process is worked with the treasury department. and how those decisions were made. senator johnson: the i.r.s. is responsible for evaluating the exemptions for the individual mandate. how many americans in general or what's the estimate in terms of how many will be provided for? commissioner koskinen: at this point, we haven't pulled that data, so i can't give you an answer on that, but the assumption was basically that probably more people would file for hardship exemptions or they had coverage for part of the year than people who will pay the shared responsibility payment. it will be a number that will actually see and in three, four weeks will be able to accumulate that data. senator johnson: those that are grant the exemptions that will be on an honor system. any way to verify that? commissioner koskinen: what we'll do is when we -- the computer selects returns that have issues, whatever they are, when we go into those, we look at everything. of the 75% give or take americans saying they have coverage, if we have an issue with

treasuries.he treasury department, treasury secretary jack lew holding a first face-to-face meeting ready with the greek finance mr. jan is her ministere yanis verify arafoukis. secretary lew: there is no doubt that if this leads to a crisis such as greece leaving the eurozone, it will cause an enormous amount of disruption and hardship in greece. i have said consistently that no one should think that all of the risk of a change like that is pretty double in advance and you know, even if the contagion risk is much less than it was, say in 2012 and earlier, it would not be a good thing in a world economy just recovering from a deep recession to have that kind of uncertainty introduced. cory: we will hav -- alix: we will have more of our interview with secretary lew in a few minutes. japan suppressing china as toppled review us treasuries. joining us of course is carl riccadonna and "bloomberg news'" lisa abramowicz. what is the reaction to this news that china has surpassed u.s. treasury's? lisa:

i know the department of justice, the treasury, used to be the treasury department, cia included allng to track the funding but how hard is it to track the funding from your experience at treasury? >> well, it's difficult. al-qaeda was getting their money principally from external donors. isis is largely a self-funded terrorist organization, so it's a greater charge even to track the money for isis. but at this point it doesn't appear that the u.s. government has really gained its footing gained its traction and has a sound strategy, counterterrorist financing strategy, to go after the funding of isis. cheryl: the banks, i mean, i would think -- and maybe i'm naive here -- any ceo of a large bank, especially barclays doesn't want to have their bank and the phrase isis in the same sentence. >> you would think that would be the case, but with respect to these banks that you've mentioned that have received these enormous fines, they were deliberately providing financing to state sponsors of terrorism such as iran, syria and sudan. and apparently, they didn't have any serious concern abo

treasury treasuries, the s&p 500, gold the european bonds, the dollar -- you would have had gains. the s&p 500 -- the u.s. has been worse. 24 developed markets, the only one that outperformed was greece. quite a number when you think about the economy. i'm looking at u.s. companies. amazon -- would you like to when you put your fabric softener or detergent and your washing machine and then you run out. mark: it is very frustrating. caroline: a touch of a button, you can order a new one from amazon with a wirelessly connected internet of things a new device. you can put them near your loo. if you have a new baby, if you are running out of nappies, you can get more huggies. i don't think we need any more. this is basically amazon slowly but surely wanting to become everything to us. there will be a day and the future when we open the fridge and the fridge will sense what ran out and amazon will order it. if you are a prime number, it will arrive within a day. i love the april wolfsburg google is doing at the moment. google maps -- you can play pac-man. i'm pretty bad at pac-man. ther

the treasury, possession financing. the first in, they get paid, and they get out. as we know years later, there is no end to this. >> i know you don't make stock recommendations, people buy the stock, with the government is doing, these challenges, court challenges, has not prevailed. a very libertarian judge, quite a big judge. and on the same page in this, what the government is doing is fair, is legal. >> let me say this thing judge lambert got right, he did place -- that is exactly what we intended to happen. what as long as he does not judge the merits, would be judges is to we have an ability as a judge to hear this case, the answer he says is no. the powers of the conservative which he is right here supposed to be brought, one of the things that was done in the powers of conservative, and speak will 4. >> this is where the rubber meets the road. my twitter page is filled with these guys. fannie and freddie think it is worth 30 and if the government stops taking the money is worth 30. and investors prevailing to the federal claims court. >> i'm not optimistic

we have a lot of conversations with the treasury department. we chime in the terms of how it will affect tax illustration but i don't think there is any gap. as new issues come up, they all have to be resolved. sen. ernst: i know it is a very difficult situation and thank you for coming today to testify. sen. ayotte: thank you chairman, thank you commissioner for being here all stop -- being here. i wanted to ask about a situation we have in dealing with the new hampshire but it up in new hampshire is unique on this. i received a number of complaints from my local libraries that they didn't receive the necessary tax forms and instruction booklet. in new hampshire, we happen to have a high percentage of people that actually will file my paper and historically they have been able to go to their local library and get the tax forms so that they can do their taxes. i wrote to you, originally in february, about this issue. the first response i got back one of the primary reasons you said that these forms weren't being provided to people at their libr

