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tv   Market Makers  Bloomberg  June 30, 2015 8:00am-10:01am EDT

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e ruhle. matt: eric is in athens right now. there is a lot to talk about concerning greece. the potential default in puerto rico. the governor revealed his latest plan to revive the economy late yesterday. we'll talk stephanie: i thought you came to tell us about the dead show this weekend. matt: probably throughout the next few weeks. stephanie: describe it in one word. matt: it was all i expected and more. stephanie: we will get that for the next two hours. maybe the next two weeks. the top stories of the morning. so much talk about a last-minute deal. greece will not be making that $1.7 billion payment to the imf that was due today. the greek finance minister confirmed that this morning.
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last night in assets demonstrators are asked in athens demonstrators urged the government to hold firm. cash is running out. the banks are still closed and the prime minister is daring european leaders to throw his country out of the euro. translator: they will not kick us out of the eurozone. the cost is immense. the economic cost, the financial burden if the eurozone is dismantled. the cost of a country in default is immense. stephanie: the guy is pretty bold. the big question is how will the ecb react to greece missing its imf payment today? the ecb has been keeping great thanks afloat with emergency credit. there is another deadline that
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will be missed today. diplomats say they will not meet today's deadline or reaching a deal on iran's nuclear program. negotiators meeting in vienna say there could be an agreement within a few days. the u.s. and other global powers want to prevent iran from building a nuclear weapon. if iran agrees to limit economic sanctions would be eased. matt: the obama administration will raise the wages of millions of americans by requiring employers to pay them overtime. relations will cover about 5 million workers making as little as 455 -- four and $50 a week. -- $450 a week. many work in the retail or restaurant business. there is a big merger that brings together an insurance broker and a professional services firm. insurance and risk management firm willis group will combine with towers watson in $18 billion merger. the company will be called
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willis, towers watson. it will have more than $8 billion in revenue. that is probably a takeover with willis getting more than 50% of the deal. apple music goes online today. apple's attempt to take on spotify and pandora. the service is free for the first three months then it will cost $10 a month for individuals, $15 for families. apple says it will buy unlimited access -- it will buy you unlimited access to tens of millions of songs. that sounds a good promise you get from a lot of other people. stephanie: you do not believe in mergers. what would you call a marriage? we will discuss that during the commercial break. i will take you to athens or erik schatzker and guy johnson are there. erik: this breaking moments ago.
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the german finance minister said that even if greeks vote no in this weekend's planned referendum rejected the bailout proposal from european creditors , the country might still be able to stay inside the euro. furthermore, walking short -- explain what is going on in the mind of the german finance minister that greece may yet be able to pass a bu aid fund -- and eu aid fund. the european nations are trying everything they can to keep greeks optimistic about the prospect for their future while not necessarily relaxing the demands they have made of tsipras and the governing party as far as fiscal reform goes. guy: we are seeing -- trying to
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make the greek people feel better about what is coming up this weekend. the second thing that is happening is -- it looks like back channels are in operation still. the chief negotiator i asked him about what is happening with the banks and he was talking about liquidity story. saying, maybe we will see an easing of that over the next few hours. the governor of the central bank has gone to see mr. draghi. listen to what he had to say. >> i expect initiatives today for solution to the problem of liquidity and the banks. the number one solution is to find an agreement. we are asking the greek people to give us the strength and mandates for such a solution.
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guy: europe has this ability -- you know this the ability to pull things out of at the last minute. it is never done until it is done. erik: there are so many moving parts and that is what makes it difficult. let's think about what mr. sc haeuble was saying. the forces domestically that are doing their utmost, the opposition parties doing their utmost to persuade the dig -- the greek people that it is a thumbs up, thumbs down vote on greek membership. that much more difficult to challenge tsipras who is trying to get everyone to vote no. guy: there may be a counter argument that says, do we want to have a day or name vote.
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it we want the ability of these guys to come back to the table? . erik: it comes down to the banking system. if thanks cannot open next week all these questions are unresolved. talk to people who are familiar with the way the imf and ecb work. as of tonight, the greek bank may be technically insolvent rendering it and possibility to open next week. the story is changing every minute. we will have updates over the course of the day. stephanie: my partner erik schatzker and guy johnson in athens. matt miller, how great is it to have that team on the ground? it one thing to talk about what is going on in greece, it is another to have some of our best minds there.
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matt: we will kick off our top five with greece this morning. the top five things you need to watch. according to bloomberg data, these are u.s. investors caught in the middle of greece. paulson and company, black rock capital group, fidelity management and fairfax financial holdings all bought stake in greece banks last year when the institutions raised more than $11 billion in sales. since then, shares of the banks have fallen by an average of 56%. losses could rise as the country skirts the prospect of default. stephanie: investors who are involved in greece right now are more prepared to withstand the pain than they were the last time we faced this a few years ago. when we had that hiccup no one was expecting it. if you were investing in the last two to three years in
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greece, there was a buyer beware sign. matt: you were not buying anything at 100 cents on the dollar. stephanie: we're talking about a big boys club, these kids knew what they were doing. i will take you to number two. it is a debt saga, a group of more than 35 hedge funds has gone from standing ready to pour more than $1 billion into puerto rico to preparing for a battle against the island territory. the island's governor spoke and is signaling his desire to restructure debt rather than raise new capital. if you look at what is going on now, governor padilla does not have much if any experience in restructuring debt. they are in a position where, can they take more money from distress investors, sure they can but it is not like they can go to the high yield market and
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raise at 11% anymore. they are not want to put themselves in a position where they're taking money in a loan shark scenario. how are they possibly going to repay it, get through that watermark -- that high watermark and praise? they have a $9 billion budget. saying hedge funds are there to help you -- matt: the buyer beware sign has been posted. people continue to pile in because it is so tax-free. stephanie: investors who like buying things and $.30 on the dollar and recovering at $.60 no mom and pop in their. re. julie hyman has number three. julie: i'm looking at the markets today. s&p futures are rising after an ugly day yesterday. the s&p erased all of its gains for the year. the situation in greece was laying on investors to read we are seeing a rebound in euro stoxx 50. the euro is falling back after
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having a surprising rebound yesterday on the perception on the part of investors that the ecb was going to do something to provide stimulus. yesterday, about $1.5 trillion erased from the value of global equities. that was the most in two years. the s&p had it biggest drop in more than a year. we are only trading about 3.5% below the record close for the s&p. matt: china makes moves to prop up markets after hitting bear territory. everyone from money managers to brokerages to the finance ministry made comments or took actions to restore confidence in the market. the shanghai composite index tell as much as 5% before jumping 5.5% -- jumping to a 5.5% gain at the close. the biggest intraday point swing since 1992. stephanie: another big number.
