joins now in a first on fox business interview, mark easel with pimco -- kiesel with pimco. rally here. >> well, liz, today was another whatever it takes moment by draghi. they basically are thousand starting the -- now starting the process of going unconventional. they've brought interest rates down to almost close to zero, and now what they did is they basically are providing a pretty incident liquidity for banks. the size is 400 billion euro, the term is four years, and the rate is low at only 25 basis points, so this is a pretty big move, and that's why we've seen markets respond favorably -- liz: well, yeah. that's about 560-570 billion u.s. dollars. so do you think it'll have its intended effect, and that is to stimulate lending and to stimulate the eurozone markets? >> well, that will be yet to be determined, but i think markets are going to front run that and buy risk assets, because if you think about it, the process that we've been going through over the last three or four years is that with inflation low and jobless rates high, central banks are increasingly going

pimco, money flows in, money flows out.hows the world's biggest bond fund continues to see cash heading out the door. bertha coombs is at cnbc in the states with more details on this, bertha. sometimes you think performance helps but in this case it doesn't. >> no. well, no. the marve mans for so lo-- perf long. there have been negative headlines and returns. morning star says pimco's total return fund, the so-called bond king runs posted $4.3 billion in outflows in may. that's the 13th straight month of investor withdrawals for the world's largest bond fund. it's seen nearly $60 billion in outflows over that period. the fund had $229 billion in assets as of the end of may. that's down if a peak of about $293 billion in just april of last year. the outflows continue despite the fund gaining 1.25% for the month, which beats 79% of its peers. it likely benefitted from the rally in bond prices on weak u.s. economic data and signs the fed will keep rates low even longer. the total return fund for the year, however, is just up 3

coming up, pimco founder throwing some shade at a conference in chicago. tell you about those gross-isms we heard. carl icahn is at it again. he is calling for the sale of family dollar immediately. ♪ >> if you hate going to the doctor, which most of us do, there is an app for that. there is ground breaking technology that allows you to diagnose medical problems from the comfort of your own living room. sam grobart takes a look at three of those companies. >> certain technological breakthroughs have a way of making our lives seem more like science fiction and reality. think about the first time used a smart phone or sell someone use a microsoft xbox connect. the future was happening now. these giant leaps have already changed the way we work and communicate. hownext step is going to be we take care of our bodies. we may be able to diagnose ourselves, using tiny sensors and the computing power in our hands. pany is developing a handheld sensor they will hold your fork head to get your temperature, heart rate, and other data points. they will send all of tha

do this with pimco's idea of a new neutral.tional edelman -- international settlements. they warn of excessive leverage and say enough about the medicine being prescribed that will be consequences. this may be beneath the curator. i thought it was important for the weekend. >> pending home sales. they come out at 10:00. last week, we got a strange number. numeral sales the strongest in 22 years. you look at what we are getting today in pending home sales, expect it up only 1.5%. >> both are based on contract signings. they might be mirroring each other. havertgage applications not been great. do not expect a gangbusters report. bank is set to plead guilty and playing -- pay a record fine for violating u.s. sanctions. ban they are this going to impose, bnp got a bit of a break because it has six months to plan for this. the suspension will last for a year, but it has time to get ready. >> from brad henson, the ramifications of this are obscure. >> very obscure. that they could clear through another bank, like jpmorgan. they beco

we speak with pimco's richard clarida. pimco's newin with neutral.s is bloomberg "surveillance," we will be right back. ♪ clark's -- >> the sport in washington, it is not about the washington nationals. it is about the republican party. the politics of the capital. with madame christine lagarde, managing director at the international monetary fund. they look at the u.s. we talked to her about austerity and i talked to christine lagarde about the european commission. good morning, everyone. this is bloomberg "surveillance," i am tom keene. we will check in with you later. let's get your data check. futures pointed to a lower open, down by almost five points. buying of treasuries and other face assets. 10 year yield coming in at two point 59%. euro weaker versus the dollar. elevated oil prices, that is on the continued violence in isis iraq -- in iraq. and a new leg in the fight over natural gas between ukraine and russia. >> sterling, that is the big one. >> it has come down a little for me. >> hawkish remarks from bank of england's mark carney that r