if you look over at the treasury market, treasuries were lower but they have erased to their declinese little changed on the session, but a much -- yields are little changed on the session, bumpy much holding up. we had a week -- wages are picking up a little bit more than what economists had been anticipating. it is a big question as to when the fed moves next. june is probably off the table. september still there. the dollar is unwinding. the first monthly decline since june. alix: it is a very confusing market. i am here with lisa and carl. it is very confusing. we still have a dovish fed. we still have the ecb pumping money. we still have the boj pumping money as well. lisa: the people i spain to say this is the unwind of a lot of crowded trades. you have some capitulation. you have people getting out of overbought -- the dollar, for example. if the fed is going to hang out for longer it doesn't make sense to think the dollar will keep appreciating, especially on the other hand over the pond over the atlantic, seeing european data coming out stronger than expected, giving the euro

there's concerns about liquidity in the treasury market.n't we see the fed turn around and say fine, let's not reinvest? steven: that is the point. every client i meet, there seems to be a lack of good quality collateral, which means a lack of bonds. they are all stuck in the central banks. if that's the case, do something about it. let some out or stop interfering with the market mechanisms. i'm not saying it is going to happen for sure, but we can tell from the recent yellen speeches and those of stanley fischer that they are looking at the balance sheet. the idea that you have a conventional rate hike cycle where the curve flattens doesn't make sense to me. jonathan: i want to bring it to the u.k. very quickly. we've gone from sovereigns to credit. we've got that lower interest rate. what does it mean for yields? what does it mean for the gilt market? we've got this big political headwind. steven: small matter of an election coming. historical in analysis, for what its worth, history says that it doesn't matter too much for the gilt mark

regulatory processes work with the treasury department. senator johnson: the irs is responsible for evaluating exemptions for the individual mandate. how many americans in general was the estimate in terms of americans that will qualify for exemptions provided for? mr. koskinen: at this point, we have not told that data out of returns. i cannot give you an answer on that. the assumption was that more people would probably file for exemptions. or had coverage for part of the year than people who will pay the shared responsibility payment. it will be a number we will see in three or four weeks. you will be able to accumulate that data. senator johnson: it will be pretty much on an honor system? anyway of trying to verify that through auditing? mr. koskinen: what we will do in these matters is, when the computer selects returns with issues, when we look at those, we look at everything. of the 75% of americans who say they have coverage, if we have an issue with your return, we will ask you if you had coverage because you said you did. we will

she just sat down with treasury secretary jack lew.eems to be optimistic about the economy, is that right? >> plenty of optimism. i started by asking him on the economy, why are we seeing a bigger boost in consumer spending and retail sales as a result of all of those gas savings? here's what he said. >> one thing that's unquestionable is that u.s. consumers have more cash in their pocket because of lower energy prices lower gas prices for the average family means hundreds of dollars, if not more of extra cash that they have. the question of what they do with that cash is a bit of a puz that'll we're all trying to understand. obviously the short-term economic benefit is greatest when it leads to immediate demand, immediate consumption. >> but there's also a benefit to households fixing their balance sheets. i think it's too early to say what consumers have decided to do. >> how long do you expect this soft patch that we're in that we're coming off of in the first quarter to last? >> i think obviously the first quarter had some unique t

we have to take a look at treasuries. of interesting stuff and we did see the yields spike up that the jpmorgan ceo jamie dimon, and -- giving investors a lot to talk about. he said last year possible till to is a warning shot to investors. the fluctuation in yields last year was an event that is supposed to only happen once every three years. the next financial crisis could be exacerbated by a shortage of securities. treasuries are supposed to be among the most able securities. is this real or are the banks trying to scare the fed? the new regulatory climate has really constrained banks. they get charged and it hurts them. that is the truth. central banks and foreign investors are large purchasers of securities. we were talking about the auctions and the -- you are seeing a bigger pool of treasuries. i don't think we're headed for a liquidity crunch or drought of liquidity like jamie dimon is talking about. lisa: if you look at the market the volume of overall market of treasuries has almost tripled while trading volume

