I am stephanie ruhle. I am Erik Schatzker down the and why the new york stock ofhange, speaking to the ceo hilton hotels, once again public, and aramark, all coming up. Into a markett the alwaysive outspoken democratic senator, Elizabeth Warren of massachusetts. She sits on the Banking Committee and is a critic of the big banks. Thank you for joining us. You were pushing for a strict volker rule. Did the final version go far enough . So many bankers seem to be breathing a sigh of relief. Ani think the volker rule is important step in the right direction and i am really delighted to see they have gotten something out, and a big part of this will be what happens in terms of reinforcement, and also what happens in terms of litigation over the next year. How strong will the volker rule be when it emerges on the other side . That means we have to be vigilant as we go forward with it. In terms of enforcement and leadership, do you believe you and others in washington, d. C. , to do a better job running the banks right now and the current ceos in terms of capital allocation, managing liquidity, and making moves that would promote longterm growth in our economy . Asked out, i think what wow, i think what matters is we need regulators that are truly focused on safety for the entire system. We want to get the economy up, we want to get the economy started, but an economy that is built on loading up on risk and too much concentration in the Banking Industry is not one that is strong and sustainable. It isay i see this really the wrong frame to talk about how these things are intentioned. It is better for everyone if we can make sure the Financial System safe stays safe. It is the responsibility of the regulators, and on the Banking Committee to make sure the regulators are doing their job. When you say better for everyone, when i look at quantitative easing, during confirmation, you were enthusiastic, but when i look at quantitative easing, who have been the positive recipients wall street. It has not been mainstream at all. The problem is we are trying to get out of a really bad financial hole, and the number of tools that are available to the regulators, the number of tools available to the government right now when the republicans are saying no, there is not a lot of things they will do, is very limited. We ended up with quantitative easing in part because the regulators were not doing their jobs. If we were doing our jobs, we would not have the crisis in 2008, and we would not be trying to use quantitative easing to shovel back out of it. That is why the questions i asked janet yellen about were focused more on whether or not janet yellen is committed to using the powers of the fed to make sure that the rules are enforced and that the risks are wound out of the largest Financial Institutions. That is why i continue to worry about too big to fail. You know, we sat here in 2008 talking about what brought on the crisis. It was brought on by the lousy mortgages, and also too much concentration in the Banking Industry. Where are we today . The five largest Financial Institutions today are 38 bigger than they were in 2008 when we said there was too much concentration. They are continuing to take on risks. So, we still have Serious Problems in this economy, and regulation is part of what we have to see, a serious enforcement of the law. Warren, given what you have said about the institutions come and your previous comment that the volker rule is a good first step, what does that mean . Does it mean you still see the need to push ahead with Something Like a glasssteagall 2. 0, and a restoration of the divisions between investment and commercial banking . I do. I think glasssteagall 2. 0, glasssteagall for the 21st century is something we still need because it addresses both too big, and the risk associated with to sell. To fail. As long as theres this much risk and concentration in the system, i am still pushing for glasssteagall. I think it is what we need. Senator warren, im curious, does it matter to you, does it worry you at all, whether the not . Are profitable or you have seen the effect on profitability in terms of return on equity and that is an issue because the banks will have trouble raising equity to extend more credit to americans. Do those things worry you at all . I want to see a Banking Industry that is profitable, but i want to see an economy that an economy that works for middleclass families, an economy that works for people that want to buy a home and do not want to get cheated, an economy that works for people who just want a job, get out there and work, get a little savings, and put something away for their retirement. We have to have some balance in this system, and a large part of that is we have to have Financial Service institutions that are really serving the economy, not that are out there rolling the dice, taking on more risk, and getting bigger, and bigger, and bigger, and getting comparative advantages in their Business Model solely because they are big and because the marketplace believes hey, if anything goes wrong, the taxpayers will have to bail them out again. Senator warren, when you talk about balance, it makes me think about your recent comments on Social Security. When i think about in balance, i think about our children in the next 10 years, between medicare, medicaid and Social Security spending, it will grow to 780 billion. The money were spending on children is 20 billion. Are you not worried about our kids . Why should Senior Citizens be getting more money . Of course, i am worried about our children, and i want to see more investment