we will see why the 13th straight month investors pull money out of the pimco fund. consumer gauge with numbers that matter to you. check out. that's your wallets right there. we will be right back. we're moving our company to new york state. the numbers are impressive. over 400,000 new private sector jobs... making new york state nuer two in the nation in new private sector job creation... with 10 regional development strategies to fit your business needs. and now it's even better because they've introduced startup new york... with the ste creating dozens of tax-free zones where businesses pay no taxes for ten years. become the next business to discover the new new york. [ male announcer ] see if your business qualifies. gerri: investors have lost that warm and fuzzy feeling for the biggest bond fund in the world. for the 13th straight month investors pulled money out of what is called pimco total return fund. the outflows are happy even though the fund is doing well lately. with me now eric jacobson from morningstar. so, it's ironic is it that the last or months th

forwas another tough month pimco.r the turk -- for the third straight month. the etf says it follows the same strategy as the firm's flagship mutual fund. bramlett, whosa covers this for us. a people are theorizing about couple of things. the biggest, most glaring difference between these two funds is size. you have a $3.4 billion etf versus a $229 billion mutual fund. operateaffects how they in a significant way. with such a big volume of debt, you cannot really invest in the smaller securities and spent so much time looking at one particular bond. you have to think big. flexible. >> more flexible with a smaller one. this matters to the debt market where there is not that much turnover on any given day. it makes you more nimble. >> how much has it outperformed? >> it has returned almost 15% versus 8.5%. outperformance, and there are some other differences as well. the etf has two, when they get redemptions or deposits, they can redeem to deliver bonser received bonds are that kind of is a little bit different. also t

says pimco and not just pimco. you got apple moving in. you got b.m.w. million plant. pimco saying that basically all of the negativity is priced in. the stock market is down by a third from its peak and sometimes you have to take the road less traveled. >> give us the arguments for investing in brazil. what are the detail of positives? >> i went through their note that they came out with back in april to sort of mine it for the four big points. one is they say brazil has a young population. average age just under 31 years old. it's an increasingly democratic population which they argue is good for markets. the sense that they're very pessimistic. that means that they're going to actually enact change. or carry out change. where if they were apathetic then we would really have something to worry about. they're increasingly educated and part of that is the previous government invested in a program called bolsa familia when g.d.p. was 7% or 8% and took that extra money and gave poor families stipends to send their kids to school reducing the poverty rate b

basically, pimco, you know, had a rough patch, i guess, towards the end of 2013. now it's not a rough patch. we're moving ahead. i couldn't be more confident by the end of this year, you know, that pimco will be close to the top of the pack in terms of the bond market. and those that are taking money out, you know, hopefully they'll be putting it back in pretty soon. >> bill gross, hey, always a pleasure to have you on the program. thank you so much. and we'll you next time. >>> meantime, breaking news out of washington, d.c. let's go now to john harwood. >> brian, we have the senate just wrapping up the confirmation of siylvia mathews burwell. a smattering of republican opposition including from the senate republican leader mitch mcconnell up for re-election in kentucky. he said today that he wanted obamacare repealed and couldn't support sylvia mathews. by and large, people agree that she is a person of character and skill and integrity. and so she has moved forward, and she's going to be replaced as omb director by shaun donovan who's now the hud secretary. his

>> it is the exact opposite of pimco.n and pimco is saying, we will be here for a while. so they think you are better off selling that protection and taking home the premium. >> the kind of timeline is black let -- blackrock projecting? >> it is an interesting difference. --co sees it as a short form short-term trading opportunity. blackrock is saying, we will keep updating you every six months with what we think. so far, it has been pimco. -- 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

pimco's mike d by amey. ♪ >> welcome back to "the pulse."e just got the latest snapshot on the state of europe's .iggest economy german business confidence data coming out showing it declined for a second month in june. gorp, mike. taken with yesterday's weak p.m.i.'s what is your reaction to this disappointing number? >> i guess the underlying theme is that growth looks like it is leveling out at 1% in europe. doesn't look like there is that much momentum. it is quite interesting when you look at the relative monetary policy stance. everything coming out of europe suggests it is going to continue to ease. i don't think there is anything in yesterday's p.m.i.'s that would challenge that. >> what form is that going to take? >> they have got one bullet left. >> q.e. ? >> some say that. that's the way they have got to go . obviously they are doing with going wait to see how things pan out. see whether that unlocks things. >> so they are going wait for the a.q.r.? >> that is at the end of year. it will be odd to go through that set of packages a