listen to what russell george, the treasury inspector general for tax administration said. "the i.r.s. has continually rated the risk of improper additional child tax credit payments as low. however," he said, "our assessment of the potential for improper payments in this program indicates that it is an improper payment rate similar to that of the earned-income tax credit." what is that rate? about nearly $6 billion and even more than that over a period of time. "it is imperative," he said, "that the i.r.s. take action to identify and address all of its programs that are at high risk for improper payments." so today we're talking about one of those programs that us russell george said we ought to be taking a look at. and we'll be looking at others later. it is a pretty easy fix that we are proposing. i am submitting legislation that would require the submission of a valid social security number in order to get the tax credit. requiring this doesn't take the credit away from anyone who legally qualifies for this credit but it does help ensure that only those who are truly le

mark: former treasury secretary hank paulson. coming up, who will stand druckenmiller -- who will stan druckenmiller back in the 2016 elections? ♪ mark: welcome back. a tense moment at today's ecb press conference in frankfurt, germany. a protester jumped up onto a table where president mario draghi was speaking. demanded an end to what she called the ecb dictatorship. the woman was taken into custody. after a short break, mr. draghi resumed speaking. interest rates, unchanged. aaron hernandez has been sentenced to life in prison with the parole following his conviction today of first-degree murder. a jury in massachusetts found hernandez guilty in the shooting death of odin lloyd who was dating the sister of hernandez's fiance. the conviction will be automatically appealed to the state's highest court. hernandez was selected by the patriots in the fourth round of the 2010 nfl draft. coming up stephanie ruhle's exclusive interview with stand druckenmiller and his take -- with stan druckenmiller. the president with the boston -- t

we saw the treasury markets here in the u.s. sell off, due in most part to the yield spiking over in europe. everything thereafter, liz, was fairly constructive for the treasury market. the gdp number, the subsequent fed statement this afternoon. all of that's constructive, it essentially is taking a june rate hike off the table that's good for treasuries. i don't think the spike in the european rates is here to stay and the relative value trade will come back the other way. we have a buying opportunity in the treasuries and tomorrow and friday. liz: okay at 2.04 for the yield. thank you very much. the fed voted unanimously to keep interest rates at very low, almost zero to a quarter percent for another six weeks but are investors putting way too much focus on the fed and soft economic numbers like today's first quarter gdp data. let us bring our next guest who says investors need to hedge risk even if the fed isn't moving. he has ideas right now. john wilson, ceo and co chief investment officer. have you 7 billion in assets man

it's been sort of a very punishing bet to try to bet against treasuries right?e thing, it's a question of, is it a long-term strategy to be short or is it sort of reducing the exposure to the thing, it's treasuries right now because there might be volatility coming up or the yields might cream up a little bit? i think what people are looking at is they're saying in the u.s., if inflation rises enough you start to basically get negative real rate of return if you own treasuries at too low yields. there's sort of a floor to how low they can go. that's the argument. at the same time when you look at the trillions and trillions of dollars of negative yielding assets in japan and europe it's hard to see how yields will rise that much. so this is sort of the conundrum making a lot of investors right now. erik: carl, some at least of what appears to be driving treasury yields lower is the quantitate tive easing that the european central bank has taken across the atlantic. to what degree is that a help or behind drens to the fed? carl: to some degree the more q.e. done

treasury energy policy director.e talking about all of the dynamics of oil, iran, and opec. mark: "street smart" coming up at the top of the hour. thanks. stay with us. scarlet fu will have a check on the market movers on the other side of the break. "bottom line" continues in just a moment. ♪ mark: get the latest headlines on the top of the hour on bloomberg radio and streaming on your tablet and on bloomberg.com . that does it for this edition of "bottom line." thank you for joining us. on the market with scarlet fu is next. ♪ scarlet: thank you. it is 56 past the hour and bloomberg television's on the markets. with one hour to go in a quiet day, the dow is little changed. gain as many as six or two point before sliding to its low, a loss of 75. now we are pretty much at where we were at yesterday's close. meanwhile the dollar is stronger and treasuries are falling which means a higher yield for the 10-year. utilities is the worst performing sector so far in 2015. the xl you spider etf is down 6% this year. my next

the treasury does things differently. in defense of myself, i will say that i used treasury figures emma which i adjusted to make them consistent to changes to the way the reported things differently during the bush administration. this is all coming from the treasury. it is a consistent measure. every year, the number of tax expenditures grows. so this is something that is growing. the dollar value volume, of gdp -- by the way, back to the last part. at the bottom, i have refundable credits, which have multiplied by a factor of 500, growing from one to five. that may seem like a pretty small number them a but these are -- this may seem like a pretty small number, but these can be a major headache. this is from individual tax expenditures including focusing on individual taxes and that is individual tax expenditures that are including those that individuals claim on business income. those numbers have been gradually rising over time. the bottom of that chart, the top black box, dark blue, shows the revenue losses. the bot

