makers" that anytime at 8:00 a.m. i am stephanie ruhle. erik: i am erik schatzker and it is that time. 2:00 p.m. eastern time it is coming and janet yellen will be holding a news conference at 2:30. a super important day. you will be able to watch that news conference live on bloomberg television and it is super important, not because the fed will raise rates, there is a slim chance of that happening but because we will get a statement which gives us a chance to gauge the fed's feeling on the economy and janet yellen's comments will give us a better sense, one would hope, about the direction of rates and the pace at which the fed will raise. stephanie: i thought it was because has a new haircut -- because erik has been you haircut and is that a new suit? erik: recent but not new. stephanie: catherine mann is from the organization with economic cooperation and

development and her report on credit and the impact on the economy will be breaking it down in the next hour. erik: gated time for top stories. both sides in the greek crisis are standing their ground. prime minister alexis tsipras says the government is ready to give what they called the big know if there is no reasonable offer on the table from europeans. meantime, he reportedly told for no deal on greece and jimmy nielsen is he is pretty certain there will be an agreement at the very last moment he spoke to charlie rose. >> it's a game of chicken it seems to me. a lot of games going on. i have assumed all along that in typical european style that honesty, right now as we are adjusting it is an outrageous thing to say. erik: the focus shifts to tomorrow meeting of the eurogroup.

they need to get a deal by the end of the month or risk financing the debt. a new track to the fast-track bill. they are looking at advising by adding a fast-track proposal to an unrelated bill and the plan is designed to bypass some democrats who refuse to support the workers assistance program attached to the current fast-track legislation. stephanie: china and australia have signed a free-trade agreement. australian prime minister tony abbott said the deal will change both countries for the better and australia will move a 5% tariff on chinese electronic goods. meanwhile, 95% of australian exports to china will be terrorist free. -- will be tarrif-free.over at the paris air show -- that is where it is happening. boeing announced it has sold 20 of the upgraded 4740 and the

list value of the plane is more than $7 billion. demand has been following for engines like the 747. the golden state has ended a four-day year drought. the warriors beat cleveland 105-97 to win their first nba title since the year of my birth 1975. erik: everybody knows. stephanie: 39. i see it all the time. a one dollar and stephanie -- and stefan curry had -- b one dollar was named the most viable player and lebron james had 32 for the cavaliers. those are your top headlines. i know you did not watch it. king james is not the king in many regards. erik: of course he is still the king. the cavaliers would not have been in the game. he was the winner just to get

them to the finals. stephanie: if you said to someone on the street, beside stephen curry and lebron james who is in the finals -- it would be hard for them to answer. stephen curry was named m.v.p. and then they went. it was not long ago that kevin durant was the guy. that blows my mind. i did see still night was there at the game and that is a little bit of a, where is waldo? you don't seem very often and i did see him at the end of the game. not the lebron commercial, a soccer ad. don't you love that? you know, there was a lebron ad waiting if they had one last night and then -- change in the conversation. let's talk soccer. erik: the five things you need to know this morning. number one, everybody, when will the fed raise rates? i don't know but we could find out today at 2:00 p.m. eastern time. note that janet yellen will not tell us when the fed raises

rates but we will get an idea when she holds a news conference at 2:30 p.m. and i will say this to everybody out there -- please, whatever you do -- stephanie: just whisper it to me. erik: do not say all eyes on the federal reserve. stephanie: why not? erik: because not all eyes are on the federal reserve. our eyes but not all eyes in the financial market. i urge you folks. stephanie: i will give you number 2 -- let's put all eyes on opec. a slump in revenue. last year, petroleum exports plunged below one trillion for the first time since 2010. this is according to opec's annual report. we are kind of stating the obvious. erik: we are stating the obvious, but this is the tension point between opec. saudi arabia once prices to drive out show producers and the impact, of course, is that it reduces revenues for the likes of iran.

russia, venezuela, the countries that cannot take it. russia is not an opec member iran and opec member, iraq and opec member and they are being starved for revenue by low oil prices. the saudis on a per capita basis, a run -- among the richest nation's honor, can take it but those guys cannot. stephanie: i believe we are familiar with supply and demand. stop pumping if you want prices to go up. erik: yes, that is true. stephanie: let's head out to the newsroom more julie hyman has number three. julie: indeed, i do. some eyes are on the fed today. expected to price the ipo between 17 and $19 per share. they were just talking surveillance about the eye-popping number that fitbit had 85% of the u.s. connected activity tracker market that was in the first quarter. according to npd. prices at the midpoint of that range on a price to sales basis

it will be at a higher price than apple, higher price than garmin and most of it is a different type of device. interesting there. it is still cheaper than gopro because most things are. stephanie: lots of people are not wearing fitbit but they own them and it is one thing to keep in mind when you talk about tech startups. these guys are crushing it in terms of revenue. erik: i think you have to think if you are going to buy into the stock, how long are you going to hold it? if it is $19 a share, it will be more expensive on a price and sales basis and apple. apple is a bigger company and going at 175% by year. the point is that apple is a software company and furthermore, apple has a lot of secret sauce. if you want to hold fitbit for a short amount of time and don't care to see the next iterations of this project and what it evolves into great, but is this going to be the next apple?

stephanie: i think that attend a people by devices but if we are going to judge based on our executive producer -- graveyards for wearables. erik: they have teamed up to consider a $10 billion buyout of the ncr corporation according to two people with knowledge of the bidding process. it would be one of the biggest leveraged buyout since 2008 and a rare joint effort between the two firms. that is really the point to emphasize. the club deal. we have not really seen club deals. private equity firms teaming up with each other since before the financial crisis. there have been rare examples but this would be a real club deal. $10 billion price tag and north of $10 billion. remember, one of the reasons we have not seen club deals is the allegations that private equity firms conspire with each other to keep prices down. stephanie: now those private equity runs are -- firms are ruling the world and they can

partner up and yacht together on the mediterranean celebrating $10 million. amazon hoping to enlist ordinary people to deliver packages. that is right -- old school. according to "wall street journal" they are creating an act that would pay every day couriers. erik this is not a crazy idea and it is kind of but we have always done. erik: amazon is going ground on me. stephanie: more old school. they are going mailman. i think it is a great idea. it gives more people jobs. erik: part-time work. stephanie: you can be in uber driver and delivers amazon packages. the company came up short on revenue for the fourth quarter but expects a strong earnings growth in 2016. fedex is down a little 1% in early trading. here with us now is bloomberg

intelligence. what do you make of these numbers? kllee: the numbers treating much came within expectations and was probably driven more or less on ipaqs implications given that international company and hard to model those by that impact to the bottom line. you know, i think the ground and express businesses look pretty well and their freight business which is less than truckload business was a little weaker than most expectations. out looking into their fiscal 2016 numbers, it looks like they will have eps growth around 20% which is pretty good. erik: people look at fedex kind of the way they look at cisco -- when fedex says it still assumes moderate economic growth, what does that say to you? lee: i don't think that is much of a surprise if you look at gdp