a fund manager for pacific investment management which is of course pimco. he is starting 10 food trucks in los angeles, rather than continuing to work at pimco. veronica. >> he is young. he is 36. he made his money. he is probably bored in the bond market. nothing creative. melissa: how crazy everything at pimco has gotten with bill gross writing a letter about his cat and people running for the hills and this guy is like, you know what? grilled trucks that make grilled cheese. >> have you heard about this guy? melissa: no, i don't think he is quite low level. >> not household name like bill gross. i remember during the, in the 1980s a lot of brokers i knew made a few bucks during the 1980s and quit. i knew guys who opened up bagel shops. they're doing quite well. midas muffler shops. they did okay. >> maybe he come back like dave -- >> who is that? melissa: amazon big announcement with this online video of people looking down at a mystery object. look a little closer at one of these shots though. you can see what -- >> what are you pointing. melissa: i kno

we're back with pimco's chief economist paul mcculley. posed the question in essence, if stocks are fairly skr lly va where does that put bonds? can they move in tandem? >> i start with the bond market and go to the stock market. i don't think the bond market can go a lot higher from here in price because i think that it's priced almost to where the fed's terminal fed funds rate will be which is 2%, so i think the bond market is fair, and therefore, it makes valuation on the stock market fair, but the issue of whether or not the stock market can go up is a function of underlying growth in the economy and earnings, and so the extent that you're a believer that the economy is escaping from the liquidity trap, there's upside, i think, for stock on the back of earnings. but from a pure evaluation perspective, there's not going to be a lot more support on the upside coming from the bond market for the stock market. >> all right, paul, great to see you again. welcome back. >> great to see you. >> talk to you soon. >> thank you, appreciate it. >

pimco's chief economist paul mccully.. >> what you do think of jim bullard's comments? >> he gave a really nice speech a couple of weeks ago pointing out that relative to their mandates of unemployment south of 6% and inflation up to 2% we're getting closer and closer and then he added we're getting closer to the first rate hike so i didn't see anything new from what jim had to say but clearly at the margin he had a reaction in the market because the market is getting ready for its first tightening dance and we haven't had one for eight years so everyone's very nervous. >> i wonder going back to those gauging the outlook and just how long interest rates can stay at these low levels what you make of the first quarter where not only did gdp plummet but productivity was horrendous. what does it all mean? >> it's very interesting. gdp plummeted. productivity plummeted and the reason was actually the inputs to the economy basically jobs didn't. you had good income growth but lousy out growth. you certainly wouldn't want that f

talking to us about pimco's low volatility strategy.♪ >> live from bloomberg headquarters in new york, this is "market makers," with erik schatzker and stephanie ruhle. business waits on the supreme court. a week left in the term and justices have crucial cases. versus tvm is aereo networks. >> ousted american apparel ceo says the company's board is acting illegally, trying to be reinstated. >> the tie that feels like a to usaortugal's stun with a final goal. what are the odds of america making it to the next round of the world cup? it is

they have got the consumer bug, pimco argues, they are not going to walk away.klin templeton, he said a similar thing. i asked about the issue of people demonstrating on the streets and the economy. he said that is good news long-term because that will help the economy. >> there is always a warning, in ans case, the world bank has ease of doing business survey. this year, brazil comes in 116th place out of 189 countries. the football club will do much better. if you look over the last seven years, they have improved three places. it either is opportunity there. say, doingrarians business can be lousy. >> who will win? >> everyone thinks brazil, what it means for the stock market. disclosure,est of we picked out of a hat and i ended up with ivory coast. i'm going for what this means for the stock market. goldman sachs says the victor's stock market rises by 3.5% after their victory in the world cup. that would mean brazil's stock market would go up by 3.5% by the end of the month. >> hope they do not lose and cause further slowdown. >> ubs said a loss would be be

