George soros. He says europe still has a way to go. Yes, i was asking him on whether the fed should think about the rest of the world while setting fiscal policy and he said because they are so far ahead, they cannot be dragged down by the concerns of the emerging markets the concerns of europe and china. He believes that fed tapering is what needs to be done. Actuallys. Economy is is the best functioning. The u. S. Economy has its own momentum. Its not following optimum policies at all. The internal political struggles which have not been resolved. We had a very wideranging interview. We talked about the u. S. And china and europe and the ukraine. There was a Common Thread in everything he said he has but he sees a political vacuum. In europe and the ukraine and a little bit in the u. S. And he things president obama can do more with ukraine. He believes all the political wrangling and washington, d. C. Is just holding back the economy in the u. S. Because he thinks it could forge ahead and we are still in a state of limbo. He also mentioned as not only the Central Banks facing pressure but commercial banks as well. Exactly, we talked about Central Banks and he said its a fragile world and there is stagnation in europe but also in the u. S. Because of the political wrangling. I asked him the question on whether the markets are too complacent in europe. Because of the European Central bank saying they stand firm behind the euro are. Do they care about some of the weakness we saw in the data and deflation . He says investors want one thing which is to make money. He says in europe one of the best bets you can have is on commercial banks. It is going to be a very tough year for the banks. They are under pressure because they have to pass the stress test. The banks have an interest in passing the stress test rather than providing credit to the economy. Banks as a transmission mechanism for the peoples savings, channeling it into the real economy, they are not fulfilling their function. He believes a lot of these bank stocks are undervalued in europe which explains why there is speculation as to why he bought a big chunk of banks in spain but that is not confirmed. Thank you very much. Back here in washington, president obama is going to take action tomorrow to boost wages. He is moving on his own to do something since the state of the union. Bill mattingly Phil Mattingly joins us now. The president is now tackling overtime pay . ] he started with minimumwage specifically on federal contractors in the state of union and tomorrow he will announce an executive action that will require the department of labor to look at its minimum wage rule. He will look at employees currently being paid under 450 five dollars per we cannot be denied minimumwage. Administration Officials Say they are going to significantly propose that the department of labor does that and work on the definition of people exempt from overtime pay. Who are executives can be exempt and they will reduce that flexibility and make business organizations prove that those people are executives or professionals before they have the ability to deny that. This is going to the department of labor and these rules will to go through. The president is acting on his own once again without congress to boost wages. Its interesting hes highlighting that issue. We were talking about minimum wage and the increase. Is there any more momentum behind that in congress . There really is not. House republicans are Standing Firm they believe this will actually cost jobs. Do somethingould along those lines and you will not see movement there. What the president is doing in dad, is doing instead, the president took a walk around the gap he is calling on businesses and executives to do this on their own. If congress will not act, he will do as much as he can for the white house will ask is mr. Act on its own. Thank you so much. My guest is this morning is someone that knows all about managing worker pay. He is widely considered a leader and innovator in the retail thestry, steve sadove, former ceo of sacks and chairman of the National Retail federation serves as the director for colgatepalmolive, ruby tuesday, and most recently, jcpenney. Great to see you this morning. Good morning. Just mentioned the president shopping at the gap. It made the front page of the new york post. It was a big deal for the tv moment but also because he was backing companies that say they will raise wages for our employees. Is this the right move . I think its great he was out there shopping and getting people thinking that they have to be shopping again. We had such a tough january and early february and the idea of consumers going out and the weather is turning better and fashions are getting out shopping thats the First Priority for all of us in retail. The issue of minimumwage is a complex one. The Congressional Budget Office indicated you could lose half a million jobs with the minimum wage increase. There are alternative ways we can address this whether there is an income tax credit or in terms of helping the employees. It is not a simple answer. Minimumwage seems like a simple answer according to the democrats. They want to lift americans out of poverty so lets raise the wage. Why is it so complicated for retailers . Small businesses who are on the edge are going to have a very tough time in many cases with the minimumwage issue. Most Large Companies are already paying above minimum wage. The issue here is one of billions of dollars of impact, potentially employment risk and i think the longerterm answer is accelerated Economic Growth. If you have the economy growing, that creates more Job Opportunities and it will create the opportunity for more wealth at all levels, at all income levels. I dont know that it is an easy answer. I am not against raising the minimum wage. Where do you stand . Dont want to get into my personal view because ira present the industry as well. I think the earned income tax credit is a possible solution. I want to make sure we are not going to degrade the growth in the economy. That is my biggest concern that if you lose half a million jobs, one Million People might be better off that if we have half a Million People who end up losing their jobs, im not sure that is good. You say the earned income tax credit could accelerate Economic Growth . And could be a solution for people below the minimum wage you can offer them a tax credit. I know you cannot get into specifics but walmart, the largest retailer of them all, was reportedly backing a higher minimum wage but they recently said they were neutral. What do you read into that . They are wrestling with the same questions i am raising. Everybody wants to see the lower middle class or the people who are struggling do better. Everybody wants to see that. What is the best mechanism to do that and . Generally speaking, the Retail Industry pays above minimum wage . Most of the Larger Companies do. Tell me how much labor costs are a part of a retailers entire business. It goes very dramatically from one company to another but its a substantial component of the equation. Its more important than just the percentage. It represents your base to the