brands, and chipotle, and it is supposedly better to sell than by treasury -- buy treasury.ss: u.s. treasuries are a whale of a buy, i'm suggesting if you don't want to hedge that the best bet is to sell the bonds of from the treasury. alix: he says that is a whale of a buy for treasuries. lisa: that is what he is saying, if you are going to go one of the other, you might as go short and choose the lesser of two evils. alix: james, i think you are good you have a good microphone now, right? james: i do. alix: what is your call? alix: i think the --james: i think the best thing is the yield, so some people say you can stay here, but european growth data is begin up a lot right now, and all you have to price in -- all you have to do is price in different growth rates, so i agree with him. alix: we're going to look at earnings and updates are poorly as it came in just under the wire, and earnings per share are coming in ahead of the estimates? scarlet: -- julie: that's right, aaa fell short on comparable sales, these are sales that are existing restaurants, up 10.4%, which woul

we'll start the show with two former united states treasury secretaries, one from each side of the aisle. larry summers on the left and hank paulson from the right. on the u.s. economy, growth is back, but there's a problem and it gets wider every year. on china, is it a friend or a foe? also, a pope and a politician trading tough talk. why is the president of turkey taking on the vicar of christ? and what does it say about turkey today? then david brooks games out the 2016 presidential field. nd avenue and jeffrey sacks tells us why 2015 is our last chance to act on climate change. but first, here's my take. the obama administration's foreign policy energies are now fully engaged in the middle east. negotiating the iran deal, sending special forces into iraq, supporting saudi air strikes in yemen, working with the syrian rebels. whatever happened to the pivot to asia? remember the basic argument behind the pivot was that the united states was over invested in the middle east, a crisis-prone region of dwindling importance to the american national interests. asia, on the other hand, is th

i was ronltdald reagan's treasury secretary and white house chief of staff for four years.ou can't be in those jobs and be too liberal. >> when you look at the line up of republican contenders can you be objective about this or are you going to be working hard for jeb bush? >> well, i'm going to be working hard for jeb bush because i think he's clearly the cream of the crop of the republicans who are going to run for the nomination. i've known him since he was a young man. i know what kind of president he would be. he would be an extraordinarily good president. he's very knowledgeable. he's very temperament tal. he's suited for the job. yes, i'm close to the family. >> what did barbara bush mean? >> you think i would answer a question about what did barbara bush mean? i spent years not answering questions like that. >> jim baker, pleasure to have you on. >> thank you. >>> up next imagine a country where prison sentences average less than a year. prison cells look like college dormitories, and the system works. sounds crazy? global lessons on prisons coming up. asis most my

>> biggest news in chicago, sell-off in the treasury markets. contributors the weak auction market as well as hawkish talk indicating a june rate hike is not out of the question. neither of the two items have lasting legs from the demand standpoint, liz, we think global seekers will come in, a ceiling how high the rates can go, and from the fed standpoint, i don't know how we can get hawkish coming off the worst nonfarm payrolls over the past year. liz: let me push you on that, trend. hold on. jobless claims today. up 14,000, which is less than expected. this is the number you don't want to see climb too much. and we are looking at fewer layoffs, week after week, this number started to look good. the average number of claims dropping 3,000, touching the lowest level since the year 2000. >> the claim numbers look good, liz, here's my point. if they're going to raise rates in june, you have to assume that the data is better in their opinion than prior, and if we have 13, 14 straight months of plus 200 job creation, if last month's number is an ano

treasury bond. so get ready, if you buy into that, treasury rates go higher.nd they will hike before the end of the year in december, then that would play into that particular theory. dollars are higher and yen is lower. the bank of japan says get ready for zero if not slightly negative rates. mark: europe is facing a month of turmoil with greece in a cash crunch and further economic sanctions on the table. one man at the center is the vice president valdes who joins me now for his first interview of the day. good morning, how close are we to a deal between greece and creditors? guest: as we know the technical negotiations are ongoing and as you agreed already on the 20th of february, those conversations should go until the end of april so the meeting for the 24th of april will be a good occasion to take stock of how the technical conversations have been going so far. mark: can you give us some sort of clue as to the intricacies of the negotiations, what progress is being made by greece if at all because some would lead us to believe that there isn't progress

