alix: you raise a good question on where we will see the risk and that brings me to steve schwarzman talking about where the next financial crisis will be. an op-ed in the wall street journal, he said politicians and regulators construct an expansive unregulated framework that will have unintended consequences for liquidity in the financial system and may well fuel the next financial crisis. mike is laughing here. we see ceos blaming regulators for this as well, but the idea is that there is risk we don't know about. michael: it's not the question of will there be, it is just a question of where it's going to be. that cracked me up. i don't know, is it an inevitable thing, necessarily? who am i to say? i don't know. it certainly is a question that a lot of people are wondering. joe: could there be a situation with a big crack up in credit where the stocks to find? michael: it is amazing to me that the volatility has remained outside the stock market. credit, for ex, a lot of people believe it is inevitable and that it will find its way into the stock market. i wrote how goldman calle

schwarzman is a republican and fink is a democrat.fink has been mentioned as a potential treasury secretary. funny story about how schwarzman acted as a go between bring the fiscal cliff negotiations. mark: i read your article and those of you who have not coming fascinating. to jimmy lee of j.p. morgan chase about these two firms. what did he have to say? jason: it was a great interview. one of the last interviews he gave. he really saw both of these firms and both of these men coming to their own. he speculated that they could come even close it together and he was one of the people we talked to that said it's not impossible to think about blackstone buying a traditional asset manager or blackrock eyeing an alternative manager. they cross paths in certain social situations. jason: they do. when you deal in that rare binary, you are bound to run into each other. , thank you solly much. , cars and set on fire in paris by angry taxi drivers. the story is next. ♪ mark: welcome back. i'm mark crumpton. let's get a check of the markets no

we had steve schwarzman giving $150 million to yale for a new on com campus center.ese are all to current facilities. harvard in the last year has gotten to other writing it. -- two other mega gifts. they've had a lot of mega gifts recently been none are going towards helping students specifically. scarlet: this is an arms race among these schools to build state-of-the-art labs. thata rate of spending pressures other schools to keep pace as well. will they charge higher commission as a result? >> tuition has been rising. students going to school is dropping. some schools have started to cut tuition. the interesting thing about harvard and yale, they have such rich financial aid programs. harvard -- majority of students do not pay the full tuition rate. , overis relatively high $50,000 a year. most students do not pay it. they have an extremely rich financial aid packet for almost everybody that goes there. we talk about the bifurcation in america between the haves and have-nots. -- howhe ivy league financially sound is higher and? -- higher ed? laura: there is so muc

schwarzman readiness quote.en the rapid expansion of bank regulation of growing liquidity concerns of our regulators need to revisit whether they've overshot the mark adding that five years after dodd-frank became law, it is time for a fresh look at the impact. this has been on tested regulatory framework. you have the volcker will, dodd-frank and community bank strapping by 41%. the bond market and when the fed raises rate, when they do, what happens? sandra: there is a big debate going on about what will happen when you get the first interest rate hike. standard thinking that would be good for the bank. some argue that it's not necessarily the case. probably relate to a lot of volatility. before you head out the door, let's get a look at your wednesday forecast with fox meteorologist maria molina. what are we looking at? reporter: but cannot storm struck the day today and also went to the midwest. we could see some large hail and damaging winds and isolated tornadoes throughout the day today. for tomorrow, sim

that is different than the comments with regard to steve schwarzman's comments.here will be another economic shock from a variety of different ways. what that means from a credit standpoint and liquidity, we have to seeing. how can there is a shock how it is going to be a buffer for liquidity can come back to allow the economy to continue to function. it will happen. is the high-yield market an indicator of how good the economy is performing. guest: historically it has been. that is not mean it is going to be the leading indicator in the future. necessarily mean it is going to be the leading indicator. it ties towards the health of the credit to the market. the market currencies clinic credit markets as a whole. the next shock that we look at is going to be the left one. your base case is four to 6%. what do you avoid? we look at the high-yield market now. it is not cheap in the market. .t is a good asset to own it will get 6-7%. the economy is. improving at a slow rate per the corporate market is in good shape. there is not access risk that is going to create cr