customer. Youve got to make sure you have an engaged workforce. Because youith me will talk about every aspect of retail in the next hour. Moving and shaking this hour pimco cofounder bill gross when he was not reportedly getting into public squabbles with mohamed elerian, he was selling treasuries. He has cut the amounts of u. S. Government debt in his total return fund from ory 643 and urging investors to sell what the fed has been buying because they will not be buying treasuries when the tapering comes to an end. Over the last year, his fun ranked in the bottom 20 and contributed to some of the tensions reportedly between bill gross and mohamed elerian. Bain capital is still all us on bitcoin. We will talk to one of the firms partners and tell us why he is and what investments they are looking at and also, new jersey pulls the plug on electric carmaker tesla motors and elon musk. We are just Getting Started on this wednesday morning. We will get data tomorrow on retail. And back with steve sadove the chairman of the National Retail federation and serves on the board of jcpenney. Michael mckee is joining us with more on retail sales. What will we learn tomorrow . Its not what we are spending but where we are spending. When the weather warms, sooner or later, are people going to come back to the stores . The lousy winter has accelerated and already accelerating trend of dumping the mall for the mouse. We are shopping more and more online these days. That is hurting the brickandmortar retailers. Instore traffic is plunging since the middle of 2012. That has been going down according to shopper trac. Just this month alone, sony, childrens place, staples, dots, radioshack announced they were closing thousands of stores and if youre not going to the mall, you are not eating at the mall. E commerce data is a month behind and we will only learn about january sales tomorrow for Online Shopping but it made up 30 of december sales. It was 17 five years ago and it has gone up to 30 . Will the numbers tell us what people are doing these days in terms of what they are buying . You just described my saturday afternoon going to the mall and heading sbarro afterwards. Now you can click on virtual pizza. Steve, why are not people going to the malls as much as before . You haveomnichannel shopping. They want product anytime they can get it so they will go to the mall and shop in the stores but they will also shop online. The traffic in the malls is down probably in the high single digit. That will continue. Maybe it will stabilize a little bit but it will continue to have a shift toward digital but people are shopping both. The winners are the ones that are just internetbased. They are brick and mortar and internet. The macys of the world are doing well because they have been having a vibrant internet is miss as well as brick and mortar. If you talk to a retailer, they say have an online strategy. How do you know when you have it right . Its when you invest in the technology and can offer a seamless experience between the store and the web. If you look at the data over the fourth quarter, the winners versus the losers, in almost every category whether it was Sporting Goods or homeimprovement or Department Stores at the low end or high end, it was the companies, the Big Companies that had invested in technology and were doing agile, the internet, and the stores and they were winning. It is a different kind of store that can win on the internet . If you have to buy clothing or shoes which you have to try on, people send stuff back, but arent you better off with someone who has a commodity and i can buy it without having to try it on . I think theres an opportunity in almost every category for both the digital and the stores. You want to have the experience. Aght now, you are finding huge growth in the apparel business on the online piece of it as well. I look at the electronics, you are looking at the issue of show rooming and whether or not it is a commodity item. The real issue is how do you differentiate product . Not be able to say i will go to the lowest common denominator. It will be exclusive rants or it could be exclusive items within a brand. If you look at macys or jcpenney worse saks, exclusive merchandise is an important part of the max. Of the mix. The electronics side has to think about that and how they will provide differentiated product. Skas . Ipod for it could be but it could be about services or experiences. Apparel does have a decent sized return rate on the web and there are technologies emerging to reduce the return rates. In the end, people want value and service and they want product that fits them or something that is unique for them. You need to differentiate. Do you think the Retail Industry has been behind on the digital front as a whole . No, i dont think so. Retail is embracing im talking about traditional retailers. Are somef the brands of the largest internet retailers around today. Retailers have become very much web days. Look at nordstrom. These are technologybased companies and have invested quite a bit. You are right that the brickandmortar purchase it is stable or declining a little bit but there is enormous growth, 30, 40 growth on company websites. Thats were the action is. Anfrom the point of view of investor, how do i know in this new world who is really doing well . The data does not come to us as accurately about ecommerce is the brickandmortar. A lot of the companies and not rating at the percentage ofecommerce sales. I would look at their Technology Investments and who is investing in the future of technology. The ability to move inventory and buy online and ship it from a store opens up the entire companys inventory. Those are the kind of Technology Investments that make a big difference. Thank you so much for joining us, michael mckee. Steve is staying with me through the hour. Overseas profits are piling up for apple and microsoft and we will see what on rest seeks to do for those companies to bring that cash back. Plus, just what the midwest does not want to hear, another snowstorm on the way. We will be back in two minutes. You are watching in the loop, on Bloomberg Television, streaming on your phone, your tablet, and bloomberg. Com. It is 26 minutes past the era which means Bloomberg Television is on the markets. Little bitres are lower, extending the weekly decline we have seen so far. It is one of the worst we have seen so far this year. We will see if we continue to go lower. We are on the markets again in washington, there is 1. 90 5 trillion reasons for congress to finally overhaul the nations Corporate Tax code. Thats how much money u. S. Human multinationals have parked overseas. We have more numbers and how they might change the tax debate in dc. Companies parked more in 2013 and dont want to bring it back unless they get a tax break. Thats right, they dont want to pay the higher taxes in the u. S. So they are leaving it offshore. It was up 206 ilion dollars in 2013 based on a bloomberg review it was up 206 ilion dollars in 2013. Dollars. Llion ge is number one on the offshore list, 110 billion dollars. You can see the list of the top five. The apple number is quadruple what it was three years ago. They are leaving my overseas because it is cheaper. The u. S. Has the highest Corporate Tax rate in terms of returning the overseas profits, 35 compared to ireland at 12. 