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$18 billion deal. the third largest broker, willis group, agreed to buy towers watson in an all stock merger. the company will be called willis towers watson. the entities had a combined revenue last year of about $8.2 billion. with that kind of revenue they could help places like puerto rico and greece. those are your top five things you need to know this morning. matt: alexis tsipras and eu leaders have a different idea of what a no vote would really mean . we will take a look at how it plays out for greece with thomas right next.
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stephanie: look how beautiful that is. it is the roof cam in new york city at bloomberg world headquarters.
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welcome back. you're watching "market makers." i'm stephanie ruhle. how about some news? ge capital keeps getting smaller . general electric has sold off another chunk of its finance unit. this time the price a 2.2 -- $2.2 million. the ceo a shrieking while he tries to refocus -- shrinking the company while he tries to refocus the company. uber is losing hundreds of millions of dollars as it expands worldwide. bloomberg news obtained a document. uber is showing to potential investors. the document does not make clear what the timeframe is for the loss.
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it says in uber is growing at an annual rate of 300%. it will be a milestone for the biofuels industry. this summer, a united airlines jet will fly using fuel made from farm waste and oils derived from animal fat. the united -- the new york times says united is investing $30 million in a producer of aviation biofuel. matt: it will smell worse than a dead show. stephanie: that is not possible. dead shows stink. matt: back then. stephanie: i am not saying it is not a special community -- matt: the average age this weekend was like 45 years old so i think everyone was wearing deal to rent. -- was wearing deal to rent.
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-- eo todeodorant. we will get to greece now. alexis tsipras is urging greece to vote no during a referendum on sunday for the deal that was on the table last week. tsipras thanks a no vote means voting for a new deal. eu leaders say voting no means leaving the euro for good. for insight into how this will play out, we bring in brookings institution's thomas wright director of the project on international order and strategy. thank you for joining us. let me ask what you think a no vote means. we had wolfgang schaeuble saying a no vote could still leave greece eligible to remain in the euro. thomas: i think the reason it is going to be -- i think the
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reason why you here these messages come out is because the polls in greece are contradictory and they say two things. the first is that people support tsipras' hard-line in negotiations and want him to take it position. the other is they want to stay in the euro. those things do not make much sense together. people have held both positions despite the fact that they are contradictory. that is why you see european leaders try to frame this as an in or out of the euro because they know people will want to stay in the euro and tsipras this saying it is about getting a better deal or not because he knows they favor getting more concessions. which narrative wins will determine the outcome. stephanie: how important is the referendum this weekend? thomas: incredibly. if greece votes no it will be
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difficult for european leaders to give further concessions because it will -- they will not less us early -- they will not necessarily lead the euro next year because it is difficult to see with the triggers are. there are lots of things that can be done to prevent that from happening. it is likely there will be further capital controls. the banks will stay closed and they will have to issue a parallel currency. it will not be replacing the europa the government will have to issue ious to pensioners and other people they all money to. stephanie: how chaotic with that be? thomas: i think it would be very chaotic. there are signs of the greek people -- until a few days ago they've not fully understood the crisis they are in. that is why you saw lines at the atms. one question i had, why do people -- why did people not take their money out two weeks ago? you could see this coming from a bit away.
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it is dawning on people that this is a real crisis. i think the chaos will grow in the coming weeks. stephanie: how did they not see this coming? thomas: i think they thought there would be concessions, that there would be a deal. they believed tsipras that they were leaving best that leaving the euro would be a disaster for all of europe and germany would want to stop that from happening . there are signs that that is true. the fact that schaeuble came out and said there are different things in the mix to keep greece in the euro. there are signs that ultimately germany does not want and merkel particularly does not want greece to leave. stephanie: should they stay in or out? thomas: i think they should vote yes and try to get a better deal that way. i think a no vote will lead to a lot of uncertainty and instability not just in greece but other parts of europe. matt: thank you for joining us.
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thomas wright. ♪
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stephanie: puerto rico has seen years of economic hardship a diminishing population, the loss of its middle class and a mountain of debt. $72 billion in debt to be exact. it's governor says it cannot possibly pay it back. a default looms for the island. what can it do to get the economy going again? the president of retail development group. alex welcome. governor padilla spoke last night. i want to get your thoughts.