so bill gross, pimco. seeing huge outflows at the same time, you know that we're looking at folks making money in quantity funds. maybe we don't need these guys anymore. >> i like bill gross. he is a very smart guy and member of our "barron's" roundtable. >> full disclosure. >> if you have a bond fund where you're charging people half a percent, it becomes very difficult for investors to make the numbers work. with yields this low, it really exposes fees on actively managed bond funds. melissa: do we need active managers at all any longer? >> you do but need people who can trade. melissa: why? >> you need people who understand the change in trends. post the recession we see people spending differently. that is 70% of the gdp in the united states. there is a change. and people are investing in 2006 trends as opposed to 2014. melissa: i don't know we need these big loud guys anymore. if you're individual investor, you go with the s&p and dow you do better. if you -- you get in a quant fund. >> my friend in m

we want to talk with that deputy chief investment officer at pimco.h yields have come back a bit since then. but 10 we expect it to stay around these levels? -- can we expected to stay around these levels? and if i look at france, can we expect -- upfront, can we expect spanish yields to go lower you -- to go lower? >> i think you can. german yields are at about 1.4%, so well below u.s. treasuries. in spain, it is spread over germany. you have had this tightening helped by the ecb action last week. and i think probably, spain can continue to grind tight a little bit. france trends very tight to germany and would not expected to go anywhere too much. but we have very low inflation in europe, which is keeping yields down, possibly more from the ecb. we have a divergent passing in europe compared to the u.s. >> i looked at the ecb last week and the biggest things they did are some -- is maybe something they did not do. they have talked about a quantitative easing program. the second one was a new long-term financing operation, a targeted operation. but t

madam lagarde moved over to pimco from new normal to new neutral.cial repression for a long time, where do i find yield if i'm going to have low yields for years, if not a decade? > so i think the market is now incorporating this notion that policy rates are going to be lower than they would have been otherwise, and certainly lower han historical averages, and that's correct. part tv is financial repression, and that is how you overcome a debt burden. part of it is that growth engines are less powerful these days n. terms of investors, i think that investors have gone a long way in searching for yields in public markets. there wasn't much left at this point, tom. if you are investing at this point for yield, you really are anticipating that things will be steady for a long time. so i think increasingly you're going to see search outside of public markets into private markets. that's why yield is going to be obtained from here. >> adam, you see that with bank of america going to a run rate el-erian said. >> in fact, carly fiorina, we are going to get

tom, pimco has a short maturity bond fund. i'm wondering about particularly in light of what mike was saying about interest rates going up. why do you like that now? >> because it is less interest rate risk. the downside to, to all fixed income when interest rates rise. it has such a short duration, we feel like it has some safety built into it, if we're right that interest rates do rise by the end of the year. david: would you go with that as a strategy fitting in with your rate rise, mike? >> i would be pretty hard-pressed to buy that frankly. i think you have too much risk over the next six to nine months. it strikes me as somewhat dicey play at this point. liz: lindsey what do you see as dicey? do you find the way treasurys are behave something a little disconcerting? are you okay with that? can you explain to our investor viewers why they shouldn't be too concerned about something like that or should? >> i'm actually in a very different camp than the other guests. i don't see fed raising rates anytime this year. in fact i

we're going to be getting reaction coming up from pimco's bill gross. he may have more riding on the fed than anybody else out there. there he is. maybe he's the amazon phone purchaser. there he is. >> plus we're going to ask what he wants to hear from janet yellen in the news conference in about 20 minutes' time from now. this is a very special edition of "street signs." we have five phones, bill gross hopefully on fire, janet yellen, all kinds of things coming up on "street signs." don't go away. we're moving our company to new york state. the numbers are impressive. over 400,000 new private sector jobs... making new york state number two in the nation in new private sector job creation... with 10 regional development strategies to fit your business needs. and now it's even better because they've introduced startup new york... with the state creating dozens of tax-free zones where businesses pay no taxes for ten years. become the next business to discover the new new york. [ male announcer ] see if your business qualifies. female announcer: then don't