5 . That is one reason why chiquita announced it is moving its headquarters to ireland. We are talking about real money. The annual revenue loss in the u. S. Is up to 90 billion. If microsoft brought that money back, it could be 25 billion. There are many proposals to bring the money home but it has not happened yet. The president and Top Republicans want to use some of that money for Infrastructure Investment and would lower the rate to get that done but there is still no deal in washington. These numbers just highlight the problem. What about the new numbers . Will this move the ball in congress . It bolsters the argument for those like republican dave camp who runs the house ways and means committee. Foreleased a detailed plan overhauling the entire tax code including what happens to overseas profits. He wants to use some of that money and he wants to bolster his argument and will get others involved. I spoke to marco rubio yesterday and he is working on his own Corporate Tax overhaul which includes repatriates haitian repatriates haitian. Repatriation. Would encourage the creation of new businesses and the expansion of existing ones. Youve got some big fires in congress and the white house in agreement that this is a robb laments money needs to become back in use for better purposes and vested at home. This is a serious heavy lift in this Midterm Election year with so many other issues that it will be very difficult to get this done. Genuine agreement of bunk among republicans and democrats. Thank you very much. I am back with steve sadove, the former saks ceo and chairman of the national ceo of the National Retail federation. Where do you stand . Reform of the Corporate Tax code is critical. Retailers pay the highest tax rate of any segment of the industry. We are paying 35 in terms of taxes. The reason is that most of the businesses in the United States so that retailers are largely domestic so they are paying the high tax rates. They are not in the same situation as apple or ibm with huge resources overseas. They dont have a lot of money parked in other countries. Anvery little so there is interest on the part of the retailers to have Corporate Tax reform, lower the overall rate, and then you have to make some changes in the deductions and whats allowed. I think that is the right thing to be doing. As a part of this, if we can repatriate some of the dollars overseas and get reinvestment backing in the structure in the u. S. , it would accelerate growth which is in all of our best interests. That will fuel the consumer which is 2 3 of the economy. That ifou in agreement we lower Corporate Taxes that it will, in fact, create jobs . I think you will see more investment and that will create more jobs if we have a reduced Corporate Tax rate. The ceoe speaking with of the Red Apple Group and owns a different kind of retail it is a supermarket chain. He talked about how businesses in new york city are paying higher and higher rent. Butrents continue to go up the tax issue is a big problem for small businesses. Listen to part of what he said about how higher taxes affect businesses and individuals. The Florida Real Estate people were celebrating that more and more new yorkers are moving down. It is like 400 families or people per day. Because of the taxes . Because the fear of taxes. Taxes did not go up yet. They fear that it will rise so they figure lets get out of town faster. I dont know about 400 families per day number but there are two separate issues there is higher rents for retailers and number two, higher who are the wealthy large consumers in big cities like new york. Youve got higher tax rates. New york has high tax rates but its the best city to do business in in the world. Number . U believe that 400 families per day . I have no idea. Do you believe people are leaving new york to go to florida . And others have moved residences to florida and there are other examples. They move their operations because there is no state tax in florida. From a taxation perspective, there are benefits of being in florida. You are then are not in new york and i love florida and i have a home in miami, but its not the same as new york. I think you will not see a wholesale movement of people there. The affordability of doing business in the city like new york is critical. Its not just about the taxation. Wehe affordability were talking about the minimum wage earlier and workingclass class people to be able to afford to live. The cost of living in some of these major cities, especially new york, is very tough. I have young kids were just Getting Started. The rents that they are paying are making it very difficult for someone working on a moderate income to be able to afford. Affordable housing is an important issue that we all have to think about if we want to continue to see the Economic Growth in our city. What about retailers . What about the smaller or medium size businesses . Is it harder for them to be able to be in the center of take cities like new york . Will you see them more spread out around the country . I think its getting harder to do business in new york. This is where the population and the customer is, two. Look at the rents on 5th avenue or madison avenue. Its incredible but its where the customers are. Stay with me. There is another story i find interesting. Is elon musk versus Chris Christie the new jersey governor won this round. Musk does not use franchised auto dealerships. A year ago, tesla received permission to open two stores in new jersey in new jersey and the state auto dealers responded. That is Chris Christie, car dealers want the Motor Vehicle commission and they have they say the model is bad for competition and the Commission Said they would block tesla from directly selling its automobiles to customers. Mmusk accuses Chris Christie of going back on his word. Way, there are two other being who band teslas sold record to customers. You own one. I do. I bought it in new york, westchester county. It was simple, i bought it at the westchester mall. The short hills mall is where elon musk is one of his new jersey shops. What do you think about this . I think its a great car. Consumer reports rated at 99 or something. Its fantastic. I think its a silly discussion. If they dont allow them to sell it, they will show room it and not for the price on it and tell people they have to go to connecticut or new york to buy the car. It will not stop the consumer from buying the car. Its just hurting new jersey in terms of any sales tax or revenue they will be getting from the sales. Im not sure i understand that. I think it is protecting an antiquated system. Progress says there is another way to do business. We should open it for the new way to do business. Do you hate buying a car from an auto dealership . I have several other cars that are not teslas and we have had longterm relationships with a number of dealers. What color is your model s . It is silver. Nice. Up, bain capital still says it will invest in bitcoin related companies and we will hear from a