the former secretary treasury volcker said it very well. in one week, through currency exchanges, you can undo years of benefits in terms of undoing tariffs. i would urge my colleagues to support it and i certainly support the minute that senator schumer offered. this is very targeted and focused and consistent with wto. it has to be consistent with imf and wto for it's a pulse. i would encourage my colleagues to support it but to do it in a way that enables our workers to compete. if they are given this level playing field, they can compete and they can win in the global trade war, but we have to be sure we give them the tools to succeed. >> i would love to have the administration's viewpoint on this. do we have somebody from the illustration here? did he just step out? >> he is there, he moved to the middle. >> you are and charge so we would like to hear the administration's position. >> thank you again. as i stated earlier, secretary lou and the administration have worked intensively to address currency practices through a number of bila

and the yield of the treasury bond on tenure is solidly below 2%. our next guest runs the biggest bond fund and he's to share about the fund and the fed. he's scott mather the chief investment officer for pimco. good to see you scott, welcome back. >> good to see you, sue. thank you for having me. >> you are outpacing your peers by better than 90% and you've turned that fund around. how did you do it? >> well i'd like to tell you it is all myself but it is really not. we have a process here that is a large team of people involved in designing the strategies and the individual securities that we're excellenting for the fund -- excellenting for the fund. so we have 260 portfolio managers and they are part of the strategy-making process. so it is using the same people and the same processes that have allowed us to outperform over numerous market cycles for deck ates. so we are returning the fund back to where we spend most of the time at the top of the league taes. >> indeed. where did you find the best trades and the best value in the market. because

lawrence summers was treasury secretary under president clinton. the national economic council under president obama. and was of course a president of harvard university as well. welcome back to the show larry. >> good to be with you, fareed. >> you have been writing a great deal and very concerned about something that you call secular stagnation. and it's important that people understand what this idea is. the idea is the economy is growing but jobs are not being created, productivity is not rising anywhere near what it used to in the past because we have reached a point at which for some reason the economy's basic growth rate is just not going to be very high. is that fair? >> that's right. and what i'm emphasized that this is really a global phenomenon of the industrial world and what it's got to do with is that we seem to have a lot of savings. more savings because there's moreinequality. more savings because developing countries are building reserves. more savings because people are paying down debt. and we've got much less demand to put that

former secretary of the treasury.f state, you gave a speech a very rare case you gave a pretty tough speech to one of the most powerful lobbies in washington -- apec the lobby that supports israel. and you said very bluntly israel has to stop settlement activity it has to reach out to the palestinians. you got -- you got a lot of pushback on that. but you are back at it. you went and gave a speech -- >> well here is my view on that fareed. i think that the two-state solution is critical to israel's future. i don't -- i think the future is going to be extraordinarily difficult for israel if she can't find a way to get to a secure peace with the palestinians because i think that it's going to be very hard to maintain both her jewish character and her democratic character, as long as she continues to stay in occupation of those arab lands. the demographics i think will overwhelm her. >> one of the guys who at the time when you were secretary of state bitterly criticized you for that speech was one bibi netanyahu. what do

we're a bureau of the treasury department. we don't issue regulations by ourselves. they technically have the authority but obviously design and we draft regulations with an eye on what's the impact on tax administration. if there's a policy decision about do you increase this or that, for instance the policy decision about the penalty application, that's a decision by the treasury department. we get involved in that only to the extent that it's a question of what are the implications for tax administration. would it work better easier, which is the best way for it to work. but all of the policy issues are decided, again, of by the administration and ultimately by the congress in terms of legislative either recommendation or fixes. >> would that be true with regard to the credits for illegal immigrants as well? the decisions that were made about the refund ability of credits for folks under aca wouldn't have qualified under the statute about but appear to be getting credits? the irs plays no role in the rule making process. >> we participate in the discussions about

assistant general counsel dolls from the department of the treasury. commissioner bell from cpb office of international trade as well as jericho from gct. members benefit to answer any questions that anyone has. briefly describe the main pieces of the proposal. >> the committee is considering a proposal to reauthorize the trade facilitation -- >> is your -- is your microphone on? >> the trade facilitation and trade enforcement functions of the united states customs and border protection and other agencies, seven titles. title i considers the trade trade, facilitation and enforcement mission of cbp. the import health, and safety mission. the import related protections of intellectual property rights missions. title v establishes new requirements for cbp to combat evasion and anti-dumping and countervailing duty orders. additional trade enforcement intellectual property rights protection requirements primarily for agencies other than cbp. title iv and seven contain miscellaneous provisions. thank you, mr. chairman. >> the senator 70 questions regarding t