expectations in bloomberg. they are pretty tempted at best for the world. u.s. might be a place of strength but globally, there are pockets of weakness. pockets of strength for that matter with proposed acquisition of at&t and that should help as europe slowly re-accelerates their growth. stephanie: in general, operationally, everything is -- operationally on all cylinders this is not an issue so anyone who has concerns of surprises has not gotten any. lee: they announced they are continuing to modernize their fleet and that just adds dollars to the bottom line. they have a goal of improving and upgrading income by 1.6 billion by next year due to this for a lot of it is driving the modernization process. fedex is executing on their operating plan. they are trying to improve the overall efficiencies and they

have done well in the peak season relative to some competitors, mainly ups. it is a well run company and continues to operate well. stephanie: thank you so much for joining us this morning. senior analyst lee class cow. when i even say it's a fedex, nightmares and memories of mailing night after night. erik: breaking news about the sanctions and vonnie quinn in the newsroom has more. vonnie: we have news from an eight year old official who spoke about the national eight in brussels. eu has has an initial accord to extend russia's sanctions for six months until the end of january. this coming as st. petersburg international economics forum continues in just to let you know, we will have an interview with resident vladimir putin by charlie rose that will air on bloomberg television on friday morning in the 7:00 a.m. hour.

erik: the big interview indeed. thank you. private equity has been outperforming the public markets. why has your pension plan not invested more of your retirement money in private equity? you answer that question we come back. ♪

stephanie: erik: still ahead -- then lost key on his exit from the department of financial services, future regulations and wall street. returns from private equity have outperform public markets. other institutions have not exactly been piling into private equity in hamilton lane knows why. the consultant and money manager for such pension funds and institutions, hamilton is the chief and -- hamilton's chief investment officer is here. what is it -- what is there not to like effectively about private equity because the

returns have historically been superior? >> it has been 20 years and it has been consistent. erik: more than that really if you go back to the birth. >> it is a lot over. it is not that they are not in the asset class. they very much are but they are not growing. the question is, why are they not putting a lot more money into it? the models say do more, do more, do more. stephanie: that is what we are hearing. they are raising. >> but they are returning so it is coming and going and you are seeing equilibrium of a lot of liquidity coming out of the system and money being raised. i would say it is two issues -- the asset class is not doing favors around duration. everything is taking a lot longer so those 10 year lines we keep hearing about are not really 10 years. they end up being 12 or 14 and it keeps going and going and going so the asset class has an age issue. it also has a data issue. the asset class has taken the private part of equity to an extreme and they are not

embracing transparency in a world where we all love to see the data and we all look to see what we actually own. stephanie: these private equity firms do not feel any obligation to change their tune because performance is so good? >> it is hard. stephanie: hold on. there is nothing hard for them. >> we are not going to cry from them -- cry for them but it has been a great run. one side says, we keep delivering the numbers, what else do we need to do? lp world is saying it has to be about more than returns. we want you to be a good investor and a good fund manager and sometimes those are at oddss for each other. erik: do you look at the irr internal race return reported by the likes publicized -- publicized is the wrong word reported to clients by the like of apollo for example or carlyle. >> there are smaller firms and

we absolutely trust them. people want to see what is underneath them. understanding the irr is one thing but if you are cio of a public pension, you want to understand what is underneath the number. what are earnings doing? what are the debt levels on those businesses? that is the next evolution. stephanie: isn't that a fair expectation? after the financial crisis when so many money managers hedge funds absolutely fell out of red, if i ran a public and had to turn to niagara falls and say, sorry i lost your money i did not know how it was being invested -- how long would that be? >> it is not a public pension fund issue but everyone know -- wants to know where their money is on what it is doing. we have a huge scale issue and not a mechanism to transfer data back and forth between fund managers and lps. erik: how closely do the cash in and cash out returns do you see from private equity match those irr's? >> we do a fantastic part on

that. you can argue that the asset class does itself a further disservice because they are so conservative in valuations. most are overstated and they actually are not. they are understated. erik: where are you in this debate? you are advising as a consultant and in some cases, you are functioning as a manager of managers and a fund to fund if you will, for these institutions. are you the one demanding more transparency? and as a result, not staring as much in the way of having equity? >> we are absolutely at the front of this. our view is not just returns. erik: it is because of you. >> i think what they are doing is where is it going and we are trying to reward managers who are delivering good performance and transparency. stephanie: where is the balance? what's more important to me right now -- maintaining my privacy because once i open my kimono, i cannot close it again or raising more dough? what do they want more?

>> they want to raise more dough but i think they believe they don't have to open the come on all the way to get the dough. stephanie: no need for full frontal, part of the way. 17 billion and counting? erik: can you call out some best practices? you said that some managers are really good. >> the performance is there for blackstone and transparencies. they have been a group that has embraced technology and embracing transparency and they get rewarded for it. that to me is an example of -- the problem is we are in thousands and thousands of fund managers, like to talk about the blackstone's -- stephanie: we all know. erik: >> -- it is a much more complex and vast world and changes from geography to geography and we are focusing on u.s. firms -- erik: hold your thought. we need to take a commercial break. eric hirsch is the chief investment officer at hamilton a lane, a consultant to money

managers and pension for funds and endowments. we will be back. ♪

stephanie: julie: welcome back. we are watching copper today and it is trying to stop a two-day losing streak with the fed meeting on interest rates and copper is hovering around the lowest level in three months on concerns over weaker demand from china which is the biggest consumer of brown materials. joining me to discuss copper's next move is the director of strategy joining us from out in chicago. chris, we have had this downward pressure in copper. anything the fed will say today that will help copper in a

sustainable way? chris: unfortunately i think that the leading coming later today and janet yellen talking 30 minutes after the notes come out. i really believe it will be healthy for copper. the huge story is as you had mentioned, the slowdown in china. actually, i just heard tom keene talking about the cleveland cavaliers jerseys and that market. that being said, there could be a 20%-30% pullback in the china market and tom is right on. that means bad news for copper. as traders believe that this three-month low is actually any buying opportunity will be catching and we will see consolidation in january as low as 2.45 before any real buying comes in. julie: are you say it needs to fall further before you would do any buying? chris: i believe in needs to fall at least two to .51 range