partner at the firm. Ipo, this may be one big candy crushes going public. We will have more, stay in the loop. Despite the recent implosion of Bitcoin Trading , a mobilet gox Software Application will start to make the Virtual Currency useful in the physical world. Sadove is still with us and we are joined by bain capital partner. He trades in bitcoin himself. You say despite what happened, this implosion in japan, you are still bullish on bitcoin, why . The issue is with mt gox which was a Software Infrastructure but not related to the underpinnings of bitcoin. Hear, the exchange was written by kids who apparently did not understand databases and transactions and security and they were not reconciling their Balance Sheets. Apparently, they did not understand business fully. This was not disclosed to people . Comes from the magic online gathering online exchange. That name should have been a clue. Not the best run exchange. It does not undermine the currency itself. To make a comparisonStock Exchanges have had problems with flash crashes and stoppages and outages. Thathave had allegations the Stock Exchange officials were getting paid too much improperly. That did not undermine equities are currencies. But bitcoin is pretty nascent and few people im sure in your world, people are in it all the time, what about your world, steve . Very few people in the Retail Industry. Part of it is because it has not told the confidence level. So much of that currency is in terms of the consumer having confidence and trust level. When you have what happened at mt. Gox, it destroys trust in the system. Its fine if the new york Stock Exchange has a blip for an hour something thatve is very nascent and people dont really understand and then you see it crash and people losing. You ask what is going on. The question is can you rebuild the trust broadly in the system . It has a secondary effect of some loss of faith and currencies need faith. They are a popularity contest in some ways. The price of bitcoin, the fact that it did not crash and it stabilized at 600 shows that people realize that this was just an exchangespecific problem, poorly run exchange that failed. Bitcoin is fine. It has that secondary effect or it then how do you know when you put your money, your bitcoin intuit platform, how do you know that platform is secure . Find an. S. Investors, exchange that is in the u. S. So you are bound by the same laws and you dont have to worry about the laws of another country. Make sure they have good investors and go to the about page and see who the founders and investors are and go to the investors page and make your there are investors in the company. Is a san franciscobased company that is an online wallet for bit client and Jason Horowitz invested in them. A business fore bitcoin and i think there will be a market there. It will take a while for broad retailers to adopt it. Im not sure how much the upside is. There are multiple uses for bitcoin. One is as a currency but there are other uses as a store of value or a commodity. Also as a way of transacting. Currencies need price stability. Faitheed the publics that there will be price stability and that cohen does not have that yet. It is already useful and bitcoin does not have that yet. They want to transfer one currency to someone else without a third party involved. Thanks so much. Interesting to get your views. With more onith me retail and we will be back in two minutes. Weve got breaking news from Warren BuffettsBerkshire Hathaway eying a miamibased television station. Berkshire hathaway will turn valued6 million shares at about 1. 1 billion. They would get the tv station along with a yet to be determined number of berkshire shares and cash. Thatll it is a little bit of a swap and he gets to go into the television business. Thats not bad. Health food craze is not a bad business to be and which has affected every corner of the food industry. E. Comays. Com graz sees huge growth in portion control snacking. You got an announcement . Launched in the u. S. In december, we flew past 100,000 customers. They love it and we think the market is a minimum 500 million ecommerce snacks so we will invest 75 million. To where . Its in the marketing and Product Development and the technology. To build thee need Logistics Infrastructure lets us serve the 250 million addresses. You are putting that in the states . Yes. Why hasnt caught on . As you said, there is a product need and that is americans are looking for healthier snacks which they enjoy eating. With our model, we can very quickly create new products and get it to them. Steve, are you buying it . Not yet but i think its a great concept. Growing in model is the u. S. And healthy snacks are growth area. The major food manufacturers are playing in this space as well. To technological innovation transform the Business Model is interesting and to be able to go to direct to the consumer subtraction model, you are seeing it in other categories and the consumer, a segment of the consumer is responding to that. Who are most of your customers . Are they younger . They are predominantly early adopters. We see predominantly women in urban environments are the first people to try this product. We can do various bits of advertising to test the rest of the market and we are finding very broad demographics accepting the products. Why is subtraction shopping taking off . I think its tied to what is happening with the internet in terms of the internet taking off and you are finding there are so many opportunities to service the customer differently. Here it is convenience the customer stays at home and pay six dollars and they will get a shipment on a regular basis and they will get innovation. You never know what you will get, they will get variety. Thats what the consumer wants and i see it in shoe dazzle and other categories. Would you expand beyond snacks . Absolutely, i think the 500 million opportunity is just in snacks. We have tried kids boxes and breakfast occasions and the u. K. And you can go into multiple verticals with this kind of model. Is a hard to get into this . Absolutely, we lost a lot of money before we learned how to make it work. Now weve got that infrastructure and that learning and we can release products that consumers love. How do you know what steve would like . The pretzels look good but all of them look good. The cinnamon pretzel is the number one product. We made it just for the american market. When we launched in america, we lost approximately 100 products. Them weelisted 30 of delisted 30 of them already. You are tailoring these flavors to customers, is that right . Thats the beauty of the model. We are constantly churning the product range and we are vertically integrated it the data is coming in from the consumers and we manufacture the products ourselves and this allows us to respond quickly. Thank you so much. Million towards the u. S. Steve, thank you for hanging out with me for the last hour. He is the chairman of the National Retail federation. There is a square off in chinas regulators and china test of a concept, private banking. Stay in the loop. It is 56 minutes past the hour which means Bloomberg Television is on the