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translator: the inherited debt is so big in bars us from accessing the financial markets. our country does not generate enough revenue to repay our obligations. according to this report released by international economists come even if we increased revenues, the magnitude of the problem is such that we would not result anything given the weight of the debt we are dragging. stephanie: one year ago i sat down with the governor and he said we are a-ok. alex: things tends to change quickly. that rating was set to jump a year and a half ago. there is no ability to power anymore. in a country where the budget is $10 billion a year and you have $72 billion in debt, i find it difficult to repay it. stephanie: it seems like it was the right move. alex: in hindsight, it seems the
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credit agencies were right this time. matt: i wonder what you think about -- there was a moment of possibility when hedge funds got together and they were willing to put another injection of capital into this government. the governor said, forget it we will restructure instead. alex: you have the general obligations of the government and then you have the debt of corporations. hedge fund is moving more aggressively were for the public utility. it is a lot more competition than it seems from the outside. the terms were very onerous. it was double-digit. everything was going to be in new york instead of puerto rico. puerto rico was giving up some
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of its sovereignty. stephanie: when you look at this hedge fund rescue, as a puerto rican businessman do you look at it as a rescue or loan sharks? alex: i've heard you messed in -- mentioned before when hedge funds come to your rescue you are in trouble. stephanie: is that how you feel? alex: i think the debt of puerto rico has to be restructured. within an organized legal framework, which is what puerto rico is lacking now, puerto rico is a lot like detroit in terms that there is no social unrest lines for atms for the 60 euros of yesterday. it is an eerie calm. in terms of uncertainty, it is like greece and the droplet currency controls in a sense that we do not have bankruptcy protection to do an organize restructuring of our debt. matt: it is much more likely
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that they get -- if a few laws are changed, the kind of bankruptcy detroit got. alex: we have seen detroit at-bat -- bounceback. puerto rico needs to some direction and the restructuring of its debt. stephanie: does the current government -- a may have the willpower but do they have the expertise to execute this? the head of the government development bank leaves and goes to banko popeopular, it seems like there is a in balance. alex: the head of the board of directors quit effectively today to go into private practice. the bank is headless right now. they need a seasoned and well-versed restructuring team in order to -- this is uncharted territory.
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the first time you could say a state or territory within the united date goes into bankruptcy without being able to declare bankrupt. i am talking -- matt: they are not legally allowed. alex: congress trying to move this through to read on the other hand you have lobbyists for hedge fund firms fighting this. stephanie: where will they get this expert restructuring team? alex: some say it will be sent by the treasury or the fed. matt: we put people in charge of general motors. we put people in charge of detroit and they both did a good job. hopefully we can find those kinds of mine for puerto rico. -- those kinds of minds for puerto rico. increase, you only have sophisticated investors putting a bet on black 22 with money that is $.23 on the dollar. are there still mom and pop investors still exposed to greece? not too long ago, everybody held
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greek paper. -- porter he can paper. -- puerto rican paper. alex: 7%, triple tax-exempt, it was a retirement fund for many in puerto rico. many of the local pension funds were heavily invested in this bond. it is not only the goldman sachs or paul singers of the world. a lot of local pain that is going to happen in puerto rico. stephanie: a local developers have had to sell at distressed levels what does is need for the john paulson's with come in in the last two years? alex: there is opportunity. mr. paulson is acquiring property at a third or fourth of the price under good terms that were not there as recent as five or six years ago. if you are an operator you have opportunity in puerto rico three at international airport was privatized a couple of years ago and they are crushing it. revenue is up, the airport looks
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state-of-the-art. the same thing with a highway systems area goldman sachs bought toll roads. the government has tv channels, radio stations -- stephanie: what does this mean for puerto ricans? it seems that your middle-class has left the country and moved to the united states in the last 20 years. what does it mean for businessmen? alex: we have to find a silver lining of opportunities in this. we have to partner up with american funds and foreign investors. we have a lot of acceleration in the system because the recession hit us and now is the opportunity, we have to activate the economy. everything and puerto rico is measured in terms of job creation. i'm going to deliver 5000 jobs. a new currency on the island. stephanie: if you partner with
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american investors, did they have a better tax position? alex: they do. that is beside the point. you try to salvage the island -- we are trying to salvage the island. i will give you some laws. we have the most onerous shipping cost in the world because we are under the jones act. costs -- it costs me more to send a container from jacksonville florida to china. our casinos are not competitive against those in aruba because we do not have -- matt: i still lose money in puerto rico casinos. alex: we cannot attract -- the dominican republic is crushing it. those customers cannot come into work rico area they need a full usb said to do it.
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they go to the dominican republic and show their passport. matt: tourism in puerto rico is picking up as well. alex: yes. the new airport is helping a lot. we have 20 or 30 flight a day directly from jfk and new work into puerto rico. the cold winters have helped. going back to the point, we'll get 35% -- it is killing markets for retirees. it is because of medicare and medicaid does not cover the same amount. stephanie: what is the one thing puerto rico needs if they could get it? alex: it needs not to close the government tomorrow, which is impending.
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we need a balanced budget and a chapter nine bankruptcy protection from the irs. stephanie: good luck. matt: thank you very much. i'll hundred retail -- alejandro brito. stephanie: stay with us. matt: we will give you some apple. we will talk about apple. stay with us. ♪
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matt: that is the bay bridge. crossing over to berkeley. stephanie: no doubt people are kayaking, going for a run. matt: i spent some time this weekend in san francisco to
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watch the grateful dead. i thought, i could live here but not in a hotel room because they were very expensive. the average is 270 -- $397 a night. stephanie: the tech boom is pushing hotel prices up. there is not really any construction. supply and demand issue. really causing a problem in san francisco. matt: that is the free market. that is how it goes. in 2003, apple launched the world plus most successful digital downloading service. now it is making a play into a field it has avoided for years, music streaming. the company debuts apple music today offering access to tens of millions of tracks for a monthly fee.
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stephen joins us now to talk about -- you have been testing haven't you? stephen: i have not actually been able to use it on my own phone out of the test environments. i am normally a google play music person. matt: when you tell someone that in a bar they say really. stephen: it is the more nerdy option. stephanie: who uses that? stephen: unlike tidal i think apple will try to use celebrity in a different way. they will try to bring some users over. matt: tidal is this service with jay-z and dead mmau5.