>> pimco says the fourth quarter of this year.te the low inflation numbers, the lowest inflation since 2009 which you got yesterday, nothing will stop the bank of england. guy, i am surprised at dollar-sterling. fairly flickering. am i being unfair? >> a lot of it has been priced in. waysis repetition in some of what carney livered. in some ways, we have had the message. thatis just a confirmation the mpc is broadly thinking along those same lines. the boe saying it would be difficult to reverse the first rate hike. that may be goes to a little bit of caution around that first rate hike. the first one in the cycle is often the most important. nevertheless, you get a sense that they are taking this seriously. or they be our -- they are being more cautious. >> the bank of england can be argued to start earlier. to start earlier means more gradual hikes. this is my bone of contention with the bank of england. i have lived through a number of rate cycles. when rate hikes, -- and this is where i have a big issue with there is nobody ou

that hasn't happened in months. >> chief economist of pimco joins us now, paul mcculley.ce to see you. >> welcome back. >> hi, welcome. >> thank you. >> this jobs report, the fourth one in a row job growth above 200,000. are we on stable ground again? where are we here, do you think? >> i thought it was a very soothing job report. in fact, we've had a series of very soothing job reports and i think it's indicating that the economy is in full-blown healing. i think we're on the cusp of escaping from the liquidity trap of the last five years. i think it's a really nice report. kind of like, you know, a bowling ball right in the pocket. you raise your happened and you say, you know, good deal. >> except the ten-year isn't raising its hands. is it ever going back above 3%, paul? >> oh, i think we will in my lifetime. >> you think? >> yeah, i do. yeah, i do. i think we're at the lower end of the new range for the years ahead. i think we'll have an economy that continues to do well. in fact, in our lifetime the fed will hike interest rates, not as much as they would historicall

they will be talking to the pimco managing director about those comments.ollow me on twitter. ♪ . >> carney's credibility questioned. the bank of england's governor gets grilled this hour about his u-turn on interest rates. we'll bring you his testimony live. up exclusively. santos recently explored a $40 illion deal. good morning, everybody. welcome.

neel kashkari, former head of equities at pimco are running for governor of california.e is e3 one of the biggest gaming meet ups in the country. we will show you the highlights. we'll be right back. ♪ >> he claims he is the first billionaire to make his fortune in hip-hop, and dr. dre might be turning to real estate. he put his hollywood hills mansion on the block for $35 million. he bought a four years ago for half of that. spent $40is month he million formerly owned -- on a mansion formerly owned by tom brady and gisele bunge and. he is the ceo of beats electronics, which apple agreed to by four over $3 billion. you we have the top 10 trade you not want to miss after this break. ♪ >> first. bloomberg. >> welcome back. you are "in the loop." i am betty liu. it is 26 minutes past the hour. bloomberg tv is on the markets. senior markets correspondent julie hyman has the latest on futures right before the open. we halted a four-day winning streak for the sdi -- s&p 500, and it looks like the declines will continue. the world bank is cutting its global growth forecast from

. >> bill rhodes is pimco bonds $4.2 billion. this number extends a record streak of withdrawals. the redemption that the fund with $239 billion in assets. the federal aviation administration is is considering a drone exemption for movie and films. they said several aerial photo and companies have asked for regulatory exemption that would allow drone usage. krispy kreme cut its yearly rains forecast. shares are falling. back to you. >> thank you. at itsosted businesses worldwide developers conference today in san francisco. apple did not come out with any new machines but it did promote a new operating system for its mac computers and iphone. yosemite andoduced a new mobile software called ios 8. >> it has great user features. incredible developer features so you can expand your yourience and build apps couldn't do before. >> with more, let's go to cory johnson. he has been at the conference all day. thank you for being with me. what did you take away from these new software introductions? what is the strategy behind this move? >> it looks to be improvements of what they do. apple

pimco has been doing that.ar and the last three and five years. >> the huge bull market we have seen for bonds, is that over do you think? >> no. we don't think it is over. bonds are a good place to be. the credit funds are yielding 4.5%. bill has been very vocal about the new neutral. we see a zero percent real funds rate the next three or four years. that's 2% nominal. in that world if you can earn 4.5% in credit, that's a good return for investors. that's an equity-like return with similar volatility or a third the volatility of stocks. so we actually like bonds. >> where would you tell someone? i know it's different for every age and risk perspective. in the past it's been 80/20, 70/30. >> for someone like myself, who is 40 i would like to be 60% bonds, 40% equities. a lot of it depends on the economic cycle. >> that seems high to me for someone who is 44 years old. >> i'll tell you what, i think tax rates are going up. owning bonds are not a bad place to be. >> municipal bonds that aren't taxed? >> yeah. >