and that is basically a moving average. -- to the 2.51 range and that is basically a moving average. around january's low of 2.45. julie: of course, if the fed is going to be raising rates in september for example, that does signal that the u.s. growth is improving. there's that helped copper on the margins at all or does it have to be all about china and china improving? chris: i think the fed decision is really the third motivator in any sort of movement with copper. the first being china which we had just discussed. the second is the stronger dollar right now. i think the price of safety we have seen an uptake and investors worldwide going into the cash market, specifically the dollar as the dollar get stronger obviously, it is

denominated commodities such as copper will be hurt. the fed raising rates in the quarter growth is perceived to be a little bit stronger than what we want -- stronger and that is great. if they produce a september hike that is fantastic but i really believe momentum is a technical trade right now and we will be visiting that 2016 low. julie: all right, i appreciate it. back over to you. erik: thank you very much. eric hers, the chief investment officer of hamilton a lane is still here. how do you persuade your client? ensure that they believe you are working for them? because you are in the position to marshal the flow of a great deal of money and there is obviously a temptation there and many, many consultants in your industry have succumbed to it -- how do your clients know you are working for them? eric: you have align economics

the right way. all of our revenue derives from our clients. fairly simple and he keeps that issue totally off the table. stephanie: and those clients being public pension funds? >> we work for public pension but an array of all types of institutional investments. stephanie: in general, when you are looking at potential investments on the advisory front, is there a basic checklist that all of these organizations have to meet before you even consider them? eric: absolutely. one of the luxuries is you do have time to make a decision, so we are not making buy and sell decisions today and tomorrow. we are doing due diligence on these fund managers over months. erik: when you go see a new client, is that one of the questions that continues to come up? it has been several years since we last saw consultants -- funding consultant scandals but how do you persuade me you are free of conflict? eric: we have a 25 year

reputation and it is not a question we get asked a lot but it is a question for smaller groups that are out there that are industry is full of mom-and-pop institutions so absolutely, they get that. stephanie: could not make the argument, if i'm a pensioner, to the ceo running that pension isn't that what we pay you to do? why do they need you? eric: 250 people and 11 offices is what we bring to them focusing on private markets. even large funds erik: grew up to or the people. what do you make of the trend that we are beginning to seek some organizations like new york city or san diego trying to bring more of these capabilities in-house? eric: i think they should if they can and if they can get the right people and keep them there is a cost back and fit. stephanie: what do you think about the fact -- kandi these public pensions pay their employees are not to attract the right talent to run these businesses?

when i look at the way they are compensated for the per diem's they are given when they travel, it seems crazy. how a going to get 50 k investors to take those jobs? eric: you have seen it because the turnover -- reading the people there is not the hard part. getting them to stay is the challenge. stephanie: yeah, when you send them on business trips and you say you can spend $20 a day on all three meals. erick: it is very hard. erik: great to have you. love to have you back. right now, top stories everybody. breaking news a few minutes ago on russia and economic sanctions. the european union agreed to extend the sanctions six months all the way to mid-january. a final decision will be coming next week. all of this according to eat you officials and important to note that eat you and u.s. put sanctions on russians -- put sanctions on russia for rebel strains. the treatment for double chins

-- pharmaceuticals will be bought for $2.1 billion and it makes the only nonsurgical treatment for a double chin and also has an extra mental product for baldness. stephanie: i know another treatment -- eat less, exercise more. erik: meantime, pricing at ipo today, a place to get fitness. strong demand has led this maker of wearable fitness wristbands and offering at the high end of the range $19 a share and valued at about the $.9 billion. the company is profitable and got $100 million in net income last year. simon cowell searching for talent once again. the outspoken judge from "american idol" is looking for young on to bring yours and has joined forces it to create the f-facotor. they will have an idea to pitch their ideas to google chairman. stephanie: it could be great but simon cowell's skill set is not

just being nasty but his background is discovering artists. what kind of magic or expertise is he going to bring to the tech industry? erik: $16 -- $16,000 is enough. stephanie: not for a tech entrepreneur, maybe it will be great but eric schmidt clearly a value but what does it simon cowell know about tech? boy bands, i will give you that. and surgery for double chins? double no. erik: nonsurgical. stephanie: i have a nonsurgical solution -- eat less and exercise. it is summer, get outside. the financial sector expansion into falling economic growth and inequality. we will be hearing from the oecd chief economist at the man -- catherine mann, next. ♪

stephanie: there you have it. look at that live shot of london this morning. looking good. beautiful here in new york city and that is where we are this morning. we are talking too much lending, particularly from banks. a negative impact on economic growth and in a wallaby. that is what the organization for economic cooperation and development found in a brand-new report looking at ways to restore a healthy financial sector. captain mahan's chief economist at that oe pd and she joins us now from london. catherine, what is your big takeaway and punchline at this report? catherine: finance is good for growth that like chocolate, you can have too much of it. we found in particular that bank lending can be negatively associated with growth and can cause growth to slow but equity market on the other hand moving into equities is something that promotes growth.

what really matters is the structure of finance. erik: 20 say too much finance, catherine, i think i understand what you are getting out but are you pointing your finger more at america wall street for pointing it at europe, the city of london, for example? kathryn: we pointed our finger using 50 years of data and 40 countries or there about. it is not pointing a figure at either one. this is something to of across-the-board for oecd countries. if you are lending to much, what happens is you are drawing resources away to other parts of the economy. u.s. spending on housing instead of innovation and investment. your best talented people are going into finance instead of going into other jobs where they would actually be more productive. it's a combination of things. stephanie: why exactly would they be more productive? what would those smart people be doing if not working in finance? catherine: they could be

working on new innovations robotics, caring the common cold. they could be working on innovation for health care. stephanie: i'm just like to say it has -- i spent a long time -- i spent 15 years of my life working in banking and i can't think of almost anyone i worked with you i would say if they were not a traitor, they would be tearing the common cold or creating a dancing robot. where exactly do you think these people would come from? catherine: if i take your average banker and i look at how much they are being paid they are being paid 28% more than the same person who was doing the same job not just -- just not in the financial sector. that is where the inequality comes from. stephanie: my husband is a portfolio manager at a hedge fund. what is his same job in another industry? kathryn: if he was in and under

industry, he might, for example, if he was in the financial sector but not lending, you would perhaps be involved with developing some new ideas for investing in a real economy. looking for new challenges for small named sized businesses. he came out of school at some point with a set of schools and the fact that he is working in finance gives him a 20% margin -- 28% margin over his roommate who went into another company. erik: would you say that there is too much or too little credit available today? catherin: it is allocated to the wrong thing. again, it is an issue of allocation. we know that there are parts of the real economy that are not able to get the credit for expansion of their firms, for investments to hire workers, pay them more. on the other hand, in some countries and not all, but in some, there is plenty of finance going into housing.