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stephen: what apple is trying to say, we will pay artists more but this is a platform for artists to be creative. you can interact with artists. this almost tumblr like platform. apple wants this to be a music magazine that is also where you get your music from. stephanie: that is what they want. will it be a success? stephen: we will find out at 11:00 a.m. eastern time this morning. the service goes up. the beats 1 radio station kicks off. it will take some time. i do not think you can ever count apple out especially when this service will be the default music player on hundreds of millions of iphones. matt: no matter how many taylor swift sign up for tidal or how many people use spotify i know stephanie uses it. i even have it on my phone.
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you want to stay in the environment. stephanie: the apple ecosystem is so good that on many levels unless this apple venture is a complete failure many people are sibley going to default. -- are simply going to default. stephen: when you pull your iphone out-of-the-box, there will be an icon that says music and that will put you right into apple music. for people who do not want to think a lot about it could not tried five or 10 different services, this is going to be music. matt: if i can get all the songs i want for a similar price, why would i bother using another service? stephanie: these services are now saying they are offering different things. tidal is offering users invitations to exclusive events and access to certain office -- certain artists. people who want to pay for experiences, it seems like that's what these services are leaning toward. stephen: i think beats 1 radio
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is apple's flagship product in this area. starting at noon , a famous dj is kicking off the before our radio station. if you're an apple music subscriber or if you have an apple id and do not pay for the service you can access beats one and is the same thing for everybody across the world at the same time. it is talk, interviews, music, behind-the-scenes. stephanie: did you know who zane lo was before he worked on this? stephen: i did not. he was with bbc one radio. matt: thank you for joining us. associate editor at bloomberg pursuit. stephanie: the choice between black rock and blackstone could be getting smaller. the rival companies are trying
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to attract the same business. ♪
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matt: still ahead the former greek minister for administrative reform will join erik schatzker live from athens. his take on whether the country can turn things around or survive if it does not at nine: -- at 9:10. stephanie: black rock and blackstone could be in a battle for the same business. the companies are said to be diversifying their investments, touching on what one another does best. jason kelly wrote the story in this month's bloomberg markets magazine focusing on rivalries. welcome. take us to the history. jason: the history of these firms is that back in the late 80's when blackstone was first getting started, steve schwarzman met a guy named larry
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fink who was a successful mortgage trader. schwartzman said come work with me. they had a fairly bitter corporate divorce. black rock went on its way and over the subsequent 20 years or so, these firms became the dominant firms and their respective industries. stephanie: it was not like they were doing the same things. blackstone's competition was kkr. black rock's was fidelity. jason: when you're thinking about this issue, we did think about blackstone versus kkr or something like that. the interesting thing in private equity is that blackstone has put a lot of distance between them and their traditionsal alternative rivals. as they have gotten bigger they're looking at new pools of
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money, especially retail investors. matt: you look at this chart and you can see that blackrock, as far as total assets under management, destroys blackstone. $4.8 trillion to $310 billion. blackstone actually makes more money in profits. jason: on the same basis, about a billion dollars more per year. when you look at how investors are valuing this you saw that huge difference in terms of total assets under management. when you look at market cap, they are only about $10 billion apart. these are firms that are competing, not just for money from retail investors but even in the public sphere as well as companies -- as investors try to ss who they will invest in. matt: you were explaining they are starting to go after the same clients. stephanie: same investors. jason: the limited partners as
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it were and also the retail investors. blackstone is seen the 401(k) market. they're seeing things in terms of individual investors. blackrock is looking at those profit margins and saying, let's get in deeper to infrastructure investing. they have an alternative business -- stephanie: blackstone seems to make a lot of money doing that. you cannot just put a new shingle outside in say i will do that too. jason: it is a hard business to get into. there is a guy at black rock who used to work at blackstone who was running that alternatives business. they are hiring into that business and looking at that as a profitable -- as profitable down the line. stephanie: i am pretty sure both are doing pretty well. matt: jason kelly, thank you for
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joining us. stephanie: bloomberg's new york bureau chief. you can read the full article in the latest issue of bloomberg markets. check it out this weekend and you are on the beach. matt: when we come back we're celebrate fourth of july. driving a mile never looked so fun. we'll explain this story would become back. ♪
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matt: welcome back to "market makers." analysts flooding the streets with calls on recent ipos. julie hyman has all the action that you need to know. first, a bullish call on fitbit. julie: it is interesting that shares are up about 4%.
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you can see how they have already done. it has been an extraordinary performance for fit bit. shares sold in public at the dollars each on june 20 josh -- june 17. they are up 66%. as for david's tea jpmorgan and goldman sachs we have one outperform from william blair. we have had a strong performance for those shares. these david's tea shares have also done well, but not as well. june 4 at $19 when they became
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public. a big drop after earnings and shares were down on that day, 25% pullback. the shares are still up 18% from the ipo price. most of the neutral ratings we are hearing about our on valuation as shares have risen given that outperformance. a company that provides software that helps with e-commerce. most of the ratings are hold ratings. we have one by rating. it does have to do with valuation. the ticker shop. matt: i'm glad they got that. julie:shopify is up 84%. matt: we will take a quick break. we will come back and talk about
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the temperature. ♪
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announcer: live from bloomberg headquarters in new york. this is "market makers," with erik schatzker and stephanie ruhle. stephanie: good morning. it is not :00 a.m. in new york city. i'm -- it is not :00 a.m. in new york city. i'm stephanie ruhle and you are watching market makers. matt: i matt miller. stephanie: breaking economic data. vonnie quinn is in the newsroom. vonnie: continuing the trend we have been seeing of a mild but positive trend, the s&p home price index month over month up 3%. -- up .3%.