in our children. This is what we should be doing in the budget, making the investment in preschools have education, college, and refinancing Student Loans so that students are not crushed. We also need to build an economy that will produce jobs, jobs for the parents, and jobs for them as they grow up, but we cannot ignore the fact that we have a Retirement Crisis in the United States right now. We have a crisis, in part, because middleclass families have been able to save much less now than they did a generation ago, and the 2008 crash put them in a worse whole. Not means test lets finish, what is critical Social Security is not driving our deficit. Social security is a system that pays for itself. If we did absolutely nothing with Social Security, we would make payments for more than 20 years exactly at this level, and then they would drop by roughly 25 and pay forever into the future. I do not say that because i do not think we should do something, but what it means is we could make modest adjustments now in Social Security, take sure it will be there to pay on into the future, and if we make some more adjustments, we could see an increase in Social Security benefits for those who count on it. What we have to remember is right now, when we are in the middle of a Retirement Crisis, the last thing the last thing we should be talking about is cutting Social Security. Right now, two out of three seniors relies on Social Security to keep a roof over their head and put groceries on the table. For 14 million seniors, Social Security is all there is between them and poverty. We cannot cut the Social Security system. Senator warren, forgive me for jumping in. Not at all. Face asay seniors crisis, the people that have studied the budget recognized that we are facing an crisis. Coverage be specific, what reforms would you use to address the entitlement crisis . Social security is not creating a deficit in our budget right now or in the future, so lets pull that one out. That is not the conversation. If you want to talk about the crisis in medicare, and we do have a crisis there, the central crisis is a Health Care Cost crisis, and the answer is not to say we are going to benefits cut benefits, because you can cut benefits, but people will still have heart attacks, strokes, diabetes, but the difference is they will go to the emergency room and get worse treatment at higher costs. This is where the pieces fit together the Affordable Care act will bring down the cost of health care. You asked me how to refine this, and the answer is that is part of it. Why not means test 30 yearolds have less money than they did 10 years ago, and Senior Citizens wealth has gone up why not mean test . There are plenty of millionaire seniors out there. We built a Social Security system in which everyone paid in a certainurn for set of benefits, and we can talk about adjusting that, but that is with the court Social Security is about. What is key for me is we are not talking about cutting benefits. We are not talking about cutting benefits in Social Security at a time when little he millions and millions of americans rely on it. Point. S to be the start but the tax hike will affect generation x. They will pay for it, correct . Whenever we do with the Social Security system will help those that have Social Security now and if we did nothing, there is enough money that it could go for more than 20 years without making any adjustments in the benefits. If we make some adjustments, we make sure the Social Security system is there forever into the future, and when i say forever into the future, that means for 40, 30,oday who are 50, and people who are 20 that is the point, to build a longterm, sustainable system. We are not that far off of it. We make adjustments, get it to the right place, and frankly, that is what we should be doing. That is to be the center of the bullseye. That is where we need to aim. I will in member what you said, but you also said you would not run for president. In 2006, barack obama also said that. Is there no circumstance in which you would run for president of the United States . I am not running for president of the United States. I am working my heart out every day trying to be the best senator that i can to fight for the people that are counting on us here. Thank you for your time and commitment, senator Elizabeth Warren, join us exclusively on market makers. A look for jamie diamond will have to pay up again, facing a settlement. Well have details next. An ipo as bigbeen as this one. Hilton sets a record. This is market makers, live on Bloomberg Television and streaming on your phone, tablet, and on bloomberg. Com. Welcome back to market makers. Breaking news for you hilton is trading, the largest ipo ever , and it is already up 8 . Erik schatzker will be speaking to hilton ceo chris nassetta, clearly a big day for him. I have more i want to cover here because it was five years ago this week that bernie made offs bernie made offs ponzi scheme was exposed. Andrgan was the banker, there are claims they ignored the fraud. Jamie dimon is ready to settle. Dawn kopecki has covered jpmorgan four years. Exactly what is jpmorgan accused of . What are they admitting to . Were not sure what the agreement will say exactly, but the bank is looking at conceding that it ignored signs and did not tell regulators what was going on they did not file suspicious activity reports, they knew internally, or highly suspected that this was a fraudulent ponzi scheme. The current chief operating officer actually said this in e mails that have been releasein on bernietigation madoff. Said what