this comes less than three weeks schwarzman gave hundred $50 million to yale -- $150 million to yale.we come back, why analysts just cannot seem to get it right. ♪ andia: investors journalists talk a lot about companies missing or beating earnings expectations. i do it almost every day. erik is rolling his eyes. always get itho it turns out they get it wrong more than i knew. there is new study that shows , theverage estimate forecast error, mrs. target by 35%. ses target by 35%. the game of expectations. i think it is ridiculous. what the study is talking about is whether or not there was an improvement in forecasting accuracy since the new financial regulations went a couple of consequences- help to explain the situation, among them that research departments are no longer entitled to the cut of t fees generated by investment banking. on the whole, analysts are not making as much, not as much as they were 10 or 15 years ago. it is harder to attract the talent. on the other hand, look at it truly cynically, which i'm inclined to do, in the era of they have to build models, instead of

steve schwarzman with something like $20 billion -- $13 billion. you know,ou wonder, why doesn't he just strike out on his own? he could be worth 10 times that. >> i've asked him that. he feels like this is what he is supposed to do, this is what he was meant to do. he built citigroup and rebuilt bank one, and now he is rebuilding j.p. morgan chase. this is sort of his destiny. when and if he retires -- i think it'll me it would be another five years, but it's up to the board -- that he might think about doing something like that, but i don't think this is a guy that sort of lust after 18 billion dollars, $20 billion, $30 billion. i think he can figure out a way to be comfortable with $1.1 billion. pimm: is it unusual for someone to have this kind of money but for 40% of it to be in terms of shares of stock of the company he works for? bill: it's not unusual. you want your ceo to be in line with company investors. you point, jamie dimon is not a flashy guy. he's not like one of these hedge fund tycoons who is very flashy about his wealth. but if he

scarlet: not too long ago stephen schwarzman gave 100 million dollars to you for a new student center do not exactly need the money. and harvard's case, $37 billion endowment. so it is doing just fine. to some extent you wonder whether all of the money going into the state of the art facility means they will have to charge higher tuition. mark: mr. paulson issued a statement to say he hopes this gift will make the school at 21st century engineering leader. scarlet: i have a feeling would've been that way without his it. we will talk about that and talk about the many facets of higher education overall. you and i will this us how companies like anthem are now offering free college education is a park to employees. starbucks started it. what is in it for the company's? in a scarlet fu, three you few minutes. coming up, the days after enron, the government try to improve the accuracy of corporate earnings forecast, but appears the efforts have been in vain. we will explain next. ♪ ♪ mark: welcome back to the bloomberg market day. i am mark crumpton in new york. government action like the

if steve schwarzman said i want to do this big deal, jimmy lee said, you're done and somehow, he bendsrganization around his will until it got done. matt: we have heard he was monumental in the birth of lbos. we know he was a force behind j.p. morgan chase. what about jimmy lee as a person? you described him as old-school. give us an anecdote. is such a personal thing. matt: that is the most interesting thing right now. bill: i saw him in april. last year, he is a big williams college alum. my sons go to williams. i was playing golf with my sons last year and jimmy was there with his family. we ran into each other at the end and my parents were there too. .y father was playing with us we ran into jimmy and his family and it was this incredibly warm s andce. i've had up downs with jimmy. he was a tough boss when he wanted to be. i was all years ago. we have actually become good friends. a great person to talk to about wall street people and events. seeing him at the end of that and introducing him to my parents, it was great. matt: i want to bring in another great person to talk to abou

this is going back to steve schwarzman, the founder of blackstone in 1985.jimmy was there with him. scarlet: he went with him. >> became very close to going to work for steve at blackstone, but ultimately -- scarlet: he is a company man, loyal. >> yes and he had a tremendous impact across the landscape. if you think about the big names, ali obama, gm -- alibaba, gm, he worked in everything. alix: take us more through his career and his legacy. being aner was one of innovator on wall street. identify not just what deals could get done, but new ways to do them. the loan market, what that did was make possible the takeovers that otherwise wouldn't have been possible. ,e made careers of henry kravis other names that we associate with the private equity business, his legacy is a --ti-trillion dollar m and a m&a market all the way to ipos. alix: we are get a reaction from twitter. we will read for you some of them. jack welsh, just got devastating news of my dear friend jimmy lee's death. a great guy, what a loss. and a business insider asked jimmy lee what was th