some people say time to short treasurys. what do you say about that? >> i think that is a dangerous trade. even though the fed wants to come off zero rate policy stay to the discipline of being data dependent, data doesn't support it. i don't see them moving. do think that favors treasurys, because a lot of money coming in from foreign central banks. david: still you go for treasurys even though there is up tick in inflation? >> i wouldn't be short treasurys. you can make your judgment on long positions. two year note would be subject to what the fed would do is down 10 basis points last week. we're not thinking about it that way. we have greater risk of 150 than 2.25 on tens. liz: tim, if we go what you in essence says, avoid the fed and go international, where are the best places to stash that money, to sock it? are there opportunity you see where you get widespread bang for your buck? >> i think internationally. international small caps are still trading below their book value. that is a good area to invest in. should provide higher than expected re

it all goes to the general treasury fund. and in some ways, in fact, in a lot of ways it probably shouldn't come to us. in other words one of the things it's clear in the way we run the organization is nobody gets measured by let alone a performance award by how much they collect. so people should be comfortable that the agent they're dealing with isn't going to get mores pay depending on -- more or less pay depending on how much you owe. somebody suggested well, you know, we're doing this, we could give a little of that money to the irs, and it certainly would help the funding problem, but i think ultimately we need to be funded directly, and people ought to be comfortable that we're, by being more aggressive we're not helping ourselves by building the budget up. i would note just maybe as a closing point, i've now -- i've been to 37 offices i've held front line meetings with front line employees at every place managers at every place union people at every place, had lunch with 20 employees. and when i talk to, go to call ce

for 2014, the entire year, treasury treasuries treasuries never traded in negative territory once.he beginning of 2014 was the high-water mark. this year is a little different. there's only been two sessions, year to date, at ten-year yields close to where they closed at 217 last year. they're tied to data which makes me feel good. the 295,000, the nonfarm jump we had on the headline number. that was released on the 6th of march, a friday. that day is the high yield close for the year at 224. the following monday, still digesting, we had our second of the two close above 217 to 219. all the rest of the year have lower yields, if you look at year to date returns on five-year, 2.3% and on 30's, close to 2.5. the horsepower of these returns isn't so much your biannual yields you're getting it's the appreciation of price, let's put that into perspective. the low yields historically on five-year are 54 basis points, july of 12. 138 on 10s, july of 12. on the 30-year bond it was this year, at 222. the reason i bring that up is, there's a lot of room. there a lot of room. 54, we're at 130

treasury can continue to rally.is now is basically pinned between 1.65% and which was necessitated by recession in their qe. 2% and that is the range i am playing. tom: alan krueger and bill gros s. the market making one bet, which we see with the ten year and two year. the fed is on one, themarket is on one. is the market telling the fed what to do? alan: there's some of both. on the long end the fed cannot do that much. on the short end the federal reserve is more important. tom: are you telling janet yellen what to do? bill: not bet, which we see with the really. the bond vigilantes are third or fourth place. the central banks are key, then there is a reserve purchases by emerging companies that is the dominant influence. the vigilantes, if there were any, are weaker these days. olivia: how much lower do nominal policy rates need to be than nominal gdp? bill: good one. olivia: thank you. alan: back to the taylor rule. bill: history will not give us an example but from 2010 isthan an instructive period. it's the p

it goes to the general treasury fund. and in some ways, in fact in a lot of ways, it probably shouldn't come to us. one of the things that's clear in the way we run the organization, nobody gets measured by let alone paid a performance award by how much they collect, so people should be comfortable when they're negotiating or talking with us that the agent they're dealing with isn't going to get more or less pay depending on how much you end up oweing, but it is attractive. one of my recent hearings an appropriation hearing, somebody suggested, we're doing this, we could gif a little of that money to the irs and it would help our funding problem, but ultimately, we need to be funded directly and people ought to be comfortable that we're by being more aggressive, we're not helping ourselves by building the budget up. i would note as a closing point i now, i've been to 37 offices. i've held front line meetings with front line employees at every place. managers at every place. union people at every place. had lunch every pla

. >>> up next, a former treasury secretary and goldman sachs ceo tells fox news two world powers need to work together to keep the cash flowing. ♪ money ♪ >>> in depth with a financial executive who has made a career out of studying the american way of life and now says the key to our future may lie with china. here's chief washington correspondent james rosen. >> reporter: for more than two decades as a top investment banker and ultimately a secretary of the treasury under george w. bush henry hank paulson has led the u.s. effort to help china develop its economy and to persuade beijing to play by the rules. now the former goldman sachs ceo has distilled the lessons he's learned about the world's largest economy in a new book titled "dealing with china." >> and how have you seen china's economy change over that time? >> well, just dramatically. i tell the story in first part of this book about working with the chinese leaders on some of the landmark transactions the first ipo of china mobile or their first oil deal petrochina and helped drive reform and opened the country up to more