markets. Equity futures are lower again today and we are headed for one of the worst weekly declines we have seen for this year. There is an eye on what is going on in ukraine with a referendum on sunday in the president will meet with ukraine Prime Minister later today. We are on the markets in 30 minutes. In the next halfhour, legendary investor george soros speaks exclusively to Bloomberg Television and we will bring you that interview coming up next. Old spice has found a new audience with young women. You are watching in the loop, on Bloomberg Television, streaming on your phone, your tablet, and bloomberg. Com. We are 30 minutes away from the opening bell. We are in the loop. I am betty liu. Bill gross now selling treasuries. He says you should sell when the fed is eyeing because the tapering is coming to an end. A Senate Proposal calls for shutting down fannie mae and freddie mac. We will also put private lenders on the hook for the first 10 of mortgage losses. For theries have joined search for the missing malaysian plane. Tough onorce that plays a track thats going well up course. Four days ago. Earlier this morning, Francine Lacqua had a chance to sit down with george soros. He weighed in on everything from politics to the business environment. One market he is watching closely as china. In a television exclusive, he told us why the world passes largest country is causing tremors around the world. China has been the mortar of years. For the last ten not as big as the american consumer, which eventually ran out of resources. Now, it is also runnin gout. The growth model needs to be changed. It cannot continue like this. Andorities are aware dealing with it. The Market Correction is occuring right now. Was maintained by smoke and mirrors. They have corrected it suddenly, exports. A big drop in francine, he said china is going into a correction. Emerging markets . He was saying there are tremors coming from the chinese economy. Is the emerging markets that are the most wonderful. I asked him why he was concerned about china. He said he is more concerned about emerging markets. More may be coming if china slows down, but he said this is like a huge oil tanker. They have to turn it around and he is confident. There will be tremors. Concerned about europe. Yes. He has a book out he says if we have a monetary union, also transfer money to weaker countries when they need it. Concerned about the clinical vacuum. Because of that, we will see stagnation despite the slow growth. He is also concerned europe will be the new japan. Thank you for bringing us that exclusive interview with george soros. She will have more from her exclusive interview all day long right here on Bloomberg Television. Halfway into a second obama term, wall street conservatives are ranking up for the top dog in the Republican Party. Chris christies problem has left most republican donors looking elsewhere. Many want governor jeb bush to be the front runner. We have been taking into the story and we are joined now. It was one of the barclays anchors that said it feels like internet dating, trying to find the best candidate. Said it is like for states. It is true. These guys are upset at what they see. Few months ago, this story would have been boring because Chris Christie felt like an obvious frontrunner who will take a lot of money from wall street. Now that he is facing the investigations into Hurricane Sandy and the George Washington bridge closures, it has become more complicated. We have seen there is a wide field. I thought it might be an issue of one or two guys. Asked the billionaire grocery magnet. He is a clinton supporter and also a republican. We asked him, what about the candidates you support. I want to roll for you the names he put out. The tea party is wrong and they should have stayed under their old adage. Lets reduce taxes and not go on to every other subject. Extremism in any direction, whether far left or far right, is wrong. Americans have to come together come up together and with Commonsense Solutions like we did for the last 200 years. I think the leaders are jeb bush. He is a decent person. Think mitt romney it is quietly being talked about in certain circles. He wants to give it another shot. T the two top leaders are mitt romney and jeb bush. Coming back from thirdplace is Chris Christie. Is interesting. I wish i had included some of that in my story. On the one hand, you cannot include everybody in a piece. Talk about who we did not want to include. Mitt romney went on cnn and said, i will not run. That is tough. I love what he said in the first part of the clip. He said i do not like extremism of any kind. That is what we heard over and over again. They want less regulation and less taxation. Get slowed want to down by the other stuff. They said the same thing. They were so turned off i what happened with the tea party and some of them did not want to get back into the game but they know they have to. I should point out i was surprised to hear how much enthusiasm there was on wall street. Clearly, marco rubio, ted cruz, Goldman Sachs employees are top contributors. On the other hand, when i talk to these bankers, they did not war, or gay marriage, inequality. They feel genuinely annoyed by the fact there is a lack of and theyion for them freed from those constraints and they say that is and thatsh or greedy, america will benefit as well. Thank you for bringing us that story. Moving and shaking this hour, one of the major donors to the Republican Party is a billionaire investor. His firm is the largest shareholder in the company. The plan was to use the proceeds of the ipo to help buy new ships. Is not opposed to the company being publicly owned but not at any price. He called the proposal unacceptable. Not commenting on this. Next up, growing competition for alibaba ahead of its highly anticipated ipo. Companye ecommerce might look for u. S. Acquisition targets. That is right ahead. Stay in the loop. Him him preparing to go public in what could be the largest ipo ever. Valuations up with the average price tag around 153 billion dollars. For more, were are joined with leslie, who covered the ipo. And mobys is Vice President of america, who played a key role. He knows the market very well. I want to start with you, leslie, on this ipo and how much yahoo is pushing for it. The whole reason for the ipo is so yahoo has a method to exit its stake in ali baba. At Chinese Government looked it and realized ali baba is owned primarily by sworn entities. This has been in the works for several years in order to allow yahoo to exit stake and make it more of a Chinese Health company. How Game Changing is if riley baba to go public echo class i think it needs to go public now is losing in mobile and it will give it the currency it needs to make more acquisitions. Press ok. It is lagging behind in mobile to a rival. A messaging service. Is it similar to a whats apple or what is it that is beating alibaba . It has been the dominant Internet Service similar to yahoo in its heyday. Bunch branched out to a of different services. One of them is a popular messaging app similar to whats app or more like Facebook Messenger or the yahoo messenger. The Messenger