julie: steve schwarzman is on the list online and he mentioned "outliers" by malcolm gladwell.ittle lighter reading. majored in history at harvard, mark: summer reading for the heavy hitters. betty: i will say goodbye. mark: we will meet the ceo of boxed. ♪ mark: breaking news this hour. you are looking at the live shot from the floor of the united states house of representatives lawmakers are voting out on the trade adjustment authority. they believe that is the best means to kill the fast-track authority. they have launched the last di tch effort to scuttle the president's program. we saw nancy pelosi speaking earlier. she urged her colleagues to avoid -- to vote against this red and the democrat from corey gaines said the taa is he had needed to facilitate the whole deal. they can stop this whole train revisit the most egregious provisions of fast-track. welcome back to bloomberg market day. let's go straight to your top headlines at this hour. setting aside another $63 million to owned a growing recall if to cut airbags. the additional cost will not affect the company's div

olivia: steve schwarzman, speaks torik regularly, has an op-ed in "the wall street journal" this morninging that the next crisis could be spawned by the government, blending the lack of liquidity in the market on. fred -- on dodd-frank relation. nabila: absolutely. you have everybody from jamie dimon to janet yellen worried about this issue and regulation is a big part of it. it anis it fair to call unintended consequence of regulation? nabila: i think so. erik: i can't imagine regulators wanted to suck liquidity out of the bond market they wanted to do one thing and ended up with perhaps something else. thank you very much. at this point, olivia, i'm going to say goodbye. i've been on for two and half hours. olivia: you can take a break, great to have you could much more ahead. back in 2. olivia: welcome back to the bloomberg "market day." i am olivia sterns. we are waiting crude inventories this on the morning that bp tells us that the uss surpassed saudi arabia to become the world's largest energy producer. are rallying u.s. and we're seeing gains in energy stocks. energy rallying abo

. >> blackerstone chairman ceooh steve schwarzman in op-ed lays out what he why he thinks regulationl trigger the next crisis in markets, he says we are seeing the effects, citing lack of liquidity in fixed in being killing a for comprehensive review of the dodd-frank to see what kind of affect this legislation has had on liquidity and the availability of credit we know that this legislation has already had an impact on the economy, sandra, because businesses are sitting on cash, not knowing what is do unthe. sandra: untended consequences we all talked about second we started hearing about added regulations on financial firms schwarzman sort of an obviously point somebody very smart with a lot of money that is pointing that out but look less liquidity an obviously problem a going to continue for major financial institutions if they are required, to keep more capital on balance sheets, they are going to be less liquidity and that could potentially as he is saying, lead to a big problem with the -- >> look at some firms thousands of people in compliance, thousands of people in money yo

it included barry diller, the general electric ceo, and stephen schwarzman of blackstone. maker has been in talks with a smaller competitor about a merger. the new company would rival the u.k. gambling industry's biggest player. harvey keitel is suing e*trade claiming they featured him in a series of television commercials. he was offered a termination fee , instead. let's get more on the top story. donald struck a positive tone after the emergency counsel can showed signs of commitment towards a deal. >> he has assured us of greece's constructiveity. we can see a solution -- see a full commitment towards finding a solution. let's bring in charles, the head of microstrategy -- macro ostrategy. charles: there has been a seismic shift in operations. to the table. the devils is in the details and that is what we are starting to hear. a lot of work needs to be done and the fine print needs to be worked out. there are major stumbling blocks ahead. will the parliament approved the deal? will there be a shift in the political temperature of greece. getting this approved is not th

if steve schwarzman came calling and said i want to do x, y, z big deal jimmy would say you are donend he bends the organization around his will until it got done. matt: he was monumental in the birth of lbo's. we know he was a force behind j.p. morgan chase. what about jimmy lee as a person? you described him as old school. he reminded you of the warden from the shawshank redemption. what was it like to have him -- bill: this is such a personal thing. matt: that's the most interesting thing right now. bill: i saw him in april. last year -- he's a big williams college alum. my two sons go to william. i was out playing golf with my two sons last year and jimmy was there with his family. we ran into each other at the end. my parents were there, tubing. my father was playing with us. -- my parents were there, too. it was this incredibly warm embrace. i had my ups and downs with jimmy. he was a tough boss. that was all years ago. we had become good friends. a great person to talk to about wall street. seeing him at the end of that and the big embrace and introducing him to my parents, it

history of these firms is that back in the late 80's when blackstone was first getting started, steve schwarzman guy named larry fink who was a successful mortgage trader. schwartzman said come work with me. they had a fairly bitter corporate divorce. black rock went on its way and over the subsequent 20 years or so, these firms became the dominant firms and their respective industries. stephanie: it was not like they were doing the same things. blackstone's competition was kkr. black rock's was fidelity. jason: when you're thinking about this issue, we did think about blackstone versus kkr or something like that. the interesting thing in private equity is that blackstone has put a lot of distance between them and their traditionsal alternative rivals. as they have gotten bigger they're looking at new pools of money, especially retail investors. matt: you look at this chart and you can see that blackrock, as far as total assets under management, destroys blackstone. $4.8 trillion to $310 billion. blackstone actually makes more money in profits. jason: on the same basis, about a billion dollars m

he is very close with steve schwarzman. they had done many deals over the course of the 192090's.teve approached jimmy be my number two. they came within days of doing it. that job eventually went to tony james, who has been at dlj. blackstone has gone on to do amazing things. jimmy really leveraged a lot of the work he had done in private equities to work on massive ipo's like alibaba and facebook. also at the center of some of the biggest takeovers. dell. worked on that, too. brendan: our bureau chief. familiar with the history of jimmy lee. this is jimmy lee describing the dell buyout. "it's like going into a haunted house, and every time you go run a corner, some ghost pops up." this is bloomberg " surveillance." good morning. ♪ brendan: this is bloomberg "surveillance" vonnie, you have got a morning must-read. vonnie: it comes from stephen l carter. you clal that -- call that dynasty? perhaps the three generation requirement is a corruption of the domestic dioidiom. it seems we do these great houses a disservice when we use the same word to refer to political family sues a co

yesterday, we had steve schwarzman writing in the wall street journal that he thought this would be the financial crisis. the problem is if you are an investor, you have a lot of ways to protect your portfolio against that kind of risk in the credit market. we have seen a lot of big investors get creative when it comes to hedging their portfolio. they have been using the vex. the vex tracks volatility on the stock market. we have bond investors essentially turning to the stock market to hedge their credit risk. how about -- stephanie: the dita's framed the bell the nasdaq the day after nike announced that they have got the exclusive and be a adidas walked away from it? is is interesting. my he is going to crush that business but you get to ring the bell. erik: i think julie hyman might have somebody say about nike. julie: nike has indeed signed a contract now with the nba. the company did not disclose what the contract was worth, but a person familiar with the plan says nike is paying a billion dollars for the privilege. it is an eight year deal. as part of this, nike will be the first

behind dodd frank, former financial services chair barney frank will join us with his take on schwarzman'ss it for us on "the closing bell." thank you so much, guys, this afternoon. really appreciate it. "fast money" is coming up now in just a few seconds with melissa lee and the gang. melissa, what's on tap? >> we've been tracking the move in tesla today down 2% off the news of the shareholder meeting, sell the news sort of event. today we've got a tesla competitor privately held and the car, get this costs more than half a million dollars. >> melissa, if i'm right i remember we teased this earlier. is it renovo. is there any coincidence that rhymes with le noefo? >> i'll have to ask the guy. i don't think he wanted to name his car after a chinese appliance maker slash -- >> what -- is it a chinese company? >> no, no. it's a u.s. company. it's got enfunding. it's based in california. >> just wondering. >> super high end. if you think tesla's expensive, this one's in another league. >> can't wait to find out more. straight over to you guys. >> thanks a lot, kelly. "fast money" starts right