one of the things we find is that housing that goes into financing or financing that goes into housing is relatively more negatively associated with growth then financed by goes into business or as they say, finance goes in to equity which has a positive correlation with growth. stephanie: how do we inspire these people to say that when you finish school, there are other jobs you can have an wide they may not pay the top, you can have far more impact? catherine: we can reduce incentives for banks to lend. right now we have tax incentives that make them more advantageous to be at that holder and at that issuer then to issue equity. that is number one. number 2 -- we have subsidized large tanks. they are too big to fail and that has implicit subsidy in it. some of those advantages accrue to the workers in those institutions as well. we have set up incentives through our policies that have yielded the outcomes that we observe. some types of finance are too

great for growth and others that are disadvantaged are actually positive for growth, so we should think about reorienting the policies we have in place and that will reorient the incentives and that will lead to the person who was coming out of school with a set of scales going into another job. stephanie: the market distortions are what has created this. erik: i want to follow up with you -- this is the part i want to follow-up on -- i have not sure what you are sane catherine mann. should we go to a system where there are no policy-based incentives? in other words -- should it be truly free market or are you talking about a different set of policies were government is once again, being the kingmaker and deciding who gets the incentives and who does not? because as you just illustrated with housing, the desire and outcome is always what you get. catherine mann: that was a set of incentives as i say, we have

a set of incentives right now that promote that. attacks lies is promoting debt so there is no reason why policymakers cannot change that incentive. we have already moved forward in restructuring some banks, capital surcharges. it institutes in the financial market itself, the equity markets, banks are not the highfliers. the equity margaret -- equity markets are disciplining the bank structure even as we work also on a regulatory side. it is both accommodation of market discipline as well as regulatory neutrality that can help promote a reallocation of finance away from that which is negative for growth toward what is positive for growth. and also positive for equality. stephanie: it is fair to say in terms of positive for growth just going into technology or entrepreneurship, is it necessarily a clear, better path

in banking? there are loads of people in the tech industry creating useless apps right now. it is not just a black or white scenario. catherine mann: correct. our study focuses on the structure of finance. we argue that if we focus on the structure of finance alone, then we can say that promoting debt is negative for growth and promoting an equity-based market is positive for growth. in europe, for example, the capital markets union being on the table as one of the objectives of policymakers in brussels is to promote a more equity-based financial structure there. it is also the case that if pensions were able to invest in equity, which many of them cannot again, regulatory guideline or policy oriented deal that is not neutral -- if pensions were able to invest in equity, then more people at the lower end of the income distribution, for example, those

people would be able to get the benefits for the equity market while still being protected from some of the volatility in equity that is a challenge for someone who was at the lower level of income. in equity-based strategy, particularly, if you brought in pensions as an important role, it could promote growth and promote equity. that is really the kind of thing we have been looking at in the course of this two-year study. stephanie: isn't it very hard to remove some of these distortions, though? i think it is a fantastic idea but let's be practical for a moment. captain mann: one of the things we do is conveyed countries to talk about how they have approached policy challenges. it is one of the very important roles of the institution. you know, policies differ with regard to treatment of taxes treatment of housing, and the extent to which we get an advantage from holding debt, and the treatment of banks and loan to value ratios. the oecd is a forum where

different countries can say, well, this works in my country, how does that make a transition pass and my policies to get to a better outcome? by bringing together policymakers, we are able to help each other and they are able to help each other bring themselves to a more superior outcome for the economy as a whole and for different groups within the economy. stephanie: i agree with you. i am -- time to remove the mortgage interest rate tax industry -- deduction. there will be rotten flying tomatoes around the globe. captain mann: there have already been changes. stephanie: that is true. catherine mann: a change in the armor there. stephanie: we can't complain. thank you so much for joining us. great report. the chief of oecd. erik: more breaking news on fedex. they reported earnings earlier this morning and vonnie quinn has more. vonnie: ceo and founder of fedex frenchman is speaking for the last -- fedex downgrading the

forecast to 2.3% and that is all the way down from 3.1%. quite a severe downgrade for fedex for gdp growth. next you, not so bad but still a down growth. down 2.9% from 3.1%. it will be interesting because we are probably going to get a downgraded forecast from the fed as well. the press conference with janet yellen and more interesting headlines from fedex, industrial production growth down to 2.2%. it had said that industrial production would be at the .8% for the year. again, quite a severe downgrade there. or next year fedex industrial production growth is at 3.2% down to 2.6%. he knows a lot about this. erik: thank you very much.

breaking news of vonnie quinn. stephanie: let's bring in julie hyman. julie is taken a look at some of the analyst action from this morning starting with a name that is moving quite a bit this week, cigna. julie: cigna has been a company that has been talked about as a potential target. the company is being added to the most preferred list over ubs this morning. the analysts are attracted from a consolidation perspective and an operating perspective, even if the deal does not get done, ubs analyst say that there is a 30% probability that a deal does indeed get done. you can see what the shares have done over the past month, up 16%. shares surging under reports that it would be buying pmg's hair care business and this morning, a citigroup is saying, well, maybe that is not the best idea. it would be a surprise if indeed it would do this since coty said they are not interested in entering her chair and there are

potential challenges and integrating this kind of an acquisition at a time when coty is in the midst of a turnaround. i want to take it step back as we have talking about m&a in a recently. take a look at the terminal and the chart of the volume in terms of number deals and dollar volume. you can get to this by doing ma on your bloomberg terminal. this is the past five years, volume is in blue and the line is the actual number of deals. this quarter, we have seen a drop in the number of deals but the volume of deals has surged. this is one of those situations where if it feels like there has been a lot of m&a, it is because there has been a lot of m&a and the deal sizes have been pretty substantial. erik: thank you. that is julie hyman. when we come back, fitbit and the potential hurdles it may face as a public company. stephanie: you are watching "market makers" at our new time it :00 a.m. right here on bloomberg. ♪

erik: fitbit is stepping up the pace. get it? yesterday, they waste their ipo target to $17 to $19 a share meaning in hopes to raise as much as $650 million. fitbit shares will start trading tomorrow. we are taking a closer look with the ceo of research and they have done great work on pre-ipo. you brought your deck, i love it. this is everything you need to know about >> welcome back to between two could --fitbit between two covers. whether to get the allocation but they are trying to decide whether to buy, right? what do they need to know about fitbit in the context of wearables, consumer electronics? >> first, supply and demand. is the stock going to go up? second, is it a good company?

we focus on the latter. fitbit scored 17 58. we think fundamentals and even for companies like guess? as if by magic, there are actually reasons it grows. 7.58 is the second highest score of the year after shop a fight and it is a break deal. in has over $1 billion in sales. much more interestingly, the model for this company shows that customer acquisition numbers continue to be favorable which suggests that the company -- erik: this is the rocketship to the moon and let's bring up the come -- the customer acquisition chart because that is -- >> what it shows is that fitbit can continue to spend money to acquire customers at a reasonable price. sometimes customers it will be called returns for your next marginal customer costs a lot more than your last one and fitbit has not experienced that.