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it is a positive trend. weaver looking for 5.5% of again emily got 4.9%. this is going to be -- we are seeing futures higher. we have the s&p futures up about two quarters of a percent. matt: greece has put an end to the speculation it will not be making that payment to the imf today. if you thought they magically came up with the money. the greek finance minister confirmed they have not. greeks are only allowed to take out $66 a day. the prime minister remains defiant saying european leaders will not push greece out of the euro. translator: they will not kick
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us out of the eurozone. the cost is immense. the economic cost, the financial burden if the eurozone is dismantled. the cost of a country in the vault -- in default to the european bank with great amount is immense. matt: on sunday, voters will decide whether to accept the latest austerity measure proposed by lenders. the obama administration is making another effort to raise wages for lower paid workers. it is changing the role so that 5 million more americans will be eligible for overtime pay. some of the people we are talking about make as little as $455 a week but they currently do not get overtime because they are classified as managers. many of those people work in retail or restaurant businesses.
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stephanie: a merger of equals that brings together the world past third-largest insurance broker -- willis group will combine with power -- towers watson in an $18 billion deal. company will be called willis towers watson and it will have 39,000 employees and more than $8 billion in revenue. i will continue to look at the camera because matt is whining that that is an acquisition, not a merger. matt: when will you learn our lesson? there is no such thing as a merger of equals. willis gets more than 50% of the company and its name goes first. stephanie: new jersey governor chris christie is officially entering the race for the white house today. governor christie returns to his old high school to announce he is running for the republican nomination for president. christie was once considered a rising star in the party but polls and bridge gate indicate
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that he has faded in recent months. those are your top headlines. stephanie: german finance minister wolfgang schaeuble told lawmakers in berlin that greece would stay in the euro for the time being. matt: even if greek voters reject austerity and a referendum scheduled for this week. for more on how this could play out, we bring in hans nichols he is in the capital right now. what can we read into these comments? a little at odds with what other finance ministers are saying. hans: in some ways what we have from schaeuble is a legally factual statement, whatever the referendum is on sunday, that is not going to change greece's immediate membership in the euro. what schaeuble is doing is stating the obvious. greece will continue to try
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remain in the euro. packages are still on acceptable to the greek government. they still need to do all the reforms they have been avoiding to this point. i look at what has come out of the finance ministry today out of berlin and it seems as though berlin is starting to look past sunday's referendum. if the greek population agrees to the terms and conditions there needs to be some way to get them back on track to start negotiations. whether that is with a caretaker government we do not know the answer to that. it does seem that germany is starting to position itself for a post-july 5 referendum. matt: that would be a good thing to do. what they are preparing themselves for -- what i'm hearing you saying is, a yes vote.
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they feel that they have partners they can work with. hans: that is one way to look at it. the other way is what we have heard from other finance ministers and the prime minister of spain, if they vote no there's going to be a percussion's. the prime minister says it means they will have to leave the euro. a carrot and stick approach where it seems the spaniards are offering the stick and the germans are holding out the carrot. there needs to be something to entice the greek public back to the negotiating table. schaeuble seems to be hinting. they do not want to be accused, especially not the germans of trying to influence the outcome in greece. matt: i wonder if capital controls can be seen as a stick as well. after you are stuck only getting six he six dollars and pensioners only getting half of their money out of atms struggling to survive how could you then vote no and doom
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yourself to those circumstances? hans: that is more than a stick. that is a formed -- a thorned stick. quite a bit of anger from mr. tsipras as well as the entire eu for yanking the bailout package and not offering extension. in some ways mr. tsipras it was clear the bailout package was not going to be extended when he walked away friday night. it is somewhat remarkable that he is crying unfair now after walking away from a negotiation. matt: hans nichols, thank goodness you are back in berlin. hans only brought one suit to brussels so he was stuck. stephanie: more on greece ahead. we head to athens to speak with a former greek minister of administrative reform. erik schatzker is on the ground
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and we will give you the latest. ♪
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stephanie: look at that beautiful blue sky in london. i thought new york was having a nice day and san francisco. london look for the good too. matt: it is almost up time. -- pub time. stephanie: alexis tsipras has called for a referendum asking the greek people to vote no to new bailout conditions. a win is hardly guaranteed. one of the politicians leading the yes fight is live with my partner erik schatzker in athens. erik: thank you very much.i'm here with a parliamentary
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spokesperson for his party. he happens to be the son of a former prime minister. serious political credibility standing in front of me. yesterday, in front of parliament, we had a sizable representation of the people who are aligned with the government who want to reject the bailout conditions european creditors want to impose on this country in exchange for new credit. what can we expect from the yes forces tonight? >> i expect a bigger demonstration tonight. i think there is a silent majority within greece that is beginning to express itself. which on sunday will send a clear message by voting yes. the yes vote signifies an opportunity for greece to stay within the eurozone and not to jeopardize the biggest achievement this country has realized over the past 40 years, to become a full member of the
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european union. erik: the way that this debate is framed for the greek people area how do you, the people on the yes side persuade the greek people that this is a referendum on eurozone membership and not a referendum on the bailout conditions? >> i'm happy that you asked. it could only take place over a fundamental existential question greece's position within the european union. this is what our european friends are telling us. if you want to keep greece's hopes to remain a full member of the eurozone alive, you have to vote yes because a no vote is not going to solve the dilemma in which we have found ourselves. erik: how do you get the greek
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people to understand that that is what they are voting for? mitsotakis: the great people are feeling the consequences in the form of capital controls. the economy is completely paralyzed. i think people are beginning to understand what exactly is at stake. we always have this argument austerity was obviously terrible. we lost 38% of our gdp. a lot of people keep telling us how worse can it get? it can get much worse. this is a real dilemma. we are also trying to spin it in a positive way. there is room to have a better deal with creditors. it does not have to be a tax only deal. this was the priority of the government to construct the deal in such a way and it was its priority because the government felt it did not want to hit core
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supporters, civil servants and pastures -- and pensioners. we did a lot, not just to downsize but to make it more efficient. we feel that this country deserves a better administration and a private sector which is going to be able to invest without being constrained. this is still a relevant bait increase. -- a relevant debate in greece. erik: why does it appear as though the opposition, the forces for yes, are so far not particularly well organized? we've seen people like you on greek television and i'm sure you play a valuable role in that context but it is not like there is a groundswell, an advertising campaign. mitsotakis: a lot of it is grassroots. a lot of the people who came to demonstrate our people who never showed up to demonstrate. they feel compelled to make a
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case. erik: how do you reach these people? mitsotakis: i run a full campaign. a lot of tv, media. i try to talk to people to explain to them what the alternatives are, not just the catastrophe that could possibly result for the country but also why it is important for greece to be a member of the european union and why we could still get a better deal than the one that has been offered. erik: you think he will win this weekend? mitsotakis: even if it is by a single vote, i would be happy. i'm convinced greeks who have worked so hard to turn this into a proper come up prosperous western european country are not going to throw everything away. erik: thank you so much. he is with the yes side.