treasury 0, safer corporate bonds.d goes to four itch don't need that junk bond at five. so as those yields start to spread widen, that junk bond market collapses, that's super bad for investors because a lot of mom and pops have moneys the their iras in those fend, the high yield etf is $17 billion in it, and so it's a huge signal -- i was asking, let's make news today, tell us something exciting. >> that was the headline. >> he is a wonderful guy super smart, right on the federal reserve. >> didn't said i what imminent. >> he said is an 18 to 24 emergency horizon -- 24-month hazard. the federal reserve is holding a $4.5 billion balance sheet and has a seven year maturity. and as the bonds roll over if they don't buy bonds to replace them, that will also have pressure, some selling pressure -- >> people worried about this for a long time, it's going to be like waiting for goudeau. >> it's a problem. we're in a cyclical economy, an interest rate sensitive economy. the federal reserve has sim stated -- stimulated the ec

treasuries. the u.s. capitol briefly locked down today after a man landed a gyro copter on the capitol lawn. the man flying the helicopter was arrested. reports identify him as a florida mailman protesting corruption in campaign finance laws. authorities inclined to say how he was able to land so close to the u.s. capitol. nokia may have to pass a deal before it merges with alcatel. combined, a would be the world against maker of networking equipment. etsy has priced its ipo at $16 a shares, the top end of the range. that means etsy raised $267 million. etsy starts trading tomorrow on the nasdaq. and a high-frequency trading firm is set to price its ipo at $19 a share, at the top end of the range, according to a person with knowledge of the matter. the company is raising about $330 million. the ipo was delayed last year after a book claiming -- claimed high-speed trading was reading markets. now to the lead -- in europe google faces the biggest threat to its business ever as the eu slaps the search giant

form at treasurie -- former treasury secretary larry summers calls at a turning point for u.s.power. he stages the past months may be remembered as the moment the united states lost its role as the underwriter of the global economic system. the bank is china's plans to start the first new development bank in decades. more than 40 countries applied new founding members, including the u.k., france and germany. samsung shares rose. rising demand for memory chips offset falling sales of smartphones. they are banking on the new debut of the galaxy 6. caroline: you can join the conversation on twitter. we will be looking at samsung and what is behind the profits. everyone focusing on the next edition of the smartphone. you can reach us on twitter. mark: coming up, europe is back after the easter break. soft jobs data on the u.s. and greek agrees to pay the imf. what more could the markets possibly want? join us for the debate. ♪ manus: we are back from holiday. stocks close that 15 years highs. allen higgins joins us now. welcome to the show. i've had a few days rest. mark: buzzing l

but the demand for income can be partially satisfied by the higher treasury yields.you will have higher demand for low euro bonds. desperate low -- for low yield bonds. what if interest rates rise to the extent that people are thinking about normalized back to six -- 6% or 8% on 10 year treasuries? what will high-yield bonds yield? a lot more than 10%. it is anybody's guess. companies are borrowing at 5.5 today my have to roll over their dead at double digits -- roll over their debt at double digits. systemwide there would be more income and free cash flow but it will not be uniform. matt: i was erik schatzker's interview with jet -- jeff good undlach. olivia: we have breaking news on some m&a. julie hyman is in the newsroom. julie: another development in mylan's quests to buy perrigo. this morning, mylan said it was now offering a higher price for perrigo, $75 per share in cash and 2.3 mylan shares for every perrigo share. perrigo is now rejecting that offer saying it is not higher and there is a little bit of dissent between the companies among the value of the off

i want to mention the gentleman i called in my office, he was recommended for a a job in treasury. i never met him, i don't know him, but he was vilified that somehow he caused the 2008 economic meltdown on wall street. he was basically in research and analysis and advice. he wasn't trading or part of any mistakes that were made but they said because he was from a firm this firm wasn't even involved in wall street or the trades but because trades, but because he was in a firm doing research and advice, he wasn't fit to serve. every now and then i think we are a strong country because we have a strong private sector and a strong public sector. if we vilify people who understand how they can volunteer and help the public sector we are making a big mistake in this country. there were demonstrations in front of his house, petitions against him, his children are asking why do they say your horrible person that caused the financial question crisis. it it might be good to have someone who understands finance to serve and finance. we could talk about loretta lynch. she was a distinguished

secretary of the treasury stand on the steps of the treasury wants the year and say i reaffirm no federal guarantee, but their loans always traded with a discount that indicated the market thought they were backed up by the u.s. government and they were and they got bailed out. but i did talk to a couple of economists who said stocks for loans or biggest banks. indicating the market doesn't believe the biggest banks would be allowed to go bankrupt in 2008, these bailout happening and we saw t.a.r.p. you cannot argue that they the tea party started was the day the bush administration announced $800 billion bailing out the big banks and congress's phones rang off the hook with nobody organizing it. congress's phones started ringing off the hook with people saying don't give a hundred billion dollars to the big banks. i am opposed to too big to fail, banks should stand on their own two feet, banks would make more responsible decisions if they had to stand on their own two feet. but if i don't believe that the u.s. government would let the banks fail if they make bad decisions, what do i do?