Service has 250 million users. It is massive. A lot of them are based in china. It to dominate the mobile audience. Quest that is huge. Are you hearing what ali baba will be doing with some of the processes from the ipl . Class unlike most, the proceeds will go to yahoo . They are selling their stake. It is not a Capital Raising event for alibaba, unlike most we see where they use capital to expand overseas and so forth. This is a different situation for ali baba, which is why they said they are not on a timeline and why we have in anticipating this for so long. Yahoo and ali baba have an where this is to happen sometime before 2015. Quest i would bet it would happen sometimes this year and very soon. You say regardless of what theyre using money for, or it is going to yahoo and whatnot, you say they need to make acquisitions. Who exactly could they be buying . They have been very busy on that front. Taking stakes in messaging services. Chinese Services Like twitter. They have taken a recent stake in film and video distribution production company. And they have also started to invest in gaming. I have to believe that will accelerate. Nothing they have done has made a big tent in mobile. I have to believe they are looking at other messaging services. Quest the fact that these companies are getting bigger and bigger, does that mean the opportunity for u. S. Companies here like facebook or linkedin, that those opportunities get smaller . It is a very good question. Largest shopping portal in japan. They bought vibrant. This is overshadowed by the Facebook Whatsapp acquisition, but a lot of people have not talked about it. Users ands a lot of is a Message Service globally. The question is, what happens when amazon moves into messaging. About echo some of the moves we have seen in asia. Why has facebook not gone into commerce because that seems to be the trend . Interesting. A lot more questions are raised here that we will talk about at another time. Thank you for joining us. Also to leslie of Bloomberg News on ali baba. Was the essence of masculinity for generations. Why are droves of women now flocking to old spice . Is it that guy . President Obama Meeting with the Prime Minister the white house today. Russia is standing by viktor yanukovych. An expensive piece of candy. Maker of candy crush pricing its ipo at 21 per share. It will sell 22. 2 million shares. The latest storm could make this the snow is winter in detroits is history. It has been buried in up to seven feet of snow. Than a foote more of snow in vermont. A few minutes from the opening bell. The top 10 traits you do not want to mess. Keep it here. Class all come back. The open down again. Goebel stocks headed for their longest losing streak of 2000 14. The s p 500 could open the lowest for the Third Straight day. China is driving sentiment. Chinese stocks are approaching a bear market right now down 20 . Copper futures are lower by about one third of one percent right now. Clutterthe lowest in years, on concern about slowing growth in china. With all the external concerns, the and is getting a bit here. We are on the markets once again in 30 minutes. Thank you. Lets count down to the top 10. Store stearns joins in. Number 10, the Company Behind brands like cattle chips reported secondquarter earnings that beat estimates. Declines in net sales. Number nine is General Mills, raising its Quarterly Dividend by 80 . The ceo same General Mills has paid dividends without interruption or reduction for 115th years. In at number eight, pharmaceutical shares falling as much as 24 in the free market after two analysts downgraded the stock following yesterdays earnings update cancer drug. Its cofounder was second down as ceo. Warrensure hathaway, buffetts Company Buying a miamibased television station. The former parent of the washington post. Over its roughly 1. 1 billion stake as part of the deal. Number six, blackstone group. It produced the best wrist of adjustment in the past year. This is according to the riskless return ranking. Number five, boeing. Billion it said development of the masses moving on schedule with the first flight scheduled for 2016. Tesla motors will no longer sell its eagles directly to consumers in new jersey. Chris christie voted to block it from auto sales. Teslastens to close only two stores in the state taking effect april 1. Class number three, systems. Shares are surging after they reported firstquarter revenue and earnings that topped analyst estimates. It also raised its profit forecast. The retailer reported fourthquarter earnings and it felt. 5 . A heavy pace and deeper discounts. They also projected firstquarter and fullyear earnings far short of analyst estimates. Class number one is fannie mae and freddie mac, two stocks in washington. Senators interest a plan to dramatically reshape americas 10 million mortgage requirement. Investedt hedge funds in fannie and freddie nervous, as you could well imagine. Peter, what exactly with the plan do . Walk us through. Buts not only what they do who announced it. The top democrat and republican on the Banking Committee have more power on the issue than just about anybody else in washington. Their plan would effectively wind down fannie and freddie and replace it with a new organization. Would maintain a government guarantee on loans but only after a 10 private capital loss first. Most borrowers would have to make a five percent down payment so it would affect those trying to get in the homes. The details really matter. They announce an agreement in principle to move forward but they have not unveiled their specific legislative language. Everyone will wait to see how they bring certain issues. Their job right now, enough of government backstop that the Housing Market will not be dramatically changed and americans will get access to homes. Skeptical House Republicans will be convinced this is not entangled government in the housing sector and prevent future bailouts from happening. That is the risk from republicans and that is why it is a difficult balance. But a huge step in house Housing Finance reform. Thank you, peter cook. Time now for the call on the markets. I want to bring in the Global Markets strategist. Fixed income returns are likely to look better this year than in 2013. Great to see you again. Why do you say that . Class you have to look at the base rate. The 10 year was 1. 5 . You now start off at three percent. I think we are still entering a rising rate environment and that will have an impact on this fixed income investment, but i do not think it will necessarily be as bad as returns we saw in 2013. Andt will gross tweeted said in a statement on twitter, cellular treasury and cell of the fed is been buying because they will not be buying them when the paper ends in october. Would you agree with that . Class i would in the sense that if you look at the fixed income universe today and think about which areas of the market will do better, you want to be moving away from interest risk and take more credit risk. Try to move away from the unhealthy Balance Sheets of sovereigns, and clued in the United States. As the fed pulls back on its asset purchases, you will probably see treasuries continue to back up. That is one area of the bond market i want to avoid. Go for investment and corporate but stay away from u. S. Government. Qwest even as you move into the corporate side, i would look for higher yielding here at the bond market. I know you are constructive on japan. Scarlet has been looking at the case against japan. Yes. Investors like japan. This is the Prime Ministers policy to boost the economy through primary easing and boosting stimulus. It is also hurting japanese consumers. Joblessbines japans rate with inflation and economists estimate it will jump to seven percent in april once the government raises its sales tax. Sinceould be the highest 1981 when japan was coming out of depression. Inflation may be rising but wages are not keeping pace and on top of that, partners are not it weaken to let either. They seem miserable. Why would you want to buy . Class there are a number of structural issues with japan. I am not convinced this will solve them all. Thehave issues with population and of course over to gdp. T to debt if the bank is successful with two percent inflation, you will probably see Interest Rates rise. My thought is looking in the near term. Once the consumption tax hike goes into effect, i expect he will probably see more aggressive action come from the bank of japan and you may well see the japanese yen weakened further. Especially for the exporters. Are you focused on them . Class we are. You want to look at earnings expectations of the exporters. When i look at earnings, i expect earnings estimates will move higher. You like europe. Olivia . Class i will take a page from george soros, who we had earlier this morning. He essentially warned unless there is a Major Overhaul in europe, the eu faces decades of japanesestyle inflation. Europe may not survive 25 years of stagnation. He also said you have to solve the banking problem because europe is lagging behind the rest of the world in sorting out its banks. He said it is a mistake banks are being encouraged to pass these tests are getting rid of assets. He wants to see banks loosening lending. He sends he says stocks may look cheap but there are bigger questions about structural reform that need to be put in place before the economy is going again. Qwest that is a good point. A lot of uncertainty still. Qwest europe is another area with a ton of structural issues. With europe, we take two steps forward and one step back erie the issue will not be resolved overnight. I have learned markets do not necessarily need to believe issues in europe are resolved in order to outperform. They need to believe issues in your part detained. In europe are detained. Given some of the Inflation Numbers we have we have been seeing, Economic Growth is picking up at the margin, at a very moderate pace. Operational more leverage. In europe, they are a few innings behind where the u. S. Is. Great to see you. Lobal Market Strategist coming up, more information comes down on the missing airlines, jet, we will learn the flight opted out of a service that could have made a big difference in the search. Qwest julie hyman has been tracking this phenomenon. I love that commercial. It is a win . Yes. A win. You wonder, old spice is this classic brand. Itn though fun fact, when started in 1937, it was fragrances for women and men in all four men. The first u2 commercial got 48 million views. Some of the people watching it were obviously women and not just men. When they were starting with the marketing campaign, women became aware of it and even one woman has a facebook page, old spice for women. She says it smells good and she was looking for a deodorant and not in ansi per sprint, at a recent price that smelled good. They have it. She said it is a simple appeal. We do not have exact numbers on old spice but we know they are expanding the brand to Hair Products beyond deodorant and soap. Is selling even though overall the Beauty Products division has been struggling somewhat. That makes them about 1 5 of the business. It does not explicitly reach out to women with this but it does discourage them from spending their money and buying the product either. Class is there a risk here . To try to cater a little bit to women . There are potential risks we have seen in past products. One Harvard BusinessSchool Professor calls it gender contamination. One of the more highprofile examples of this was the porsche suv the company marketed to women, soccer moms, and there was a huge backlash from men who saw their macho brand it is ridiculous, but unfortunately, it was reality in this particular case. The brando are upset was more catering to women in that particular case. Qwest they are welcome to come in if they would like to do that. Thank you. Our senior markets correspondent. Here is a look at our top stories. You want your mocha faster. Starbucks heard your coffee prayers and it is actively working on mobile ordering. Officer isigital testing the service at some u. S. Cafes this year. Now accepting bitcoin. We mentioned that earlier. Shoppers can make purchases by using the mobile app, pound. It is made by an israeli startup and works by digital bitcoin wallop. Man versus machine at the office. New advances in Artificial Intelligence have made it possible for robots to make decisions by detecting patterns in human behavior. Robots can do important tasks like search legal documents by using algorithms, which could make lawyers unnecessary. We will let you decide if you are lawyers is a good thing or not. Only on bloombert west. Learning more is about the boeing plane missing. It turns out Malaysian Airlines opted out of a service to collect realtime performance a from jets like fight flight 370 missing asia. Megan hughes joins us now with more. Do we know why they opted out of this and what is what is it exactly . Class the carrier gets a lot of the same information itself. This is all according to a person familiar with the matter. It would have provided a back up to the airlines on surveillance of the plane. What we are talking about is the boeing Health Management program. Polls and performance data to help airlines spot mechanical falls early. Data via anuter online link. About 75 of boeing 777s used the system. A maintenances and Monitoring System designed to use posts flight and not as inflight monitoring in the case of effect the crash. It could have provided valuable information on what was happening on board when radar contact was lost over the weekend. Class we have talked so much about the search for the airplane and also for the black boxes, which gives clues as to what happened here. How come we do not have data from the black boxes . The data stream live so we actually have it elsewhere . A good question and one that gets brought up free much every time there is a crash. The air france in 2009, a big debate being the ignited all over again. The answer is simple. Technology is there. What is prohibitive is the cost. A conventional black box, like the one theyre looking for, they usually cost 10,000 to 20,000. It is a longtime expense. Compare that to the hardware needed to transmit the data. 57,000 per plane according to the new york times. The base cost, on its face, more expensive but