. >> bill rhodes' pimco return fund suffered $4.3 billion in redemptions last month. this number extends a record streak of withdrawals for the world's largest bond fund. the redemptions left it with $229 billion in assets. the federal aviation administration is considering drone exemptions for movie and tv productions. they said several aerial, photo, and video companies have asked for regulatory exemption that would allow drone usage. krispy kreme cut its yearly earnings forecast. shares are falling in the after-hours trade. back to you. >> thank you. apple hosted businesses at its worldwide developers conference today in san francisco. apple did not come out with any new machines, but it did promote a new operating system for its mac computers and iphone. tim cook introduced yosemite and a new mobile software called ios 8. >> it has great in-user features. it also has incredible developer features so you can expand your experience and build apps you couldn't do before. >> with more, let's go to cory johnson. he has been at the conference all day. thank you for bein

elsewhere, pimco executive neel kashkari has won the republican nomination for california's governor'sf with democrat incumbent joe brown who's favored to win. >>> and still to come, president obama has thrown his support behind ukraine's president-elect after a meeting in warsaw as he prepares to head to a g7 leader's meeting tonight. all the details on that, next. ♪ ♪ drivers want to go further with their electrical vehicles. but you can't take a trip from lisbon to stockholm if you can't plan and re-charge along the way. the european commission is using cloud to make this possible. creating a single charging and billing network across 28 countries. so drivers can travel as far as they want to go and when they want to go. >>> you're watching "worldwide exchange." >>> recap of the headlines. european squabbles on the agenda as obama heads to a g7 meeting in brussels. it's not fair, france's finance minister calls the potential fine against bnp paribas disproportionate. >>> china's in a security crackdown as the world marks the 25th anniversary of the tiananmen square protest. >>> nort

liz: mark, another mark, mark kiss sill over at pimco, nearly 400 billion in assets over management. he was just with us. he said ecb is telling you what it is going to do, that is to prop up the markets, then go for it. are you worried about unintended consequences or are you with him on this? >> always, liz, you have to balance risk and reward and, from my perspective i wouldn't be in a rush to increst in ex-individuals -- in equity unless i saw a difference in price and value. people were so scared when lehman failed in september 08, we had a previous period where people were paying u.s. treasury to hold their money. i don't just take a risk-on, risk off approach. we're look business valuation work and trying to find high quality business at cheap price which is tougher as the markets roar up as they have. david: yeah. patrick, we've had a number of people come on over the past couple weeks suggesting europe was a good place to invest right now. but when you look what draghi has proposed i don't think anybody would suggest it implies a great faith in the recovery of the european m

." >> we have pimco's bill gross at the top of our show.-riches story. a tech entrepreneur who arrived here with just 26 bucks in his had pocket. >>> and imagine if you had a few billion dollars. let's say a lot of billion dollars. want to buy an american city? well, we've got something fun up or sleeves for you. do join us on "street signs" coming up, top of the hour. so what i'm saying is, people like options. when you take geico, you can call them anytime you feel like saving money. it don't matter, day or night. use your computer, your smartphone, your tablet, whatever. the point is, you have options. oh, how convenient. hey. crab cakes, what are you looking at? geico. fifteen minutes could save you fifteen percent or more on car insurance. [ girl ] my mom, she makes underwater fans that are powered by the moon. ♪ she can print amazing things, right from her computer. [ whirring ] [ train whistle blows ] she makes trains that are friends with trees. ♪ my mom works at ge. ♪ my mom works at ge. you need to see this. show 'em the curve. ♪

but thatthat is risky, is the pimco strategy at the moment, betting at some point soon we will not seety, this is where we will stay. >> that raises a great point. at what point will we see that kind of volatility? you saw last year when interest rates spiked 3%, i think if you get going forward a good credit on gdp growth and inflation starts to pick up, i think you will see bond investors become less complacent, as they should be. >> you have a couple of picks. one is citigroup. you have the parish case on citigroup -- bearish case on citigroup. >> according to analysts, declines of up to 25% year on year will weigh on results for this quarter and potentially the full year. there is no timetable for the plan to return cash to shareholders. investors are not getting paid to wait as they trail other banks and the broader market. legal expenses are a wild card. they could be up to $10 billion overall. >> lots of headwind. >> there is a lot of reason to be bearish on citigroup that has resulted in low multiples. along the way, it is well-capitalized. it is cheap. they did should themselv

