scarlet: i'm scarlet fu. alix: i'm alix steel. scarlet: in 15 minutes, president obama will speak on tax inversion's. this comes after the treasury's announcement to make inversions less financially appealing. alix: stocks falling around the world as safety trades rally. and an exclusive bloomberg interview. imf managing director christine lagarde paints an uncertain picture for global growth. alix: we are half way into the u.s. trading day.

we need to get a snapshot of today's action with julie hyman. julie: we haven't had big pullbacks recently. there has not been that much movement either way in u.s. averages. the fact that we are seeing a pullback that is good -- getting there are these concerns about growth. the strategist over at goldman sachs says today that the recovery we have seen in the united states in the stock market is likely to falter before gets a second wind. -- there arere was two big issues. a slowdown in the buyback activity. he thinks the other reason is going to be the drop in profits for the s&p 500. take a look at the bloomberg. we are seeing the s&p 500 --

strategists are still pessimistic. the median forecast is 2150. and i'm going to send it back to you. belowthe dollar falling ¥110 for the first time since october of 2014. that means the yen is at its strongest level in a year and a half. it just illustrates the risk off trade we have been seeing. negative interest rate policy -- continues to give jim at -- japan's a pop economy -- economy a boost -- alix: some companies like the weaker dollar. julie: the yen has been rising for the past three days. or we can take a look at the bloomberg. or we are going to go back to the yen.

ok. the yen is higher versus the dollar and training at the highest since 2014. it is not only rising versus the u.s. dollar. ker world currency rancor here. all these other currencies are red versus the yen. the mexican peso and brazilian rail are falling the most -- brazilian real are falling the most versus the yen today. this is an issue for the japanese government at this point. scarlet: thank you so much. alix: let's check in with mark crumpton at the news desk. mark: iceland's prime minister has resigned.

thousands of i slanderous protested outside parliament demanding the prime minister sigmundur davi gunnlaugsson step down. leaks financial documents allege the prime minister and his wife set up a company in the british virgin islands with the help of a panamanian law firm. he's denied any wrongdoing. he's the second icelandic premier resigned amid street protests. president obama will speak from the white house at 12:15. he will address new rules to determine tax inversion's. they occur when companies move abroad for lower tax rates. his remarks come the day after the treasury department announced steps designed to make inversions less financially appealing. we will have live coverage. voters go to the polls today for the wisconsin primaries. republicans will award 18 delegates to their statewide winner and three more to the

winners in each of the state's eight congressional district. is looking to clean up in wisconsin. john kasich has been focusing on madison. donald trump is expected to do well in the north. polls showed bernie sanders -- show bernie sanders with a slight edge over hillary clinton. million dollars. mrs. clinton raised slightly less than $30 million. it was one of the best finishes ever in the ncaa basketball tournament. with five seconds to go and north carolina down by three, carolinas marcus paige it's a wild three pointer to tie it up. with a buzzer beating throw. and classes were canceled today.

scarlet: political dangers galore. that is the message from christine lagarde. she spoke from frankfurt earlier with francine lacqua. touched on everything from monetary policy and politics to the greek debt crisis. been invited by the greek authorities to engage our efforts through very competent staff members to actually help the greek economy and the greek people. we have to do transparent -- we cannot cut a special deal on the side. we have to do it the way we do it with all countries. because we are independent and we do it for all. >> i get the anger and animosity amongst the great government toward the imf is something we have not really seen in the past. is it unfair? >> together with the greek

authorities we have gone through ups and downs. continue because we are there for the people. canhat the greek economy strive. we have seen central banks chasing either currencies or chasing financial fluctuations. it seems that it's a reversal of what we've had in the past. we believe that monetary policies handled by central banks are fine. toy have been a huge support growth in this part of the man -- the u.s. and clearly there combined shift as the policies work together.

with interest rates being raised measures with less going forward. it has been critical in order to sustain growth. >> if donald trump or to get into the white house, how does the imf deal with this? >> we have to deal with new political reality all the time. as i said, the countries are members. the people are concerned. politicale to change leaders, we have to engage dialogue with whoever is in charge. >> have you spoken to donald trump? >> i haven't. as far as i know, elections have not yet taken place. >> a final question on oil. you were talking about the bread britries -- writ -- countries.

what was meant to be the decade of the brakes -- bricks is no longer the case. theirhink they'll have separate and individual paths and they have faced the challenges of completely different nature. india has the benefit of loyal prices. resilient and russia rich in oil and other resources -- brazil and russia rich in oil and other resources. oil-rich and it has taken significant measures it is reforming. look at canada. and alls rich in oil these new resources. they are taking heavy duty measures on all fronts. there are multiple different situations. alix: that was christine lagarde speaking earlier with francine lacqua. let's bring in michael

mcdonough. greece and theut imf has a lot at stake there. what about the global growth forecast makes the imf so influential? >> people are looking for any sign. the imf has access to information that other people may not have access to so they have that are clarity. when you see the imf reducing forecast, they are saying things are not as rosy as we thought they were the last time we updated this forecast. alix: what to you is the single biggest global risk for global gdp? >> obviously china is a big risk. there's a lot of downside risk their. re. there's a lot of debt. alix: we have known about that for a while. >> i think japan is a place where -- they have lucked out.

kind of like china, most of within debt is owned japan. so they have not faced any sort of crisis yet. -- try to increase potential growth and they have not had a lot of success. this morning was a great example. you were talking about the yen. why is it suddenly appreciating? the government announced that we are going to frontload government spending to help support growth during the first half of the year. the problem is people were expecting there to me a much broader structural reform. you saw a big selloff in japanese equities and the yen strengthening. scarlet: we talked about the

dollar falling below the yen. how much damage will the stronger yen do? >> it will do a lot. i think it's going to entice them to act more. if you look at the trend it has been a rather subtle path of appreciation. it has been appreciating for a while. they could turn rates further negative or increase the size of their asset purchases. i think that's becoming increasingly likely. it seems like the biggest risk is central banks because they have become unpredictable when they should be a source of stability. >> i don't view that as a point of risk. i think they are trying to manage the risk. it's moree of japan of a fiscal problem.

putting in the proper reforms and policy. the central banks are responding. the place you can view central banks as a risk would be in the cases where you have policy divergence and some cutting but others hiking rakes. it's where they are hiking that you could see some risk. at the same time, the fed for example -- if the fed starts hiking rates and the u.s. economy takes a turn for a -- the worse, they are going to stop. and they did. are now basically in agreement with where the market was. the market is now discounted a little bit further. look at the u.s. economy could probably support two rate hikes. slow toumer has been come around which is why growth in the first quarter has been less than what people would like. you still have strong job gains. good to see you, michael

make. i call him chart man. -- good to see you, michael mcdonagh. i call him chart man. coming up, finders keepers? not in this case. our ministry stock of the day is reporting its best gain in seven years. scarlet: the answer, next. ♪

mark: you're watching bloomberg markets. i'm mark crumpton. we go live to president obama speaking about tax inversion's. s. >> as i travel around the country, what always stands out is the fact that the overwhelming majority of folks work hard and play by the rules. and they deserve to see their hard work rewarded. they also deserve to know that big corporations aren't playing by a different set of rules. that the wealthiest among us aren't able to gain -- game the system. that's why i've been pushing for years to eliminate some of the injustices and our tax system so i am very pleased that the treasury department has taken new action to prevent corporations from taking advantage of one of the most insidious tax loopholes out

country justg the to get out of paying their taxes. it's got some attention in the business press yesterday but i wanted to make sure that we highlighted the importance of the treasury's action and why it did what it did. this directly goes at what's called corporate inversions. they are not new. terms,put in layman's it's when big corporations acquire small company and then change their address to another country on paper in order to get out of paying their fair share of taxes here at home. as a practical matter they keep most of their actual business here in the united states because they benefit from american infrastructure and technology and rule of law. they benefit from our research and element and patents. they benefit from american workers who are the best in the world. but they effectively renounce their citizenship. they declare that they are based somewhere else, thereby getting

all the rewards of being an american company without fulfilling the responsibilities to pay their taxes the way everybody else is supposed to pay them. when companies exploit loopholes like this, it makes it harder to invest in the things that are going to keep america's economy going strong for future generations. it's six the rest of us with the tab and it makes hard-working americans feel like the deck is stacked against them. so this is something that i've been pushing for a long time. since i became president we have makeour tax codes fair and -- major they are enforced. i will say that it gets tougher irs gets when the squeezed by the congressional appropriation process so there are not enough people to actually pay attention to what all the lawyers and accountants are doing all the time. but we have continued to emphasize the importance of

basic tax enforcement. in the news over the last couple of days, we've had another reminder in this big dump of data coming out of panama that tax avoidance is a big global problem. it's not unique to other countries because frankly, there are folks here in america who are taking advantage of the same stuff. a lot of it is legal. but that's exactly the problem. it's not that they're breaking the laws, it's that the laws are so poorly designed that they allow people if they have enough lawyers and accountants to wiggle out of responsibilities that ordinary citizens are having to abide by. here in the united states, there are loopholes that only wealthy individuals and powerful corporations have access to. they have access to offshore accounts. and they are gaming the system. middle-class families are not in the same position to do this.

in fact a lot of these loopholes, the expense of middle-class families because has to be madeue up somewhere. alternatively, it means that we are not investing as much as we should in schools, making college more affordable, putting people back to work, rebuilding roads, infrastructure, creating more opportunities for children. this is important stuff. these new actions by the treasury department build on steps that we've already taken to make the system fairer. i want to be clear. while the treasury department actions will make it more difficult and less lucrative for companies to exploit this particular corporate inversions loophole, only congress can close it for good. surenly congress can make that all the other loopholes that are being taken advantage of our closed. i have often said the best way to end this kind of irresponsible behavior is with tax reform that lowers the

corporate tax rate, closes wasteful loopholes, simplifies the tax code for everybody. in recent years i have put forward plans repeatedly that would make our tax system more competitive for all businesses including small businesses. so far, republicans in congress have yet to act. my hope is that they start getting serious about it. -- favors thens wealthy at the expense of the middle-class, it's not surprising that people feeling they can't get ahead. it's not surprising that oftentimes that may produce a politics that is directed at that frustration. and rather than doubling down on that led a few big corporations or the wealthiest among us play by their own rules , we should keep building an economy where everybody has a fair shot and everybody plays by the same rules. taxer than protect wasteful

loopholes for the few at the top, we should be investing in things like education and job creation that we know wrote the economy for everybody. letting them lock in tax breaks for millionaires or make it harder to actually enforce existing laws, let's give tax breaks to help working families pay for child care or college. companies rewarding that are shipping jobs overseas and profit overseas and start rewarding companies that create jobs here at home and are good corporate citizens. that's how we are going to build america together. that's how we got back from the great recession. that's the story of the past seven years. that can be the story for the next several decades if we make the right decisions right now. i hope this topic ends up being introduced in the broader political debate that we are going to be having leading up to election season. ok? with that i turn it over to mr. josh earnest.

yeah. the release of these millions of pages of financial information, are you concerned that that reflects on the ability of the treasury department to be able to see all the financial transactions across the globe and whether that suggests that the sanctions regime that you put in place and a bunch of places around the world might not be as strong as you think it is? >> we know sanctions regime is strong because iran wouldn't have cut a deal to end their nuclear program in the absence of strong sanctions enforcement. that the is no doubt problem of global tax avoidance generally is a huge problem. it's been brought up in g-7 meetings, in g-20 meetings. progress been some made in coordinating between tax authorities of different countries so that we can make sure that we are catching some

of the most egregious examples. but as i said before, one of the ag problems we have is that lot of this stuff is legal, not illegal. and unless the united states and other countries lead by example in closing some of these loopholes and provisions, then in many cases you can trace what is taking place but you can't stop it. there's always going to be some illicit movement of funds around the world, but we shouldn't make it easy. we shouldn't make it legal to engage in transactions just to avoid taxes. and that's why i think it is important that the treasury acted on something that's different from what happened in panama. the corporate inversions issue transaction that

is brokered among major fortune 500 companies to avoid paying taxes, but the basic principle of us making sure everybody is paying their fair share in that we don't just have a few people who are able to take advantage of tax provisions, that is toething that we really have pay attention to because as i said, this is all net outflows of money that could be spent on the pressing needs here in the united states. and the volume that you start seeing when you combine legal tax avoidance with illicit tax avoidance or -- some of the ,ctivities that we are seeing this is not just billions of dollars. it's not even hundreds of billions of dollars. this may be trillions of dollars worldwide and it could make a big difference in terms of what we can do here. i will take one more question and then turn it over to josh. go ahead. >> the republican front-runner

today outlined his plan -- >> oh, no. >> for an undocumented immigrants in the u.s. sending money back home. the implications of his plan and are his policy proposals already doing damage? >> the answer to the latter question is yes. i think i have been very clear earlier that i'm getting questions constantly from the lankyaders about or suggestions being made. i do have to emphasize that it's not just mr. trump's proposals. i mean come you're also hearing concerns about mr. cruz's proposals which in some ways are just as draconian when it comes to immigration for example. the implications with respect to ending remittances, many of which by the way are from legal immigrants and from individuals

sending money back to their families, are enormous. they areall, impractical. we just talked about the difficulties of trying to enforce huge outflows of capital. the notion that we are going to track every western union bit of money that is being sent to mexico -- good luck with that. then we got the issue of the implications for the mexican economy. in turn if it's collapsing actually sends more immigrants north because they can't find jobs back in mexico. but this is just one more example of something that is not thought through and is primarily put forward for political consumption. and as i have tried to emphasize throughout, we've got serious problems here. we've got big issues around the world. people expect the president of the united states and the elected officials in this

country to treat these problems seriously, to put forward examinedthat have been , analyzed, are effective. -- unintendedted consequences are taken into account. they don't expect half-baked notions coming out of the white house. we can't afford that. all right? i will turn it over to josh. thank you guys. mark: the president of the united states speaking from the white house. the topic today was tax inversion. the president making his comments a day after the treasury department announced a series of steps designed to make these inversions less appealing. bloomberg's sac miter joins me now with more. the president said corporate inversions are not new but he called them one of the most insidious loopholes out there. just how global in scope are we talking about? about 50 companies so far

have undertaken a corporate inversion. that is essentially where a u.s. company kind of renounces its citizenship and declares it is now a foreign company and therefore can pay a lot less in u.s. taxes. there's estimates that range in the billions, tens of billions of dollars in terms of how much the country has already given up in tax revenue and how much more it will give up in the future if they continue. mark: is this something that can be addressed through the u.s. tax code or is it so global in scope that it would take an international effort? >> this is actually kind of a u.s. only issue. the u.s.ly all about tax code being set up in a way that gives companies a big incentive if they are doing business here to be foreign-owned. it's better to be foreign-owned if you are doing business in the u.s. than it is to be u.s. owned. it's really kind of a u.s. issue.

the president also spoke about transparency and the leaks from panama. companiesbout shell and things like that, you are talking about a problem that touches every country in the world. mark: talk to us about the so-called panama papers. dump ofs been a global information showing people, individuals, and governments alleged to be avoiding taxes, setting up shell companies, having their money overseas in place is known to most people when you have a conversation concerning where you are putting your money offshore. > the leaks> were data from a panamanian law firm. they cover companies and industries all over the world. your thing pressure on the prime minister of iceland to resign because he was linked to one of these panamanian companies. there is other data in their connected toe

prime minister's all over the world. mark c.: please correct me if i am wrong. the president tries to make the between what could happen with these inversions when corporations and individuals seek to establish a new haven, if you will, and the word paying their fair share of taxes. the president talking about tax breaks to families in this country. was it just me, or did sound like a bernie sanders stump speech. to put thisying very technical action in the context of politics, entire to the discussion of inequalitywor, and basically saying -- that rich people and corporations are paying -- -- playing by different sets of rules than middle-class americans. he is trying to put it in a political context, and really, he said he wants it to be discussed during this election year, which is maybe tough to get people to focus on the tax

issue in an election year. we will see. mark c.: politics being what president reminded people that all of this is legal behavior. this is not a legal to do this. >> absolutely. is a great example of a problem -- the companies doing it are always doing it, whether they think they are complying with the rules. the rules, just because of the up,they have been set provide a lot of opportunities for companies to do things that don't really totally make sense, if you were to try to design the system from scratch. is a great example of amark c.: sac meyer, thank you joining us. the president spoke from the press briefing room.

he simplified it by saying -- he said that businesses who do this are getting all the rewards of being an american comely without paying their fair share of taxes, like everyone else does. that is the latest from the newsroom. scarlet, back over to you. scarlet: we have some breaking news. first, in press briefing room. he simplified it by saying -- e minister resigned in the wake of the penama papers. the disclosure indicated the politicians, some rich people had put money aside in shell companies organized by the animating law firm. alix: the penama papers taking its first casualty. we learned earlier that the iceland prime minister would resign. we have learned that the top challenge right now is capital control exit, and he is asked, and the finance minister will as the opposition to drop a no-confidence motion. the idea being, how you do with the transition when there is this kind of scandal and negativity in the market.

the finance ministers says he won't make any demand to be the prime minister, he will stay the finance minister, basking opposition to drop the no-confidence motion. here on whatcheck the fed is doing with the currency. this is the dollar-iceland krona . you can see, not a lot of movement. relatively flat on the day. i'm sure you saw the fall in the ona. for the most part, not a lot of currency reaction to the news. scarlet: it is something that has been growing since the penama papers for release. we will continue to monitor that for you. in the meantime, some breaking news from south africa. the prime minister has escaped impeachment for violating the constitution. it was by 243 votes to 143.

if you look at the currency, the south african rand, that is falling to session lows at the moment. after the rand had rallied to a four-month high at the end of last week. alix: the idea is we had an impeach -- impeachment rally, as well as in brazil, with hopes for a changeover in government. in that case, it did not pan out. scarlet: let's head over to julie hyman with a look at company movers in the u.s. abigail: related to this inversion ruling that we have been hearing so much about, that we heard about from president course, the two companies infocus today are pfizer and allergan. analysts are saying this may scuttle the deal between the two companies. already as if it is 95% dead. pfizer shares are higher, and

have been climbing more through the session. analysts asked if there was a plan b. in addition, analyst here -- analysts here say that the its globalit of finance business has been pushed back and allergan deal. if it moves forward, it will be positive for pfizer. it is not just these two companies. there are a lot of companies pursuing these types of deals, and they are reacting as well. one other example is back felt baxalta and shyer. buy is not into anversion -- i inversion. areeast for today, analysts

expressing concern. what about the mysteries dr. go a decline in the stock over the day -- the biggest fans, excuse me. it is not a potato chip maker, it is a semi conductor. that kind of chip. scarlet: not frito lays. abigail: the ceo of the company and the president are leaving. they are leaving their positions effective immediately. starwood value recently took an .nvestment in the company it has been climbing this year, but really getting a bump up today from those resignations. alix: i'm going to get better at this thing, i swear. mr. stock action. -- mystery stock action.

scarlet: is the golden age of hedge funds coming to an end? lowows fell to a seven-year . now by the author of "so you want to start a hedge fund?" he famously made a bet with warren buffett eight years ago. welcome. your book is less a step-by-step manual, but a series of lessons for anyone wanting to start a hedge fund. let's start about why you wanted to write this down. hedge fund industry is certainly at across arts -- a crossroads. >> i found i was regularly approached by people wanting to start their own hedge funds, and offering advice. what i found is what i had to say was always knew to them, when it was common knowledge to

me. over the years, i acquired a body of knowledge that could help a lot more people than i was able to reach one-on-one. scarlet: head wrench has passed their disruptive phase -- it is all about stealing market value from each other. >> that's right. a lot of the founders of the larger headphones are nearing retirement age. that capital will get recycled to smaller funds. it is interesting opportunity for smaller funds and emerging funds to capture that overtime. a lot of people with headphones -- hedge funds will moveto think about how to their money over the next 5-10 years. >> i think that is certainly the case. those allocators, generally stayed 20 have

been 30 years with the great funds of today. they are little less accustomed to following the patterns of lesser funds. stayed 20 have been 30 years with the great youtakes is what learn from. there will be a lot of shifting in the coming year. this talk about hedge funds less as an investment vehicle and more of a startup business. that is what struck me. thate of the key lessons you see repeated is that managers, who are well versed in not ass analysis, are experienced in starting their own business. if they take the thoughtfulness of analyzing companies in analyzing themselves in business, it could pay a lot of dividends. scarlet: it is the squishy part of the business for guys who are used to quantifying everything. when the guy found interesting is the safety of the hedge fund managers should seek a diverse client base. you learn from. there will be a lot ofpatient ne endowments and foundations.

>> sometimes the more prestigious clients end up making similar decisions at a certain time. rather than have a client that will all be driven by the same factors, over time, it makes sense to go to a more diversified client base. scarlet: is bigger better? ofr book profiled a lot different funds, and includes a lot of anecdotes. >> i don't know that bigger is better. it is different. as investors today have a lot of their money with bigger funds, there are different risks, and there is embedded diversification. scarlet: i have to ask you about your update on the tenure that tu made with -- 10 year that you made withbet warren buffett. for the year?re >> you never know what will

happen in the future. scarlet: two still stick by your idea that contraction is needed for hedge funds to prevail? >> i think that is the case. scarlet: thank you so much. we have much more on bloomberg markets coming up next. ♪

scarlet: you are watching bloomberg. i'm scarlet fu. alix: i am alix steel. this is your cold will -- global business report. scarlet: iceland minister has resigned after accusations that he used offshore shell companies to funnel his wealth. alix: hedge funds ahead of europe's biggest a kind of me --

economy. scarlet: saudi arabia prepares for a post-oil economy. we begin with the penama papers. iceland's prime minister has resigned in the wake of allegations he used offshore shell companies to funnel wealth. regulators across europe look into the offshore activities of the biggest corporations. structuresaccept with legitimate basis. we don't engage in that. when there is a beneficial

third-party winning seats, knowing who is a beneficial owner, we will not engage in business with that entity. we are very confident with our investments. alix: german factories dropped in productivity. german corporate month.nce grew last month thated last growth could slow in the second quarter. in saudi arabia, big changes are on the way for the country. the stock market, which is among the most closed in the world. the state plans to double the size of the stock market by adding dozens of companies and make it easier for foreigners to invest. the plan is to grow the market capitalization to match the size of saudi arabia's gross domestic

product over seven years. that is according to a government regulator. the current value of listed companies is that 7.4% of gdp. scarlet: time for the bloomberg quick take. from this will have more oil than saudi arabia more poverty than brazil. voters gave the opposition control of the nationals and the .ed first time in 16 years here is the situation. uro promptlyd gave himself executive powers, which lawmakers tried to block, only to be overcharged by the supreme court. opposition leaders have threatened to out him unless he curbs inflation, restores t economic growth. he devalued the currency and 94% of from oil makes up the currency earnings. lessconomy produces little

for export and shrink last year. here's the background. his mentor is none other than the late hugo chavez who revolutionized venezuelan politics. he nationalized thousands of theanies, reducing ability to produce anything but oil. he told out $8 billion a year of cheap oil. tohad widespread support turn a democracy into an authoritarian state. optimists argue that by threatening to unseat maduro, the opposition can force him to go along with reforming the economy. aboutposition, made up of a dozen parties, has no single plan or leader. in a poll, 57% say they still

in high regard. for more stories, visit bloomberg.com.

alix: you are watching bloomberg markets. i am alix steel. on u.s. pic here stocks. very much, a risk off day. we are near 1% decline in the s&p. we did not have those in march. this is action kind of remarkable thing to know. among the sectors giving us trouble, we have utilities, financials, health care. down. is the least scarlet: the best performer, really. let's go now to abigail doolittle, live from the nasdaq.

abigail: in keeping with president obama's press conference on tax inversions, up ag today.rgest driv apple earnings could be hit for as much as 50% on the inversion bowl. basically the possibility that the company could pay back taxes around the european business deal. the stock just moved above its daily moving average. in a similar fashion, late last year, ahead of the decline. there is a possibility that sellers could step back and here in the medium-term. alix: thank you so much. scarlet: argentina is asking for more time when it comes to paying $20 million of debt. the issue now goes before the new york appeals court april 13, one day before they have to make the first repayment.

wait to buy the bond. we have to wait until the appeals court makes a decision. the has been basically rules of the game ever since. that is what the judge said he would do, but then, there's always the court of appeals. 13re is a hearing on april -- lucky over is not on april fools' day. we would have liked that hearing to take place earlier on. not just us, but the holdouts. that was not the case. it will happen when it will happen. way, wet is out of the will basically issue the bond,

and everyone will be happy that you have your share of the bond. >> the current deadline for paying off the holdout -- holdouts, notf all, but one group. it is not a deadline, but a strike, basically. option day, if you will. it is their option to stay in the deal or leave the deal. it is their option. nothing we can do about that. >> is there a chance that it could all fall apart if the pay and is not made by that date? bei don't see how that could

the case. why the holdouts would holdout of holdout. we have done what we were required to do. we have agreed on the terms. replaced the law through pushed the law through congress. the repealed the laws that we needed to repeal. go.re ready to y> is there an mechanism -- agree on an extension, possibly. >> we have given the option away. holdouts toe .xercise or not exercise the judge was very clear about what he said and when the two

conditions are met, the two the laws, andng agreement signed on or before april 9. once we deal with these guys, the injunction will be moot. it is very clear to me what the option is. scarlet: that was argentina's finance minister. coming up on bloomberg television, secretary of state john kerry spoke at the summit here in york. we will get his take on the penama papers. ♪

>> welcome to bloomberg markets.

>> from bloomberg world headquarters in new york, good afternoon. alix: here's what we are watching at this hour. almost two months, where he about global growth, sending investors to save havens. john kerry says the islamic state remains a danger but fewer foreign flagged -- fighters are headed to syria. we will have more from the finance summit in new york. >> first, julie hyman has been tracking the decline of u.s. stocks. julie: a risk off with the s&p 500 down the most in almost a month.

the nasdaq in the s&p faring worse today, down nearly 1% or there is a concern about global growth, despite the fact the economic data we got out of the u.s. today was not negative. the largest portion of the u.s. economy, the service industry, growing for the first time in five months. we are still seeing a selloff today. you will see it is a broad-based selloff. decides a sliver of consumer staples. utilities faring the worst despite the fact that rates are down. they usually do better when rates are down. financials are down. health care dragged down by consumer discretionary. a lot are once again suffering today just as they were yesterday. is a big mover today that we are watching. in this case, a beneficiary of concerns of global growth. the japanese yen.

below 110, back up above the level again. it had not reached that level since october 2014. it still remains at the highest versus the u.s. dollar going back to november of 2014. we are seeing other havens benefiting today. the u.s. 10 year yield, the buying of treasuries and gold amid a newly nervous environment. are seeinguessing we stocks that are too expensive and valuation falls? julie: the strategist at oppenheimer says when we bump off 19 in the price to earnings ratio in the s&p 500, when we have done that over the past year, we have seen stocks go down. the pasthe chart over year, with these instances circled, when it gets close to 19 and as you can see, stocks come down following that. of thears to be one levels where it has happened

before. he says it will be tricky once we hit the 19 threshold to maintain gains. let's check in with the news afternoon. mark crumpton has more from the news desk. mark: president obama spoke out against taxing versions today. they occur when companies move abroad for lower tax rates. the president spoke earlier at briefing.house press president: i am pleased new action has been taken. it is one of the most insidious just toholes out there, get out of paying their taxes. mark: the remarks come after the treasury announced limiting the ability to participate in an versions if they have arctic done them within the past 36 months. betweenlion merger pfizer in our can.

voters go to the poll for the republican and democratic primaries. they will reward 18 delegates and three more to each of the states congressional districts. ted cruz is aiming to clean up in milwaukee and john kasich has been folks on madison and donald is expected to do well in the north. iceland spymaster has resigned, a decision announced in parliament today. thousands protested outside parliament, demanding the prime minister step down after allegations. document's alleged the primus read his wife set up a company in the british virgin islands. he has denied any wrongdoing and is the second -- second to resign amid street protests after the force-out in 2009 of the financial collapse. the women's basketball team can make history when it tries to

win an unprecedented 14 straight title. their 75th try for straight victory and 24th street in the ncaa tournament. global news 24 hours a day is powered by our 2400 journalists and more than 150 news bureaus around the world. opportunities in distressed assets. that is what the newly raised $3.335 billion is looking for. >> earlier today on bloomberg of soule corporate cycle here on the horizon and offered insight on energy. >> if you are thinking about the energy of commodity related things, we think it is too early. we think the pricing does not yet reflect a much lower for longer environment in oil prices. we have to wait. >> you are saying energy is not enough-- yet distressed

to buy. >> it is distressed enough but not cheap enough. >> when do you think that trigger will be? .hanks reassess the loans given i have been waiting for the cycle to happen in the last couple of seasons for this. what will be the trigger? >> when companies run out of cash. have given them companies time, or shrink over time based on the ground. this has been slower than people have imagined. that is one trigger. the other is when will they run out of cash? when their hedges burn off. the hedge profile of these companies generally running off in the course of 2016. >> the other part of the energy is coal. financial resources, energy,

debt, it is kind of a disaster. is coal interesting to you? >> it depends. established between thermal coal and cooking coal used. they have both been lumped together but most of the secular issue is in thermal coal. the u.s. but around the world, reducing alliance -- a reliance on it, generally avoid that. medical does provide opportunities and it is a global market. the u.s. is a relatively small player. australia is the largest producer in the world. thats more to do with how happens and how currency move happens. >> the other sector going through a huge shift is media. we saw twitter one thursday night game. are there secular versus cyclical issues that do provide opportunities? less if they were cyclical, i

would say they provide opportunity. a lot of what we see is secular. it is slow in developing when changes like this happen. thexample of a good one in sense that people's understanding of how distribution happens and how content is delivered is changing rapidly over time. a lot of stress in the system happens as the transition moves and assumptions changes quite meaningfully. those are hard to predict over a long time. >> i feel like with energy, i of a is a great example regular station, we have been waiting for it to die for a while. we will have streaming and satellite radar takeover but it has not. does that imply there is value even in a structural shift? >> there is value. and a lot of these situations, the company actually generates quite a bit of cash. maybe not enough to support the debt, but that is a big difference and often what we do

is unlock the value of the company through a restructuring process. it is trapped by having too much debt. we were involved in one company that was exactly that. very cash generative, but not enough to serve as debt. some media assets could. >> what about retail? it is similar to radio and media. waiting for it for a long time. are we at that point? >> the amazon effect, we have been waiting for it for years. it has been slow to show up but you knew it was happening. you know how many show up in your house. everybody uses it to some extent. role takes time for the impact to be felt by the stores, but in general, a lot of retailers have too much floor space relative to the product --

productivity they can generate. will not just be the operators themselves, but the owners who will feel that pressure in secondary locations particularly. that was jamie weinstein with me earlier today. >> coming up, new concerns of rising supply and we demand in china. i we will dive deeper. get excited. iron ore is hot -- is happening. ♪

alix: you're watching bloomberg markets. stephanie: julie hyman has a check on the moves and metals. julie: looking at iron ore, let's start there. we are seeing it right today.

we got some numbers out of china. a one-year high. .ron ore futures are up we also have a chart of the stockpiles tires -- at a one-year high. that has been feeling the gain. you can see the rebound to the highest level we have seen in a years time. it is down 1.1%. both of them have seen a rebound from their lows of the year, just as we have seen a pattern in many of the metals in iron or or aluminum year to date. here is the year to date rebound we have seen up 17%. aluminum has been bouncing around off the lows it reached

in a year. >> thank you. for more, we're joined by david, where he covers metal and mining. you just returned from a weeklong trip in china, across the country. what did you learn there? >> the chinese government got concerned about house loving scott. infrastructure spending will be about 26% this year and basically put the pedal back on the gas. with -- the second -- the sentiment has been the same across the board? x yes. inventory levels got down to one third of what they normally are and we are seeing a big restocking going on now. >> that was the big question. actual underlying demand, or

was it just restocking. it seems you are saying we have not seen it really move. >> the biggest part about it has been the stock. how long can it sustain at this level -- at these levels. there's not much we can do that if a sugar spending. lower tier cities have that inventory and the need to get that down, the lower cities. >> just because he restocked, it does not mean demand is sure to follow. >> no, it obviously drives prices higher. price.the $57 everything is off the bottom because the initial restocked. now the russian is can they sustain -- the question is can they sustain it is levels? did have them say, ok, guys, we cut back reduction. do they reverse that? cut lasthalf of those year are coming back online.

the supply situation for aluminum continues to get worse and not better. come offe some stuff in the fourth quarter but the so,y over the last month or we have seen a slowdown in economic reform in terms of shutting down steel mills. that is interesting how we impact the longer-term situation. trade cases so far this year as compared to the u.s. prices affect the u.s. market? >> up 60 or $70 as well. significantly, $40, partially because china is not exporting as much. we have had low inventories. basically, semi-fabricated steel, and basically it is cheaper now to buy sure -- scrap out of the u.s. been to buy europe. everything has basically gone up as well because chinese prices have risen.

alix: digging deeper, is that because the u.s. has the tariff on chinese imports or because prices are rising in china? >> it is twofold. the trade cases have not locked out china from exporting products to the u.s., that is the big positive. we have seen imports down total. .t has been a huge drop also the fact that demand has improved a little bit in china as well. less i cannot believe we have not talked about copper in china yet. >> exactly. what is your call on copper? >> demand is i believe somewhat weak. we have power infrastructure spending down. demand for copper right now in china is probably 0%-2%, pretty slow.

day, you are the probably plus or minus where we are today for the time being, and a on what chinese demand is to it is not that good right now. >> explain this to me. --s has been one of the most perplexed and charts i have seen in a long time. shanghai futures higher, but bonded inventories are higher than china, meaning there is no shift around inventory. how does that make sense? you get one chart and you get one idea and another chart, another idea. >> it is just an arbitrage between the different prices. got the price of the lamy too low, people shifted the inventory to the shanghai amatory. over the next six or seven months, we will see that flight back depending on what the arbitrage is. that is what is going on now. >> thank you for joining us today.

>> to national security, after the break, a special and wide ranging interview with john kerry. we will delve deeper. ♪

>> we have breaking news. the sports director is said to bankruptcy. could file as soon as next week. we will keep you posted with details on the group. the bloomberg new energy finance summit is underway here in manhattan among to take the stage today, john kerry. him, for an exclusive interview. the islamic state and how private sector can tackle climate change. >> make energy conscious decisions in their business, how they power their plant, where they do it, and also in their

choices for national policy with respect to energy. meet -- need to move to a low charging energy-based economy. that would be not only significant in terms of our admissions and all the negative consequences that come from the climate, but the greatest economic opportunity the world is looking at today. millions of jobs will be created and making those energy conscious decisions. a lot of savings for companies. you can save millions of dollars, literally. our wit -- -- >> are ceos just missing the boat? companies understand this. walmart is engaged in working to deal with climate change. pepsi, coca-cola, general electric. a long list of brand-name companies that are doing it, and

a lot of other people are engaged in lower and smaller levels to make wiser choices about their energy use and energy production. >> are you encouraging the government to take regulatory steps to account for the cost? >> not a regulatory step, but we would urge -- i mean, accounting an exercise inbe transparency and accountability and truth. real figures in real accounting. real accounting on energy today does not take into account the cost that we pay, the american cap -- taxpayer is paying. enormous sums of money. $70 million for hurricane sandy. the storms are more intensive today. i cannot say one storm or the precise effect of the client moment, but i can tell you the intensity generically is up as a

consequence of climate change. more flooding, more droughts, more melting of glaciers we have depended on. the migration of certain species of plants, certain species of animals. fish are now migrating to find colder waters. it is a huge transformation has potentialhat negative consequences, but the accounting needs to reflect those realities. >> another subject that is important to you, the islamic state. there are reports progress is being made on the battlefield. is that progress reflected in the outflow of westerners, americans and europeans, going to syria to fight on behalf of the islamic state? mr. kerry: yes. there are still people going there. there are less fighters than previously.

we are taking more effective tops to curb the travel, affect the decisions people are making. we now have many communication centers beginning to reach out to islam to counter the false narrative of isil and mention the scenarios on the ground. 15 members were executed in iraq and we assume because they were trying to get out, not buying the narrative. this is what happens. if you try to get out, they will kill you. you are a prisoner of this. we see increasing incidences of fighters trying to desert or run away from fighting positions, even as commanders are urging them to fight. we believe we're making progress.

isis is still a danger. it still has people with positions in countries over the past two years. that willthing continue to require our initiative for some time. but we will defeat and destroy isis. >> that was john kerry speaking earlier. alix: morehead from the bloomberg energy finance summit, we will talk to ceo david crane about life after big energy and how he is doubling down on clean energy dreams. ♪

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you can see the reaction in the stock price, down at session lows as a result of this one headline. halliburton has been down all day. we go to julie hyman for more. they cannot get it together, they cannot get the merger going yet. yes.: even though this is one report, analysts talked about potentially this is a deal that is happening. we have the williams energy transfer equity deal that there has been a lot of talk about as well. , and apparently i'm just looking for the description. it is a media organization focusing on the regulatory organization. it is a website reporting that the doj reporting to sue, according to their reporting.

fallingthe stocks are to the day. >> it does get a huge termination fee if the deal were to not go through. other reports are coming out saying, what would happen. there was another one. there with me. also saying baker hughes are downsizing not to the mid-20's to some extent dashed some respect. -- to some respect. regulators-- whether would step in. this is the latest movement on that according to this one report. we do not have confirmation from any of the sources. just this one report. is down 15% this year. we have seen under performance from some of the energy

companies, but the s&p energy is up .4%. it has been an underperformer amidst questions about whether this would happen. >> services will not get any kind of relief here it will take them time so they can charge energy producers and wind up going out. this will combine a second or third largest service companies in the world. headlineso to the here at mark crumpton has more from the news desk. mark: president obama says he is pleased with new steps the treasury department has taken to discourage corporate inversions. he called them insidious. tax inversions occur when companies, brought for larger tax rates. the president spoke earlier at the white house. president obama: they keep most of the business here in the united days because they benefit from american infrastructure and technology and will of law.

they benefit from research and patents, butnd they renounced their citizenship, declare they are based in somewhere else, and get all the rewards of american compass without filling the responsibility to pay the taxes the way everyone else is supposed to. mark: the president's remarks, day after since they have vardy done them in the past 36 months. a 160 millionvent dollar merger between pfizer and allergan. the dump chomped movement is hoping to gain traction in today's wisconsin primary. ted cruz is leading the republican front-runner. senator cruz got a big boost when endorsed by scott walker. exit polls will show whether democratic front runner hillary clinton will win over more

younger and white working-class voters. bernie sanders has a narrow lead. sanders good when 67% of the mrs. clintonegates and senator sanders will lock horns here in new york city. they have agreed to a televised verbal showdown in brooklyn on april 14. that is five days before the state holds the primary. both claimed ties to brooklyn. the clinton campaign headquarters are located there. bernie sanders was born there. news 24 hours a day powered by our 2400 journalists and more the 150 news bureaus around the world. i am mark crumpton. energy but his radical call for transformation in the energy is missed eventually led to his exit late last year.

david crane does remain a strong voice in the industry and is still sketching out a vision for the future of clean energy. scarlet: what exactly is his next challenge question mark david joins us from the bloomberg energy finance summit in new york. give us a preview. what are you working on now? right now, i am really not working on anything. futures in the clean energy side of the clean energy sector. probably solar. you know who else has been investing in renewables has been pe, riverstone is investing in this space. could that be a good fit for you? david: i hope so. energylic market for companies, as reporting earlier, were so swamped by commodity is a great time for

private equity to be circling around. and gas side to the solar and wind side. i am more interested in the solar and wind side of things. you be more specific in terms of opportunities? that are created an alternative energy? what looks exciting to you? david: the idea of actually getting very close to the energy customer. energy star says a commodity but ends up as a service, particularly in the mobile and wireless world i live in. excites me is working with energy companies that are providing energy to customers and use customers in a different way than before. people are generating more of their own energy. basically, solar and things like that.

>> those kinds of projects are quite innovative. energy is difficult to do and a big company. how do you innovate and take on risks in new technology when you have to deliver results to shareholders? that was one of the issues at energy. the thing is, energy -- a reported records in the year that i left and the year i was fired on december 1. we were on pace for a record when i left. it was not the company's natural performance, but you are right that the stock price had suffered because the stock price traded in correlation with natural gas prices, which as you know are in a trough. that was the big issue. your company was one of the first to start yield codes. most of the stocks are lower now. could you give us insight as to

why yield codes did not prosper? >> everyone got into yield codes and everyone gets in and then it is the time to get out. the yield codes overwhelms the market. there were missteps and the companiesthing now is are very interested because they have very good assets and very good contracted assets. the business model itself in a relationship with the sponsor to me it is completely broken. i think yield codes have to be remade as something other than they are, but based on the assets they have within them. do you think we will see what will happen with the parent company, rolling back there yield code? david: most of the sponsors do not have the money to do that. it is not going to be like

morgan. that would be a logical thing for them to do. if you do not have the money, you cannot. surprised there are more yield codes that have not been taken private. i think that is an area for private equity or for infrastructure funds. >> infrastructure funds or private equity maybe for david crane. scarlet: thank you very much. coming up, the fallout from the papersed panama paper -- . tech collectors want their hands on the data. ♪

scarlet: i am scarlet fu. alix: i am alix steel.

