo of pied piper. olivia: thank you so much. we cannot wait for those interviews. watch more coming up.

olivia: good morning. it is 11:00 in new york. pimm: welcome to bloomberg market day. in or out. self-promoting billionaire

donald trump is a new york saying he is moving closer to a present to run. olivia: dozens of billion dollar but wills -- startups, janet yellen be the one who turns off this big it in silicon valley? pimm: one instagram is becoming the preferred platform for art collectors. ♪ good morning. i'm olivia sterns. pimm: i'm pimm fox. we are 90 minutes into the trading day. what is look into the markets and where stocks are trading right now. the dow jones industrial average adds 40 points. a game about two and a half points. everyone watching what is meant to happen with greece. we have some disappointing economic news as well as some positive economic news on the housing industry. a little bit of a pickup. olivia: