blackrock chairman and ceo larry fink.ng about the fed, the markets, and why he says companies should manage for the long-term, rather than the short-term activist investors. "squawk box" will be right back. fifteen minutes could save you fifteen percent or more on car insurance. yeah. everybody knows that. did you know there is an oldest trick in the book? what? trick number one. look-est over there. ha ha. made-est thou look. so end-eth the trick. hey.... yes.... geico. fifteen minutes could save you... well, you know. >>> welcome back to "squawk box." for the next hour black rock's larry fink will be guest hosting. many market moving topics to cover with the chairman and ceo of the world's largest asset manager including the fed's latest move. the crisis in iraq. politics on the hill. and the impact on investor confidence. this "squawk" exclusive starts right now. >> who was that? >> our voiceover guy needs vacations, and he couldn't do the voiceovers before he left because he -- >> he's never gone on vacation before. >

blackrock does not agree with pimco. i have seen this continue for decades.crisis and you don't get yourself out of the sources , youe financial crisis rely on financial repression and you have a 20 year period of low interest rates. what the u.s. did was fundamentally different. we talk a lot about aig. the problem, you fix it, you recapitalize it, sell off pieces and move on. we did that to our banking system. we are recovering. to a higherer interest rate. how quickly and to what eventual level? >> there has been coordination for the past three or four years between all of the central banks. if the u.s. decouples, that will rock the boat. >> you have a disconnect. the u.s., but the boe versus the ecb. currency volatility, we talked about common the market and low volatility. currency volatility can expect to go higher. >> the dollar should go higher. >> it should, but it has not. the second half of the year, a for we get better economic data, you will start to see some of the currency volatility. >> what will you be focusing on peer -- focusing on? headlin

blackrock is saying, we will keep updating you every six months with what we think.o. -- they'res saying not saying this is our big trade of the moment, but you sleep better. pimco says, say, you can and blackrock is like, i am just fine to wait it out. >> thank you so much. market makers is up next. ♪ >> general motors posse -- general motors's big payout, we will talk to the compensation expert in charge, ken feinberg. the supreme court takes on obamacare. we are expecting a rolling moments from now. the issue whether the company --t pay for the companies the employees birth control even if they are morally opposed. the largest bank in france will be hit with a record fine ie

. >> and ida blackrock is one of the stock picks that you -- and i know that bloc blackrock is of theyou favor. -- and scarlet fu has more on that. looking to grow into emerging markets, that may get unevenway because of revenue growth and phoebe right dynamic in the near-term because of the mix businesses. they also talked about a make outlook for the stock. and third, management seems perhaps behind the curve in alternative investment options. therefore, blackrock may need to make acquisitions to round out its offerings. >> what do you think of that? >> blackrock has increased 15% andhe last year and has -- will be on pace for the next three. this is a company that offers a wide variety of products. if we think we will get a correction, we will come out of it. i like companies that have a strong correlation to the spx and have a big dividend that are not money center banks. plus, the dividend increase, i think will be larger than most people expect. >> given what you like and in , whyreas that you like even bother picking stocks? why not put your money in some sort of mutual fund th

blackrock advisers, which is a subsidiary of the big asset management firm blackrock, has received aotice from the securities and exchange commission, the s.e.c., and what this wells notice is, is in essence a heads-up of a possible further action by the s.e.c. it's in relation to a former employee of blackrock advisers, a man named dan rice, a portfolio manager for one of the firm's funds. there was a potential conflict of interest inquiry back a couple years back in 2012. the employee, dan rice, no longer works there and hasn't since december of 2012, but the s.e.c. staff has taken the preliminary view that blockrock advisers' disclosure as it related to this whole investigation situation was inadequa inadequate. now, again, this is a wells notice. this is not a formal allegation or any kind of a finding of wrongdoing, a heads-up, if you will, about a possible situation. so, we'll bring you more details, but for right now, the shares are down, but they're down marginally in the after-hours session. so, again, a wells notice served for blackrock advisers, a subsidiary of the bigger

and others. -- kleiner perkins, blackrock and others. uber will use financing to expand its operations. today marks the 30th anniversary of one of the most popular games ever. tetris was designed by a russian scientist who worked in a soviet computer lab when he came up with a puzzle game. the game has millions of paid mobile downloads and is on 50 different platforms. to the lead story of the day, the fcc created creating internet fast lanes, netflix has no plans to back down and is fighting with verizon over internet speeds. some say netflix will continue to display on screen messages and blaming internet providers for slow-moving videos. this comes after verizon sent netflix a cease and desist letter, demanding they stop displaying the message blaming arises credit network for the videos loading slowly. in verizon lawyer wrote -- "there is no basis to assert that issues with respect to playback of any particular video session are such available solely to verizon." we have jon erlichman in los angeles. is this really verizon's fault? >

i'm here with rick rieder, from blackrock. he oversees some $700 billion in assets. rick, we were talking about market conditions, the impact in monetary policy. let's talk a bit about strategy. you made the point that the fed has to be concerned about keeping the long end of the yield curve a 30 year bond, more yes -- more or less where it is. they don't want the market to be to disrupting the house letting. -- housing. was that save you -- what does that say to you? and doesn't make sense today, but if you go out for the next 10 years, that growth is going to be -- a lower birth weight and we were 10 years ago. the long-term growth rate could be a three not for. if you can keep the backend of the curve more stable, let -- if you it should look at the reason -- recent housing data, it's disappointing. you have to give the mortgage rate down, you have to keep housing moving because of the influence of over inflationary expectations. if you don't keep housing moving, you can't truly fix structural unemployment. >> what happened this year? we had a surprise rally in th

rosenberg of blackrock, basically talked about 3 1/4% long-term bond.why the bond was 2.50. most people understand@bond is 2.50. there's a shortage of instruments around. why is the fed buying 45 billion a month if there's a shortage of fixed income? >> doug, how much is the u.s. deficit shrinking? how much is treasury issuance shrinking? >> we saw the deficit close dramatically. it's going to be under 3% of gdp. but i think for people looking past two, three-year horizons the basic deficit picture is unchanged. we have not altered the tax system. we haven't altered the big spending programs. all of which means in 2016, 17, 18 we're going to see the deficit widen and the debt trajectory head north. i think there's going to be a real wake-up call if congress doesn't move somewhere between now and then. >> so then we'll start to see issuance pick up at around the time the fed may finally stop buying as many of these securities. so lee, do you then adhere to this view out there that interest rates, as ben bernanke has said, are basically never going to go

also jeffrey rosenberg would join us, their chief investment strategist at blackrock.for to a summation of volatility. we have a lot to talk about. >> let's get to some company news from the files of bloomberg west pinnie we start with the president of paypal. he is leaving to join facebook. he will be in charge of their mobile messaging service. his job will be finding business models for facebook messenger, which does not make any revenue. walmart is ramping up for an e-commerce battle against amazon. -- world's largest retail fernando madero would try to integrate web sales with brick-and-mortar stores. and go daddy is going public. the company that has sold millions of internet domain names has filed for an ipo. they have raised their profile in recent years with commercials featuring celebrities like race car driver danica patrick. >> good morning everyone. futures at negative four. last week we had the thursday cb announcement. friday the jobs report. and then we slipped into a bit of quiet. liz ann sonders is with us, chief investment strategist at charles schwa

blackrock says it is cooperating and does not believe any violations of provisions take place.s slim is taking over a latin american phone company. at&t is unloading the unit after agreeing to pay $48 billion for directv. those are the top headlines. >> thanks very much. go pro's initial public offering proves a success. got aker of tiny cameras giant vote of confidence from investors today. shares are up nearly 50% since its ipo yesterday. thrill seekers who want to use go pro cameras to make action videos may soon have another option. it is called the airdog. it uses go pro cameras and is designed to follow people on their adventures automatically. rozentals, by edgars the chief executive of the maker of the airdog. tell us a little bit about the detail of this airdog. how did you conceive of this particular drone? started because quite a few of our team work guys doing action sports, including myself. surfing,n of kite snowboarding, and wave boarding. we were building industrial drones for aerial mapping, more industrial use cases. we realized we are missing when we do these

and cohead of investment at blackrock.d to have with us this morning. i was fascinated by your note because it is so outside the zeitgeist. every city and -- everyone said the emerging-market is cheap and use it -- you said no. >> is not cheap relative to history. within the emerging market you find quite a bit of divergence. you have places like russia where it is cheap for a very good reason. you also have india and south africa, actually quite expensive. >> air will tough question, if i could, dr. sh -- a world cup quest, if i could, dr. shen. is brazil and emerging market anymore? >> i think the world cup can potentially be a turning point for the country. >> when you look at a chart of how emerging markets have performed, they lag behind world index for the first part of this year and then they have played catch up since then. tom mentioned whether brazil is an emerging market. what is the distinction between an emerging and developed market these days? there is talk of korea being upgraded to a developed market. >> a

you need some people to take the fidelity of the world and the blackrock of the world for any large ipo need them to take a couple percentage points of any deal. it will be key that you are able to have a good roadshow through july, early august, to get a deal of this size done. >> jeff, this is a big rock in the middle of the pond. i wonder what ripples and other deals we will see affected by this. reallyknow what i think plays a role is not just the ipo landscape but also the m&a landscape because this deal, softbank has a big stake here, and you also see alibaba do the road acquisition. they have done a number of acquisitions already. they are constantly on the prowl looking for others fills out once they have the ipo and they have a valuation attached to the company and they can sell shares at a deal if they want to, ebix it easier for them to pursue deals. is morect of the ipo broadly, the trillion dollar, multitrillion dollar m&a let's get as well. >> interesting, jeff mccracken, thank you. >> thank you. >> tune in tomorrow for a special edition of "bloomberg west." looking at the

in april 2014, blackrock noted that since 1998, institutional trading costs have declined and are among the lowest in the world. earlier this month, itg reported between 2009 and 2013 implementation shortfall cost decreased from 45 basis points to 40 basis points. further, our market is able to handle volume and traffic considered astronomical only a short time ago. the efficient operation of our market structure throughout the stress of the 2007 and 2009 financial crisis and systemic risks that have been reduced. the number of erroneous executions on our markets is on pace this year to be nearly 85% lower than the previous five-year average. results that stem from the success of a recent plan. exchange system issues as measured by self-help declarations have dropped more than 80% since the first years of regulation. we must remain squarely focused on improving market quality and stability in a coherent and responsible way. keenly aware that investor confidence is important not only to help americans realize investment retirement goals, but it plays directly into the overall health of o

the investors like blackrock are sitting tight on the inventory.for five to six years. but the mom and pop flippers who bought a house, they needed to cash that out. so they did it quickly. >> what happens when blackstones of the world do cash out? meaning do you believe that they own so much inventory that they are -- there's an overhang on the market effectively? >> there is. and it's like a mutual fund that takes a big position. it's hard to get out of it. so if you own a huge chunk of the market, you can't liquidate overnight. so it's going to take them years to unwind that position. the challenge they have right now is they got good at renting out the place the first time. now they have to find the second renter, the third renter. they've got to keep mowing the grass and fixing the broken windows and that's more management than they anticipated. >> the millennials if they're looking at buying a house, potentially not the best place for an investment. you think they are right in this or you think they are going to in the long run, have made a b

for example, high yield corporate bonds, i think we have three to show you today, including blackrock, lord abbett and dreyfus. these are really good plays. the five-year yield, 12 to 15%. but here's the twist that we offer. we love to be defensive and our targets are only 7 to 8% per year in bond. so what that allows us to be is tactical in nature. what i mean by that is i mean we can withdraw from the market and sit in cash for periods of time. for example, next week might be a really good opportunity to move to cash in if in fact iraq falls. high-yield bondeds are a good place to park your money. we're looking for yield, not a lot of growth in the market. liz: phil what happens to oil prices on monday. phil? >> depend on action on the ground. if it looks like baghdad is going to fall, we should be sharply higher. if looks like things will calm down they could be sharply lower. my understanding is that baghdad is not going to fall as easily as these other cities. there is going to be a massive campaign to keep that. iran will have boots on the ground. we may not, but iran will. they

i don't think we were expecting it to be that day, but let's wring in david kelly and blackrock's russ -- i don't want to be too harsh here, about but is the fed's credibility a bit on the line in the fact that they maybe didn't acknowledge the inflation situation picking up as much as some people maybe were expecting? >> well, let's be clear about how much inflation we're facing. what we're really seeing is a stabilization rather than a real acceleration. headline inflation at 2%, most of the measures the fed prefers are still below that 2% threshold. really what we have seen is less about a real pickup in inflation, but the fact that we're no longer as worried about deflation, at least not in the united states, is perhaps as we were six or 12 months ago. i think these a normalization of conditions. >> yeah, yeah, the fed is facing this interesting issue here, rising inflation. i know david is very concerned about that, but also lower growth. in 2014, it lowered by 0.7 down to 2.2. though very slightly raising the forecast to 1.6, up by 0.05. i wanted to point that out, that they lowe

up next, blackrock's bond guru rick reeder, they managed nearly $7 billion with him.ther he's changing his investment strategy based on yellen's outlook. >>> also, fedex ceo fed smith will tell us what's driving profit growth and what that says about the health of the economy. you are watching cnbc, first in business worldwide. we give you the most free research reports, customizable charts, powerful screening tools, and guaranteed 1-second trades. and at the center of it all is a surprisingly low price -- just $7.95. in fact, fidelity gives you lower trade commissions than schwab, td ameritrade, and e-trade. i'm monica santiago of fidelity investments, and low fees and commissions are another reason serious investors are choosing fidelity. call or click to open your fidelity account today. could help your business didavoid hours of delaynd test caused by slow internet from the phone company? that's enough time to record a memo. idea for sales giveaway. return a call. sign a contract. pick a tie. take a break with mr. duck. practice up for the business trip. fly to fl

>> i think blackrock is too big. you should be they ship you know? >> are you watching?says you are too big? >> they are controlling vast sums of money, but not on their balance sheets. >> they do so much for joining us. ofmartin gilbert is the ceo written's largest money manager. >> get ready for a lot of hillary clinton. she is making the television rounds to promote her new book, hard choices amah and answering questions about the hard choice ahead of her -- whether to run for president in 2016? ♪ >> welcome back to market makers, i'm stephanie ruhle, with my partner erik schatzker. hillary clinton is back thomas though some may say she never left. the former first lady, senator, presidential candidate and secretary of state is promoting her memoir, hard choices. it comes out tomorrow. she is planning a major media tour, starting tonight with diane sawyer. here, she is answering the big question, will she run in 2016. >> i just want to get through the year, go around country, signed books, help in the elections in the fall, and take a deep breath. go through my plus a

it, and they will take an old school approach saying they do not want to be in that business, the blackrock and pimco's of the world who have a produce year he responsibly for best execution, they will tell them to take a hike. who will that hurt the most? the firms all based on relationships. if you are a fiduciary, you need to transact with the dealer they gives you the best price. >> times have changed. cofounder alibaba's hopes number eight is a lucky number. we will tell you why in a moment. >> plus, it is baseball versus the open days. the team wants to move, but major league baseball says no. ♪ " onhis is "market makers bloomberg television. i am erik schatzker with stephanie ruhle. there are two interpretations for ba in chinese. one can mean gate, the other means fortune. picker is and has been on the ali baba ipo trail. leslie, how important is superstition to the people behind ali baba? >> incredibly important. you have two very careful and seerstitious -- you can number eight pop-up in various forms of their culture. there originalas ticker in hong kong. now they are private but

>> the exchange traded fund industry, blackrock expects it will increase the volume of assets to $2 trillionhis is not going away anytime soon. >> is this good for investors? >> there is a lot of debate over that. it depends first of all on how these funds operate. do they lever up, do they use derivatives, are they investing in a safe way? how sticky is the money? think about those etf funds. i appreciate it. on the markets again in 30 minutes. "market makers" up next ♪. next. ♪ >> live from bloomberg headquarters in new york, this is "market makers" with erik schatzker and stephanie ruhle. >> recall? what recall? general motors has not sold cars at this fast pace in six years. >> the missing man. there is no vladimir putin as major industrialized nations need to discuss more sanctions to russia over ukraine. >> $1000 for a haircut? that is what you will pay to be a real mover and shaker. good morning. this is "market makers." i'm erik schatzker.

washere is zero chance i going to get the call the head of blackrock and say, by the way, guess whatb is doing. >> of course. >> you would want to know if your counterparty was lying to you about it and giving of false marketing the trails and different things, you would want to know, right? >> yes, but if i was a neck salesperson, i would not be calling a client. maybe i would be a whistleblower and call the government. >> them a break in for a moment. the supreme court has just come out with the ruling. the justices deciding to rein in the president's ability of the united states senate to make recess appointments. a big loss for president obama and executive power in general. megan hughes is outside the high court to give his the braking details. >> this is a very narrow ruling, but it was a loss for the obama administration. at issue is the president's power to make recess appointments that members of congress did not approve. in this case, we're talking about january 2012 and the president appointed three members to the national labor nations board and senate republican said, wa

jeffrey will join us from blackrock. talking about emergency market. he has a different view. supporter of president obama. about thelk to him politics in washington and the future for the republican party. so much, tom. coming up 25 minutes from now. only startuphe that has angry cabdrivers on its tail. hailo is quickly expanding its footprint. the company just announced plans to move into the market for bmws.e hire mercedes and is founder and ceo. i was on trafalgar square for 13 hours yesterday. uber said they would start hailong black cabs, what has been doing. you are going to offer executive car services. how is the shaking up the competitive landscape? >> hailo's approach, we have always entered any market, we are a global business in asia, europe, and the u.s. we have always come at the market from the licensed taxi side. we are a u.k. business, it was founded here. we have been working with our lightness -- we have been working with licensed cap drivers from the beginning. customers want more choice, particularly because we are expanding our service and seeing that cu

. >> the blackrock, pimco -- >> that is to we are referring to.o get it meaningful exposure it is a lot more dollar wise. and it is harder to move that needle and it forces them to rely on derivative instruments. for the mid-tier firms, we are a little bit more nimble. but not ingood size, performance. >> exactly. >> bonnie, thank you very much. a rare treat to have you in new york city. the numbers simply don't lie, but will they tell us who will win the world cup? we will do some number crunching on the comeback. and we might also be talking about brazil's signature spirit. ♪ >> if he -- it could be the next tequila. if you are not familiar, the brazil national spirit could be on the verge of an explosion. companies are starting to pile into the market. down with one of the countries top producers to get a look and taste at the finished product. i drink twice a week, when it is raining and when it is not raining. >> cachaca is a liquor made from 100% sugarcane. >> it gives energy for the body through sugar. through happiness cachaca for all the

engel has 2%, black bark -- pim andas 2%, blackrock jpmorgan at about 3%. what is the thesis?l the central banks and the fed wanted 2% inflation. all the focus is on the real interest rate, the after inflation return. the real interest rates central banks were aiming for was 2%. almost everyone now agrees that going forward the real return on cash will be lower. a year ago, they were aiming for 2% real. think you have comments from mr. dudley and john williams, charlie been at the bank of england. this is a process. larry summers talks about secular stagnation. the basic view is that a post crisis global economy with an overhang of leverage and slow potential growth rates, look at the cbo marking down growth in the u.s. there's going to be a lower real return on cash. all things considered, our view is that that real return is going to be less than 1% and closer to zero. certainly than 2%. >> in the mansion house speech, carney kept saying how much of a value partner he has in the u.k. that is something you do not hear in bernanke or yellen's speeches. they do not have a partn

blackrock. >> my lords, please be seated. >> the signal has been received.n a determined way steps off. that is where members of the public can come in and meet members of parliament. you can become a member if you like. the approach has been announced their by one of the officers of the house. the doors to the house of commons will be slammed in his face. it is a demonstration of the independent of the authority. [knocks thrice] >> open the door. >> he steps into the chamber of the commons. he delivers the queen's message. >> her majesty the queen commands this honorable house. attend her majesty immediately in the house of peers. >> [indiscernible] [laughter] >> there is a contributor. [inaudible] the procession from the commons. they will walk along the corridor that leads to the house of lords. everyone is so cheerful and chatty. you wonder sometimes. >> they work quite hard, the leaders of rival parties. what will we talk about? we will be seen on camera. someone somewhere will try to live read what they are saying. try to lip read what they are saying.

one teacher in blackrock and a 74-year-old retired police officer in jonesboro, who died after a treeell on his house. >> everybody was crying and everything. >> reporter: neighbors say they could hear his screams. here in atlanta, there was an amazing sight as the storms passed through. the skies turned purple. and for much of the city, you could see a purple rainbow. people were running outside to grab pictures of it. the storms were ending just at the exact moment that the sun was setting. george. >> that is an absolutely stunning picture. thank you, steve. >>> we're going to turn to president obama in normandy this morning for the 70th anniversary of d-day. a historic moment that's also made for tense diplomacy with russian president vladimir putin over the crisis in ukraine. jon karl is in normandy right now. good morning, jon. >> reporter: there's no formal meeting on the schedule. but president obama and president putin have already had one brief conversation today and likely to run into each other one more time. both here in norman day to pay homage to those who sacrificed so

in april 2014, blackrock noted that since 1998, institutional trading costs declined and are among the lowest in the world. earlier this month, itg reported between 2009 and 2013, implementation shortfall costs decreased from roughly 45 basis points to 40 basis points. further, our market is able to handle volume and message traffic considered astronomical only a short time ago. the efficient operation of our market structure throughout the stress of the 2007 to 2009 financial crisis indicates the systemic risks that have been reduced as a result. efforts to introduce infrastructure risk since the flash crash of 2010 are producing beneficial results. for example, the number of erroneous executions occurring on our markets is on pace this year to be nearly 85% lower than the previous 5-year average. results that stem from this success of the recently enacted up limit, plan. in addition, exchange system issues as measured by self-help declarations have dropped by more than 80% since the first years after regulation nms. we must nonetheless remain squarely focused on improving market qual

obviously blackrock's huge stake is a largest shareholder in a lot of the major companies out there andg some of those things he has seen business investment pick up. that's a big question though, why haven't we seen capital expenditures -- >> we haven't seen them go any place else because "a" you've got to get a return on the capital. and the best place to get that return on capital is to invest it. i'm not saying the fed should bring down the stock market. the stock market should be free on its own. and the fed has -- i think artificially induced people to invest. it just -- >> if steve liesman were here -- >> hold on in the commercial break two breaks ago i gave you guys a set. i said how many s&p 500 companies have a dividend upon 3%. and becky you guessed 40. 94. so nearly 150 s&p 500 is yielding more than 3%. the ten-year bond is at 2.5%. why wouldn't you put your money in the stock market? >> at&t fielding 5. %. i'm stunned. >> at&t. listen capital risk is there. the stock could go down. but my time line is 20 years, at&t will be higher in 20 years than it is today. and it's zero