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

this morning, mohamed el-erian, the former pimco chief, executive officer, now with 9:00 this morningandkeene with scarlet fu adam johnson. >> we want to start off with company news because walmart is kicking off its annual meeting in arkansas today. it is usually a pep rally atmosphere. you have 14,000 attendees including 3000 walmart employees flown in for the event. willeo, doug macmillan, head up the event. to see be interesting what plays out because they have so many issues they are battling, including disappointing performance at home. jeff hayzlett, our host for the hour, bloomberg contributor, former chief marketing officer eastman kodak. wal-mart's advantage does not seem to be working for them anymore. >> they are starting to be the poster child for bath -- for bad jobs or that paid jobs, just like mcdonald's has become the about everything for fast food or healthy food. look at walmart. they are still 50% on the family. when you look at the roots of the company, it is not the kind of thing you would like to have. >> a lot of workers will be going on strike across 20 cities

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 that number

one potential bidder is pimco founder bill gross, who happens to be a stamp collector.usa -1, but facesa 2 tough odds of advancing out of what is called a group of death. >> that was a huge deal. before the day started, the u.s. had a 26% chance of getting out of that group. theyse they beat ghana, got a 50% chance. all of a sudden they have a double, a 50-50 chance of getting out. before the day started it looks like they did not have a shot. >> what does that mean? >> they got the easiest game. the games are going to get harder. a 39%ana game they had chance of winning. the portugal game, they have a 23% chance of winning. germany, 10%. they took care of the easy game, if they have not won they really would've had no shot. it just gets harder. >> they improved their percentage without doing anything. >> because portugal last the first game, the u.s.'s chances went from 26% to 30% because portugal did so badly and lost by 4 goals. the tiebreaker comes down to goal differential. the u.s. could get a neck strap -- the u.s. could get an extra 4% chance by doing nothing. >

. >> pimco's new neutral. >> i'm not sure america is ready for 6% unemployment. >> that is not what people to our agenda. tom, get us started. you are going big. your political. >> price of oil. we had a pretty good week. there it is. percolating this morning. the news on syria. he gets on iraq and the basic idea of these elevated oil prices -- our dependence on oil and the idea of where does this crisis go into july? >> you say these higher oil prices could slow down gdp. could it take a big bite out of it? >> absolutely. the world has got more efficient with its use of oil. impacts of lesson. it still has a noticeable difference in the growth of the u.s. economy. if oil prices rise i $10 and sustained,ses are you can see gdp harmed by 0.3% four quarters out. it makes a big difference when you go up to $50 per barrel increase. >> here is what is on my agenda. the first half of the year ends on monday. next week, we will get all sorts of commentary on how do you make money in the back half of the year? utilities were the best performing sector in the s&p 500 , up about 15%. i will be looki

joining us on set right now is mark, pimco's deputy chief investment officer.ark, what do you think? we watch stocks continue to march on like this, does it make you nervous? do you think there's good reason for stocks to be at these levels? >> i think there's good reason for stocks to be at these levels. you've got a healing private sector, several growth engines kicking in across the country. and you've got central banks around the world going all in to support this healing process. and valuations aren't overvalued. i think it's natural we're going to continue to see equities do okay as well as real estate and corporate bonds. >> how much of that is because of what central banks are doing around the globe right now? >> i think a lot of it is central banks. and the fact is that we don't have broad based inflation and because of that, interest rates are going to stay lower for longer. and that is going to revalue equities in real estate to higher levels. >> and if central banks were to start raising rates, obviously, the message this week from yellen was that i