manageable. The real expense comes when you look at the volume of data we are talking about. Contain 25 hours of information along with two hours of cockpit audio. One analysts estimated a terabyte of data. A tremendous amount of data, the cost to send it via a satellite, threefive dollars per minute. Talking about hundreds of millions of dollars a year. Very extensive. Bottom line, regulators have not required its airlines have not in the money. Chris really interesting. Thank you for bringing it for us. Our washington correspondent. In turkey, tens of thousands of protesters showed up at the funeral of a 15yearold who died in injuries sustained from last summers protests. Thousands more showed up where police broke up the demonstration with tear gas. A new gauge is being used to measure the health of the european economy. Mario draghi and other leaders it pointing as a reason why will mean low rates, even after growth and inflation kick up. This afternoon, head of a march 16 referendum in crimea. This is being seen on president obama posses latest demonstration of support for the ukraine new government. Joanna joins us with more on how important this meeting is. It is important for the reason you just mentioned. Country, thet the region, is going to stay and annex itself and be part of russia. There was a statement that came out earlier today from g7. Notably, russia is missing from this statement. Speaking with one voice, the u. S. And europe, speaking out against the referendum, urging them not to have it and saying if they do go ahead, it will not be recognized by the international community. It is all part of the Diplomatic Campaign the white house has been pushing for the u. S. And europe to be sticking with one voice when it comes to the ukraine. It does not mean they will not go ahead with the referendum. The white house thinks it is important to be sending these kinds of signals to isolate russia. The other thing to watch is whether or not the Prime Minister will go back to the ukraine and be handed what kind of aid packages it will bring back from washed up. The house last week approved the presents request for 1 billion in loan guarantees for the ukraine but it is being held up in the senate. Jockeying for other proposals to be included in that. That is something to watch in the senate side today. Qwest tell us the signal it sends to russia. Qwest it sends a strong signal to the russian president and what everyone is watching right now is what is his next move. If the referendum goes ahead as planned, will he be looking eastward toward the more industrialized cities in crimea . The president has come under criticism from analysts who the region closely who are saying, the presents campaign to isolate russia is causing pollutants to dig his heels and further. The object of the visit today with the Vice President of ukraine and the president will be interesting because president obama is elevating with an appearance in the oval office by having cameras in their and having Vice President joe Biden Joining as well. It is sending a strong signal to vladimir putin. What about the aid and how competition that is . You have one billion dollars in loan guarantees theyre trying to get through and some senators want to attack the provision that the president separately requested, a different way about getting ims resources. Some republicans also want to put in some language around in irs provision. The live jockeying going in right now will be important to see whether or not they can get timehing through by the the ukrainian Prime Minister goes back. Qwest thank you so much. That does it for today. Keep watching Bloomberg Television. We will have more from our exclusive interview with a billionaire legendary investor george soros throughout the day. Halfhour into a the u. S. Trading day with almost no Economic Data to trade off of except the Weekly Mortgage cap. U. S. Stops stocks are falling. Losses for the s p 500 since late january. Only utilities are not the climbing. Concerned that china passes economy is slowing, driving the negative sense is that incentive today. Approaching a bear market. That will be down 20 from their peak. Copper is lower as well, down to its lowest in almost four years. To safes are moving haven trades like the japanese yen. The dollar yen right now is at 10269. Lets go back to commodities at the moment. Below 100 dollars per barrel. The lowest in five weeks. Joining me now with a look at what is driving down the Energy Complex and commodities overall is the managing director at spectrum asset management. He joins us now. Michael, is this all linked to china and data that will be reported overnight, including retail sales gekko sales . There is a lot of speculation coming into last week, midweek, crude was not only looking technically, but fundamentally, there was a growth story making its way. That being said, yes, china is clearly the reason yesterday we got through the 200 day moving andage at 114 in the wti this morning, we bounced right off our lows on the 50 day, setting up the market on crude oil, the allimportant 100 Day Moving Average and 9730 three. That is the key level. A question about supply. Out of the Energy Information and Administration Later today. What you see in terms of supply. Thet it seems as though inventories will not necessarily be surprising. It is expected we will have more than expected. That on inventory scenario will also be very bearish for the market. The reason i mention this is the fact is, as we saw the crude oil market rallying, we also saw gas going the opposite direction and unlimited despot and let it railing with the crude oil. Unleaded railing with the crude oil. Some people have said copper, now youre it now a fouryear low, may have touched a bottom. The fourth biggest copper miner listed up in australia said they have a lot at stake but they say copper will trade above three dollars per pound in the next two or three years. What are you hearing on the floor . Not accuse them of talking their own book but i would have to say copper got ridiculously week here in the last couple of days and support in the market is there to stay. I love copper at these levels. Because Precious Metals have gotten so much attention, i like doing the reverse, selling into the euphoria of gold and buying into copper. The copper trade is a good and longstanding position. You mentioned gold. We need to touch on that as well. The ukraine and russia are driving that higher. Does the fed factor in here when it comes to the precious trade . Metal i will not count out the swiss or the eu for a factor right now for ecb measures. It seems 1375 is a very nice resistance in the market actually getting a little closer than anyone would have expected for the month of march. I like copper down here. Qwest thank you so much, with todays look at commodities. We are on the markets again in 30 minutes. Market makers is up next. Live from bloomberg headquarters in new york, this is market makers. Stagnation japanese style ilion or george soros says thats what your places unless it overhauls banks from lending. Tesla will have to shut down its direct sales outlets in the state of new jersey. The garden stat