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they will go to the polls this weekend. stephanie: thank you. in new york, i want to give you this morning's top stories. puerto rico's debt is getting downgrades from standard & poor's. it's governor wants to delay payments on the island posts $72 billion worth of debt. officials say they will develop a restructuring plan by the end of august. the territory's debt load is higher than all but two states. general electric is moving quickly in its plan to divest most of ge capital. the company is agreeing to sell its european sponsor finance unit. the buyer is japanese bank tsu matomo. uber is losing hundreds of millions of dollars as it expands worldwide.
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bloomberg news obtained a document uber gives to prospective investors. it says the company has $470 million in operating losses on $450 million in revenue. the timeframe is not clear. the prospectus says uber is growing at a rate of 300% annually. matt: could the apple watch become tim cook's achilles heel? we haven't exclusive accept ash we have exclusive access to suggest -- we have access to suggest that it may be in better shape. ♪
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matt: gorgeous view of san francisco. 6:21 a.m. stephanie: that is what i call a san francisco treat.
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matt: does raisa rony still exist? -- does raisaice a roni still exist? sifting through the numbers. a few surprises. fitbit i was shocked to see the numbers from the prospectus. they sell a lot more than i expected. they are not really taking a bite out of apple watch performance? josh: one of the things from the data i saw --
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apple watch consumers and fitbit users are pretty much different people. i think it was about 5% of people who bought a fit it over the last couple of years bought an apple watch. only about 10% of apple watch consumers have bought a bit in the past -- bought a fitbit in the past. people who want to exercise are using fitbit and people who are more interested in the smart watch features, the things that make an apple watch connect to your iphone -- stephanie: who was the apple watch taking business away from? josh: a bunch of other smart watches in the market. none of which have performed well. when apple watch is trying to do is create sales from people who were not buying any sort of wrist-based computer. stephanie: fitbit seems to be
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crushing at. josh: it seems that fittbit is selling more than everyone else combined. it was not even close from the data we saw. the question just is, is the fitness band market big enough for fitbit to survive over the long run? stephanie: if it is the leader in the industry, why does it have to get much bigger? matt: they have $750 million in annual revenue? that is poised to go over $1 billion this year. josh: i think they have sold about 11 million bands last year. there seems to be some thought that the idea of fitness bands is not going to stick around.
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stephanie: my nightstand table is a wearable graveyard. my husband loves his. the world of connected fitness is only getting bigger. i want to be in the space. matt: you do not wear one either. josh: i have worn any number of wearable bands and now i just where this thing. matt: a watch so you can see what time it is. every time i talk to someone who wears an apple watch, they say i love it and it takes forever to tell what time it is. you cannot just randomly check it in a meeting. josh: one of the oddest things about the apple watch, the idea that it was going to be less rude to check your apple watch and your phone. matt: has the watch been successful? stephanie: at least when you check your phone you can pretend
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to say i'm taking notes, but you are really -- with the watch -- matt: do the sales look good? fitbit sales are positively rising. josh: from what we saw from spliced, fit it was ahead of apple sales. some question about whether apple sales are limited by demand or supply. apple said in the past it is having trouble making these. it is much more expensive than the fitbit. matt: great to get you on the show. stephanie: we are now just minutes away from the opening bell. i want to bring in joe weisenthal with the three things you need to be looking at today from a markets perspective. no doubt you will lead with greece.
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joe: you guys talk enough about greece. stephanie: we talk about the grateful dead, the fitbit greece, puerto rico. joe: last night our night was incredible. down 5% in the morning. up 5% by the end of the day. an extraordinary move. you not see it in a market this gigantic. what i am amused by is the extent to which regulators are pro-bull market. you would think the regulators would be in different toward one direction or another but there is so much cheerleading and official stuff about chinese stocks. stephanie: i want to bring in
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david balin. does that surprise you to see regulators cheering on directing investors in terms of markets? david: the other thing has been taking away from investors in china. they are also taking away the ability for investors to gain margin interest. there is a large difference between the a market and the hong kong market. matt: when you say it is a big market -- david: $8 trillion. joe: treasuries. they just had their first down quarter since 2013. people expect there to be an
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interest rate hike. people see the economy as getting better. i was surprised that we had not had a down quarter in treasuries until just now. i was not expecting that. david: i think it is saying that this is a bottom. as the u.s. economy is taking off and it is clear that the fed will raise rates some amount at some point, it is a fair likelihood that we are near a bottom must there is some major crisis that becomes global. matt: the fed is finally getting their message across. even though we are data dependent, we promise we will raise rates at some point this year. david: it is clear that that is what they want to do. joe: it would take something extraordinary at this point for the fed not to raise rates. matt: those are two conflicting messages. we will only move based on what the data does and we promise we will move. joe: the data is going in the direction the fed wants to.