. >> 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

later on this morning we'll talk to former pimco ceo mohamed el erian get his take on the ecb's decision, but he said even with everything he's announced this morning they are poised to act swiftly if needed in the future. >> when we listen to them, we obviously have to put it in context of what happened to the 1920ness germany where deflation got out of control and led to social unrest. we don't tend to that, brief period of deflation in this country, not that long. when i listen to what he had so say, i felt like what he was saying it is your sworn duty to lend, better start lending, we will do everything we can to make you lend, we will lend if you won't lend. i mean, he is -- he invoked that malcolm x statement before by any means necessary. this is it. i can't think of another way. this man is -- this man is on a mission, and i think that when i looked at banco santear jump up immediately, what it says, stop with the hoarding of capital. the only capital he's willing to have banks hoard is what they will owe the u.s. attorney in the united states. >> that number will be quite large

>> investors have been caught between two scenarios they see at odds with each oh, one is pimco saying new normal interest rates are going to be lower and ben bernanke is out there saying interest rates are going to be lower han we're used to and you guys seem to take the other view which is, no, you know, things aren't quite so different and the ten-year yield will rise back above 3% by the end of this year. is there a fundamental difference between your reading of the economy and those who believe in this new normal concept? >> not so much in the short term i think but -- but i think in the longer term my view is that while i think the -- the average short-term interest rate five years out, ten years out i think is probably going to be somewhat lower than it has been historically, i don't think it's necessarily going to be dramatically lower. when you look historically at where the funds rate has been in real terms on average, been about 2%. if you look outside the u.s. or go back further in u.s. history, you also find similar numbers over very long averages, and i don't think we're

pimco is suggesting across the eurozone we will get growth between 1 and 1.5%. something earlier you are on cloud cuckoo land certainly. >> i have it to tell you, i mean i'm sorry, i i'm sorry, i don't -- i don't drink the global central banking cool aid there's something about 2% inflation that arose people's savings faster than 0.5% inflation. this is a perfect world for europe. late cycle out of a long recession, just going to be in the sling shot phase where growth accelerates and if they can do it without inflation that's a blessing. >> it's not happening. >> why should we correct that blessing by creating inflation we don't have. >> have you ever heard of a country called japan? have you seen the destruction of wealth, growth that occurred there because of -- >> that's been outright deflation. we're not seeing that. you list the list of experts like jpmorgan and whoever else you had they have their forecasts. i don't forecast that. that's not in the numbers now. sure, if that happens and if it goes on for 15 years, then we can talk. >> can i play the hocke

. >>> pimco's total return fund suffered its 13th straight month of outflows. the world's largest bond fund posted $4.3 billion in net outflows in may. the fund was up by 1.25% in may and that beat 79% of its peers. andrew, i'll send it over to you. >>> thank you, becky. corporate news this morning, pill pillgrims pride. last week tyson offered $50 a share for hillshire. we'll see where that all ends up. hillshire at $58, up a little over 8% in the premarket. >>> apple says it will allow software developers to include virtual currency transactions in their applications. the announcement may pave the way for new forms of money to appear on iphones and 50i6789 pads. if you take a look at bitcoin, man is that spiking on that news. also speaking of apple, the company holding its worldwide developer's conference in california this week. new operating systems and a move into the health space and the home. apple revealing what's calling its health kit which lets various users use health apps share data. home kit is zuned to make the iphone a remote control for a conne

. >> pimco your biggest competitor. >> who? >> no. they're -- >> one of your competitors.ets. there has been obviously a lot of commotion around what's going on. what do you think is happening there? >> what happens to that firm. you must have views. >> it's a great firm. i've known bill gross for -- >> he's got a lot of putting it on the same level with blackrock is what he was saying. take great offense to. >> i mean he immediately took issue with that. >> you have a high bar -- >> we have more business in equities than we have in fixed income. they are a great fixed income house. blackrock is a great mixed income house. there are going to be moments where they pick up market share and those moments are going to lose market share. moments we're going to pick up market share and other times we'll lose market share. we're at a point now where we're picking up market share. >> that's what you get -- >> what do you expect from me? >> i don't know. they were like in the bottom 5% of all bond funds. can you say that? >> you could say that. >> i don't want to say that. >> oh, y