this is one of the things that happens when you have a category defining brand like fitbit does. it is a fitbit like a gopro. is there a difference between job own? -- jawbone? stephanie: is it a long-term by? tons of people buy them once and it is a perfect gift for them at the right price point, but are people really connected to this world of connected witness? rett: are models show that even in the downside case through 2017, you have good growth and possibility. this is not a company where you are waiting for inflection point later to get profitability we have downside models and we torture them based on real fundamentals showing this company makes money to mid teens and even in the downside. erik: your research is much more sophisticated than mine but i did a little bit to show everybody where fitbit ranked

against other wearable companies and there are not that many. it is growing faster than anything else, right? casio goporro, garmin but fitbit is way better. revenue growth one hundred 75% and it is not a brand-new company. it has been in business for several years and very competitive on the gross margin -- let's been up that chart. they have already figured out how to manufacture efficiently. rett: here's an interesting thing to consider -- you seek spotify a company that will never raise money no matter what it does but these guys are raising money in the public market. stephanie: but they let the private market months ago. rett: this company is ready to be public and it makes sense for them to be public. erik: thank you. the ceo and cofounder of triton

research. fitbit is pricing tonight. we will be back. ♪

>> live from bloomberg headquarters in new york. this is "market makers," with erik schatzker and stephanie ruhle. erik: good morning once again. you are watching "market makers" on bloomberg television. i'm erik schatzker and beside me, stephanie had to catch a flight and olivia sterns is here. thank you. olivia: of course, i had to get on their one hour earlier because i cannot wait to see what happens. can you believe it? it is basically never going to happen but today, a rate hike is actually on the table. i am lucky stephanie had to go. erik: that policy statement coming at 2:00 p.m. eastern time and janet yellen is speaking at

2:30. you can see that live on bloomberg television. also ahead, the now former superintendent for financial services in new york state been lost be on where wall street has been punished enough. olivia: a look at the top stories. european governments have reached up a limitary to extend economic sanctions against russia. the sanctions are aimed at rest -- pressuring russia to bring peace to ukraine and they are due to expire next month but if the agreement is finalized by next week, they would be extended to mid-january. greece's prime minister says you can blame him if there was no deal to unlock the bailout fund. alexis tsipras says the government will "say a big no creditor demands are unacceptable." negotiation's are close to breaking down and once again officials have a meeting tomorrow as a last chance. greece needs to get a deal by the end of the month or risk missing payments on their debt. erik: shares of federal express are trading lower in the pre-markets and fedex is what we

call it now. the largest cargo airline posted quarterly profits that missed analyst estimates and sales missed, too, in part to currency trading and currency values, lower fuel surcharges and meantime, fedex will order the focus and they say gdp increased 2.3% and down from an earlier forecast of 3.1%. say goodbye to baker -- starbucks cafes. they are shutting down 23 cafes by the end of september and they will still use the name to sell food at the coffee shops. starbucks bought a bread and the brand back in 2012 for 100 million dollars. those are some of your top headlines and we will have more in a few minutes. olivia: we get the fed statement in less than five hours and we will be looking for you clues on the economy and when the fed may raise rates at which has not happened. i will remind you since june of 2006. there is a six in 10 chance but bloomberg senior economist adds

that there are factors at work that could change the timing perhaps significantly among them is greece. joining us with carl riccadonna. great to have you with us. what changes are you expecting to hear today? richard: if the fed ritually dependent data as they say they are, they would go today. we have seen them creep up in wages and wage pressures. you have 200, 200 80,000 jobs coming along every month. you have all of these -- you have 200-280 thousand jobs coming along every month. the fed should go today. if is if they are truly data dependent. my point is that there are hygienists things probably keeping them to the theme in september.

karl: i think that if we look at economic fundamentals, we can see conditions are being met but the fed does not have the analyst risk assessment yet and they are very concerned about moving to soon as opposed to not too late so they want to late the economy redline a little bit. erik: what good then is this a new era of fed transparency and data dependency if they tell the world these are the conditions under which we will be raising rates and once the conditions are met, they don't actually do it? richard: i think it is very confusing. the careful what you ask for in transparency because you might get it. erik: we should go back to the days of our great? -- of al green? richard: i remember back when they did tunnel diagrams on money supply every friday when money levels -- erik: back in the day when money

supply mattered. richard: and when it was released on friday. olivia: we did get a monthly press conference which we sure appreciate on bloomberg television. there is a. plot -- there is a dot plot and that suggests the future of great heights. i have to push you a little bit if they were data dependent, they would raise rates now. what about the fact that they have cannot and say, please hold your fire until 2016? the economy contracted in the u.s. richard: why are they dictating monetary policy for the united states of america? erik: i have to agree with rich on that. i think janet yellen will soft-pedal and there will be lots of questions, what about christine lagarde and she will diplomatic he defer judgment and say well, depending on the data she could be right that most likely, we will see the economy of for me to a greater degree and that is why they will have to keep it on board for the

second half. the key is not just a dependency here because the fed is there a sensitive to the ripples they are sending throughout the world. much more so than in the past. they don't want a repeat of the vocal driven latin american financial crisis or the tequila crisis of 1994 and the greenspan, so the fed has to very clearly telegraphed that they are going to be a very gradual -- take a very gradual approach to monetary tightening and in doing so, they can avoid that type of cheaper tantrum that impacts sides of the u.s. market into sensitive sectors like housing or international markets. richard: one thing to consider is the greece being -- greece issue. front burner now. it has been back burner back and forth and what ever, but what if the fed did go today? hypothetically, the fed goes today and then friday, greece defaults? now you have systemic risk in the financial industry and you

have the central bank for the world, essentially, starting to ratchet up policy. how do you send that message? had you cleared that up with a transparent -- what kind of a dot plot are you going to throw out next? i think it is a very confusing trend to try and guess which dot belongs to whom. it is more confusing than it is clarity. carl: the fed is sensitive to the dot plot. erik: kelly bring a block of again -- back up again? if you look at what it shows fed policymakers inc. that over time, we are going to get back to some of the 4% environment. bill gross makes the case that there is a new neutral. that the most we will get or the average we will get up to in the long run is to 75. carl: it tells of the rate is about drifting a little lower at

350 is said 375. out of the cable fall further below that because we are seeing firming affirming in the economy but certainly, dot plot is not in line with his pimco. richard cohen part of the reason is people listen to bill gross as much as they do is for the part that you are making before. erik: hasn't the fed, in a sense , because it is not following economic fundamentals outsource some of the judgment in the financial markets? richard: who are they conducting monetary policy for anyway if not at least to that channel for the financial market? erik: they are sensitive because of the dramatic tightening of financial does heavy lifting. olivia: by the going to downgrade u.s. forecast today? carl: they have to, we cannot go fast enough to hit previous targets. it will have to go down from 2.5 to 2.25. olivia: i will cut you off now.