in the email . That this was something the company needed to get out of, that they suspected was a ponzi scheme. He was not the chief operating officer at the time, he was the head of fixed income, and those concerns were never reported up to regulators. Jamies settling mean dimon and j. P. Morgan are admitting guilt, or could one fines, heave paid the wants to start 4014 without an overhang, and want to take all of the litigation off of the books . And he is willing to write a big check to do so. We are trying to confirm whether or not jpmorgan is going to admit the middle tilt. Criminal guilt. We know they will definitely admit to a statement of fact of some sort. Whether or not they will admit to criminal wrongdoing, trying to ascertain that, yes, because none of this is public yet. Nobody inside jpmorgan has been named for being negligent, at the very least . Id not think so, but we are awaiting details. We expect this before the end of the year. Jamie dimon, one might say he is trying to clean house. Dawn kopecki, always on top of jpmorgan, great story, covering five years since bernie madoff. When we come back, we will change the ways you watch movies and invest in ipos. Amc theater chains wants to do both. We will have that next on market makers. \ welcome back to market makers. I am Erik Schatzker, here, as you can see, at the New York Stock Exchange, where two Big Companies are making their trading debut, and one of them foss, the ceoeric of aramark, which provides food to, among other things, stadiums. You must be thrilled. Thank you for having us. We are very excited. Timeis is aramarks third as a public company. It will be different this time around . Sponsorsvestors and are looking to pay down some debt, the most important thing about going public is this will now allow us to be far more competitive in the marketplace, giving us more resources to compete and win new business, and for our employees, 270,000 associates, it creates great growth opportunities. Five lets talk about the opportunities. You have heard the question, any kind, this is a fragmented industry. Wille a consolidator you be a consolidator . Look to the future, we feel comfortable with organic growth opportunities, but with that, we will be strategic with mergers and acquisitions as well. You are choosing your words carefully. Everyone wants to know what that means. Are you planning acquisitions, as you identified targets, or are you not at that point yet . We are always looking at what the target looks like, but for us it is important to focus on the core business, and as we laid out the algorithm, we feel comfortable with the midsingle digit growth. Mergers anded positions, but we will be strategic to opportunities that are presented. Will scale help improve your margins . Anyone looking at your statements recognizes the margins in your business are very thin, and operating income, net income, have gone down even the revenue has gone up. What can you do to bolster those margins question mark actually, margins . Actually, we have come off of two record years. It has helped us triangulate and position ourselves to go public today. As we look to the future, our margins are a key focal point, as is accelerating the revenue growth, and as we look at the margin opportunity, we see continued opportunity across our 10 billion in addressable costs and we have specific plans to address and expand margins Going Forward. In your securities filing to go public, you identified cisco, a large food provider, as one of your biggest suppliers. Is there not a risk in the lack of diversification in that you would be so dependent on getting so much of your food from one supplier . To be honest with you, we use cisco solely as a district gender, so all of our deals are negotiated by us. As a cisco fits in is distributor, which allows us to run a more assetlike business. It makes sense here and they are a good partner and will continue to be, but they really are a district or only pet distributor only. You are in anything from education, sports, corrections the vertical line you can draw makes a lot of sense, but you do gardening, laundering is there any point where you could see aramark focusing on just one of your businesses and turning other parts into a separate company . Business. Ocus on one at the end of the day we are in the Customer Service and people 270 thousand associates serving tens and thousands of tens of thousands of clients every day. We are in the Customer Service people business, and the core competence is all about creating a Great Customer experience. That is what we do across all lines of business. That is what every company tries to do. What is similar between Food Services and laundry, for example . At the end of the day, what wins business is the moment of truth excellence you create when you come in contact with the ultimate consumer, and you meet and exceed their expectations, you will have a great, viable Business Model. That is what we do regardless of what we do, food, uniforms, or medical technology equipment. You are a big provider of food service to schools. That is correct. Xd you share the concern that summit do you share the concern that some have raised about the quality of food American Students are getting . We are obsessed with quality. It is important to offer choice across all lines of business, certainly in education, making sure there is an emphasis on health and wellness. There is an initiative we are deploying across our sector right now. Should kids in grade school, for example, beginning burgers, fries, pizza, and chocolate milk . Our offerings meet nutri