scarlet: let's head over to the markets desk were julie hyman is. julie: i will get miners here. we have got steelmakers moving higher today. u.s. steel in particular is of little more than 1%. 28 dollars from $17 over at jpmorgan. the analyst is optimistic about the pace of still price increase, and i think the prices should continue to be supported by preliminary tariff that the u.s. left last month. ,pmorgan saying the top pick steel dynamics and newport as those stocks are not faring quite as well as u.s. steel today. not seeing big gains for the steelmaker today despite that particular note. looking at the rolled

largest iron or producer, selling its share in a brazilian steel adventure. symbolic price, that he does company said, part of the strategy to dispose of non-core help a balance sheet. we see shares are up 3% in german trading. it fell about 4% on the news. we have watched gold prices had higher. there is a trepidation and a coffin. newmont goldcorp on the back of that. breaking news coming out of reuters. it is now reporting pfizer is leaning toward abandoning the allegan deal, another step in the drama. michael mckee is out with the stats today, saying you're not an allergen market value loss of

over $17 billion in over one day. really, with what they're looking at, it is making almost $20 billion over the next decade. crackdown went down almost the same amount they're trying to make in 10 years. thank you, mike mckee. scarlet: josh earnest, the white house spokesman, was saying earlier that pfizer and allergan were not the target of the treasury and version thread even as we see they reportedly set to lean toward not going to this. >> it seems like they may be a casualty of this. one thing is the ownership of the company wants to do with this. by much will be owned allegan shareholders and will it be able to bundle into that the acquisition of various companies, a three time of a

treasuries are looking at. will the deal be able to go through and will the tax savings be able to be realized in the same way? some analysts had said it could be a good thing for pfizer. that is one of the reasons are faring pretty well in the face of this. alix: reuters is learning that pfizer could be leaning towards abandoning -- abandoning that deal. conducting are review of the actions announced today. we will not speculate any particular impact. elizabeth covers the industry and has been looking into this. julie was just talking about how he would not know the structure of the ownership. if we apply treasury numeral's to the deal, what does it mean to the structure? >> we take a look at stripping out some of the deals allergan

past three the years, they'll include the legacy allergan, acquisition that they just close, as well as the warner. that would bring allegan's ownership to about 25%. it means they now lose some of the additional benefits you can get with an inversion. they still might get the tax benefits, being able to lower therate to 12.5%, which is allergan rate. they would not be able to take advantage of other things, like the loans we see another inversions. it is something we generally see if there is a 40% ownership. they are not calculated as part of earnings or making loans to the u.s. as part of your company essentially being able to take

advantage of some of the deductions there. is not a set number just yet, is it? some of the terms set out initially. some people said, why is it earlier in the deal? we see these breakup fees all the time. says ite a line that would be $400 million breakup fee. if it is due to a law change, it could be 400 million and that could be on a case of tax change. more if the company were private and did not want to or reasons beyond what the treasury had stated? >> we are going to get a new president. is there rollback potential?

have seen this before. you look at other deals in the sector on the deal, treasury rule.ut on a proposed they pulled out and then they paid essentially a 1.6 billion dollars breakup fee to shire. we have seen it paid in some festival don't want to do with it even if it is just a proposal. scarlet: allergan remains as an independent company can what would it look like? >> pretty good. they are waiting for $33.75 million that would come in from the deal. we expect that to close pretty soon and down by the second half. they have enough cash on hand where they could pursue other deals. the legacy portfolio they picked up has nice growth. it is showing about 10% annual growth rate. thank you so much.

some more headlines as well about this deal. >> yes. bloomberg is reporting it -- pfizer is planning to save the allegan deal. we're still failing -- figuring this out at the end of the day. scrambling to save the allergan deal amid the new taxes. they are extremely busy. news.also have breaking we had gone on -- gone over that earlier. this is bloomberg news reporting this. we do not know, is set to face the suit. not confirmed by the justice department. the doj, the department of justice said to prepare a lawsuit to block this from happening. services of the oil company. >> this would be a huge deal for the industry there. more coming up after the break. we will be back.

♪

>> breaking news. the justice department is now saying it prepared a lawsuit to block the merger, saying an offer to sell assets has not yet satisfied the u.s. doj. station, thata the assets are not good enough when you merge the companies together, or are the buyers not good enough? you have really smaller players buying these assets and that will not be competitive with a huge company. any the right company to want to buy the right assets to make that merger go. it looks like it might be an asset issue versus a buyer issue. not satisfying right now.

scarlet: from bloomberg intelligence in our toronto bureau, anjou, give us more on how they would face a u.s. lawsuit from the u.s. department of justice. this is according to our reporting right now. andrew: the main issue is halliburton is fully committed to trying to get the deal done. there is not ais buyer that could soak up the assets. you need to have ge in the picture. the only real buyer that could absorb all of the assets right now. there are a lot of concerns in international markets. you are going from three competitors to two. in're talking about ge offshore completions or something like that. that is where the doj is right now. buyers thatck of

can absorb the assets. that is the main problem. >> does that mean we will have to see halliburton and baker hughes with more assets? or do we need to find the right buyer who could compete with them in the right markets? it is the buyer. halliburton has explicitly said the really want to be foremost front for north america and have the most leverage their. the other piece of the business that was overlooked was the international side. lines,ng in nine service baker hughes had four, you could compete and bring market -- margins down and up, but it now it's like they will have to sell more and it comes back to the buyer. you're talking about $10 billion. ge is the only company out there to make it happen.

not sure if they even want to take that proposition anyway. scarlet: can they thrive as independent companies without merging with anyone? >> i think halliburton has been outperforming internationally. if you look at financials, they have been doing better in the middle east. revenues and margins have been picking up on a relative basis. baker hughes has been falling back a little bit. hughes has the core business they are good at. andou look at north america extra 300 bits of margin. if the deal falls through, they could probably boost cash flows for north america. they are taking a share right now. is one of those things where we will have to wait until more information comes out. it is hazy now. alix: thank you for joining us,

andrew. bloomberg news is reporting the justice department is said to be preparing a lawsuit to block that merger. scarlet: pfizer is reportedly scrambling to save its merger with allergan, at disco falling apart because the u.s. treasury is cracking down on corporate inversions, tax in versions that give entities a tax advantage. by theot confirmed company. looking to rescue -- rescue its plan in anyway possible. working on how they may be able to challenge these rules in treasury. much more is coming up. we will be right back on the other side of this break. ♪

david: it is 2:00 p.m. in new york, 6:00 p.m. in london and 2:00 a.m. in hong kong. tracy: welcome to "bloomberg markets."

david: here is what we are watching this hour. markets taking a dip today. all 10 s&p sectors in the red. the dow flirting with its first double-digit loss since march 8. aroundil is bouncing between gains and losses as crude looks to stop the two-day losing streak. his oil stuck in the $40 range? david: the treasury department issues new rules on corporate inversions as the obama administration warns that more action is coming. some breaking news here, u.s. antitrust officials are said to have prepared a lawsuit to stop halliburton from taking over baker hughes.