maybe this is not an economy that can sustain a raise kite. thank you. erik: janet yellen is speaking at 2:30 this afternoon and live right here on bloomberg television. when we come back my interview with the now former superintendent of financial services then -- ben lawksy. ♪

erik: quad two years ago, it was a different world for wall street and ben lawsky. he had just started at the head of financial services, new agency charged with regulating the state banks and insurers. ben lawsky major everybody knew about it big putting onto a case involving standard chartered when it seemed like other regulators were dragging their feet. now they're collecting $6 billion in fines and penalties. this formally toothless regulator is an organization

they fear on both sides of the atlantic, ask. last -- yesterday, i sat down with ben lawsky and started by asking whether he thinks wall street has been punished enough? ben: we want wall street to move onto financial system that is healing and started to get its bearings again and starting to drive and grow. at the same time, if there are continuing to be people within the industry who want to throw out the rules and chief and commit fraud they need to be held accountable. i think you can hold both of those ideas if you are a thoughtful person in your mind at once. erik: there is a point to prosecuting that what you achieve as a prosecutor is supposed to function as a deterrent so that others do not follow in the path of the wrongdoers -- how do you know if that is happening? ben: i think it takes time to judge that and i think the best way to judge it is overtime. now it clock two years to say

well, have the bad actors or bad acts slowed? unfortunately, i don't think i can say that today. we have had most recently the libor scandal and the fx trading scandal and between those two, that is conduct that took place in 2011, 2012 and sometimes later and those were clear cases of some individuals committing very alert and fraudulent conduct. i think that when we think about that, we need to all look in the mirror and say, we need to determine a kind of conduct and are we doing enough? erik: you found a way to hold individuals accountable without actually charging them with a crime. you name them, shame them, and forced him to resign. would you say that was your signature achievement? ben: no, i would say that was the best we could do without criminal authority. we are trying to focus a lot on accountability and individual accountability, especially after we had been doing this work for

about 1.5 years or so. we realized we needed more determined in the system, so i think that was a very important achievement. and in important thing for us to do and i hope it continues. erik: some people might say that there is a super legal quality to that that if individuals will behold -- held accountable, they should be held by -- accountable by the district attorney. ben: i hear that, i think we have a certain set of powers and jurisdiction. item don't think we ever exceeded that jurisdiction and did we try to use it creatively to accomplish what we thought were the end answers? yeah, we did. and i hope in the future, they will continue to be a creative agency. erik: as superintendent, you can -- you collected something up $6 billion for the state of new york and generated a lot of revenue. you forced accountability on banks, consulting firms, mortgage firms, and you show that the state can and perhaps

should have a voice in regulating its largest industry. what about the downside, is there one? ben: the downside to being -- well, i think about it this way. erik: you raised the cost of doing business to big banks in the state of new york. do you ever worried that some of them might look at what you have done and what a guy like the district attorney does and say these guys are creating an environment and we are going to decant across the hudson instead of shopping in jerseybe. ben: i don't worry about that too much for the following reason -- if you look at our record where we have had major enforcement actions -- the cases have been few and far between. a get a lot of attention but it is probably -- erik: there are $1 billion price tags. ben: it is probably a handful of companies, first of all, that they those big price tags and appropriately so given the conduct that went on intentionally four years.

at the same time, it is probably only about 20% of what our agency does, maybe even 15%. i think the good news is for all of the other companies who haven't gotten into trouble, it is a good thing for them. they are in a way being rewarded but for playing by the bulls. i would -- playing by the rules. i would argue that our work is not lower the cost for the industry to do business in new york. it is actually made new york more hospitable for companies that want to play by the rules. erik: more hospitable. ben: yes, and less hospitable for those to cheat. it causes of the green to rise to the top. i think that is actually a very positive thing. look, if we look at how the industry has been doing over the last live years, again, we have seen this. erik: i like that argument, but

quite honestly, how many ceos have come to you and said, i want to thank you very much for being an aggressive regulator and running the financial services the way you have. it has made new york such a better place for me to do business? ben: you would be surprised. i will talk about individual conversations with ceos but i have had quite a few over the years. there is a set of them who have done quite well because they played by the rules and they did it right and they put the customers first. erik: every firm has been held accountable. ben: the vast majority have not actually and i think we created an environment where if you want to do well in new york and you want to compete in new york, the very best thing you can start off by doing as have a great product, treat your customers well and make sure your compliance is very tight. erik: what is next for wall street as far as regulation goes? ben: i think they will be a huge

focus on cyber security for the next year or two. i think we have to resolve the remaining foreign exchange cases and i think there is a whole aspect of those cases around electronic trading that we have been focused on and that will take some time to shake up. erik: how was the now former superintendent of financial services in new york state. ben lawsky is -- was chief of staff and he will be succeeded. we have to assume that the governor is looking for a new face to run the dss on a permanent basis. i followed up that last question to ben lawsky by asking him if the state should take some of the money that they generate the revenue by finding banks, mainly big banks. he said to fund more investigations because one of the criticism against the department is it effectively brides on the coattails of the justice apartment, u.s. attorneys office both in

manhattan and in brooklyn. the district attorney, all of which have large investigative operations by just levying fines that it really has not done the hard work, if you will to justify. he said, listen, if wall street proves himself to continue being a bad actor, yeah, i would make the case that we need more investigative resources. olivia: i sort of made this argument to guys before. they say, show me the firm with a budget under $50 million and bringing and $10 billion in fines. moving on, yesterday, ruth mayer speaking at the bloomberg technology conference talking about yahoos spinoff of alibaba. she says it is still on track despite tax implications. >> our plan is as proposed and based on understanding a few things. one is the confiscated changes that have been communicated today don't apply to previous request for rolling.

our rolling is actually we made file for it well in advance of the changes being communicated. one of the thing, it gives us confidence that they proposed changes actually contemplating changing the applicable law and it is more about the processes around these types of transactions and less about applicable law. we have also been reassured that it was something specific to yahoo! or in response to this trend actions -- transactions. and so, i can't presume to speak for the irs, but from the given of our understanding of that patterns, we feel that we should proceed with the proposed transaction as planned. olivia: that soundbite sent shares in yahoo! about 2%. ruth myers also asked, what is yahoo!?