along with officials from the agriculture, treasury and commerce departments. topics include the opportunities and challenges of expanding trade with the island nation. this is 2 hours and 10 minutes. >> okay. just quiet down. let it go. let it go. >> i was going to say that myself. sure got quiet. good morning the committee will come to order. i call this meeting of the senate committee on agriculture, nutrition and forestry to order. at the beginning of this congress, i was extremely hopeful that trade would be one area to work to find an agreement. i still maintain that hope. we certainly hope that's the case. we're working very hard in the finance committee to make that happen. tomorrow, will mark up the promotion bill. that allows our negotiators to garner the best deal possible for american exporters. tpa is good for agriculture. and i look forward to getting it passed. international trade of american agriculture products is critical. absolutely critical to the nation. and to the nation's economy and our farmers and ranchers. i've long fought to eliminate

the treasury. i have no idea who talked to whom, how that process and those decisions were made. >> so the irs is also responsible for evaluating exemptions for the individual mandate. how many americans in general or what's the estimate in terms of americans that will qualify for the various exemptions that had been provided for? >> at this point as i say we haven't pulled that data out of return. so i can't give you an answer on that. but the assumption was basically that probably more people would file for exemptions, hardship exceptions, or that they had coverage for part of the year than people who will pay the shared responsibility payment. it will be you know a number that will actually see and as i say in three, four weeks we'll be able to cumulate all of that data and understand where it is. >> those granted exceptions, that's going to be on an honor system. any way of trying to verify that other than through potential auditing process? >> yes. what we'll do, in all of the matters as we al

the treasury does things differently.n defense of myself, i will say that i used treasury figures which i adjusted to make them consistent to changes to the way the reported things differently during the bush administration. this is all coming from the treasury. it is a consistent measure. every year, the number of tax expenditures grows. so this is something that is growing. the dollar value, volume, of gdp -- by the way, back to the last part. at the bottom, i have refundable credits, which have multiplied by a factor of 500, growing from one to five. that may seem like a pretty small number, but these are -- this may seem like a pretty small number, but these can be a major headache. this is from individual tax expenditures, including focusing on individual taxes, and that is individual tax expenditures that are including those that individuals claim on business income. those numbers have been gradually rising over time. the bottom of that chart, the top black box, dark blue, shows the revenue losses. the bottom shows

and then treasury yields fall off.d all sorts of different series but it was a different day. a lot of people wanted to say "just because." karl: i think that lisa is onto something, some kind of global value trade. it was not what was forecast given the macro economic data in the last two weeks. so it is really confounding alix: but you don't agree that we will see a snapback in the back half of the year. atu >> >>l: it will be on the soft spy. we are not seen the forward momentum in the economy that will generate job gains like we have been seeing over the last month we get that in two weeks time and this is also low. and when tom, it was down about 100 points, and you sought stocks vacillating for a fourth a, the really trying to look for some kind of direction. within the s&p you had nine out of the 10 sectors of finishing off by about eight points, and the dollar suffered its worst they in two weeks, so for a look at the day's biggest equity movers, let's get to our senior markets reporter julie hyman. julie? juli

. >> not only are they having the midnight meetings, but they're the ones that the treasury secretary need to be sustained first in order for anything ohappen afterwards. >> do you disagree with that? do you think we could have done something differently in 2008, could big banks been allowed to fail and would we be around having this conversation if they did? >> we be having a very differentk, from the top down, which has happened, the federal reserve, has the largest hedge fund in the world right now subsidizing these banks, if we had gone in and subsidized the mortgages, the bottom up the things that were lining the toxic assets that we came to know of that infiltrated the system that went from the bank balance sheet to be sold in little towns in norway, if that had happened in a foundational level instead of the top down maybe another bank would have failed but the result wouldn't have been larger more powerful banks that had been sustained by banks and subsidies -- >> do you knew tim geithner knew enough hank paulson knew enough at that time for that -- in other words it was a pan