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it would take something remarkable to derail it. the third one is the british pound, the best currency in the world. matt: historically? joe: it is a great currency. in terms of performance, the best major currency. stephanie: i need to interrupt. we have it breaking headline on greece. i want to send you back out to the newsroom. vonnie quinn has the details. vonnie: we have a headline out of greecesking for a two year bailout program. this is coming from the prime minister's office. it is difficult to know what the official creditors are making of this request for a two year bailout program from the european stability mechanism. the greek government will seek a
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viable agreement within the euro. this could be a response to headlines earlier that wolfgang schaeuble said greece will stay in the currency region even if there is a vote to -- a no vote to sunday's referendum. joe: it is hard to know exactly what the details are. there has been -- there were other headlines from schaeuble earlier. it feels like there's a lot of noise happening back channel communications. i'm not sure what this means for the referendum. the details matter a lot with this kind of thing. if you like people are trying to make stuff happen and avoid a disaster -- it feels like people are trying to make stuff happen and avoid a disaster. david: incredible deterioration in the economy. it seems there are likely to be stopgap moments that take place.
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referendum on the government itself. it is not surprising there would be some of these back channels. matt: we wants to get right to julie hyman to take a look at which stocks are on the move. [indiscernible] matt: jules. stephanie: you guys all set? julie: stocks are rebounding after the climb we saw yesterday. let's look at the deal that is happening, whether you want to call it a merger, and acquisition or just a deal. i will call it a deal. willis and towers will be combining. willis shareholders will own 50.1%. it is an $8.7 billion deal.
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you're looking at willis, the third-largest insurance holder in the u.s., adding more consulting services. competing with other companies in doing that deal. another deal that is kind of incredible, we are seeing the largest upfront payment in a biotech licensing agreement ever , talking about juno therapeutics and celgene. juno shares up 26% on this. a billion-dollar payment as part of a 10 year partnership to study cures for cancer and autoimmune diseases. relatively small payment and there will be juno shares that will be issued $9.1 million that celgene will buy. that is how this deal is going to work. juno known as being part of a new wave of immunotherapy.
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matt: celgene is going to buy juno? julie: celgene is going to buy newly issued shares in juneau but is not buying the entire company. they will own a stake in the company. matt: but 26% premium. julie: apollo education owner of the university of phoenix cutting its profit and sales forecast saying it now may replace some of its two your programs with a certification program. shares are down 13%. matt: matt: university of phoenix. thanks. david balin, still with us. let's get back to what we saw come out of greece. an interesting twist in the story could be what happens between now and the referendum.
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someone tweeted into surveillance this morning that they thought tsipras would make a deal before the referendum to save his job or at least save his party's leadership in greece. david: the question is, what is his endgame? if his endgame is to get the best deal he can for grace and have the issue of how much that they have outstanding dealt with, that would argue against that. no deal in the interim would deal with the complexities of the actual bailout. it does make sense, given the amount of stress taking place in greece that he appears to be supporting his own people and reaching out and seeing if something is possible. if nothing takes place in the next level days, the vote will be declared up either he will be in increase will be out, or the vote will go in favor of
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remaining with the eu, in which case his tenure will be short. matt: i assume most of your clients are not directly invested in greece anymore or if they are they rationalize -- they realize the riskiness. are there concerns as far as contagion? david: in general, if you go down significantly in valuations and equities, most would consider that a buying opportunity. 80% of greek debt is held by major world institutions. the remaining 20% is probably spread and virtually none of it is held by any private clients on a speculative basis. i think this is a buying opportunity. whether or not this is a contained event -- the ecb has more than enough firepower . it is hard to see a scenario where greece it self comes a catalyst for a major calamity. what is taking place in greece
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is a potential tragedy both humanitarian and otherwise. the other thing people underestimate is, once greece goes into crisis economically all of the targets established as part of these negotiations even if they were agreed to, would be hard to meet. i think that puts greece under greater constraint. a deal may be another kick the can exercise. matt: i want to show you and our viewers another potential solution for greece. fundraising. there could be the site come indigo go, a new campaign called the greek bailout fund, looking to crowd fund 1.6 billion euros for the people of greece. more than 6000 people have pledged up to 95,000 euros so far. for pledging three euros, he supposedly get a postcard from alexis tsipras. do we call him just alex now? first name basis.
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what do you think about that? crowdfunding going on. david: i think that is a funny idea. if we crown funded -- crowd funded for the next hundred 50 years, we might get there. best the network hundred 50 years, we might get there. matt: a closer look at rare earth miners. will other companies be following suit? ♪
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matt: from smart phones to ballistic missiles, so much of our high tech works because of rare earth metals. molycorp has followed this filed for bankruptcy. why molycorp is not the only minor on the brink of a bust.
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ramy: if you held onto rare earth stock since 2010, you're probably wishing you had not. the bankrupt announcement of molycorp has brought investment worries to a head. on april 15, 2011, it hit a record $74 $74.22 per share. today, one share is worth about 12.5 cents. there are 17 rare earths highlighted here on the periodic table of elements. a metal most in demand strengthens magnets in hybrid cars.