there has been criticism that they don't have a clear strategy on what they want to be an ruth meyer tried to lay it off. she said, look, we are the biggest media company that gets tech and the biggest tech company that gets media. what do you think about that? erik: i don't know. olivia: i don't know what to say. it is a pretty impressive front since she became ceo in july of 2012. erik: it is really hard to look at it in those terms without alibaba but i would like to see a chart that shows percentage of alibaba. we should have that made. olivia: another big interview made at the technology conference. we sat down with dick costolo and here is what he had to say about the search for a new leader. >> the board is legitimately doing a search and there is a search committee of the board that is through the board members and come alive -- and comprises mainly of a director leading that and two of our biggest shareholders. olivia: he is insane the board will not get in the wake of the

new ceo even though, remember, it is rare for a ceo to remain on the board. erik: props to dick costolo. he was just down fast ceo from twitter and he came to our press conference. olivia: it is me, it is not you. erik: we thank you. that was a class act. olivia: it was. although, he says twitter has no change of strategy and the current one will hold and that has got to leave investors scratching their head. erik: i agree. when we come back, greece is next. and you bloomberg survey shows forecasters are bullish and we will have that story when we come back. ♪

erik: here we are, 9:26 a few minutes from the opening bell in

new york city. tracy always here, the executive editor of bloomberg markets. president of global strategies. we talk about what is moving on market. tracy: today is a special day. something big coming up. at 2:00 p.m. when they publish their state may i want you to ignore all the words, go straight to the dot plot and see whether or not it has change from the last one back in march. erik: this is the march dot plot. tracy: these are the fomc member predictions for where interest rates are going to wind up over the course. erik: of course, we don't know whose name is attached to which dot. tracy: there is a fun game you can play to figure out which is olivia: cool. we will see -- which one is who. olivia: we will see the dots would suggest we will see the trajectory -- tracy: you will see them go up and you will finally see them move up. olivia: i thought we were expecting for 2016 and 2017, the

estimate of where rates will be at the end for those of the come down a little bit. tracy: i'm talking about on the short end. >> i wonder whether the dot plot matters really much. i think the people to watch will be janet yellen and watch what they want to do. the others are basically going into the right. i don't know that they determine much in terms of what is going to happen to interest rates. the three of them so far have remained very dow dish. i don't want to spend my time looking at the dot plot when all of that is data dependent and gets changed at the drop of a hat. olivia: you just came back from a trip around the world and the fed will telegraph that they will raise rates by 25 of 1%. does it really matter if they do it in september or december? komal: it does not matter if

they do september, december or next year. it is area late for them to raise interest rates and we would have had seven years of zero interest rates, olivia, and we have an amount of distortions not only in u.s. markets but globally that i find. money going into risky investments because people are finding they do not get good returns. it is going to be very negative. the fed has done its damage already, so it does not matter if they raise rates. tracy: you are saying it will be too late already even though the last time you said you think the federal wait until 2016? koma; i am saying the same thing now. -- komal: i am saying the same thing out. they should have raised rates years ago to avoid damage when the going was good. tracy: the fed has created this difficult situation for its upper it is inflated a lot of asset bubbles, induced a lot of calmness into the market and now it has to navigate the exit process without rolling markets.

that is why would janet yellen says with the dot plot becomes more important because they want to meet the fed cap way in terms of expectation. komal: it seems like it will be impossible for them to create the markets went the only way to moderate it is to do it sooner rather than later. it should have been done years ago. olivia: what is number two? tracy: good story in bloomberg today saying that 100% of stock market forecasters in europe are bullish on european stocks. that is 15 forecasters surveyed by bloomberg. they all say the european stocks are going to end higher this year. greece does not matter, volatility in the bond market does not matter, as long as we have european qe, it is all good. erik: do you agree with that?

should investors play the book the same way they played it with the feds and japanese stock? as long as the central bank is easing. risk assets are going to go higher. komal sri-kumar: a very good question. so far, it has worked out that way. we have had a similar impact on the european equity markets that we had with the u.s. selloff. at is what i am coming to next. what europe has, that the u.s. did not have, california my home state had a debt problem and therefore seceding and having a bankruptcy, with greece, you have situation that is different between the u.s. and the united states of europe. that is like greece is going to be the tail that lacks the -- wags the dog. the grexit is a proceeding.

it is not a wedding without a divorce. it is going to be very negative. you're going to have negative impact on europe. in mind, olivia, until the recent appreciation of the euro, the european union was bigger than the u.s. in terms of total gross product. your document the u.s. getting a smaller part of the world, the emerging markets 15% less and the u.s. cannot withstand the negative impact taking place elsewhere. you going to see it in terms of exports and washington objecting to the fed increasing rates which he would not have seen 10 years ago. erik: that is a view that i do not think is widely held, that things are going to play out in europe very differently from the way they have played out here. until about six weeks ago, they had. anyone who went, short euro come

along european stocks, made a killing. komal sri-kumar: i was very negative on the euro for a long time and changed my position when the euro hit the dollar. if the euro weakens any further, the federal reserve is going to tell you, they are not going to raise interest rates for a long, long time. that is what you are fighting against. the euro cannot workeaken too much. olivia: the dollar strength is one thing that could make janet yellen hold fire. tracy: forget the u.s. and europe. let's look at africa. nestle is cutting 50% of its workforce across 20 after countries -- 15% of its workforce across 20 african countries. they said they thought it was the next asia but they realize the middle class is extremely small and not really growing.

once again, a lot of euphoria about african growth and more wealth in the region, lots of the multinationals moving and hoping to capitalize on that. it has not panned out. komal sri-kumar: i hope it is short-term development. i am very bullish on africa because the average age is less than 20. as population grows, the median age is going to remain low because of the high birth rate in many countries. tracy: that has been the debt and that is the stake walmart took. walmart had the same trouble. they have only open to 10 stores in the past three years. shop right, a local south african player, has expanded well. multinational companies are not doing well in africa because everyone thought it was good to be the emergence of the great middle class that asia was and it is not happening. komal sri-kumar: you have

hiccups and growth and they do not go in one straight line. i can good about nigeria, kenya rwanda. you were going to see that spread more. you cannot invest willy-nilly. the changes that are taking place, mobile banking for instance, the middle income groups are going to be a big story. erik: there's no question. i have seen some of the evolution of mobile bank with my own two eyes and it is transformative. he can't ignore the one fundamental problem. the cartoon it cannot feed itself and there is not enough advancement -- the continent cannot feed itself. and there is not advanced --

enough advancements. komal sri-kumar: i have seen other countries with a similar problem.the country i was born in. things have improved a medically and what happens is that when the market mechanism opens up -- dramatically and what happens is that when the ark mechanism opens up -- market mechanism opens up, things change. in the case of africa, you have to be selective. some people are doing better feeding therefore than others -- their poor than others. it is not going to be quick. it is gradual. erik: thank you. tracy alloway and komal sri-kumar:. julie hyman is here to bring us up to speed about what is happening in the stock market.

fedex is a name we have our eyes on. they reported earlier and it was disappointing. julie: stock is down the most since march. it is the worst performer as stocks begin trading. trailing analyst estimates. got lower fuel surcharges. the irony of fuel improving. fedex express has been declining. another big deal in the farm industry. the maker of botox is buying a company for $2.1 billion. it makes an injection that is the only approved nonsurgical treatment for double chin. you can see shares are up by 22%.

finally, david's tea is down 11% after reporting earnings. it is based in canada. it's all loss in the second quarter -- it saw a loss in the second quarter. we get the fitbit pricing later today. olivia: the only company that makes a nonsurgical procedure? julie: there are other ways of losing the double chin. olivia: the ceo had a sales conference when they bought botox. he went on stage and got the talks and all the sales representatives went crazy. i wonder if he is going to get the double chin procedure. julie: no thanks. erik: i will join you with the shoulder shrug. olivia: you're young, you don't

have to worry about it. erik: best day of the week olivia called me young. olivia: goldman sachs will offer some loans online. a mobile banking app, will other banks follow? ♪

erik: you're watching market makers. online lending is so hot, even goldman sachs once a piece of the down market action. it is building an online lending business under a former discover credit card executive, positioning the firm to compete with lending clubs. what is the future for all the shadow banks? matches the ceo and founder --

matt is the ceo and founder of -- what is the future of shadow banks? matt: the better term is sunlight banking. this is being done in a very transparent way. there's nothing being done in the shadows that all. they are transparent with their data. we get real-time updates on day-to-day basis on every loan that investors have bought. shadow banking is not quite the right term. erik: let's forget with shadow banking. olivia: sunlight banking. erik: some might banking. -- sunlight banking. get to the nub issue. goldman thanks has -- goldman

sachs has said there is going to be a real business and we are going to do it at scale and they have a bigger balance sheet. matt: they are late to the game. it is similar to blockbuster trying to appeal with netflix. they are five years late into the market. there are significant competition in the market. one of the new players is doing half $1 billion. having a balance sheet does not win this. erik: to the folks at lending deck, they should not fear that goldman sachs -- matt: you should never underestimate competition, but it is an acceptance of the space, that's bigger banks are finally moving in. it does not mean that they are going to win.

it is still very competitive and they have a long way to go. they are in last place right now. olivia: that is the critical question. what is there competitive advantage? goldman sachs to qualify you have to be worth $10 million. why are they in the business of lending a $20,000? it is 1% -- erik: institutional investors capital looking for a home loves this. matt: there's way more demand than supply. erik: loans are being generated. matt: once acceptance happens, ranks hedge funds, family offices are all buying up this product. olivia: it is an impressive trajectory of growth. organ stanley says this kind of

marketplace lending is still 1% of lending. matt: it is still very small. the market for consumer credit is enormous. it is growing exponentially. it is 1% this year, 2% next year. erik: that is potentially the issue, the fact it is growing so quickly. and right now outside the regulated banking industry. is it not possible that regulators will fall in love with the idea that a bank i'm nationally chartered bank, is actually getting into this business? there will be full transparency into what they are doing. matt: lending club and prosper file with the sec every day. they have done it every day. -- in a clear way.

it is not being done in the shadows. all of these are very transparent about what they are doing. if i was a regulator i would to adopting this space because it is providing a better product to consumers in a more transparent way. what they are concerned about is the risk to the system. they are afraid of not knowing what is going on. as long as you are transparent and doing all the right filing and being up front, you are going to be in the regulators camp. olivia: they had more practice regulating companies like goldman sachs. what is the advantage of goldman sachs, this commentator was saying that it is the fact that people have inertia. they are used to going to a bank to get a loan. matt: millenials 70% would

like to go to the dentist rather then their banker. you see them act very differently than the generations before them. for goldman, let's look at the competitive advantages. balance sheet, low cast for capital, but what is driving it is do they have a brand resonating with the average american? erik: we have to leave it there. ceo of orchard platform, we talking about the future of goldman sachs and sunlight banking. olivia: and the pantsuit designer. ♪

olivia: still to come, dottie

herman will be here to talk luxury real estate trends. guess what, it is expensive to buy a house in the hamptons. hillary clinton has gone to south carolina today to talk about her plan for apprenticeships. we are wondering about her image. is in the power of the pantsuit. stephanie ruhle sat down with the designer who dresses some of the most powerful women in the world, including hillary clinton. >> the senior i married, i started this business -- the same year i married, i started this business. they would call me and say, i can't find something to wear.

i went shopping, solid they were talking about and said i understand what they need. i'm going to start a business and sell direct to consumer i'm going to put a lot of women into their own business by being a consultant and doing private trunk shows. when we get strong enough, i will start to open stores in places where there are a lot of women coming in. stephanie: when he started this business, there were only 20 women ceos. you dress 10 of them. how did you get in there. nina: i have been a member and knew some of them. i had been going to meetings with them for years. some of the mine you and others began to hear about us from colleagues. it has been a lot of word-of-mouth. the stores have helped a lot.

last year when the article ran jenny came into the store. it has been a combination of stores existing customers who really like our product. stephanie: the quality of craftsmanship and materials are so important. are you at risk for getting priced out? the zaras of the world are creating clothes for special women act discounted pricing. could it hurt your business? nina: i don't think so. if you are a professional woman you don't have time to shop and you are traveling all the time. you want clothes that are going to look good at the end of the day. that does not happen if you are not using really fine fabrics. stephanie: how much strategy goes into what hillary clinton wearing and where she is wearing

it? people do take notice. nina: we only dress part of what she wears. maybe 10%. her first consideration is how is it going to look at the end of the day. is it comfortable and then how does it look on-screen? people on stage on-screen, have to think about what is flattering. the high standup collar, long vertical lines, and things that fit well are going to look good on stage are important for women in the public eye. stephanie: first night at the dnc, what would you like to see her where? ear? nina: a high collar. she is much slimmer than she looks on television. she is comfortable in a long jacket and pinks. ants.

maybe she should shake it up and wear a skirt. erik: did you notice stephanie wearing a pantsuit? olivia: that is what you call brown nosing. erik: i am going to be gone for two weeks. i'm going to italy. olivia: with the euro, it should be a lot of fun. ♪

olivia: good morning. it is 10 a.m. in new york . happy fed day. investors are counting down the

minutes until janet yellen's conference. erik: been lost key one billions of dollars from the world's biggest firms. olivia: and hampton home sales are on the rise. i will talk about some of the most expensive properties in one of the most expensive places in the world. good morning. erik: it is time to have a look at what is going on in financial markets. that is where we begin this hour. at 2 p.m. we hear from the fed. at 2:30 p.m. we hear from janet yellen.