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ternium is used influence in -- in fluorescent lamps. europium adds red lights. china was the main catalyst. the country produces about 90% of all rare earths. in july 2010 it cut exports by 72%. global prices rocketed. companies and governments opened more mines while looking for substitutes and ways to use less. toyota made the size of its electric motor smaller, meaning less metal for the magnet inside. ford uses half as much in its battery. ge's wind turbines use less neodymium. in two dozen 10, the company targeted less use of rare earths overall. it is led to the bottom falling out and rare earth equities. beyond molycorp australia minus
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corporation, greenland minerals and canada's avalon rare element resources and questec rare minerals have lost nearly all of their value. rare earth's payday has come and gone. stephanie: what is my quick reaction? a bad feeling, like a yucky deja vu of high school. matt: you did not like chemistry? stephanie: let's move on. i get to change the subject. indonesian authorities say at least 37 people are dead after a plane crash earlier today. a military transport plunged into a neighborhood in the country's third-largest city. the hercules was carrying a total of 50 people. officials say it had engine trouble just after it took off. a new analysis says netflix will
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overtake the major networks in ratings within one year. it will in my house. an investor bank predicts the service will have a larger 24 hour audience than all broadcast networks. netflix is growing more than 40% a year and it spends less on content than major networks do. those are your top headlines. a few months ago i did not have netflix. you told on me nonstop every time you sat in the seat and i said, i have to get netflix. that is when i started eating house of cards. -- dating house of cards. matt: vonnie quinn has britain news for us. vonnie: -- has breaking news for us. vonnie: we have a better number than the previous months but not as good as forecast. 49.4 for the managers index.
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that is going to play into the overall ois and index which you will get in about -- the overall ois m index which you will get in about a week. economists were looking for a reading of 50. there had been a range of 48 to 50. mixed data coming out. matt: chicago pmi on a scale of one to 10 of importance. vonnie: it is pretty recent for a look at that part of the economy, especially through the middle of the country and it starts to feed into the national data so we start to get a better picture of what is going on nationally for june. matt: we are now about 15 minutes into the u.s. trading day. let's get back to julie hyman
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for a look at movers in the early session. julie: can aggregate -- con agra. the stocks we are looking at have to do with activism. conagra pushed to make changes. conagra is exiting private brands selling those brands. especially -- essentially reversing that acquisition. shares are down about 2/10 of a percent. they rose by 11% the day that jana stake was revealed. a water company. the shares are some of the best
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performers in the s&p, up 4%. triumph management took a 7.2% stake in the company. we are watching some of the other water stocks today as well. jonathan litz led an unsuccessful battle with mgm earlier this year. he is renewing his call for restructuring at mgm and saying they be one of the things he could do would be to buy wynn. to see no stocks are on the rise. -- casino stocks are on the rise. matt: i have been into nissans a lot lately. the juke rs. it is not a trick it is actually driving on two wheels. stephanie: i drive like that unintentionally. matt: a new record for the fastest two wheeled mile.
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two minutes and 10 seconds at an average speed of 30 miles per hour. nissan has been coming up with cool things lately. the weird news moe thatizmo -- stephanie: nissan is leaning into this, why? matt: because of congestion in today's cities. it is harder to drive on four wheels. stephanie: the two we'll proposition. matt: you could potentially lane split in a car. it is legal in california. stephanie: that is cool but i am not sure why one would do it. stay with us. ♪
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matt: 2015 is coming in hot. last month was the hottest may on record and the warmest start
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to the year since agencies have been keeping record in the 1880's. who are the players looking to help combat or capitalize on, or both, the effects of global warming? a summerlong series we're calling changing climate changing business. i want to welcome proterra ceo ryan popple. proterra is among the leading providers of -- congratulations on a new round of funding. what would you do with the money? ryan: thank you for the congratulations. we are going to grow. we reached the point where we had a one-year backlog on our first factory and we wanted to make sure we could keep up with the growing demand for zero omission transit vehicles in this market. we will open a second factory in southern california and it will give us the ability to serve those markets in the united states effectively. stephanie: two different cities
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have different needs? ryan: for the most part, a bus is a bus and that is the same nationally as it is internationally. every city across the planet has the same set of problems. growing population, growing congestion and real concerns even in countries where we consider we have advanced regulations for air quality. matt: you save money on fuel, maintenance etc. how does it out as far as cost? ryan: at the moment, it is more expensive than combustion. we see a path where ev becomes conventional. the technology needed to build a transit bus is quite simple and the cost of the boundaries -- the batteries is coming down. the simplest case to think about
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is, a diesel bus about $400,000 per city. they will spend another $1 million on fuel and maintenance over 12 years. for a 12 your deployment, you can buy a vehicle, electricity and the maintenance for $1 million. eisai $400,000. -- you say 400 million -- $400,000. stephanie: you stand on making money? ryan: fourth quarter of last year we were cash flow positive. we are cash flow positive in april. if we wanted to come over to turn off our and d now and become a profitable company in the short order. that is not what investors want us to do. they see potential for this technology to replace combustion. when you look out and see 70,000 diesel buses in cities in the u.s. alone, they are really pushing us to advance the technology. we sent to the bar for what this technology can do but over the next five years you will see these vehicles outcompete
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combustion on every metric. matt: ryan popple with big electric buses. stephanie: i am going to step out. coming up, dr. jim walsh of m.i.t.. one of the few americans that have traveled to iran and north korea to discuss nuclear issues. he will be reacting on the iran nuclear talks today at 10:30. i will see you tomorrow at 8:00 a.m. ♪
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>> good morning. it is 10:00 in new york city. 10:00 p.m. in shanghai. >> welcome to "the bloomberg market day." >> greek finance ministers say
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they will miss today's payment to the finance ministers. >> chris christie makes his longshot presidential bid official. he is far behind at the polls. >> apple joins the streaming music war today with streaming music. it could change the way you listen to music. ♪ >> good morning. i am olivia sterns. >> i am matt miller. let's go to mike mckee for the june number. mike: it is very high. 101 .4. last month it was 104.6.

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